The Cause and Effect of Employee Turnover in the First Six Months of Employment at ABC - Essay Example

A CRITICAL REVIEW OF THE CAUSE AND EFFECT OF EMPLOYEE TURNOVER IN THE FIRST SIX MONTHS OF EMPLOYMENT AT ABC By Professor’s name University name City, State Date Table of Content Table of Content 2 Executive summary 3 Introduction 4 Literature review 4 Methodology 6 Research design 6 Data collection 7 Primary Data 7 Type of Survey 8 Questionnaires 8 Telephone interview 8 A rationale for the Choice of Method 9 The Justification for the selection 9 Data Analysis and Findings 9 Conclusion 13 Limitation 14 Recommendation 14 List of references 15 Executive summary This is an assessment paper that seeks to review and analyse the causes and effect of employee turnover in initial stages of employment at ABC. Employee turnover are caused by various reasons some are to seek better remunerations, unprecedented working conditions, career growth and other many reasons. The effects of employee turnover are many and could be negative or positive. Employee turnover has some apparent costs linked to it, including training, recruitment and earnings. However, every time a worker leaves, there are a range of hidden costs employers might not have considered though they negatively affect. It is visibly evidenced that there is unconstructively relationship between the dependable variables of company performance and the Independent variables worker turnover, work stress, workload, family to work conflict, salary. The ABC study showed turn over effect on the functions of the operations. Introduction Turnover or inter-company mobility is a relocate of employees among the corporations and its environments such as other institutions or organizations. It can have both attractive and unattractive effects. Over the previous two decades of alertness of managerial matters, the issue of employee turnover still prevails in most of the corporation throughout the globe. This research study was done to assess the cause and effect of turnover in ABC Corporation. Even in the highly urbanized industrial countries, the rate of employee turnover is still very elevated. The area for the research study was ABC first six months employee turnover. The research study was implemented using quantitative technique for research. This was to assist in getting primary data. The questionnaire circulated among the employees of ABC was collected to know how much employee turnover affect the operation of the organization. The research was to provide causes and effects to assist the management in making wise decision during employment practices. The research paper purpose was to handle the questions that is; what are the causes and effects of employee turnover on the performance of the ABC organization? Various investigations show that employee turnover unconstructively affect the overall competence of the organization. If appropriate action is implemented on employee workload, salary, work stress, job satisfaction, and work to family conflict, the turnover proportion alternatively declines and organization performance improves. Literature review A research article journal of applied psychology (2007) revealed that job satisfaction and affective dedication as the fundamental variables with turnover objectives (Jackson 2012). It is further asserted that no support was got in the results for persistence dedication as a variable with turnover objectives. The results also fulfilled that significant positive associations were found for the distal variables work stress, workload, job satisfaction, employee salary, and work to family conflict. Indicating most of the employee turnover in many organizations is due to lack of job satisfaction. VERNIER Jean-François and RAIKES Lucille, (2004) “Rewarding and retaining key talent: are you ready for the recovery”. This article asserts that “attracting and keeping key talent is regarded as a key strategy to attain financial accomplishment”. This is challenged if employee turnover persist in an organization. This duty might well getting more and more challenging, due to several factors: With the departure of baby boomers, the labour energy will stop increasing as anticipated. This or rapid economic expansion might provide the noteworthy proportion of employee already waiting to alter employers the right chance to do so. This article claims that both economic and non-financial enticements are required to keep employees. It differentiates between reward elements required “to play” and those necessary “to win” such as career advancement opportunities, colleagues. In fact, the concentration should, according to the journal, be on elevating performing employees. The first assignment is to recognize them, preferably with manifold source pointer and ratings consistently used across the organization. The responsibility of line managers in recognizing these talents is essential and therefore, they must be given adequate training for coaching employee. It is also debated that segmenting the scrutiny driving individuals to stay with the corporation should take into consideration specific causes related to diverse groups, among which high performers. Likewise, it is argued that incentives should be separated according to the productivity, including for non cash incentives. According to Stam (2009), Companies (irrespective of segment of economy, dimension of organization) are facing a catastrophe of information management which is to make sure that employees will not depart the organization prior to transferring their skill. This means that corporations are facing a “knowledge conservation crisis” as corporations’ knowledge is endangered. In this respect acquaintance continuity administration becomes a key means of lessening the risk of loss of significant knowledge. Identically, also Beazley (2003) evaluates the loss of acquaintance as a serious risk associated with employee turnover. A method of managing this risk is to introduce a structured agenda for the transfer of significant knowledge. It is obvious that not all acquaintance may be gathered and transferred, but that is not the objective. The goal is to shift solely the essential knowledge associated to the work point that would, in case it is vanished, endanger the function of the association. Some continuity is certainly better than nothing. The application of acquaintance stability management plays an essential role not only in the procedure of knowledge shift, but also for guaranteeing Business Continuity Management (BCM). Methodology Research design The principle of a study design is to make sure that the justification obtained allows researcher to efficiently handle the study problem as unambiguously as possible. In social disciplines study, assessing evidence pertinent to the research problem normally entails specifying the kind of confirmation desired to test a hypothesis, to evaluate a program, or to accurately describe an occurrence. Research design applied for this study adequately handled the research problem and justifies its selection; review earlier empirical literature associated with research problem; openly and clearly specify objectives necessary to the problem chosen (Mitchell & Jolley, 2013); effectively demonstrate the data which will be important for an ample test of the objectives and explain how such data will be collected, and describe the methods of data analysis. Data collection Primary Data This is a process that assists in collecting original data for the intended purpose. A research can be conducted using only secondary data; however, without inclusion of primary data make the data bias and least reliable (Sullivan & Sullivan, 1975). An instance of primary data would comprise ones findings from interviews with key questionnaires, informants, or direct examination. To collect ABC employees turnover report structured interviews were used to get primary data (see appendix: exit interview form). The achievement of such data needs an active or direct strategy from the researcher. It would be hard to write a high-quality case study by paying no attention to the inclusion of primary data. When gathering any data it is necessary that the researcher observes to a system of ethics and study protocol. Data that are executed specifically for a study project are confidential as primary data. Interviews were carried as a way of gathering primary data; the interviews contained a semi-structured draw round. A semi-structured conference is when the experts have a series of questions that should be responded, but the queries may differ from interview to interview. This denotes that depending on the current of the conversation the expert can inquire more than the questions that they have generated (Sullivan & Sullivan, 1975). Since this dissertation is an explanatory research, a semi-structured interview was suitable. By conducting semi-structured consultations the research respondent could further give details unclear answers. The purpose was to obtain the interviewed individual to talk as unreservedly as possible. The questions differed from interview to interview regarding who was participating. The interviews were conducted on one-to-one criteria over the telephone or face to face. Type of Survey The participants in this research paper are conducted were exiting employees of ABC Company and managements to assess the cause and effects of employee turnover. Causes and effects of employees’ turnover are numerous and it is proper to get both side of the coin during data collection methods. Exiting employees and ABC managers could be many thus face to face interviews or presentation of questionnaires was not very effective thus emailing and telephone interviews became handy. It is impossible to conducts direct interviews due to monetary and time constraint. So the applicable method of data collection was to email questionnaires and make telephone interviews to carry out the survey. Questionnaires In this study, questionnaires were not typically used to interview exiting employees but simply to gather information from management team. A questionnaire consists of some distinctiveness; like- questions ought to be meaningful to the diverse respondents, it should be easy and comprehensible. It should be guaranteed that, the participants are qualified adequate to answer the questions. Different questions prepared questions for diverse nationalities (Peterson, 2000). The questions were organized and answers were predictable in such a way that can resolve our study questions. Researchers asked and comprise those questions in survey, whose answers are not obtainable in secondary data sources. Questions were prearranged in different headings and typically in unstructured mode. This is why; there was liberty for the respondents to respond to the questions at their own expediency. Telephone interview According to Schindler & Cooper, 1998, interviews can be either in person (direct), that denotes face to face or not direct like over email, telephone, fax, and others (Cooper & Schindler 1998). The questions are in line with research questions and objectives. The respondents were very communicative and comfortable to converse as the telephone conversations were completed in various languages. The conversations were established by the respondents later on. A rationale for the Choice of Method The rationale used to use choice of method was determined by research questions, study scope and purpose or objectives. Choosing the response format that would be easy to use for collecting data from the respondent and figuring out how to present the question to get at the desired interest are basis guiding rationale of choice (Miller 2003). The validity and reliability of data collected is an essential factor that was considered during choice of method (Litwin 1996). This was an exploratory survey of data that ABC Company has in their database so reliability would involve evaluation of current data with previous ones (Panneerselvam 2004). The Justification for the selection The method was applicable since it is time conscious and economically friendly (Flick 2011). Extraction of ABC staff retention ratio and exit interview feedback is easier than seeking respondents. The case of respondent would require looking for fired or terminated employees for answers. The validity and reliability of this method is attestable since outcomes are from the authentic HR database regarding employees’ information (Litwin 1996). Data Analysis and Findings The retention data that is provided after research confirms that many employees left due to various reasons and these are constituted as causes of employee turnover. The outcome reveals that the S&GUKs rolling yearly turnover rate is too elevated. The UK standard is 15%, according to the CIPD and the average for United Kingdom private sector services in 2011, according to XpertHR was 18%. Table 1: Rolling Annual Total Turnover   FY12 - Q4 FY13 - Q1 FY13 - Q2 FY13 - Q3 Avg Annual Headcount 426 429 434.25 441 Total Leavers 89 91 98 Rolling Annual Turnover 20.90% 21.20% 21.65% 22.25 FY12 - Q4 FY13 - Q1 FY13 - Q2 FY13 - Q3 20.90% 21.20% 21.65% 22.25% Fig. 1: S&G UK Rolling Annual Turnover (%) Table one and figure one confirm that employees turnover in UK companies exist and the percentage is substantial and must be addressed by companies like ABC to remain competetive. The undesirable effects of employee turnover include, for instance, the failure to employ expertise and knowledge workers in the ABC, disruption of the approach to work and work confidence, higher requirements placed on other employees during the stage of substitution, likely loss of other clients, augment of costs to hire a replacement, selection, training and coping (CIPD 2005; Armstrong 2009; Branham 2007, Katcher & Snyder 2007). On the contrary, advantageous effects are that fresh recruits bring fresh inputs and concepts, there is no stagnation, and a more appropriate employee can be hired; an improved and less costly procedure of employees planning, development administration and succession administration. Employee turnover also bring corporations certain benefits. For instance, if a less industrious employee is substituted by someone more resourceful or if a retiring worker is replaced by “youthful blood”. A certain stage of turnover may decrease the organization’s employees cost. For managers it is very significant to monitor the quantity of employees who leave the corporation and how this issue influences the performance of the organization. That, of course, is reliant on the volume of the organization, its position and particular teams of employees, etc. that can assist to prepare a general strategy of facilities (Hutchinson & Purcell 2003). Employee turnover effects to ABC Company are related to these findings. This reveals that effects of employee turnover are serious and must be contained. Median UK resignation pace for 2011 was 7.9% in accordance to a survey by XpertHR, with the pace for the private segment being 11%. S&G UK is over that at 16%. Table 2: Retention: S&G UK Quarterly Turnover Breakdown Period % Mandatory Turnover % Voluntary Turnover % Turnover FY12 Q3 2.36 2.83 5.18 FY12 Q4 0.69 4.18 4.88 FY13 Q1 2.76 3.92 6.68 FY13 Q2 1.37 3.65 5.02 The table provide the raw data indicating the percentages of voluntary and mandatory turnover. Fig. 2: S&G UK Quarterly Turnover Breakdown The table 2 and figure 2 provided the causes of employee turnover in UK companies. It is evident that voluntary causes are more than mandatory causes. This necessitates retention procedures implementation to retain the employees within a company. It is evident that the strategies employed to curb risks of employee turnover are essential for ABC Company. BCM is a well-organized method of fortification against internal and external risks and simultaneously conserves an organization’s competitive benefit and value system of reliability. Ensuring acquaintance continuity assist organizations build up a competitive advantage (Argote & Ingram, 2002). Knowledge continuity generates a powerful benefit for organizations, their administration and employees, which is illustrated by Beazley (2003) in the subsequent basic features: It speeds up the first training of fresh employees by directing them fast to learning directions thus assisting them to become more industrious in a shorter phase of time (Loquercio 2006). According to data gathered, employees on parental leave report were found to be as follows: Row labels Count of employee ID Maternity 17 Paternity 1 Table 3 Period Number of staffs FY12 Q3 14 FY12 Q4 14 FY12 Q1 15 FY12 Q2 16 FY12 Q3 18 Table 4 Fig 3 The figure 3 and table 3 and 4 above provide the turnover rate concerning parental leave. It is evident that maternity reason for leave cases are more that paternity thus employer must check that each department is adequately gender balance to cater for turnover effects due to parental reasons. Proper turnover management assist in the following areas; maintains managerial memory; acquaintance remains with the corporations and turns into an organizational advantage. It minimizes turnover and its monetary consequences. It minimizes an organization’s susceptibility associated with recruiting of random employees (temporary workers). It incorporates knowledge and augments process productivity, and others (Beazley, 2003). Therefore the making sure of knowledge stability and the submission of knowledge continuity supervision represent a basic precondition for maintaining commerce continuity and organizational productivity. It is potential to say that facts continuity management is the foundation for BCM and jointly with BCM contributes to an enhanced competitive advantage, effectiveness, more precise threat identification and improved decision making with lower threats. Should a corporation fail to implement knowledge continuity management, it may be endangered by the loss of the employees of the essential knowledge for the organization. Conclusion The methodology used to carry the research was appropriate and viable since it assisted to gather relevant data for ABC research. Causes and effects of employee turnover are many; however, are manageable. Quantitative research method has been applied to collect data since it is a primary data collection methodology. Limitation It is a secondary data methodology which is lead to reliance on secondary information. Unlike primary data process that assists in collecting original data for the intended purpose (Vartanian 2011). A research can be conducted using only secondary data; however, without inclusion of primary data make the data bias and least reliable (Kothari 2005). It is challenging to get such information since they are treated as primate data of HR department and accessed must be authorized unless researcher may face legal challenges. Recommendation Gender balance in departmental recruitment is necessary to avoid adverse effects of turnover due to parental leaves. Voluntary turnover is more than mandatory turnover thus it is essential that retention processes are put in place that caters for employees satisfactions. List of references ARGOTE, L., & INGRAM, P. (2002). Knowledge Transfer: A Basis for Competitive Advantage in Firms. Organizational Behavior and Human Decision Processes, Vol. 82, 150-169. ARMSTRONG, M. (2009). Armstrong´s handbook of human resource management practice. London: Kogan Page, ISBN 978-0-7494-5242-1. AVERY, DEREK R.; MCKAY, PATRICK F.; WILSON, DAVID C. (2007), “Engaging the aging workforce: The relationship between perceived age similarity, satisfaction with coworkers, and employee engagement.” Journal of Applied Psychology, Vol 92(6), 1542-1556. basket=b78c3e42f202e5f773f9fa5074e52209. Branham, L. (2005). The 7 hidden reasons employees leave. New York: AMACOM. CIPD - Chartered Institute of Personnel and Development (2004). Fluktuace a retence zaměstnanců. [E-text type]. Retrieved on November 8, 2013 from http://www.personalista.cz/index.php?ID=33& COOPER, D. R., & SCHINDLER, P. S. (1998). Business research methods. Boston, Mass, Irwin/McGraw-Hill. FLICK, U. (2011). Introducing research methodology: a beginners guide to doing a research project. Thousand Oaks, Calif, Sage Publications. HUTCHINSON, S., & PURCELL, J. (2003). Bringing policies to life: the vital role of front line managers in people management. London, CIPD. JACKSON, S. L. (2012). Cengage Learning. Research methods and statistics: a critical thinking approach. Belmont, CA, Wadsworth KATCHER, B. L., & SNYDER, A. (2007). 30 reasons employees hate thein managers. New York: AMACOM. KOTHARI, C. R. (2005). Research methodology: methods & techniques. New Delhi, New Age International (P) Ltd. LITWIN, M. S. (1996). How to measure survey reliability and validity. Thousand Oaks, Calif. [u.a], Sage. LOQUERCIO, D. (2006). Turnover and retention. Literature review on turnover and retention MILLER, R. L. (2003). The A - Z of social research: a dictionary of key social science research concepts. London [u.a.], SAGE. MITCHELL, M. L., & JOLLEY, J. M. (2013). Research design explained. Australia: Wadsworth Cengage Learning. PANNEERSELVAM, R. (2004). Research methodology. New Delhi, Prentice-Hall of India. VARTANIAN, T. P. (2011). Secondary data analysis. New York, Oxford University Press. http://site.ebrary.com/id/10425251. Appendix Exit Interview Form Employee’s Details Name «KnownAs» «Surname» Current position «CurrentJob_Position» Department «CurrentJob_Department» Location «CurrentJob_Office» Employee no. «DisplayEmployeeID» Line Manager «CurrentJob_WorksFor» Start Date «EmployeeStartDate» Termination date «LeftDate» Date of exit interview Exit interviewer Employee’s job history within the Firm Job Title Dates Start and end salaries «CurrentJob_Position» «EmployeeStartDate» - «LeftDate» «CurrentJob_BasicPay» Job descriptions and duties 1. What did you like most about your job and why? 2. What did you like least about your job and why? 3. Do you feel that the job description given to you when you took the job on accurately describes the role? 4. Were your duties clearly described to you when you took on the role? 15. Did your line manager: Always Often Seldom Never Explain tasks properly? Give adequate instructions? Give adequate help/advice where required? Listen to suggestions? Show fair/unbiased treatment? Provide constructive feedback on your performance? Give praise where due? Keep you informed about your progress? Know and follow Company procedures? Company pay and benefits 16. How would you rate the following pay and benefits provided by the Company? Very good Good Average Poor Very poor N/A Remuneration/ Pay Pension Long-service award Bonus scheme Company car/car allowance Cycle to work scheme Occupational health scheme (AXA PPP) Sick pay Private Healthcare (Bupa) Life assurance Season ticket loan scheme Read More