Redefining employee retention: A paradigm shift

Talent Management often focuses on retention of employees as a critical success factor for organizations. A key reason for this is that even if all steps in the recruiting, acquisition, hiring and development process are executed flawlessly, the company is still at risk of losing an employee so carefully chosen and groomed. Conservative estimates of turnover costs cite a minimum of one to one and a half times an employee's annual salary. Given the criticality of retention, most companies still operate under the traditional notion that lifetime employment is the ultimate retention goal. However, limited tenure of employees across organizations leads to the question of whether or not current views of retention are still valid. To date, limited work has been done to understand those employees who leave an organization and how to recapture their value. Research that attends to long-term retention of employees does not often take into account a strategy for working with those who have left. It would be prudent for a company to understand the nature of those employees who have left and chosen to return to an organization in order to create a targeted strategy. From an empirical perspective, this topic has been neglected in the research. This dissertation presents a case study of employees in one organization, focusing specifically on those employees who left and reapplied for employment and those who were successfully rehired. Some of the major findings from this study include the following. First, one quarter of the employees who left Smithco reapplied to the organization, indicating a need to attend to this population as a source of future talent. Second, there are common characteristics of the reapplicant pool, including indicators of career success while at the organization and shorter tenure with the company. Third, additional variables further define the rehired sample, with performance ratings factoring significantly into the equation. Finally, the departure experience seems to play an important part in determining whether an employee will return, and former co-workers have a role in helping employees who have left identify opportunities for returning to the company.