According to the February 7, 2014 edition of the Washington Post the U.S. unemployment rate fell to “only” 6.6% during January. Even though this seems like a vast improvement from what it was five years ago, more jobs does not mean that every working American is doing well enough to support their families and pay their mortgage or rent.
The 6.6% unemployment rate may sound good, but it is very misleading. This is because there are still thousands of Americans who are still not working, but no longer qualify for unemployment benefits. Therefore, they are not counted among that 6.6% of the population that still receiving unemployment benefits. Throw in tens of thousands of underemployed Americans and things don’t look as rosy as that 6.6% makes it seem.
Regardless of the “real” number of unemployed Americans, I think most people can agree that the present state of unemployment in the United States is still high. Thus, it seems like employee recruitment and retention should not be a problem, but many companies are still finding it necessary to invest in employee retention programs. In light of the high rate of unemployment, why do so many companies seen concerned with employee retention?
The importance of employee retention can be attributed to the among of money that companies spend on recruiting, hiring, and training new employees. Most people do not realize it, but most companies treat the hiring and training of a new employee as if it were an investment. This is because they will expend several hundred or thousand dollars bringing the employee aboard before said employee officially begins his or her job.
Therefore, the objectives of employee retention are embodied in employee retention strategies that are designed to foster greater employee morale and loyalty to their employers. Obviously, if companies are able to keep their most productive employees from leaving, they will be able to cut costs and maintain an optimum level of efficiency.
While companies cannot be profitable without hiring the best job applicants, they are no better offer if they have trouble keeping quality employees on board. The objectives of employee retention programs are to help companies reduce the employee turnover rate. By doing so, companies can reduce recruitment and training costs substantially. In the process, companies can increase profitability, and focus on better serving their clients.
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