Employee Retention as a Strategy

This article discusses employee retention as a strategy. Retaining employees means lower training costs and a familiar well established workforce. Retention requires keeping employees happy, which has other benefits as well. Costco is know for paying well, and the amount of merchandise stolen by Costco employees is only 13% of the industry average. That is a huge savings for shareholders primarily due to Costco's positive employee relations.

One major issue though, is what to do when you have to have layoffs.

"There is no reason that companies cannot retain and/or rebuild favor among employees," Challenger says. "We see countless examples of companies that are able to go through significant downsizings and those remaining, as well as those who were let go, still have positive feelings about the employer. It comes down to how people are treated. If they believe that the company is being fair and honest, they will endure downsizings, salary freezes, cuts in benefits, and no bonuses."

Be fair and honest. I think that is always good advice. Good pay and benefits can, in many industries, be a win-win situation. Employees get more of what they want, and by minimizing turnover, customers get better service and shareholders get more profits.