Hi All,
I am definitely part of the retention bonus scheme. The concept of a retention bonus is appealing, but it raises questions about its ultimate purpose. I am curious to delve deeper into this matter. By providing a provision or guarantee for a retention bonus, the aim is for employees to remain with the company, increase productivity in the long term, and offset recruitment costs. However, there is a scenario to consider. An employee may choose to stay for the bonus but might turn out to be an average or below-average performer during annual appraisals. This situation could result in the employee gaining experience on their CV while still benefiting from the retention bonus. In such circumstances, wouldn't it be more prudent to forgo the retention bonus?
I appreciate your insights on this matter.
Regards,
Balaji
From United States, Houston
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I am definitely part of the retention bonus scheme. The concept of a retention bonus is appealing, but it raises questions about its ultimate purpose. I am curious to delve deeper into this matter. By providing a provision or guarantee for a retention bonus, the aim is for employees to remain with the company, increase productivity in the long term, and offset recruitment costs. However, there is a scenario to consider. An employee may choose to stay for the bonus but might turn out to be an average or below-average performer during annual appraisals. This situation could result in the employee gaining experience on their CV while still benefiting from the retention bonus. In such circumstances, wouldn't it be more prudent to forgo the retention bonus?
I appreciate your insights on this matter.
Regards,
Balaji
From United States, Houston
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Hi, Balaji,
Research proves that the cost of replacing an employee is on average 3 times the CTC of that position. This includes hiring costs, training costs, time to settle, etc.
Also, certain projects require the commitment of a dedicated person, hence the retention bonus may be useful in such cases.
Other views are welcome.
Regards,
Pooja
From India, Mumbai
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1Research proves that the cost of replacing an employee is on average 3 times the CTC of that position. This includes hiring costs, training costs, time to settle, etc.
Also, certain projects require the commitment of a dedicated person, hence the retention bonus may be useful in such cases.
Other views are welcome.
Regards,
Pooja
From India, Mumbai
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Hi Pooja,
Many thanks for your comment. I am in total agreement with your view. The cost of hiring is excessively high, and in many cases, the cost of settling down for a new employee, when combined with certain intangible factors, significantly increases the overall cost. I presume this holds true for projects, especially in the software industry, but how much of an impact will a retention bonus have in the case of process or product-based industries in manufacturing? In such industries, the retention bonus is beneficial for employees who gain experience in the industry, whereas freshers are often unsettled.
I would like to invite all HR professionals to provide their insights.
Best regards,
Balaji
From United States, Houston
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Many thanks for your comment. I am in total agreement with your view. The cost of hiring is excessively high, and in many cases, the cost of settling down for a new employee, when combined with certain intangible factors, significantly increases the overall cost. I presume this holds true for projects, especially in the software industry, but how much of an impact will a retention bonus have in the case of process or product-based industries in manufacturing? In such industries, the retention bonus is beneficial for employees who gain experience in the industry, whereas freshers are often unsettled.
I would like to invite all HR professionals to provide their insights.
Best regards,
Balaji
From United States, Houston
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Could anybody suggest do we mention Retention Bonus in our Payslip/Appointment letter?? right now we are deducting 20%of the increment as a retention bonus payable to an employee after one year.
From India, Gurdaspur
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From India, Gurdaspur
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Lots of factors should be considered before putting in place a "Retention Bonus Program," such as:
1. Cost of hiring
2. Cost of training
3. Time to recruit
4. Cost of a temp to do the work (if possible)
5. Cost/issues with sharing the work until someone is hired
These are just some of the factors. Hope this helps!
Thanks,
Tarun
From United States, Temple
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1. Cost of hiring
2. Cost of training
3. Time to recruit
4. Cost of a temp to do the work (if possible)
5. Cost/issues with sharing the work until someone is hired
These are just some of the factors. Hope this helps!
Thanks,
Tarun
From United States, Temple
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Effective employee retention strategies-BPO. doc
Employee Retention Tools.pdf
Employee retention.pptx