Reduction of ETO using best SHRM practices

According to (Allen, 2008) there are  certain strategic HRM practices can be especially powerful in enabling an organization to achieve its goals. These practices mainly include;

(1) recruitment

(2) selection

(3) socialization

(4) training and development

(5) compensation and rewards

(6) supervision

(7) employee engagement.

The diagram below shows a summary of the reasons which employees consider to leave their organizations in search of new workplaces.

                                Fig 01. Illustration of reasons affecting ETO(Institute,2021)

Recruitment

It is suggested by proof that recruitment practices directly influence turnover. Many studies shows that presenting applicants with a realistic job preview(RJP) during the recruitment process effects positively on retention. A RJP depicts proper information about the positive characteristics and challenges related to the job and clear details about performance. RJPs help employees to adjust to their new work environment. Anyhow, that can also reduce applicant pools since some applicants decide that the job or organization is not for them. Hence RJPs are most appropriate for positions in which retention is an issue (Harris, 2022).

Selection

ETO is influenced by how the managers handle the process of selection. Using Biodata during selection is an effective technique. It identifies life experiences that tend to differentiate those who stay with an organization from those who leave. Life experiences related with employees who stay may include considerable tenure on previous jobs, education experiences, involvement in career-related organizations, and work experiences (Allen, 2008). In considering which kinds of biodata to use, avoid those that could be seen as sensitive. To better manage retention, many organizations are beginning to assess fit with the job and organization during the selection process. Fit refers to the compatibility of an individual with the work environment.

Socialization

ETO rates are high among new recruits in many organizations. This issue is considered critical since the organizations usually make significant investments in recruitment, selection, and training. High ETO rates limit the organization from obtaining a return on these investments. Researchers have depicted that socialization practices support new recruits too become embedded in organization and hence more likely to stay ( Kim, et al., 2018). These practices include shared and individualized learning experiences, formal and informal activities that help people get to know one another, and the assignment of employees as role models for newcomers.

 

Training and Development

Some observers worry that training and development opportunities may be a double-edged sword. These opportunities may discourage turnover by keeping current employees satisfied and well-positioned for future growth opportunities. People in certain jobs that require constant updating of skills might leave if they have no options for strengthening those skills (Tyler, 2021). However, training may make employees more marketable and thus increase the ease with which they can be recruited by rival organizations. Those who receive more training are somewhat less likely to quit than those who receive little or no training. Growing evidence also indicates that employees are increasingly factoring future growth opportunities into their turnover decisions, and training and development play an important role here.

Compensation and rewards

Compensation and rewards offered by an organization obviously play a critical role in the inducements. Fail to offer competitive rewards may put the organization at a disadvantage for attracting and retaining talent. At the same time, pay levels and pay satisfaction are modest predictors of ETO decisions. Thus, it is needed to carefully consider how to use rewards to retain employees  (Harris, 2022). Research suggests several approaches. One is to lead the market with respect to rewards. This has the dual benefit of promoting satisfaction and thereby decreasing workers’ desire to leave and minimizing the relative attractiveness of alternatives. Explicitly link rewards to retention. For example, many organizations tie vacation hours to seniority, offer retention bonuses or stock options to longtime workers, or link defined benefit plan payouts to years of service

Supervision

The quality of employees’ relationships with their supervisors is an important factor affecting employee turnover. Several studies have  found that fair treatment by supervisors was more important than the distribution of outcomes in predicting ETO ( Wheeler, et al., 2010). It points to several recommendations for managing retention. First, preparing the supervisors and managers at organization to lead and to develop effective relationships with their subordinates  ( Kim, et al., 2018). In many organizations individual contributors are promoted to managerial positions based individually on their performance on technical aspects of the job instead of supervisory abilities. To prepare employees in an organization to take on leadership roles, they should be provided with trainings that covers not only how to be a good leader but also how to retain talent. One way to encourage supervisors to focus on retention is to measure retention among their teams

Employee engagement

 Strengthening employee engagement in an organization can also support in retaining talent. Engaged employees are satisfied with their jobs, they enjoy their work and the work environment, believe that their job is important, take pride in the company, and believe that their employer values their contributions. One report on measuring engagement at Intuit found that highly engaged employees were five times less likely to quit than employees who were not engaged  ( Kim, et al., 2018).

 

                    Fig 02. Practices to reduce ETO and retain employees(Harris, 2022).

More SHRM practices to reduce employee turnover:

·         Schedule Regular Meetings from The Start

·         Have a Candid Conversation About Retention

·         Review Your Entire Work Environment

·         Act on Exit Interview Data

·         Listen and Act on The Advice of Your HR Team

·         Ensure an Inclusive Compensation Stack

·         Pay Your Employees Well

·         Develop Coaching Skills

·         Invest in Better Leaders

·         Lead by Example

·         Consider Using a Recognition Platform

·         Reflect on Why Employees Would Want To Stay

·         Reframe The Responsibility of Retention To People Managers

·         Humanize Your Hiring Process

                     Fig 03: Statistics of Employee turnover(Wheeler, et al., 2010).

Recommendations for strengthening  employee retention efforts:

 

·         Address employee concerns - Listen to employees’ challenges and look for solutions.

·         Present realistic job descriptions - Turnover tends to be highest among new hires often because the job doesn’t match their initial expectations. Once they experience what they perceive to be the downsides of a job, they tend to quit. The solution is to expose candidates to the worst parts of the job.

·         Establish strong onboarding, mentoring and advancement opportunities - new hires have weak bonds to the organization, so it’s easier for them to leave. To retain them, help them make connections as quickly as possible  (Harris, 2022).

·         Use stay interviews, not exit interviews - Exit interviews provide insights on why employees are leaving.

·         Offer accommodations

·         Communicate frequently -  The best way to reduce turnover is to understand why employees stay and why they leave.

·         Educating Managers - HR can help by training managers to communicate clearly, following through on commitments and being honest about issues that impact employees ( Wheeler, et al., 2010).

 

Effectively managing retention in an organization is not easy. It takes extensive analysis, a thorough understanding of the many strategies and practices available, and the ability to put retention plans into action and learn from their outcomes. But given the increasing difficulty of keeping valued employees on board in the face of major shifts in the talent landscape, it is well worth the effort.

References

Allen, D., 2008. A guide to analysing and managing employee turnover. SHRM Foundation’s Effective Practice and Guidline series, pp. 21-28.

Harris, A., 2022. Strategies To Reduce Employee Turnover. [Online]
Available at: https://blog.shrm.org/blog/14-strategies-to-reduce-employee-turnover
[Accessed 29 November 2022].

Kim, S., Su, Z.-X. & Wright, P., 2018. The “HR–line-connecting HRM system” and its effects on employee turnover. Special Issue: Human Resource Management in Family Firms, 57(5), pp. 1219-1231.

Tyler, K., 2021. How to Ride the Great Resignation Wave. [Online]
Available at: https://www.shrm.org/hr-today/news/hr-magazine/summer2021/pages/reducing-turnover.aspx
[Accessed 30 November 2022].

Wheeler, A. R., Harris , K. J. & Harvey, P., 2010. Moderating and Mediating the HRM Effectiveness — Intent to Turnover Relationship: The Roles of Supervisors and Job Embeddednes. Journal of Managerial Issues, 22(2), pp. 182-196.