A Literature Review on Employee Retention with Focus on Recent Trends

Abstract

Employees are the most important, valuable and productive asset of an organization and retaining them is one of the toughest challenges for the managers. As the replacement cost of key employees involves huge turnover, there is a need to develop a fully integrative retention policy to tackle such type of problems. The objective of this study is to critically analyze the various works done in the field of employee retention and highlight factors responsible for employee departure and retention initiatives followed to retain them. As the study is descriptive in nature, a number of secondary sources are explored to synthesize the fragmented knowledge and present the literature review in a concise format. As the ever-changing technology, stiff competition, and globalization has brought human resources at the forefront in organizational roles, no organization wants to lose their talented employees. The literature review will present traditional retention techniques followed as well as contemporary techniques used to retain the employees. Also, more emphasis will be put on the factors such as leadership style of superiors, ability to exercise control with respect to decision-making and problem-solving, desire for career advancement and skills development, flexible working and ever increasing aspiration on retention of key employees.

Full text

IJSRST195463 | Received : 10 February 2019 | Accepted : 21 February 2019 | January-February-2019 [ 6 (1) : 425-431]
© 2019 IJSRST | Volume 6 | Issue 1 | Print ISSN: 2395-6011 | Online ISSN: 2395-602X
Themed Section: Science and Technology
DOI : https://doi.org/10.32628/IJSRST195463
425
A Literature Review on Employee Retention with Focus on
Recent Trends
Diwakar Singh
PhD Scholar in Management, School of Business Public Policy and Social Entrepreneurship Department,
Ambedkar University, Kashmere Gate, Delhi, India
ABSTRACT
Employees are the most important, valuable and productive asset of an organization and retaining them is one
of the toughest challenges for the managers. As the replacement cost of key employees involves huge turnover,
there is a need to develop a fully integrative retention policy to tackle such type of problems. The objective of
this study is to critically analyze the various works done in the field of employee retention and highlight factors
responsible for employee departure and retention initiatives followed to retain them. As the study is descriptive
in nature, a number of secondary sources are explored to synthesize the fragmented knowledge and present the
literature review in a concise format. As the ever-changing technology, stiff competition, and globalization has
brought human resources at the forefront in organizational roles, no organization wants to lose their talented
employees. The literature review will present traditional retention techniques followed as well as
contemporary techniques used to retain the employees. Also, more emphasis will be put on the factors such as
leadership style of superiors, ability to exercise control with respect to decision-making and problem-solving,
desire for career advancement and skills development, flexible working and ever increasing aspiration on
retention of key employees.
Keywords : Employees, Retention, Literature Review, Recent Trends
I. INTRODUCTION
“Human Capital will go where it is wanted and it will
stay where it is well treated. It cannot be driven, it
can only be attracted.” Walter Wriston, Former
chairman Citibank.
This is no hidden fact that employee plays an
extremely crucial role in the sustainability and
development of an organization. In organizations,
competitive advantage is determined and driven by
human resources. It is employees who innovate and
innovation ultimately leads to survival and
profitability of a company. When an employee leaves
an organization, he takes the knowledge, experience,
culture and value system away with him, which
might be tapped and used against the organization. A
high rate of attrition is also not good for the image of
the company as it might send wrong signals to
prospective employees and customers.
II. WHAT IS EMPLOYEE RETENTION?
Though the term employee retention is defined in
numerous ways, it basically denotes that various
measures taken by organizations to encourage its
employee so that they remain with it for a longer
duration of time. The primary reason for retention of

International Journal of Scientific Research in Science and Technology (www.ijsrst.com)
Diwakar Singh
Int J Sci Res Sci Technol
January-February-2019; 6(1) : 425-431
426
employees is to prevent its talented employees from
leaving (James & Mathew, 2012).
III. OBJECTIVES OF THE STUDY
This study on a literature review on employee
retention has the following objectives:
A. Critically analyse various works done in the
field of employee retention.
B. To highlight the reasons for employee
departure and various retention strategies
followed.
C. To highlight the recent trends followed to
retain the employees.
IV. METHODOLOGY
The study is descriptive in nature and is mostly based
on secondary data. The secondary data consists of
books, reports, newspaper articles, and various
research journals.
V. REASONS FOR EMPLOYEE DEPARTURE
When an Employee leaves an organization, the
reasons are influenced by a variety of factors, some of
the reason of leaving the organization could be
better-paying job outside, a bad relationship with
supervisor/boss, pursuing higher studies/ vocation,
relocating due to family reasons, fired form
organization. So basically there are two types of
turnover one is decided by the employee and that is
why it is called voluntary turnover, the other type of
turnover is decided by the company and that is why
it is called involuntary turnover. Involuntary
turnover generally happens when either there is
restructuring in the company, or the performance of
the employee is not up to the expectations (Allen,
Bryant, & Vardaman, 2010). Employee also leaves
organization due to job dissatisfaction, job security,
compensation not as per expectation, lack of job
autonomy, poor relationship with team members,
poor working conditions, lack of opportunity for
career development etc. (James & Mathew, 2012).
VI. CHALLENGES OF EMPLOYEE RETENTION
In their study (Eldridge & Nisar, 2011; Terera &
Ngirande, 2014), the author talks about three types of
challenges that companies face in the retention of
employees. They are (1) stiff competition from rivals,
(2) brain drain i.e. migration of skill labour form own
country to another country which offers better
opportunities, and rewards. and (3) companies are
unable to predict the future requirements of
employees and thus unable to take corrective action.
A similar view is expressed in another work also
where the authors talk about the shortage of talent
due to increased global talent (Scott, McMullen, &
Royal, 2012). Companies also feel that proportional
rise in the number of ageing population will escalate
the demand for skilled employees(Kyndt, Dochy,
Michielsen, & Moeyaert, 2009).
VII. RETENTION STRATEGIES
Turnover is a great problem and that is the reason
that a lot of effort is put for the retention of
employees. When an employee leaves an
organization, he takes the culture, values, skillset
with him which can be tapped by the competitors
and that is something no company likes to happen
with them. As the cost of replacement for an
employee is huge, it is always better to keep the
existing employees in the flock. Retention is also
necessary for the growth and stability of an
organization. Das (1996) in their studies identified six
critical factors of employee retention; Compensation,
Learning Opportunity, benefits and security, work
autonomy, merit orientation, and accelerated vertical
growth. Cloutier, Felusiak, Hill, & Pemberton-Jones
(2015) in their studies suggest the development of
four strategies for retention of employees: (1)
effective communication (2) workforce diversity (3)

International Journal of Scientific Research in Science and Technology (www.ijsrst.com)
Diwakar Singh
Int J Sci Res Sci Technol
January-February-2019; 6(1) : 425-431
427
hiring of skilled worker and (4) training and
development plan to employees. Studies also show
that making existing employee stay costs less than
hiring new employees (Sinha & Sinha, 2012). They
also emphasize the role of organizational culture,
compensation, flexible working, career development,
and communication on the retention of employees.
James & Mathew (2012) in their studies on employee
retention in IT sector emphasizes on following
retention strategies: reward and recognition, Training
and development opportunities, career planning,
flexible work time, performance appraisal, financial
support, mentoring and coaching sessions etc. Kumar
& Arora (2012) in their studies found that the rate of
attrition among young professionals (20-25 years) are
very high with following reasons: slow rate of career
growth, poor relationship with
colleagues/seniors/supervisors, work-life imbalance,
taking up higher studies etc. Given below some of the
retention strategies which can be helpful in solving
employee turnover problems.
A. Employee Voice And Retention
Daniel G. in his study suggested that the
organizations which give more opportunity to its
employee to voice their dissatisfaction related to
workplace conditions are more likely to retain their
employees i.e. there are more chances that employees
will remain with such an organization (Spencer, 1986)
as they feel that the organization is equipped with
better grievance handling system. (Spencer, 1986)
B. Communication And Retention
Efficient communication process helps the
organization to retain its employees (Cloutier et al.,
2015). They also suggest that in order to maintain a
healthy work culture, leadership should be able to
operate in an interpersonal, group, organizational and
intercultural communication effectively. According
to Sinha & Sinha (2012), effective communication not
only improves the identity the employee associated
with the company but also creates an environment of
openness and trust. James & Mathew (2012) in their
studies found out that effective communication plays
a greater role to generate an amicable environment at
the workplace. Attridge (2009) in his studies found
that better communication from company executives
helps better employee engagement.
C. Compensation And Retention
Compensation in organizations can be defined as
something (typically money in the form salary, wage,
benefits, injury etc) that the employee receives from
the employer. It is true that the trend is changing but
still research shows that compensation plays a greater
role in the retention of employees. Das (1996) talks
about flexible compensation package and is not in
favour of standardization of compensation. He
further tells that different age group of employees
have different choices and thus the thing desired by
youth may not be for any use to a middle age
employee. A study by Hong, Hao, Kumar,
Ramendran, & Kadiresan (2012) shows that a
company with no compensation planning results in a
poor working environment. Kumar & Arora (2012)
states that 27 percent of employees, compensation
was the primary reason for leaving the company.
D. Leadership And Retention
The role of leadership is very critical in employee
retention. According to Doh, Stumpf, & Tymon
(2011), responsible leadership has three components
(1) stakeholder culture where ethical and social
behaviour is of paramount importance (2) Fair and
inclusive HR practices (2) Full managerial support for
employee development. Cloutier et al. (2015) in their
studies talks positive working condition which
improves when an employee is having a good
relationship with the boss and if given a leadership
role, their sense of belongingness with company
become very strong.
E. Career Development and Retention
Indian companies do not have a well-defined career
development plan and so chances are very rare that a

International Journal of Scientific Research in Science and Technology (www.ijsrst.com)
Diwakar Singh
Int J Sci Res Sci Technol
January-February-2019; 6(1) : 425-431
428
person who joins a company as a management trainee
will become CEO (H. Das, 1996). This is a kind of
trap for a loyal employee. On the other hand, a study
by Mehta, Kurbetti, & Dhankhar (2014) shows that if
career opportunities are at the place, the employee
stays for a longer time and also they tend to be more
loyal for that company.
F. Training, Development and Retention
Job-related training improves the ability of
employees in problem-solving, making them
confident and motivated and committed to their job
and thus they are more likely to remain with the
organization (Hong et al., 2012). Mehta et al. (2014)
suggest that it is better to retain a well-trained
employee rather than wasting the training cost and
starting the induction process once again. Cloutier et
al. (2015) in their studies gives a similar view that Das
(1996) has given that training and development are a
kind of motivational tool for employee retention by
raising the commitment of employees towards the
company.
G. Work/Job Flexibility and Retention
According to Jeffrey Hill et al. (2008), work
flexibility can be defined as “the ability of workers to
make choices influencing when, where and how long
they engage in the work-related task". If employees
are given with the option of workplace flexibility,
they will find options to balance their work and life.
Also, employees will be more than happy and benefit
if they are provided with options to adjust their
working time (Eldridge & Nisar, 2011). Flexible
working not only results in less absenteeism it also
helps in employee retention. It allows employees to
improve their knowledge which again can be helpful
for the company as the employee can bring in new
ideas and innovations (Idris, 2014).
H. Job Satisfaction and Retention
According to a study conducted by Hausknecht,
Rodda, & Howard (2009), they found that job
satisfaction was the primary reason for retention of
employees (51 percent of employees choose job
satisfaction over other factors like extrinsic rewards,
organizational commitment, lack of alternative etc.
According to B. L. Das & Baruah (2013) job
satisfaction is achieved when the expectation of
employees which he brings with him at the time of
joining the organization matches with the reality. In
another study conducted by Terera & Ngirande
(2014), it is found that there is a strong relationship
between job satisfaction and retention of employees
giving the organization a clue to keep their employee
satisfied.
I. Performance Appraisal and Retention
Performance appraisal is the assessment of individual
performance to the overall contribution of the
organization. It serves as an interface between
management and employee. An effective
performance appraisal will result in a satisfied,
motivated and committed employee Hong et al.
(2012). According to Mehta et al. (2014), good
performance appraisal not only help companies to
keep a track on its employees it also helps individuals
to improve their performance in their weak areas. A
good performance appraisal results in a better
employee-supervisor relationship resulting in a great
place to work for.
VIII. EMPLOYEE RETENTION: RECENT TRENDS
Whether it is a buyer market or a seller market, the
demand for skilled employees remains forever.
According to Roger E.Herman, the shortfall of skilled
labour could go up to ten million by the end of this
decade. Companies are putting a lot of effort to
emerge as a brand which is sustainable and all-
inclusive. Organizations have understood the
importance of employee retention, and that is how
they are now talking about a full-time employee
retention specialist who will guide them to make
progress and reduce turnover. A number of
companies are paying their attention to corporate

International Journal of Scientific Research in Science and Technology (www.ijsrst.com)
Diwakar Singh
Int J Sci Res Sci Technol
January-February-2019; 6(1) : 425-431
429
social initiatives and a tool for employee retention
and focussing their attention to a number of social
initiatives which the new generation are finding
more attractive. Further, now a great deal of effort is
made by companies to understand the generational
preferences and to use it as a tool to attract and retain
talent. Many companies are experimenting with their
employees by treating them as their customer and
building a strong relationship with them in order to
retain them. Some studies also indicate that
employees too follow a life cycle and their aspirations
are different at a different stage, thus understanding
their expectation and fulfilling them will make them
retain their employees. Finally, there is a new
concept of a gig economy where companies are
paying attention to short contracts and independent
work.
A. Sustainable HRM
In a highly competitive world, companies are facing
an acute shortage of talented employees. They also
face problems on the front of how to manage their
present workforce which might include an ageing
workforce, people from a different cultural
background, more men or women employees at the
place, both working couples etc. Employees also face
a number of problems like work-life imbalance,
increasing stress level, performance related issues.
(App, Merk, & Buettgen, 2012) in their work talks
about sustainable HRM as a tool to achieve a
competitive advantage and a chance to emerge as an
attractive employer brand by addressing the issues
mentioned above.
B. Employee Retention Specialist
A buyer market is different from a seller market in
the sense that in the former it the employer who is in
the driver seat and control the terms of employment
and takes the hiring decisions whereas in the later it
is the worker who is in the driver seat and there are
abundant jobs for them to choose from. However
many studies have shown that there is no dearth of
demand for skilled workers. According to Roger E.
Herman “employee retention is not an HR issue, it is
a management issue” (Herman, 2005) and that is why
the role of an employee retention specialist becomes
very important. He is a person who is educated and
trained to help management in improving the
performance of employees and reduce turnover cost.
C. Corporate Social Initiative and Retention
As a human being, we have different aspirations from
the job. Traditionally, financial benefits tend to play a
major role in the retention of employees, however
with the passage of time the preferences of employees
are changing. Some employees are preferring less
payment over participating in corporate social
initiatives (Bode, Singh, & Rogan, 2015), they also
highlight the fact that there is a positive relationship
between employee participation in the corporate
social initiative and their level of motivation and
further their identification with the company. This
helps them to stay with the company for a longer
time.
D. Understanding Generational Preferences
When we talk about generations at the workplace,
they are a Silent generation (1925-45), Baby
boomers(1946-64), Generation X (1965-81),
Generation Y (1982-1999). Where Generation X
prefers autonomy, are tech-savvy, places less value
for employer loyalty; Generation Y workers put more
emphasis on Corporate social responsibility, training
and career development, more individualistic in
nature (Festing & Schäfer, 2014). It is obvious that a
better understanding of generational preferences will
help organizations to prepare better retention
strategies to keep this workforce with them.
E. Employee as A Customer
It is based on employee equity model (Cardy &
Lengnick-Hall, 2011). This model uses its employee
as its internal customer and tries to maximize the
value of association with them. It predicts that the
more the organization spends on its customer to build

International Journal of Scientific Research in Science and Technology (www.ijsrst.com)
Diwakar Singh
Int J Sci Res Sci Technol
January-February-2019; 6(1) : 425-431
430
a relationship, and socialization, the employees feel
more identified with the vision and mission of the
company and less likely to leave.
F. Employee Lifecycle
We all know about product lifecycle – the concept
mostly used in marketing management. Like a
product, employees too progresses in their career and
follow different phases like the introduction phase,
growth phase, maturity and decline phase (App et al.,
2012). The need and expectations of employees are
not constant at these stages and keep on changing.
Organizations need to put a lot of effort to
understand at which stage of the life cycle an
employee is and tries to meet their expectations so
that they can remain with the company forever. (App
et al., 2012) also talks about pre and post-
employment phase other than these four phases. At
post-employment phase, an employee work as a
brand ambassador of the company and thus helps in
building an employer brand.
G. Gig Economy and Employee Retention
Lloyd Mathias, a business and marketing strategist, in
a newspaper article published in Times of India on 15
Dec 2018 (Mathias, 2018) talks about a new trend for
millennials- where he talks about the key skill set
required to live in "gig economy" is to be ready to
work across industries and roles. He defines "gig
economy" as a market based on temporary short-term
contractual work or independent "freelance" work
rather than the traditional full-time job. Gig
economy is gaining momentum because of the
tremendous rise in digital technology where
companies are giving more preference to final
outcomes or results rather than the physical presence
of teams. This new trend is going to transform the
way employees are treated and retained in
organizations.
IX. CONCLUSION
Employees are the most important asset for any
organization. Their contribution is immense in the
profitability and growth of the company. They bring
innovation and paves the way for sustainable
development for the organization. This study was
focussed on a literature review on employee
retention. However, the abundant material makes my
task very tough to assimilate and synthesize the study
in a concise format. I have tried to cover the relevant
aspect of employee retention and also attention is
paid on the new trends that are started making their
presence felt in the market.
X. REFERENCES
[1]. Re Allen, D. G., Bryant, P. C. & Vardaman, J. M.
(2010). Retaining Talent: Replacing
Misconceptions With Evidence-Based Strategies.
Academy of Management Perspectives, 24(2), 48-
64.
[2]. App, S., Merk, J. & Buettgen, M. (2012). Employer
Branding: Sustainable HRM as a Competitive
Advantage in the Market for High-Quality
Employees. Management Revue - The
International Review of Management Studies,
23(3), 262-278.
[3]. Attridge, M. (2009). Measuring and managing
employee work engagement: A review of the
research and business literature. Journal of
Workplace Behavioral Health, 24(4), 383-398.
[4]. Bode, C., Singh, J. & Rogan, M. (2015). Corporate
social initiatives and employee retention.
Organization Science, 26(6), 1702-1720.
[5]. Cardy, R. L. & Lengnick-Hall, M. L. (2011). Will
they stay or will they go? Exploring a customer-
oriented approach to employee retention. Journal
of Business and Psychology, 26(2), 213-217.
[6]. Cloutier, O., Felusiak, L., Hill, C. & Pemberton-
Jones, E. J. (2015). The Importance of Developing
Strategies for Employee Retention. Journal of
Leadership, Accountability \& Ethics, 12(2).
[7]. Das, B. L. & Baruah, M. (2013). Employee
Retention: A Review of Literature. Journal of
Business and Management, 14, 8-16.

International Journal of Scientific Research in Science and Technology (www.ijsrst.com)
Diwakar Singh
Int J Sci Res Sci Technol
January-February-2019; 6(1) : 425-431
431
[8]. Das, H. (1996). Retention Policy: Whom to Retain
Anyway? Indian Journal of Industrial Relations,
32(2), 223-232.
[9]. Doh, J., Stumpf, S. & Tymon, W. (2011).
Responsible Leadership Helps Retain Talent in
India. Journal of Business Ethics, 98(1), 85-100.
[10]. Eldridge, D. & Nisar, T. (2011). Employee and
organizational impacts of flexitime work
arrangements. Relations Industrielles/Industrial
Relations, 66(2), 213-234.
[11]. Festing, M. & Schäfer, L. (2014). Generational
challenges to talent management: A framework
for talent retention based on the psychological-
contract perspective. Journal of World Business,
49(2), 262-271.
[12]. Hausknecht, J. P., Rodda, J. & Howard, M. J.
(2009). Targeted employee retention:
Performance-based and job-related differences in
reported reasons for staying. Human Resource
Management: Published in Cooperation with the
School of Business Administration, The
University of Michigan and in Alliance with the
Society of Human Resources Management, 48(2),
269-288.
[13]. Herman, R. E. (2005). HR managers as employee-
retention specialists. Employment Relations
Today, 32(2), 1-7.
[14]. Hong, E. N. C., Hao, L. Z., Kumar, R.,
Ramendran, C. & Kadiresan, V. (2012). An
effectiveness of human resource management
practices on employee retention in institute of
higher learning: A regression analysis.
International Journal of Business Research and
Management, 3(2), 60-79.
[15]. Idris, A. (2014). Flexible working as an employee
retention strategy in developing countries:
Malaysian bank managers speak. Journal of
Management Research, 14(2), 71.
[16]. James, L. & Mathew, L. (2012). Employee
Retention Strategies: IT Industry. SCMS Journal
of Indian Management, 9(3).
[17]. Jeffrey Hill, E., Grzywacz, J. G., Allen, S.,
Blanchard, V. L., Matz-Costa, C., Shulkin, S. &
Pitt-Catsouphes, M. (2008). Defining and
conceptualizing workplace flexibility.
Community, Work and Family, 11(2), 149-163.
[18]. Kumar, R. & Arora, R. (2012). Determinants of
talent retention in BPO industry. Indian Journal
of Industrial Relations, 259-273.
[19]. Kyndt, E., Dochy, F., Michielsen, M. & Moeyaert,
B. (2009). Employee retention: organisational and
personal perspectives. Vocations and Learning,
2(3), 195-215.
[20]. Mathias, L. (2018). Living in the gig economy:
Key skills for millennials is preparedness to move
across industries and roles. Times of India
Editorial (15 Dec 18)
[21]. Mehta, M., Kurbetti, A. & Dhankhar, R. (2014).
Review Paper-Study on Employee Retention and
Commitment. International Journal of Advance
Research in Computer Science and Management
Studies, 154(5).
[22]. Scott, K. D., McMullen, T. & Royal, M. (2012).
Retention of key talent and the role of rewards.
WorldatWork Journal, 21(4).
[23]. Sinha, C. & Sinha, R. (2012). Factors affecting
employee retention: A comparative analysis of
two organizations from heavy engineering
industry. European Journal of Business and
Management, 4(3), 145-162.
[24]. Spencer, D. G. (1986). Employee voice and
employee retention. Academy of Management
Journal. Academy of Management, 29(3), 488-
502.
[25]. Terera, S. R. & Ngirande, H. (2014). The impact of
rewards on job satisfaction and employee
retention. Mediterranean Journal of Social
Sciences, 5(1), 481.
Cite this article as :
Diwakar Singh, "A Literature Review on Employee
Retention with Focus on Recent Trends", International
Journal of Scientific Research in Science and Technology
(IJSRST), Online ISSN : 2395-602X, Print ISSN : 2395-6011,
Volume 6 Issue 1, pp. 425-431, January-February 2019.
Available at doi : https://doi.org/10.32628/IJSRST195463
Journal URL : http://ijsrst.com/IJSRST195463