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Employee Retention: Definition, Models, and Strategies

The company’s success in achieving its goals is the output of operational activities that include the company’s resources. Companies can achieve such success by utilizing resources effectively and efficiently. Therefore, the company needs to maintain its human resources to work properly to benefit the company. Then how to do it? The answer is employee retention.

Employee retention is an important thing that the company must do to maintain its best employees. This is because the existence of the best employees in your company is primarily determined by the presence or absence of programs for employee retention.

The increase in employee retention rate can be a solution to minimizing employee turnover and increasing employee productivity in the company. Therefore, you need to understand the full explanation before implementing the strategy in your company.

This article includes all the explanations you need to know about recommendations for the best HRM software in Singapore and employee retention, such as definitions, models, and strategies. Check out the following article!


What is Employee Retention?

The company always strives to make its employees last a long period. They have also made various efforts to retain their employees, one of them being through an employee retention program. Some experts put forward the definition of employee retention.

According to Lockwood, retention is an essential part of the company’s approach to managing common talent management. He said employee retention meaning as implementing integrated strategies or systems to increase work productivity.

It is done by developing processes to attract, develop, retain, and utilize employees with the skills and talents that companies need to meet business needs in the present and future.

Susilo stated that employee retention meaning is how the company retains potential employees with all available capabilities to remain loyal to the company. Therefore, we can conclude that employee retention meaning is a company strategy to retain potential employees to remain loyal to the company. 

Why is Employee Retention Important?

employee retention

Following the previous explanation, maintaining your company’s resources is very important. If you do not take good care of your employees, then what happens is that there is an increase in turnover that can interfere with the company’s performance.

Therefore, you need employee retention to avoid such problems. There are several reasons why employee retention is so important to your company. First, retaining your best employees can reduce your company’s recruitment costs.

Second, conveying company-related information to employees, such as the company’s vision, mission, and plan will make them eager for their job. Third, it can maintain the loyalty of your employees to have a good impact on the company’s performance.

Finally, employee retention is a solution to minimizing employee turnover and increasing their comfort in the company.

Related article: 6 Tips for Improving Employee Productivity in the Workplace

Employee Retention Models

Employee turnover is an expensive proposition for businesses. Replacing employees can take a long time and cost a lot of money. In addition, it also has an impact that can reduce the productivity of the company’s performance and decline in profits.

Therefore, companies need to create an environment where employees engage with companies, jobs, and co-workers. Over the years, many studies have been looking for a suitable model to achieve this. Here are four employee retention models that can help you retain employees:

People management (the hierarchy of needs)

Abraham Maslow developed the first employee retention model, namely the hierarchy of needs. He explained that employees have to seek five different levels of needs to satisfy their primary needs.

The five levels of needs are psychological, safety, love and belonging, esteem, and self-actualization. According to this model, employee growth is the key to organizational success.

Companies should strive to identify individual needs and encourage employee job satisfaction. As a result, employees will advance, and the company’s performance will increase.

Motivation-Hygiene theory

In 1964, Frederick Herzberg published an article entitled “The Motivation-Hygiene Concept and Problems of Manpower.” His article put forward two main factors that lead to job satisfaction, namely motivators and hygiene.

Motivational factors include job success, recognition, challenging work, and employment growth. In comparison, hygiene factors include salary, personal life, quality of supervision of working conditions, job security, etc.

This theory suggests that different work factors produce job satisfaction and job dissatisfaction. This concept aims to describe practical applications of the theory and equip managers with the knowledge on how to use its elements to improve employee motivation and engagement. As a result, you will be able to identify ways to increase your employee productivity and maintain the productivity balance across all departments. 

Human motivation theory

David McClelland introduced the human motivation theory in 1961. This theory focuses on three needs: the need for achievement, the need for power, and the need for affiliation.

McClelland also stated that achievement, power, and relationships are three important needs that can help explain employee motivation. By identifying the dominant traits in employees, companies can find the best way to motivate and reward employees.

Job characteristics model

In 1974, Oldham and Hackman introduced a job characteristics model that described the relationship between work characteristics and individual responses to work. This model specifies the task condition in predicting individuals to prosper in their work.

In addition, this model also explains that five core job dimensions affect specific personal and work-related outcomes, including job satisfaction. The five core job dimensions are autonomy, feedback, skill variety, task identity, and task significance. If the work adapts to this character, it will positively impact increasing employee motivation and productivity.

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What Causes High Employee Turnover?

Employee turnover is the activity of changing company employees caused by the determining factors for the occurrence of employee movements, either voluntarily or not.

High employee turnover rates can interfere with a company’s work productivity and even its company profitability. So, what are the reasons that cause high employee turnover? Here are six factors that can explain the cause of high employee turnover:

  • Employees are overwhelmed by the high number of jobs. Heavy workloads can cause employees to suffer from work disruptions
  • Lack of recognition that employees get for their work, either in expressions or compensation
  • The company culture is bad, thus making employees miserable and unmotivated
  • Less flexible work options
  • The remuneration and benefits that employees get are not worth their work
  • Employee’s learning and development schemes in companies are not good

Related article: Why Human Resource Management is Important for Employee Retention

Employee Retention Strategies

After knowing the cause of high employee turnover, now is the time you know how to retain employees through employee retention.  These are some of the strategies your company needs to do in increasing employee retention rates:

People management

The first strategy is through people management. People management, or what you know as human resource practices, is related to recruitment, management, and development. In addition, HR practices also provide support and direct employees within the company.

People management has a vital role in motivating, rewarding, and retaining employees in the company. An employee app can help streamline your people management. This includes pay and compensation, career development, etc.

Through this strategy, you can make the company support and recognize employee performance with the most integrated HR system for talent management. Showing your concern for employees can effectively support employee retention practices in the company.

Learning and development

The second strategy in employee retention is learning and development. Career opportunities and training have a direct impact on increasing employee retention rates. Implementing this strategy can help employees improve their skills while lowering employee turnover rates.

The implementation of this strategy, such as promotions, training programs, regular feedback from management, fixed training budgets for employees, and many more. The more employees feel they are invested, the greater their chances of staying with the company.

Therefore, this employee retention strategy is a very valuable investment. You can also use the best competency management system to improve your employee performance and skills, as well as make efficient HR planning.

Workplace management

The last strategy is workplace management. You need to provide a comfortable and safe work environment for your employees so that their productivity will also increase.

The company can retain employees with a good work environment, especially in the pandemic era. Examples of the implementation of this strategy are flexible working hours, work from home, communication and respect, a culture of constructive feedback, etc.


The company needs to maintain its human resources to work properly to benefit the company, hence you need employee retention. Employee retention meaning is a company strategy to retain potential employees to remain loyal to the company.

There are several reasons why it is so important to your company, such as reduced costs, employee loyalty, etc. 

The challenge for HR professionals in employee retention is to develop and identify the right career development strategies. Thus, your employees can increase their commitment effectively and efficiently.

However, you may find some obstacles in its implementation, such as non-updating employee data, non-integrating one system, and manual administrative work. The solution to this problem is using the number #1 HRM Software from HashMicro.


EVA HRIS Essential Software is a customizable HRM system that HashMicro designed to help facilitate HR administration work with one centralized system. Through this software, you will be able to track employee activities easily and with neater employee management.

This software has several benefits, such as automatic data updates, more practical administration, one data system, and centralized documents. By using HRM software from HashMicro, you can optimize your employee retention strategy to retain your best employees effectively and efficiently. Contact us now and get a free demo!

Interest in getting savvy tips for improving your business efficiency?

HashMicro is a software development and enterprise resource planning (ERP) company. Consequently, we often provide articles about ERP and other systems that all businesses need.

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