Employee turnover is by far the most worrying issue for any business. And this article talks about strategies to improve employee retention rate.
It’s disappointing when performing team members leave your company. The worst thing is sometimes you can’t even anticipate that. Consequently, you have to start the hiring process again, which is exhausting and time-consuming.
While most companies recognize that staff retention is critical to success, lowering the turnover rate is challenging. Most organizations just perform a few exit interviews and don’t go in depth to understand the reason behind a leaving employee.
Sadly, that won’t produce substantial change. Business owners, team leaders, and HR managers should focus on retention more than anything else.
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Why Is Human Capital Management (HCM) Important?
HCM or Human Capital Management is crucial for many reasons. But the most important of them is its main objective to get the best out of people. After all, it is people who cause innovation in a company and form its core competency.
An effective and well-designed HCM policy allows companies to recruit the best talent pool. It also helps maximize their performance and leverage it to achieve greater success.
In other words, we can say human capital management is crucial for the following reasons:
- Focus on recruiting and retaining the right workforce
- Onboard and integrate newcomers as per the organisational requirements
- Creates an all-inclusive working environment
- Help employees excel in their professional performances
- Creates personalised learning experiences
- Enables the workforce to contribute as per their highest potential
- Better compliance with company policies
- Ensures timely payouts
Suggested Read: Employee Attrition and Why its Important: All You Need to Know
What Is HCM Software?
Human capital management software is a digital tool that can perform most of the HCM operations while eliminating time-consuming, manual processes. These functions include talent acquisition, planning, and management, which can be done without any hassle.
Moreover, analytics features of HCM software provide insight into employee performance and suggest corrective steps if there is a need for them.
In other words, human capital management software combines talent management, workforce analytics, and other necessary HR activities into a single platform. You can even integrate it with other enterprise software like payroll and appraisal management.
What Does HCM Software Do?
HCM software allows you to streamline your HR processes and thereby maximise the value offered by your workforce.
- Improves the overall employee experience
HCM software improve employee retention and experience by simplifying the interaction between you and your employees. Let’s have a look at how it happens.
HCM software can make the onboarding process smooth by providing a hassle-free platform where employees can complete the joining formalities and compliance evaluations. They can use the same platform to submit and receive feedback, track their professional objectives, and view their career advancement at any stage.
Among other things, employees can further learn and engage with their team members and other peers. Even employees working remotely find the platform useful, as HCM software supports cloud operations.
- Simplifies the core HR operations
The way you manage fundamental HR tasks such as onboarding, attendance, time off, and remuneration can have a significant impact on your staff. Because most redundant duties are automated with HCM software, managing the core HR operations becomes a smooth ride.
For example, when employee requests time off through the HCM system, managers can approve or deny the request immediately via the application. If the time off is authorised, it will be shown automatically in the leave report used for payroll calculation.
This eliminates manual labour that you and your staff must go through in managing time off. Automation procedures provide extended benefits to other HR management functions as well.
- Improves employee data management
HR data is critical and sensitive to any company since it contains all the professional information and remarks that an employee accumulates in her/his professional life. This information can be related to pay, perks, and other benefits. It even contains personal information. HCM software organizes and stores the data in a centralized and secure digital vault.
This feature not only offers flexibility in data sharing but also provides top-notch security. Moreover, organized data helps in easy audit whenever it is deemed necessary.
- Provides useful information about your workforce
You may get a range of helpful insights regarding your workforce management strategies by evaluating the data that HCM software collects and offers you in systematic ways.
These reports and feedback can assist you in determining the root cause of any issue that persists among your staff. It helps make more informed decisions that are backed by data and not anyone’s influence.
- Helps your employees in achieving professional growth
The workforce diaspora is heavily dominated by millennial and Gen Z generations. Unlike the earlier generations, they value career advancement as a more lucrative benefit than hefty salary packages.
Since this generation is more tech-savvy, it prefers smart working rather than hours of manual working. Accordingly, they expect companies to provide a nurturing work environment and growth opportunity that enhances their core capabilities.
That is where HCM software comes in handy. Timely feedback, improvement suggestions, and performance monitoring tools help the young workforce stay compliant with their professional objectives.
7 Ways to Improve Employee Retention with HCM Software
- Performance Monitoring
- Filling skill gaps
- Fair calculation of employee bonuses and perks
- Simplified and hassle-free onboarding process
- Help employees learn and grow
- Better management of the contingent workforce
- Maintain an open and transparent platform for improved interaction
The biggest advantages you have with HCM are automation and streamlined processes. Let’s jump into some key benefits of HCM software that can improve employee retention strategies.
HR technologies provide talent managers with a comprehensive perspective of each employee’s performance. But there’s more than just performance trackers. It can also analyze productivity and identify shortfalls.
You may utilize HR technologies to intelligently evaluate which duties teammates prefer doing and which they tend to procrastinate until the last minute. Accordingly, the team leaders can structure task assigning and maximize both team productivity and employee satisfaction.
Filling skill gaps
Filling the skill gap is an important metric for any company to flourish. However, the first step to achieving improve employee retention is to identify your gaps and requirements.
By keeping track of performance reviews and job experience, HCM allows business owners to fill in the gaps with the right talent. The timely intervention can be followed by tailored training programs and upskill sessions to boost the overall performance.
Fair calculation of employee bonuses and perks
When employees see no potential growth in a company, they find it easier to switch over to another company. More than anything, they value professional applause and subsequent rewards. However, when team leaders overlook the applauding performance of deserving peers, that proves to be a blow for the company.
HCM, with its incentive monitoring tools, assists HR managers, business owners, and team leaders to roll out timely incentives to deserving employees. Furthermore, the automation process does it, without wasting considerable time manually calculating the compensations.
Simplified and hassle-free onboarding process
Businesses can utilize the employee onboarding module to swiftly and efficiently complete all procedures related to the onboarding of new employees. This includes drafting contracts and joining letters from pre-designed templates.
For the employees’ part, they can fill out compliant confirmation, reference information, and necessary details, everything without wasting a single paper.
Help employees learn and grow
The best HCM software supports a company’s training and skill development strategy. By offering a variety of upskill courses or training opportunities, it allows your employees to self-select the preferred training module that they believe will help them.
The managers can then match the skills learned by their team members with their requirements to form an efficient team.
Better management of the contingent workforce
Many HCM systems feature a contingent workforce management capability, which allows team managers to keep track of freelancers or remote consultants, which form the non-core employee segment.
It is critical to collect cost and resource consumption data on these employees. They also contribute to the overall business growth even if they are not regular workers.
Maintain an open and transparent platform for improved interaction
This is most often overlooked and felt unnecessary. But in today’s rapidly changing business environment, it seems a necessary step to have an open and transparent platform, wherein you can maintain a channel of active communication.
This may include feedback and suggestion, periodical company messages, and spreading organizational awareness. Having such platforms in place ensures that the employees feel valued.
How Does GoForHR Help with Human Capital Management & Employee Retention?
With the new financial year starting in India, it’s time to invest in right solutions for streamlining human capital management processes and achieving higher engagement.
GoForHR is one such human capital management (HCM) software that has all the features necessary for employee retention. Some of the core HCM functions that GoForHR streamlines are:
- Faster recruitment
Potential candidates do not need to wait for extended periods to know the status of their recruitment. With a powerful dashboard, GoForHR provides complete visibility to the management for the entire recruitment and onboarding process. With hassle-free recruitment, new employees feel more satisfied with their decision to join the company.
- No confusion in assignment of tasks
Team leaders and employees stay connected through GoForHR’s task creation function. Employees can create their own tasks and follow the individual/ group tasks assigned by their boss. This helps employees have a clear understanding of their daily work and deadlines, thereby creating a better bond with other team members and team leads.
- No regular sending of emails for approval of claims requests
Employees can send claims requests to the management for company-based tours and local travel expenditure. They can keep track of approval, cancellation, and rejection of claims via GoForHR. This way they do not have to seek regular email responses and be a part of continuous email chains whenever they have claims requests.
- Accurate & timely salary payment
Accurate payroll is undoubtedly crucial for employee satisfaction. GoForHR enables slab-wise salary generation for both individual and multiple employees at once. Employees get automatic emails and detailed payslips so that they immediately know when salary is credited in their account and have complete breakup of all components to avoid any confusion.
- 360-degree appraisal management to avoid manager centric biases
Appraisal is an indispensable part of employee retention. Employees can set goals and give ratings to themselves at different time intervals. They can also see their managers’ ratings with conclusions. If the company has a 360-degree appraisal system, they can also get ratings from their peers, subordinates, etc. to ensure that everyone is judged objectively.
- Travel and expense claims
GoForHR helps organizations set robust policies for tour and travel expense management. The powerful dashboard of GoForHR helps track and manage tour requests, admin approvals, cancellations, claim requests, etc. The self service feature makes it easy for employees to track their travel request and reimbursement claim’s status.
- Easy punch-in & leave tracking
Employees can access the portal via mobile or web to punch-in attendance, track their leave, apply for work from home or regularisation, and more. Employees also get auto email notifications with GoForHR to avoid logging in every time they want to track status.
- Smooth exit from the company
Sometimes, resignation becomes the most painful process for an employee leaving the company. This can result in employees leaving bad reviews for the company despite a positive experience during the job. GoForHR ensures a clear transition at each stage of the separation, including feedback interviews. Feedback helps in improving the company’s workings to increase the satisfaction of the existing employees, thereby raising retention rates.
The right HCM software is an essential part of HR operations. In fact, the core HR operations improve greatly when you have such software in place. Not only can you improve employee retention rate but also bring out the best professional potential from each employee with the targeted and thoughtfully undersigned features of the HCM software.
- What is employee retention tool?
An employee retention tool is a software program that can help a company devise the best employee retention strategies. It also helps companies execute the best practices to engage and motivate employees and perform up to their best potential.
- What are the five main drivers of employee retention?
The following five drivers are the core of any employee retention strategy.
1. Flexibility in the workplace
2. Career development opportunities
3. Cordial relations between manager and employees
4. Personalized experiences for every employee
5. Optimum employee benefits
- How to monitor employee retention?
Retention rate is the key factor to monitor closely and get the exact idea about employee retention. It is calculated as:
(Total number of employees in a period – number of employees departed in that period) / total number of employees.
- How to ensure employee retention?
Some of the tested strategies to ensure higher employee retention are prioritizing work-life balance and focusing on career development. The focus should be on making the overall organisational culture employee centric.