The managerial perspective of organizational success is heavily geared towards the ability of the businesses to attract and retain high skilled employees and minimize employee turnover. This factor is influenced by the exponential advancement of innovation and technology, increase in the tacit and explicit knowledgebase of given areas of expertise, economic growth and internationalization of the market place ( Goldsmith, 2010 ). Employee turnover reflects the percentage of incoming and outgoing employees in relation to the entire organizational workforce in a given working period, say a financial year. Internal factors such as job satisfaction, working environment, salaries, workload, etc. influence the turnover of employees. Employee retention in the ability of the business management to maintain a stable and sustainable workforce that is able to adapt to the robust environment of the organization. The primary goal of retention is to attract the best employees ( Allen et al., 2010 ).
The Banking Industry
The top priority of the banking industry is to increase profit and revenue and achieve competitive advantage over rivals for the primary goal of providing customer satisfaction which leads to a corresponding increase in equity. There is a positive correlation between a healthy customer relationship with the bank and employee satisfaction. This reason motivates the human resource department and the business management to invest time, money, and resources in formulating strategies that encourage retention and minimize turnover especially in retail banking ( Allen et al., 2010 ). The banking sector is faced with the challenge of increased employee turnover especially for the gifted and talented participants who play a vital role in the performance of the organization. The high turnover rate in this sector impairs organizational growth as a result of increased costs and expenses needed to recruit and train new individuals. Research shows that the factors that influence employee turnover and retention vary from one bank to another. The policies and culture of these financial institutions are sources of effective communication, tools for motivation empowerment and growth, and are essential for employee retention ( Goldsmith, 2010 ). It is evident that the core causes of turnover in the banking sector are the work environment and job satisfaction. Career-oriented employees show a gigantic desire to chase new ventures and opportunities that provide job satisfaction and an acceptable working environment.
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Employee retention management efforts require strategic insights on individual decisions concerning turnover. Pay satisfaction barely influences employee retention in the banking industry. Individual turnover decisions require rigorous analysis of the probability of withdrawal through effective and efficient assessment and management of flexibility, mobility, and turnover intentions of the employee ( Allen et al., 2010 ). The banking sector should consider managing and monitoring job satisfaction and the work environment since these are the primary predictors for individual employee turnover. Banks should consider using well formulated measures and individualized mechanisms when assessing the withdrawal probability and the attitude of the employees.
Fostering healthy relationships between the employees and their immediate leaders ensures that the organizational management is accountable for employee turnover. Employees should be assigned with clear roles to minimize conflict and deliberate opportunities for professional advancement provided for the highly valued employees. Organizations should prioritize training of the management on the importance of setting out clearly defined roles for each employee and the rising need to foster healthy relationships among the employees to minimize the probability of quitting. Training and mentoring employees ensures that employees are goal oriented and develop competence in a given area which promotes job satisfaction and promotes individualized career development ( Goldsmith, 2010 ). Instilling positive culture, effective and efficient communication, appreciation and compensation of benefits, intra-organizational recruitment, and trust are key components in ensuring minimal employee turnover and improving employee retention.
Smart managers acknowledge that retaining highly valued employees using the price or salary dimension is a losing strategy. The success of any financial organization is dependent on the power of the human resources. The dynamics of the business environment make it a challenging task to achieve employee retention and consequently reduce turnover. It is imperative for organizations to provide a friendly environment for its employees and foster job satisfaction ( Goldsmith, 2010 ).
References
Allen, D. G., Bryant, P. C., & Vardaman, J. M. (n.d.). Retaining Talent: Replacing Misconceptions With Evidence-Based Strategies. Academy of Management Perspectives, 24, 2, 48-64.
Bureau of National Affairs (Arlington,Va.). (2011). Employee retention: What employees want and why you want them to have it . Arlington, VA: Bureau of National Affairs.
Goldsmith, M., & Carter, L. (2010). Best practices in talent management: How the world's leading corporations manage, develop, and retain top talent . San Francisco: Pfeiffer.
