Retention Management Of Critical (Core) Employees A Challenging Issue Confronting Organisations In The 21st Century

Abstract

Employee retention is one of the challenges facing many business organisations today. Many industries are afflicted with high demand for specialised employees and are also suffering high levels of turnover. We have moved into a knowledge-based society where human capital is considered a key resource and a competitive business advantage. The high attrition rate of critical (core) employees is costly to corporations. Loss of these high talent employees results in the stripping of valuable human capital, critical skills and institutional memory. Consequently, companies are giving increased attention to ways of retaining their high performing employees rather than relying on costly replacement and retraining. New paradigm companies recognise that an important element in business management practices is the need to successfully motivate and retain employees who survive organisational restructuring, downsizing, consolidation, reorganising or re-engineering initiatives. This paper examines the current human resource practices on the retention of core employees in twelve Australian organisations. It explores the relationship between human resource (HR) practices and retention and further identifies the elements of HR practices, which strongly influence the decision for core employees to stay. It is part of a three phased study and the methodologies discussed in this paper consist of a) a Delphi survey of expert opinions and b) an in-depth interview of HR Managers of organisations. Results from this study will assist in the development of an effective HRM retention program for organisations. Businesses can successfully keep critical employees with a total retention strategy and HR programs to support it.