Organisations must formulate strategies to tap the skills and potential of their employees to the fullest and keep the best from leaving.

RETENTION is a noun in the English language that simply means to keep something rather than lose it. In an organisational context, employee retention means the capability of the organisation to keep or retain people who work for them rather than lose them.

There are many reasons why organisations are unable to retain their employees. They include downsizing, when the organisation is not making enough profits which in turn leads to reducing the number of its workers to cut costs. It also includes corporate re-engineering, where the organisation thinks it is not being effective, which means it would liquidate or combine some departments to reach higher effectivity.

While these reasons are fundamental and need serious attention in an organisation, any talk or references made to “retention” usually refers to keeping its good or best employees happy so that they will not leave.

So why is employee retention important to organisations? It all boils down to keeping the operational costs as low as possible. When an organisation hires an individual, a financial investment has been made to attract, select, and train that individual for a suitable job.

Every time an employee leaves, a replacement has to be found and the process of attracting, selecting and training a new employee has to be conducted all over again.

This process takes time, energy and financial resources which the organisation would much prefer to invest elsewhere. In order for it to be able to retain employees, we can refer to the framework proposed by Benjamin Schneider (1987) called Attraction-Selection-Attrition (ASA). What this framework introduces is a step-by-step method that organisations can utilise in an effort to prevent their employees from leaving.

Attraction

The first step is to draw the interest of individuals who have the knowledge, skills, abilities, and other characteristics (KSAO) suitable for the job as well as the organisation, to apply for the job. As an example, hiring a store manager for a retail business would mean that they meet certain requirements and that includes knowledge of the retail sector, the ability to think on their feet due to the job’s fast-pace, people skills which will enable one to communicate well with others, and a bubbly personality

Once the KSAO for the job has been determined, the organisation or establishment may then want to think about the image that it would like to present to attract the most suitable applicants and achieve the best person-organisational fit.

Every organisation has its own culture, that is, language, values, attitudes, beliefs and customs; its climate, which is the collective view of the people within the environment in which they work; and practices, that is the policies, structures and actions of the organisation. These factors are determined by the people working within the organisation itself.

Every individual’s interest and personality is different, thus, it only makes sense that they would be attracted to different career choices.

In general, people would crave work environments that fit their personality. One of the main reasons of voluntary turnover where individuals decide to quit their respectve jobs, instead of being forced to, is because they no longer “fit in”. This is why presenting the correct image is important in attracting the right people to an organisation.

Selection

The second step after attracting the right people who meet the KSAO is to choose the best amongst them. This is where the person-job fit is important. When an organisation is selecting new employees, they would choose those whom they think are the most compatible with the organisation and the job.

As an example, A and B apply for a store manager’s post. Based on the KSAO, both meet all the requirements, but the organisation may decide to hire B instead of A because B has the personal attributes that fits better with the organisation.

Selecting the right people for the job is important for employee retention because when an individual has the KSAO requirements for a job, they would perform better and usually be rewarded by the organisation.

With the reward comes the feeling of being appreciated, which would lead to being satisfied with one’s job. Satisfaction with their job is usually one of the main reasons why employees stay in an organisation.

Training

Individuals do need to have the basic KSAOs required to do the job upon being hired. However, organisations, just like individuals, have a need that changes across time to adjust to the ever-changing global conditions.

To meet these needs, organisations need to invest in providing continuous opportunity for growth for their employees, thus, enabling them to keep up with the changes.

An example of such development would be to provide training for store managers when the organisation decides to diversify its market. This is called Diversity Training.

Such a move will enable the managers to cope better with the changes of their customers and employees. An employee’s intention to leave may occur when during its “organic” development, organisations overlook the need to train their employees.

In such situations, employees realise that the organisation no longer fits with their goals and personality, and they would move on to other organisations that in their opinion is a better fit for them.

When an employee is provided with growth opportunity, they would feel more appreciated and that will improve their job performance. Individuals who are satisfied with their job are less likely to leave the organisation.

Attrition

The process of employees leaving the organisation because they think that the organisation no longer fits with their personality and life goals can be called attrition. When people leave the organisation, a more “homogeneous” group stays.

They are the people who were initially interested in the organisation.

Although homogeneity may be good, because everyone in the organisation shares the same vision and mission, it may also not be so beneficial.

When an organisation is filled with like-minded people, it may become stagnant and unable to grow due to lack of new ideas. Therefore, although organisations should recognise the compatibility of employees who stay after attrition, they also need to consider the side effects of homogeneity.

Role of I/O Psychologist

The role of the Industrial and Organisational Psychologist or commonly known as I/O psychologists, is to help develop strategies that build a better organisation by applying psychological principles and methods to critical issues related to business, including talent management, assessment, selection, training, organisational development, performance, and work-life balance.

Such psychologists, who may be hired as internal or external consultants by organisations, will be able to help such establishments in retaining their best employees.

An I/O psychologist would be able to identify the culture, climate and practices of the organisation and suggest ways to attract, select and train new employees.

By being clear about the KSAO required for a job, organisations would then be able to formulate strategies to attract and select the most compatible people.

With a slight investment in training, these establishments would also be able to avoid unnecessary turnover, and instead encourage attrition and retain the best people.

The writer is an industrial/organisational psychologist and lecturer at the Department of Psychology, Sunway University, Petaling Jaya.