Staying Competitive Through Employee Retention

By Tim Cummuta

Updated Over a Week Ago

Minute Read

Companies are constantly faced with finding the means to stay profitable and with a whirlwind pace of change. Maintaining a competitive advantage in such an environment is difficult in tough economic times.

This means enterprises must be adaptable, learn quickly, and consistently transfer knowledge gained throughout the organization.

This constitutes creating a continuous learning and communication environment.

Continuous Learning

Building a continuous learning and communication environment is an important key to increasing employee motivation. Employees are not always open to new training or building new skills, even during tough economic times and fear of unemployment.

A continuous learning environment must be based on the employee’s needs and not on off-the-shelf course content.

What does this mean as a leader?

The bottom line is that leaders must pay close attention to what employees need if motivation and retention are high on the organization’s priority list.

Employee Retention

Creating an organization that lives on a high level of communication and education will slowly remove an employee’s resistance to change. This requires commitment at all levels within the organization because it is about commitment and action.

employee retention

Retention in a slow global economy may not seem important for many organizations. However, research is replete with studies on the cost-effectiveness of keeping skilled employees rather than looking for new and cheaper labor.

Ramlall (2004) states the loss to a company of a critical employee is equivalent to one year’s pay and benefits at a minimum and two years’ pay and benefits as a maximum.

There is a serious cost to skilled or critical employee turnover, even in a stagnant economy. One should argue that it is even more important to keep these individuals during such hard times.

Professional Development

While there seem to be many potential employees available, skilled individuals are still in high demand. Pay and benefits are not the only reasons people stay with an organization. The ability to keep up with new methods and technology is critical as employees continue to improve upon their skills.

Personal and professional development is a high priority for workers during major changes. Regarding small to medium size enterprises, Ahlgran & Engel (2011) state that employers must play a key role in driving efforts toward an employee’s educational development.

Employee Motivation

The issue of the changing business environment that exists today must be addressed as well as the impact on employee motivation and ability to be successful if an organization is to stay healthy and competitive. It is a given that technology changes rapidly.

Every year, more and more workers are made obsolete by new technologies. Training, retraining, and career development have become an ongoing process in the business world of successful organizations.

Organizations must make a major commitment to knowledge and knowledge transfer if those organizations want to maintain a competitive advantage in the global economy (Ramlall (2004)).

Learning Organizations

learning organization

Creating a learning organization is nothing new. However, many companies have yet to embrace this. Creating in-depth and useable knowledge is the primary basis for a firm to be competitive in the 21st Century.

How can a company that wants to stay competitive not create a system of gaining and transferring knowledge?

Investing in the development of employees, both personally and professionally, will provide years of returns, even for smaller enterprises. Employees that feel appreciated are motivated. Employees that are motivated work harder and are less likely to jump ship when the next offer comes along.

Being a part of something worthwhile is far more important to most employees than just pay and benefits, all things considered.

Adjusting to Change

Too many organizations are content with pay and benefits being the important issue when considering employee motivation and retention. Employees face the fast pace of technological change with great trepidation.

Organizations must take steps to assist employees in adjusting to change. A commitment to bring the current employees along in the midst of change requires an understanding of what those employees need. Then it is important to design education to mesh those needs with the needs of the organization.

This may include assistance in general education through employer money or tuition reimbursement for college. Some of the best colleges and universities in the world are now online and can be accessed anywhere.

Assistance may also include specialized training for:

  • Learning new concepts and technologies in the industry
  • Developing self-performing teams and team building
  • Increasing leadership skills and communication
  • Turning managers into leaders

Investing in the human capital that an organization currently possesses has consistently produced the best return on investment possible.

How Can Organizations Stay Competitive Through Employee Retention?

If you have ideas that you feel like sharing that might be helpful to readers, share them in the comments section below. Thanks!

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Tim Cummuta
Tim Cummuta
Tim is a Business Consultant in Strategic Planning, Productivity, HR, Sales & Marketing, and Risk Management. He has a Master’s Degree in Financial Planning and is pursuing a Ph.D in Organization & Management at Capella University.
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