Work Based Module on IMPACT OF LOW STAFF RETENTION - Essay Example

? Running head: Staff retention. (Staff retention) Introduction Staff retention or employee retention as commonly known under common parlance is normally a process of encouraging the employees in an organization to continue working for the organization instead of changing jobs from time to time. In a world getting increasingly competitive courtesy of the new complexities that arise day by day, organizations all over the world are increasingly looking into ways to retain their staff as much as possible within the organizations. Staff retention has therefore gained much prominence as a subject of study in current times. Many scholars are getting interested in the topic and this has seen so many volumes of staff retention materials being cheered out. It therefore begs a deeper analysis into this important subject while laying greater emphasis on the causes and the impact of staff retention on the performance of organizations. In spite of the fact that staff retention has been a hot area of study by contemporary organizational researchers, it cannot be argued that it is an entirely new field. Writings from several early organization thinkers have demonstrated that staff retention is a topic that attracted much attention even in those early times. For instance Herzberg’s two factor theory and his theory on motivation greatly illustrate the behavior of employees in the organization as regards their working conditions and motivation. The need to retain the employees within the organization rises out of many reasons. Hiring employees is a procedural process that is always very costly and involving. It therefore becomes quite a burden to the organization if the employee turnover is very high. Most organizations pay external consulting firms to recruit for them the best employees. Such costs, coupled with the costs of training the workers and other support services in the recruitment process are just too high. It therefore becomes a futile effort if the retention rate is low in the organization. Another consequence that arises out of a low staff retention rate is the loss of valuable knowledge from the organization. It must be remembered that knowledge on organizational management is a valuable asset that is only accrued through experience. As such, organizations really experience deficiencies in such knowledge if the employee turnover rate is very high. Studies have indicated that 40 per cent of organizations in the UK are normally affected by a low staff retention rate. It therefore shows that this is an issue that requires so much attention and address. High employee turn over rate is also disastrous to the organization in the sense that it interrupts the various relationships that have been created between the customers and the employees. In companies all over the world, relationships will normally develop between the different stakeholders of organizations. It is on such mutual relationships that organizations stand. New faces coming in daily in the organizations normally disrupt the flow of operations as customers find themselves with different people to deal with. It is therefore crucial that employee turn over is reduced as much as possible. When employees leave the organizations for other opportunities, much workload is normally left for the remaining workers. When the work becomes too much, the workers are often demoralized to the extent that some of them may opt to leave the organization. It therefore shows that when workers leave the organizations, it creates a ripple effect that eventually impacts disastrously on the organization. It has also been demonstrated that potential employees use employee satisfaction as a parameter in determining whether to work for organizations or not. Therefore, an organization with a low employee retention rate is likely to attract few job seekers. Considering that human capital is very integral to the success of any organization, it becomes very hard for any company to stay competitively in the market without a pool of qualified employees. High staff retention rates have also been associated with time wastage in the organization. The time involved in the hiring of new workers and training them will normally impede the operations in the organization. It therefore shows that it is imperative that each and every organization finds ways to limit to reduce the rate at which employees leave the organization. This can only be achieved by studying all the aspects of customer satisfaction and the policies that organizations adopt with regard to organizations. Several organizations have managed to retain their employees for longer periods or for eternity. Causes of low staff retention rates. The greatest cause of the low staff retention rates is the concept of motivation. If workers are not motivated, they will normally seek to find better opportunities. Job dissatisfaction arises out of many factors in the organization. From the data given, Moving Forward organization is experiencing low rates of staff retention. The company is an entity that deals with young people by addressing their needs and finding ways to address the problems realized by these young people in the organization. It therefore shows that the organization engages its workers in a very interactive schedule and very involving commitments. It can be seen that staff retention from 2006 through 2010 has been very poor. It therefore begs the analysis of the reasons as to why the organization is not able to retain its workers within a reasonable timeframe. In all organizations all over the world, workers are normally induced by the benefits that organizations offer to them. The company in question is offering low pay to its workers with a child care scheme and pension as the only benefits. This is a very poor quality that cannot attract the employees at all. Benefits such as medical and transport allowance are not offered by the organization. Considering that most organizations offer such benefits, the employees in Moving Forward Company will have no reason to stay in the organization while they can get better benefits in other organization. Moreover it can be seen that there is a huge disparity in terms of what the junior staff earn and what the management staff earn. The low pay for the junior workers kills their morale making them feel unimportant in the organisation. Any company aspiring to retain its workers should therefore adopt payment schemes that are to the interest of the employees. From Herzberg’s two factor theory it can be seen that employee motivation is normally a function of so many factors where job satisfaction is a component. Few employees may therefore choose to remain in a working environment that does not address their concerns. Another crucial factor is that the organization is taking no regard to the type of staff they hire. Studies have shown that the young workforce commonly known as the “baby boomers” normally take a shorter time in one job compared to the older generations. This is the group that comprises the people between the age brackets of 22 through 32. These young people are normally in a constant look for better opportunities and will never hesitate to change jobs should they find better opportunities. The organization is hiring many young people and this partly contributes to the high staff turn over rate in the organization. The working environment in an organization is also a factor that, to a larger extent, determines the turnover rate in the organization. A poor working environment that does not take into regard the social needs of the employees is very detrimental. Employees are social beings and demand to be treated as such. In the Moving Forward Company events such as Easter parties and Christmas events are not regarded with much attention. This, coupled with the fact that most of the employees are young people sends a clear message that there is a missing link that needs to be filled. The company should therefore seek ways of ensuring that the employees are motivated in all aspects. The company is doing very minimal to ensure that the employees advance in their careers. Several theories have been advanced that indicate which indicate that employees normally feel very motivated if mechanisms are in place which ensure that they get promoted on clear specific grounds. Everybody will want to progress ahead in their careers by getting promoted and advancing their careers. In the given case, the organization makes employees stay in one job group for a very long time. Incase promotions are given; they are normally based on grounds other than performance or time duration. Some of the employees have been promoted on political grounds. Such kinds of promotion really impacts negatively on the morale and consequently the performance of the employees. It is therefore imperative that the organization develops clear guidelines that will guide the career advancement of the workers in the organization. For instance, it could be proposed that one cannot stay in the same job position for more than four years. Many organizations also provide promotions on merit basis. Many organizations today are adopting work related pay as a method of motivating employees. This encourages employees to work very hard in the organization because the more they work the higher the pay they get. This is facilitated by the introduction of appropriate bonus schemes and overtime schemes that will not only improve the workers pay but also increase the productivity of the organization. The organization in the given case is not offering all these packages and this is a reason that partly contributes to the high employee turnover rate in the organization. The management of any organization should always be integrated to be part and parcel of the organization. As such, the management should never detach themselves as the controllers of the organization. A common managerial style that is gaining prominence today is where the managers are at the very fore front in the organization by facilitating employee decision making whereby all the employees are made to be part and parcel of the organizational management process. This is very crucial in boosting the morale of the employees in the organization. Employees should never feel isolated, they need recognized and their efforts rewarded handsomely. According to the Maslow’s theory of needs, employees will always seek to satisfy their different needs in a chronological order. At the lower level of the pyramid are the physiological needs. These are the basic needs for survival and must always be satisfied first. Such need include the need for food, shelter water etc. all organizations must ensure that these critical need are availed to the employees. In Moving Ahead company, the management is doing very little to provide decent packages that will enable the employees satisfy these needs. At the second stage of the pyramid are the safety needs. This is where the employees will require security in all aspects of life. They will need job security, financial security and physical security against harms. At the next stage in the hierarchy of needs, the employees require love and a sense of belongingness as a need. Employees will want to be made to be part and parcel of the system in which they are working. They expect to be involved in the process of decision making and their decisions be respected. Organizations should always be up-front in ensuring that employees are regarded as very special assets to the organizations. This however, is taken for granted by the company in the given case. The management is totally detached from the employees who feel totally secluded from the affairs of the company. The next need in the pyramid is the need for esteem. This is the situation where the employees require respect from within the management and the other employees in the organization. This is a common psychological need that arises from the fact that humans will always need to advance in position and command respect from the other people. An employee should never work in a single position without being promoted to the next level. Moving Ahead Company is doing very little is terms of ensuring that the employees’ need for esteem is taken care of. Employees are not regarded with much attention as they should be. At the highest point of the pyramid, there is the need for self-actualization. Here, the employees will seek to find their calling and satisfy the urge to leave a name behind. Even though this is always hard to achieve, it is possible if the opportunities are availed. The company in the case has no such opportunities to enable the employees achieve the need for self-actualization in the long run. Another model that can be used to analyze the whole concept of the low staff retention rate is the value congruence approach. Value congruence is normally the extent to which the employees’ values and principles that guide them relate to their work situations. Organizations should always embrace the fact that different employees are different in terms of their guiding principles. Some employees cannot put up with any infringements on their rights and will always quite at the slightest dissatisfaction. Looking at Moving Ahead Company, one never fails to see the missing congruence between the values of the organization and those of the employees. Employees expect satisfaction and better terms from the company which is failing to provide such terms. This is therefore a factor that has really contributed in the low rates of staff turnover in the company. In the same vein, there is dissimilarity between person to person values in the company. It can therefore be comfortably argued that the company has so much incongruence that is contributing to the employee dissatisfaction. Impacts of low staff retention rates The low staff retention rates realized in Moving Forward Company has greatly impacted on the performance of the company. The failure of the company to embrace the critical factors that ensure employee satisfaction and motivation has really impacted negatively on the company. The low staff retention levels have greatly affected the reputation of the company to the outside public. Statistics show that applications from young job seekers have greatly reduced over the last few years. This is on the ground that most of these young people expect a lot from the company which on the other hand is not seeking ways to address these needs from them. The reputation of a company is very critical to the performance of that company. The company should therefore develop ways that will ensure that young people are treated in the appropriate manner. Low staff retention rates normally leads to low productivity in the company. As employees come and go, the process of production is really disrupted. The productivity of the company is seen to be very poor and this is attributed to the dissatisfaction of the workers. Dissatisfied workers will normally show up late on the job will not work to the full interest of the company. This is a trend that has been noticed in the company and is the main reason for the low productivity of the company. Unmotivated employees normally regard work as a necessary evil. They feel that work is simply an impediment that hinders human progress. With such an attitude developed in the perspectives of the workers, it becomes very difficult to realize any positive output from them. As a result of the high employee turnover rate, Moving Forward Company has been spending large sums of money in recruiting new employees in into the organization and training them. This, together with the loss in productivity realized from the demotivated staff, causes untold damage to the company. Moving forward is a company that deals with people. It addresses the needs of the youth by talking to them and finding ways upon which the lives of the youths can be improved. This therefore illustrates that the company’s workers are normally engaged in very interpersonal relationships with the customers who are actually the youth. Bonds are therefore created between the customers and the employees. It is important that such bonds be maintained. Unfortunately in the company, this is never the case. The high employee turnover rate means that such bonds will always be broken on several occasions. It therefore means that the customers will be totally disrupted by such a flow of events. Dealing with staff motivation The company is not making efforts to deal with the low levels of staff motivation in the company. It has been agreed that the staff need to be given better opportunities to grow and offer better services to the company. The management should come up with better payment schemes that will encourage the employees to work more and get more pay. There should be a better bonus and overtime scheme that will encourage the employees to work overtime and increase the productivity of the organization. It had also been seen that the company is not doing enough to satisfy the social needs of the employees. It is therefore prudent that social events and other functions are created that will enable the employees interact at periodic intervals. Most successful organizations have always been those that make their employees important assets and utilize them effectively. The company should also address its recruitment method. It should be realized that most organizations today include entirely all cadres of people in the society into their workforce. It is important that the company recruits its employees without taking much consideration to age as in the previous cases. Since young people have a tendency to change jobs frequently, it is important to vary the age bracket upon which the employees are selected. It is also important to take onto notice people with special needs in the society and employ some of them as part of the workers. Considering that the company has not been offering better employment terms to the employees, it is imperative that the management comes up with better modalities upon which the employees are to be promoted. This could be on time duration or could also depend on the productivity of the workers. Employees should never be promoted on political or any other unfair grounds. The management of Moving Forward should attempt to find ways to realign the objectives of the employees with those of the organization. This can only be achieved by creating better terms of service and getting the employees involved in the organization more and more. Decision making should never be a preserve of the top management. Rather decisions should be made at all the levels in the organization. Many organizations all over the world have adopted decentralized system of management where employees are normally given freedom to make decisions that can improve the performance of the company. There should be forums created in the organizations on particular timeframes upon which the employees can articulate their issues and whatever they feel should be addressed by the company’s management. Considering the Maslow’s hierarchy of needs, the company’s management should seek to address all the needs of the employees ranging from physiological to self-actualization. This will involve addressing all the need s of the employees and in return this will lead to much job satisfaction which will consequently improve the productivity of the company. It has also been seen that the reputation of the company is at steak when the employee turn over rate is very high. It is therefore prudent that the company does all it takes to change this perception from the minds of the public. It can do this through social responsibility programs and through conducting aggressive campaigns. Conclusion Moving Forward Company has been affected by the effects of low staff retention rates and it has been seen that this has greatly impacted negatively on the performance of the company. This is a problem that not only affects the Moving Forward. It a problem that has been seen in organizations all over the world. The employees in any organization are very important assets. Most organizations prosper or collapse courtesy of the performance of the employees. It is only good that the managements can always control the satisfaction of the employees in the organization. It is therefore prudent that organizations consider it an important duty to address all the need of their employees. It would be important if the organizations can conduct studies on employee motivation within their employees. The data obtained would be very crucial in providing the important ways upon which the need of the employees could be addressed. The company will therefore realize much gains if it can adopt policies that will work toward the satisfaction of the employees in the organization. In a nutshell the effects of a low employee turnover rate must be emphasized. Employees are social beings who are motivated by not only economic gains but all other needs as well. This is clearly illustrated from Maslow’s hierarchy of needs. Reference Maxwel, J. (2009). The Science of Staff Motivation. New York: Bantam Books. Read More