ETHICS AND STRATEGIES IN EMPLOYEE RETENTION

Introduction

The workforce is crucial to the success of any organisation, despite the prevalence of technology-driven companies. Without human resources, technology cannot be effectively utilised. Human resources are the most significant and dynamic resources available to any organisation. (Das and Baruah, 2013)

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Ethical behaviour is critical in this employee retention process. Ethical employee retention practices involve creating a supportive work environment that promotes fairness, equity, and respect for employees' rights.

One of the primary obstacles that organizations encounter in Sri Lanka presently is retaining skilled employees without losing them migrating to other countries due to the economic crisis. While many organisations strive to keep up with the competition and ensure all-round economic development, retaining skilled employees is crucial to maintain a competitive edge. Skilled employees are the lifeblood of any organisation, and they are crucial in operating technology and propelling economic development.

Importance of Employee Retention

This article discusses the importance of employee retention and the ethical strategy organisations can use to retain their employees.

Employee retention is critical for an organisation's success as it helps maintain a stable and experienced workforce, which is essential for achieving organisational goals. Employee retention is a significant challenge for large entities due to the complexity of their organisational structure and their employees' diverse needs and expectations. But it may only sometimes be a priority, depending on the specific organisational context. Organisations should evaluate their priorities, resources, and performance goals to determine the importance of employee retention for their particular situation. Here are some reasons why employee retention is vital for an organisation:

1.  Increased Productivity: Workers who experience job satisfaction and contentment with the organization are highly productive and motivated. They are willing to provide quality work, meet deadlines, and contribute to the organisation's success. (Das & Baruah, 2013)

 

2.  Cost Savings: Employee retention can help an organisation save costs related to the recruitment, training, and onboarding of new employees. Retaining skilled talents reduces the need to spend time and money recruiting and training new employees. (Ramlall, 2004)

 

3.  Positive Organisational Culture: Employees who feel valued and supported are more likely to perceive the organisation's culture positively. This can lead to increased employee satisfaction, and loyalty. (Cloutier et al., 2015)

 

4.  Knowledge Retention: Retaining employees with valuable skills and knowledge can help an organisation maintain institutional knowledge and experience. Experienced employees can mentor and train new employees, improving overall organisational performance. 

5.  Reputation: Retaining skilled employees can enhance an organisation's reputation as a desirable workplace. Positive word-of-mouth recommendations from satisfied employees can attract new talent to the organisation. (Das & Baruah, 2013)

Additionally, a steady workforce can have a positive impact on the work environment, customer satisfaction, and the organization's reputation. Retaining employees can also assist companies in establishing a powerful employer brand, which can retain highly qualified workers.

Reasons for organisations do not wish to Retain Employees

Although there are essential factors in retaining employees, there are reasons why an organisation does not wish to retain employees in certain instances. Here are some reasons. 

 

1. Limited Resources: Some organisations may have limited resources to offer competitive compensation and benefits packages to retain employees. In these cases, retaining employees may not be as crucial as other organisational priorities, such as profitability or growth.

 

2.  Poor Performers: Retaining poor-performing employees can negatively impact an organisation's performance and productivity. Replacing poor-performing employees with more skilled and motivated workers may be better.

3. Organisational Change: Employee retention may not be a priority in some situations, such as mergers or acquisitions. Organisational changes can lead to redundancies, job losses, and restructuring that may result in reduced employee retention rates.

Employee Retention Vs. Maslow's theory

According to Maslow's theory, humans have five types of needs arranged in a hierarchical order. These levels are self-actualisation needs, esteem needs, love/belonging needs, physiological needs and safety needs. (McLeod, 2007)

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In the workplace, employees have similar needs that must be met to ensure job satisfaction and retention. For example, employees need fair compensation, safe working conditions, positive relationships with colleagues and managers, recognition for their work, and opportunities for personal and professional growth. (Ramlall, 2004)

If an organisation can fulfill these needs ethically, employees are likely to be pleased with their jobs and remain with the organization Employee retention is critical to any organisation's success, especially in today's competitive business environment. Below are some contemporary techniques that organisations can utilise to retain their employees, which are linked to Maslow's theory.:

1.    Provide competitive compensation and benefits (Physiological needs): 

 

Retaining employees is strongly linked with providing fair compensation. A reasonable payment system should be based on employees' skills, experience, and job responsibilities. Additionally, organisations should offer benefits like medical insurance, retirement benefits...etc. showing employees that they are valued and appreciated. Organisations can enhance employee loyalty and commitment by offering fair compensation and benefits. (Nwokocha and Iheriohanma, 2012, p. 198-203)

 

2.    Professional Development (Esteem Needs):

 

Providing employees with professional development opportunities. For instance, organisations can provide employees with training programs, coaching, mentoring, and advancement opportunities that help them develop their skills and progress in their careers. Notably, professional development programs not only increase employee retention, but also boost the productivity and competitiveness of the organisation as a whole. (Nwokocha and Iheriohanma, 2012, p. 198-203)

 

3.    Respect for Diversity (Social & Safety needs):

 

Respect for diversity is an essential ethical behaviour in employee retention. Organisations should promote diversity, equity, and inclusion by creating a work environment that values differences in gender, sexual orientation, ethnicity, age, and religion. This creates a sense of belonging among employees, which can increase their satisfaction and loyalty to the organisation. (Cloutier et al., 2015)

 

4.    Ethical Leadership (Esteem Needs):

 

Ethical leadership is crucial in retaining employees. Leaders should demonstrate ethical behaviour, integrity, and transparency in decision-making. They should also create a culture of accountability and promote ethical conduct among employees. Ethical leadership builds trust and respect among employees, which can increase their loyalty and commitment to the organisation.

 

5.    Create a positive work culture (Social Needs)

Positive work culture is critical in retaining employees. It involves creating an inclusive, respectful, and supportive work environment. Organisations can achieve this by implementing policies encouraging diversity, equity, and inclusion, providing opportunities for employees to learn and grow, recognising and rewarding employees' contributions, and fostering open communication channels.

6.    Offer flexible work arrangements (Social a& Safety needs):

Many employees value flexibility in their work. Organisations can offer flexible work options such as working from home (remote work), flexible hours…etc. to facilitate employees' needs. This can help employees could achieve a better work-life balance, increasing job satisfaction and retention. (Nwokocha & Iheriohanma, 2012, p. 203)

 

7.    Invest in employee development (Esteem & Self-Actualisation needs)

Providing employees with opportunities for professional development can increase job satisfaction and retention. Organisations can provide training programs, and career advancement plans to help employees grow and grow their skills. (Nwokocha and Iheriohanma, 2012, p. 203)

 

8.    Participatory Decision-Making Process (Esteem & Self-Actualisation needs)

Organisations need to involve workers in decision-making processes to cope with the competitive global economic market and retain critical employees. This includes integrating these employees into organisational participation, management, and administration, which can improve efficiency and harmony in the workplace. By doing so, organisations can protect their employees' commitment, job security, and dedication. (Nwokocha and Iheriohanma, 2012, p. 198-202)

Therefore, Maslow's Needs theory can be applied in the workplace as a framework for understanding what motivates employees and what they need to be satisfied with their jobs. By meeting these needs, organisations can increase the likelihood of retaining employees and reducing turnover.

Conclusion

Employee retention is a vital function of HRM that incorporates a variety of elements, such as compensation and benefits, job satisfaction, work-life balance, opportunities for career advancement and organisational culture. Retaining employees is indispensable for the success of an organisation as it maintains a stable and experienced workforce reduces recruitment costs, and contributes to a favourable work environment. To keep their employees, organisations can employ several strategies such as providing attractive compensation packages and establishing a supportive and constructive work environment, providing opportunities for career development, implementing flexible work arrangements, and recognising and rewarding employee contributions. By implementing effective retention strategies, organisations can retain highly skilled employees, and achieve their organisational goals. However, when utilising these strategies for employee retention, ethical practices must be upheld.

 

References

Cloutier, O., Felusiak, L., Hill, C. and Pemberton-Jones, E.J., 2015. The importance of developing strategies for employee retention. Journal of Leadership, Accountability & Ethics, 12(2).

Das, B.L. and Baruah, M., 2013. Employee retention: A review of literature. Journal of business and management, 14(2), pp.8-16.

McLeod, S., 2007. Maslow's hierarchy of needs. Simply psychology, 1(1-18).

Nwokocha, I. and Iheriohanma, E.B.J., 2012. Emerging trends in employee retention strategies in a globalising economy: Nigeria in focus. Asian Social Science, 8(10), p.198-203.

Ramlall, S., 2004. A review of employee motivation theories and their implications for employee retention within organisations. Journal of American academy of business, 5(1/2), pp.52-63.