Managing of organisations looms to be a bigger challenge by every passing decade. The globalisation of world economies has seen an influx of innumerable cultures and diversity in every work place. At the same time, the recession in this millennium has seen innumerable job cuts and change in practises by the same organisations. It is necessary for the management to recognise the complexity this has posed in the recent past and also prepare for the same in the not so distant future. The purpose of this essay is to highlight one such challenge facing the management – employee retention.

Among the other challenges I considered were diversity management, technological advancements, lean production, remuneration, and so on. In my stint at running a business, losing employees has cost a lot of valuable time, effort and loss of sales/efficiency in finding a replacement.

Employee retention is defined as the extent to which employees are retained by employers. It can be expressed as a percentage of employees with a particular length of employment to the total number of employees. “Employee Retention is a process in which the employees are encouraged to remain with the organisation for the maximum period of time or until the completion of the project.” (Giri YL, 2008)

A related but inversely proportional measure is employee turnover. Therefore, higher the retention, lower the turnover. It is used widely to express employee retention in a different form.

At this juncture, I must answer the following question: Why is employee retention a key factor for the management?

An average person spends a third of his/her lifetime at the workplace. It would be needless to say that it is of utmost importance that the atmosphere and environment in the workplace should be positive and foster the employee to feel ‘at home’. The work place is one’s second home.

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