Hi CiteHR,
I had faced the problem of retaining freshers in my company, initially we tried to get the BOND signed from them, but it really did not work. Good candidates used to back out at the very mention of word BOND.
So I thought for a while & suggested my management to raise the salary package of the freshers by 30-50% than the normal standard industry level & retain 25% of the the emoluments as deposit & keep such an amount very religiously in fixed deposit of a bank & return the amount to employees after a period of one year with inetrest ( same as bank would give). The amount which is forfeited ( if employee leaves before completion of one year), is to be utilised for the welfare of the on roll employees.
( Here I must tell you that we are small company, our training to the freshers is specialised one, the trainers come from US to train them.)
By this we really achieved what was expected, the advantages were as follows :
1. As we were paying more to the freshers than any other company, we could hire the best candidates
2. We saved on attrition cost in terms of money, energy, time etc.
3. As the cost of the employee is too high compared to his experience, he is not easily hired by other companies ( even though his take home is less, his CTC is very high )
4. Any wise employee would not like to hop for a job, unless he is getting more than the present employer. The employees have a full trust on management, they know, they will get their deposit back with interest once they complete one year.
5. The employees are also convinced that the management is paying them more & retaining the EXTRA part of remueration.
After the successful implementation of this strategy we have started applying the same logic to confirmed employees too.......... even to these employees we have given 40% increment compared to our normal increment of 15-20% every year.
the 40% increment is divided in following way :
50% - direct raise in salary
30% - based on monthly performance to be paid next month
( this way we can timely check on the commitments given by them)
20% - to be retained & paid after six months alongwith interest
( Only initially it will be for one year)
This way we will always have six months sizable amount with the company, hence, the employee will think twice before putting his papers. Atleast it has stopped employees from hopping jobs for few thousands.
This way again we have seen to it, that the other companies will not be able to hire our employees easily, as their cost is too high. At the same time we have also taken some measures to give all possible facilities to the employees, we had a employee satisfaction survey & all the employees are really satisfied with the culture, the facilities & the future plans.
Mind you, the formula based on increment is applicable to only to employees with outstanding performance & not to all, so its a sort of pride for those employees who are under this scheme.
The rest of the employees are looking forward to it.
Pl. let me know your comments.
Regards,
KAVITA
From India, Pune
1I had faced the problem of retaining freshers in my company, initially we tried to get the BOND signed from them, but it really did not work. Good candidates used to back out at the very mention of word BOND.
So I thought for a while & suggested my management to raise the salary package of the freshers by 30-50% than the normal standard industry level & retain 25% of the the emoluments as deposit & keep such an amount very religiously in fixed deposit of a bank & return the amount to employees after a period of one year with inetrest ( same as bank would give). The amount which is forfeited ( if employee leaves before completion of one year), is to be utilised for the welfare of the on roll employees.
( Here I must tell you that we are small company, our training to the freshers is specialised one, the trainers come from US to train them.)
By this we really achieved what was expected, the advantages were as follows :
1. As we were paying more to the freshers than any other company, we could hire the best candidates
2. We saved on attrition cost in terms of money, energy, time etc.
3. As the cost of the employee is too high compared to his experience, he is not easily hired by other companies ( even though his take home is less, his CTC is very high )
4. Any wise employee would not like to hop for a job, unless he is getting more than the present employer. The employees have a full trust on management, they know, they will get their deposit back with interest once they complete one year.
5. The employees are also convinced that the management is paying them more & retaining the EXTRA part of remueration.
After the successful implementation of this strategy we have started applying the same logic to confirmed employees too.......... even to these employees we have given 40% increment compared to our normal increment of 15-20% every year.
the 40% increment is divided in following way :
50% - direct raise in salary
30% - based on monthly performance to be paid next month
( this way we can timely check on the commitments given by them)
20% - to be retained & paid after six months alongwith interest
( Only initially it will be for one year)
This way we will always have six months sizable amount with the company, hence, the employee will think twice before putting his papers. Atleast it has stopped employees from hopping jobs for few thousands.
This way again we have seen to it, that the other companies will not be able to hire our employees easily, as their cost is too high. At the same time we have also taken some measures to give all possible facilities to the employees, we had a employee satisfaction survey & all the employees are really satisfied with the culture, the facilities & the future plans.
Mind you, the formula based on increment is applicable to only to employees with outstanding performance & not to all, so its a sort of pride for those employees who are under this scheme.
The rest of the employees are looking forward to it.
Pl. let me know your comments.
Regards,
KAVITA
From India, Pune
Hi Kavita!
A very nice solution to most common problem faced by companies.
I take pleasure in thanking you.
You did a great job. As mentioned by Vinod it was really an out of the box thinking, very innovative.
Regards,
Shyamali
From India, Nasik
A very nice solution to most common problem faced by companies.
I take pleasure in thanking you.
You did a great job. As mentioned by Vinod it was really an out of the box thinking, very innovative.
Regards,
Shyamali
From India, Nasik
Is the salary only was the criteria of attrition rate. Have you done something in respect to managing the other areas such as Safety Aspects, Work Load, Peer - Subordinate - Boss relationship, markets, communication channels. As providing higher salary without the back up in area above mentioned with out showing the Growth path may not help the employee to stay for longer years ?????.
Hi Kavita,
It is a good idea. You can start with this way and then need to take care of other aspects, which will really make an employee stick to an organization.
On the contrary, this will have some negative aspects. Assume that employee X enjoys a very good salary at your company and opts to go out after the stipulated period for some other reason.
His/her mindset will look for a similar salary package - which he/she will not get elsewhere - then the employee will either be jobless for some time, Or will be forced to take a job at a lesser salary (compared to what you were paying). This will ruin the career unless otherwise they have higher level of attitude and mindset to accept reality.
This is just for your information as well as to get a feedback from other members.
Regards,
RAJACSN
HR consultant.
From India, Madras
It is a good idea. You can start with this way and then need to take care of other aspects, which will really make an employee stick to an organization.
On the contrary, this will have some negative aspects. Assume that employee X enjoys a very good salary at your company and opts to go out after the stipulated period for some other reason.
His/her mindset will look for a similar salary package - which he/she will not get elsewhere - then the employee will either be jobless for some time, Or will be forced to take a job at a lesser salary (compared to what you were paying). This will ruin the career unless otherwise they have higher level of attitude and mindset to accept reality.
This is just for your information as well as to get a feedback from other members.
Regards,
RAJACSN
HR consultant.
From India, Madras
Hi Kavita, Can u plz help me understand about "retaining of 25% of the the emoluments as deposit & keep such an amount very religiously in fixed deposit of a bank Thanks Rekha Roy
From India, Lucknow
From India, Lucknow
hi kavita, well i should say that u r a genius! & if this strategy of yours is picked up by people across all industries, you deserve royalty! good thought . regards, santy
From India, Mumbai
From India, Mumbai
Hai Kavita & Friends
In deed I am also in the same Boat that, We are having a Manpower of around 5000 employees alone in coimbatore. Before a year our Operator level of Salary wqas Rs1250/- , as we dont come under minimum wages, We are allowed to pay this salary. then due to attrition and Flow of manpower we revised the salary to Rs2500/- as a Jump. good hike, and so the Good Flow of nearly 1500 new recruits , But after One now, there are only 700 employees recruited last year.
Friends, Not only because of Compensation, recruitment and Rention can be made successful., there are other reasons.
Any one if you could kindly suggest other few things / schemes which can help us in recruitment and rention.
Awaiting for your valuable Suggestions.
regards
Pradeepa
From India, Coimbatore
In deed I am also in the same Boat that, We are having a Manpower of around 5000 employees alone in coimbatore. Before a year our Operator level of Salary wqas Rs1250/- , as we dont come under minimum wages, We are allowed to pay this salary. then due to attrition and Flow of manpower we revised the salary to Rs2500/- as a Jump. good hike, and so the Good Flow of nearly 1500 new recruits , But after One now, there are only 700 employees recruited last year.
Friends, Not only because of Compensation, recruitment and Rention can be made successful., there are other reasons.
Any one if you could kindly suggest other few things / schemes which can help us in recruitment and rention.
Awaiting for your valuable Suggestions.
regards
Pradeepa
From India, Coimbatore
Hello Kavitha and all others.
Sure this is a novel idea. Very encouraging and praiseworthy.
Certainly works in some organizations.
This will surely address an issue based on Monterary Benefits and for whom money is alone important.
What about other aspects. After one year or two you cant call them freshers. But no doubt you need to motivate them to stick to your company.
That is where other aspects comes into picture. The probable solutions that may include are paying for higher education by company (particularly through Distance Education Programs), knowledge management, making one of the primary requirement for a subsequent position elevation be based on skill-knowledge/aptitude test. When u include every promotion on some test and on acquiring relevant higher qualification, this will not casue dissatisfaction among other senior personnel (remember his pay pocket is not hampering) and your so called freshers remain freshers for years to come.
Any comments and suggestions and deliberations are highly appreciated please.
venkat
Sure this is a novel idea. Very encouraging and praiseworthy.
Certainly works in some organizations.
This will surely address an issue based on Monterary Benefits and for whom money is alone important.
What about other aspects. After one year or two you cant call them freshers. But no doubt you need to motivate them to stick to your company.
That is where other aspects comes into picture. The probable solutions that may include are paying for higher education by company (particularly through Distance Education Programs), knowledge management, making one of the primary requirement for a subsequent position elevation be based on skill-knowledge/aptitude test. When u include every promotion on some test and on acquiring relevant higher qualification, this will not casue dissatisfaction among other senior personnel (remember his pay pocket is not hampering) and your so called freshers remain freshers for years to come.
Any comments and suggestions and deliberations are highly appreciated please.
venkat
Hi Kavita,
Thats good even we had implemented such kind of strategy in Procurement Dept. in my first company bcoz there pressure was too much but they could not be retained more than one & half years as they got deposit (not having interest), they ran.
We need to consider long term retaintion for entry level bcoz we invest lot in training them.
Also company should have enough money to pay more than industry standard.
But its cool one that applied very well to your orgnisation. Keep it up.
From India, Mumbai
Thats good even we had implemented such kind of strategy in Procurement Dept. in my first company bcoz there pressure was too much but they could not be retained more than one & half years as they got deposit (not having interest), they ran.
We need to consider long term retaintion for entry level bcoz we invest lot in training them.
Also company should have enough money to pay more than industry standard.
But its cool one that applied very well to your orgnisation. Keep it up.
From India, Mumbai
Hi Pradeepa,
I have a suggestion first find out why people are leaving and what is making them dis-satisfied about that job by exit interviews, find out what the majority of people feel before quiting the job. Money may be a constrain but there are other constrains too like the work culture....... I am just giving you example, find out why they are dis-satisfied? there may be reasons behind it, once you find out the reasons we can discuss on the right move.
Regards
AJITHAA HASAN
From India, Madras
I have a suggestion first find out why people are leaving and what is making them dis-satisfied about that job by exit interviews, find out what the majority of people feel before quiting the job. Money may be a constrain but there are other constrains too like the work culture....... I am just giving you example, find out why they are dis-satisfied? there may be reasons behind it, once you find out the reasons we can discuss on the right move.
Regards
AJITHAA HASAN
From India, Madras
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