Why employee retention strategies fail?

By on November 24, 2011

Employee retention is a key issue in organizations today. It is hard to find skilled and competent employees and it is even harder to retain them. The organizations are working on their employee retention strategies more than ever before; yet they fail in retaining their best employees. In order to find out the reasons behind failure, it is important to first list out the most commonly used retention strategies in organizations. The employers offer monetary benefits, health insurance, education and training of employees, bonuses, stock options, retirement benefits, pension plans, holiday packages, performance appraisal, promotions, and recognition. These are the retention strategies that most employers today utilize in order to stick their employees to the organization.

An overview of the list makes us think that the employers are providing simply everything to employees, then why employees do not stay for long. Let’s now analyze what experts say on the failure of these strategies in their own words.

Why money fails to retain employees?

Jamrog (2004) says, “Surveys consistently show that pay is not as big a deal as many people think. Low pay is a dissatisfier, but high pay by itself will not keep people around.”

Why training fails to retain employees?

Baschab & Piot (2003) say, “As employees receive training, their market value increases and they will likely graduate from one job to the next. To keep the staff interested and engaged, they must be provided opportunities to move ahead, use the new skills they have learned, and continue to learn new technology skills. If the company does not provide employees with these opportunities, the best employees will find an employer who will.”

Why performance appraisal fails to retain employees?

Cunning (2004) says, “Employees are upset when they’re evaluated by a manager who’s ever spoken to them prior to the appraisal.”

Why recognition fails to retain employees?

Forsythe (2008) say, “Issuing a new title can be interpreted negatively by other knowledge workers. Knowledge workers performing identical job tasks may feel slighted because they did not receive a prestigious job title.”

Why employer-sponsored benefits like holiday packages, pension and retirement benefits fail to retain employees?

Menefee and Murphy (2004) say, “Use of employer-sponsored benefits is even more problematic due to a broad array of legal and statutory requirements.”

Why stock options fail to retain employees?

Jamrog (2004) says, “Stock options are still a viable incentive, but there is more skepticism about using them to retain and engage workers.”

So, it can be said there is no sure-shot success formula that organizations can use to retain their employees!!



  • Forsythe, A.E. (2008). The Lack of a Clearly Defined Retention Strategy and the Impact on the Retention of Civil Engineers.
  • Baschab, J. & Piot, J. (2003). The Executive’s Guide to Information Technology. New Jersey: John Wiley & Sons, Inc.