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Does retention still hold value?

Organisations till recently were following a policy that aimed at retaining employees longer rather than recruit new ones at regular intervals. Companies believed that the longer the employees stayed, more were the benefits they brought to the company. Long-serving employees had many advantages. Logically speaking such employees were believed to be more adept at the skill sets particular to their job and the organisation. They knew how to get things done in the organisatio n and had already proved their ability at their job.

With the changing business world scenario, such assumptions of long-serving employees have been turned on their head. They no longer hold true or hold any value. As business has become increasingly globalised and undergoing changes by the minute, such beliefs are no longer valid.

The changes are so rapid that companies find their products becoming obsolete and their business strategies turning outdated fast. This has also affected the approach of companies towards recruitment and retention.

These factors make practices, skills and knowledge obsolete rapidly and organisations have to constantly reinvent themselves in order to succeed. Earlier companies used to have training and development programmes for employees to help them be up-to-date and adopt changes. Today, the validity of such training programmes is being questioned.

As everything including technology, knowledge and business practices is changing rapidly, it is doubtful whether employees’ skills can be equally adept at meeting these changes because their existing skills will naturally become outdated and obsolete. For instance, a company used to selling its products using the conventional marketing mode through experienced personnel suddenly finds its competitors profiting better through interactive marketing; would naturally want to adopt the same methods. The management would obviously find it more feasible to hire expert personnel in the field rather than train existing staff.

In this rapidly changing world, the knowledge and expertise, that long existing companies have built and preserved through their staff and management practices could become outdated. Such companies run the risk of stagnation, or being overrun by their newer competitors or getting absorbed or taken over through mergers and acquisitions. Having long-term institutional knowledge is no longer the critical factor for companies to head the pack. Companies today transform themselves every four to five years. In such a case, banking upon outdated institutional knowledge or following an ancient company culture may lead to a fall. Organisations have to be more flexible and adapt quickly to changes.

In such a scenario, the productivity factor of employees is no longer the key factor in determining their growth in the organisation. In today’s flat world of business, the ability of an employee to come up with innovative ideas in order to counter the changes and meet the growing customer demands is what determines success.

Employee loyalty too has taken a back seat. The new generation of employees may be loyal to their professions, but loyalty to the employer is rare. The HR policies of companies must be modified in tandem with these changes. The focus should shift from retention to more futuristic policies that will help both the organisation and the employees thrive in this rapidly changing world.

The policies must be redesigned to let go of employees whose skills have become obsolete and hire those who can succeed in this new world of business.

The criteria for hiring employees should change from their skill sets and abilities to their ability to adapt, learn, and come up with innovative ideas. ‘Creativity’ is the key word here. Performance will cease to be assessed on the ability to meet targets but the willingness to learn, innovate and change.

Retention or training employees will start becoming less important for companies in the future.

Such changes in the business scenario calls for a paradigm shift in the way the HR department approaches recruitment and retention. The policies in these areas must be modified to keep up with the change and for the company to keep up with the times.