Using Information in Human Resource Management - Essay Example

Using Information in Human Resource Management Introduction With the changing market dynamics, the ability of an organization to attract and retain high-level employees is under threat from the current and emerging trends of employee turnover. Employee turnover is the rate at which employers lose their ability to control and retain their employees within their organization. The measure of turnover rate within a specific year is measured for individual companies or collectively for companies within a specific industry. A company that has a relatively high turnover rate is said to possess a high employee exit as compared to other companies within the same industry (Horn, 2009). Employee exit that is measured by the turnover rate is costly to a business as it demands for further reinvestment of resources to attract, train and post new employees. Due to the costs of employee turnover rates, companies are advised to conduct internal audits to determine the factors that may contribute to the rapid employee exit and develop strategies to mitigate the reasons (Silverman, 2007). In this paper, employee turnover rate at ABC bank limited will be evaluated as a report to provide the best recommendations that can be adopted by the company to mitigate the losses associated with employee exit. ABC limited was created in the 90s as a publishing company and grew to become a market force and publisher of bestseller books. Started as a small company with few employees, ABC publishing limited has grown to become a major market force and a multinational with over 10, 000 employees working in different parts of the world (Horn, 2009). The growth presented opportunities and challenges, which include the difficulty in retaining the best employees in the highly competitive market. To remain a strong market force and ensure that the employees are satisfied and motivated to continue working in the organization, ABC publishing limited has initiated an employee turnover study to determine the factors that affect the employees and those that contribute to mobility from the organization. Comparison of journal and publications on employee turnover The massive implication of employee turnover to human resource management and the overall success of organizations have led to a number of studies aimed at determining the reasons and the current trends. Journals, periodicals and reviews are available on the topic that attempt to highlight the role of employee turnover on organizational success and the factors responsible. According to Holtom, Mitchell, Lee & Eberly (2008), in situations when the demand for workers is high, the mobility of the employee’s increases and this affects the ability of the organization to retain its top ranking employees. The study of voluntary turnover among employees is important for organizations and companies for a number of reasons, all of which affects their profitability. Despite the fact that market conditions affect the turnover rates in companies, the individual decision of an employee to stay or leave is not affected by the actual unemployment figures in a country. The rate of employee turnover is not static across industries due to the differences in dynamics within different sectors that make it possible for employees to move in or out with ease (Horn, 2009). Despite the high costs of turnover, accounting systems hide the impacts on the financial position of the business and it is thus not captured on the profit and loss statements. These costs are usually blended with the costs of recruitment, selection and placement of new employees in an organization. A review of the impacts of employee turnover must evaluate the effects it has on the process of service delivery, customer satisfaction and the quality of goods and services produced. An interruption on these affects the performance of an organization in the market and reduces its competitive strength before other companies. The impacts of losing an employee as a result of voluntary turnover varies depending on the nature of the industry, the department that the employee was placed under, the availability of capable replacement and the relationship that the employee had with customer especially for service industries like banks. In other technical sectors, the high rate of employee turnover has increased the operational costs and provided ground for the progressive motion of inflation in a country (Holtom, Mitchell, Lee & Eberly, 2008). Based on the CIPD report, most human resource leaders in major organisations in the united kingdom are facing an imminent challenge due to the high turnover rate. Voluntary employee turnover in the united kingdom has increased by 14% according to a survey conducted by over 200 human resource leaders. However, the most affected based on this survey are business that are based in London and the south eastern parts of the united kingdom. Compared to other sectors in the united kingdom economy, employees in the public sector are continuing to move to new job placement in the country as compared to those working in the private sector. Human resource leaders reported cited lack of proper remuneration and recognition at the workplace as their reason for voluntary exit. Small business were affected at 46% as compared to 61% posted by the public sector, a demonstration of the impact that large multinationals have had on these organisations. In most cases, 28% of the respondents felt that the redundancy created by role replication and lack of growth strategy was cited as the reason for exit apart from remuneration. In some cases, some of the employees cited boredom and lack of proper employee development program as their reason for exiting the companies that they were working for. Employee turnover at ABC limited The impacts of employee turnover also vary with regions and this makes it even critical for multinationals like ABC publishers to develop proper approaches to mitigate mobility factors in labour. According to data from Eurostat, European employees have a low turnover rate as compared to United States’ employees within a given year. This has been attributed to the high unemployment rates in some countries in the region among other factors attributed to organizational culture and change management processes (Horn, 2009). As a result, multinationals with operational units in Europe can be safe from the financial impacts of voluntary turnover as compared to their counterparts in the United States. the reward systems, empowerment and motivation of the employees in this region makes voluntary employee turnover a new phrase as most employees are comfortable in their different roles and positions (Horn, 2009). According to Johnston’s and Spinks (2013), the deleterious impacts of outward movement of employees in an organization are not just confined to the costs associated with recruiting and selecting new employees but the impacts it creates on the remaining staff. In most cases, employees who are resigning impacts negatively on the remaining employees’ morale, productivity, the ability to embrace teamwork and demonstrate consistency in service delivery. As a result, the determination of turnover intention is essential as a barometer for understanding the reasons behind the increasing employee turnover in an organization. Turnover intention is thus a measure of the wellbeing and mood of the employees within an organization towards the same organization and how this affects their desire to continue working within the same organization (Marchington & Wilkinson, 2008). The intention spectrum is affected by a number of internal and external factors which can be mitigated or prevented by the organization in advance. It includes facts such the ready availability of alternative employment, conflicts within the roles played by different senior employees, the development of management hierarchies like centralization and decentralization among others. The growth or lack of growth and ambition within an organization can also increase the turnover intention among employees, as it creates no challenges and new opportunities for the employees. Personal factors such as motivation, appraisal, satisfaction and participation in the management process of the organization also affect the turnover intention among the employees and contribute to resignation (Anderson, 2009). However, the turnover intention must be separated from resignation itself as the former is an attitude and the latter a process or behaviour among the employees. The intention to leave cannot however be ignored on the basis that it is an attitude as it leads to the development of unwanted behaviours among employees. Research has established that employees with the intention to leave have high absenteeism behaviours, rarely participates in organization activities due to lack of interest, is a perennial late comer and adopts avoidance behaviours, which affects their productivity and performance of the organization (Marchington & Wilkinson, 2008). Communication is essential in the process of mitigating employee turnover in leading and emerging organisations. Communication is essential in the process of human resource management and when inappropriately practiced within certain contexts of the organization leads to increased demotivation, dissatisfaction and development of turnover intentions. Despite the importance of communication to almost all organisations across the globe, company managers adopt approaches that affect the communication channel and give room for the development of turnover intentions. Lack of employee-employer communication also increases role conflicts and this has been considered as a determinant in employee mobility in organisations. In situations where communication breakdown is witnessed, different tasks assigned to employees will not be finished within the stipulated time due to lack of understanding and teamwork. This breeds frustration among the employees and creates room for the development of turnover intentions among the employees. These articles, publications and periodicals have highlighted some of the causes, impacts and processes of voluntary employee turnover in organisations such as ABC publishing limited. The determination of the employee turnover rate must be based on these factors and this will be applied in the evaluation of the company in question and applied in the delivering of the recommendations (Anderson, 2009). Employee turnover at ABC ltd ABC limited has been faced with the threat of employee turnover and the emergence of intention to resign among them associated to a number of reasons, internal and external to the organization. In this study, the factors responsible for the development of this challenge in the publishing multinationals were evaluated following a questionnaire that was administered to the employees. Based on this study, the employment turnover rate was determined and the reasons that contribute to the emergence of the intent highlighted. From 2009 to 2012, the company has witnessed massive changes in its internal structure and the staff mobility as highlighted in this study. The total employees in 2009 were 590, a number that changed to 490 in 2012 with the turnover attributed to different reasons within the organization. Fifty-six employees left the organization in 2009, a 9.49% of the total employees in the year, a value that has been rising since then, with the highest seen in 2011. During this year, a total 65 employees left the organization with nine of them being members of the publishing department and 56 from the distribution department. The company has more distribution employees than the publishing staff but the mobility rate has remained high among the distributors as compared to other employees. Though the turnover was as a result of both voluntary and non-voluntary reasons, the employees that left as a result of the voluntary causes were high as compared to other categories. This demonstrated that the turnover intention among the employees is high and actions must be taken to remedy the situation before the costs associated with turnover increases (Anderson, 2009). Apart from the involuntary turnover that was associated with redundancy and maternal leaves, the employees who left voluntarily had several reasons cited. The turnover rate was attributed to different internal issues associated to the job, remunerations and benefits offered by the organization, relationship with the management among others. Most of the respondents felt that ABC does not present advancement opportunities to the employees despite their qualification, performance and productivity. Out of the 35 employees sampled in the study, thirty disagreed that the company has sufficient opportunities for growth and advancement. The employees also felt that the organization does not provide training opportunities for the employees to improve their skills and understanding of the job. Out of the 35 sampled respondents, 23 disagreed with the fact that there is adequate access to training opportunities. Through training opportunities, the ability of the employees to advance is increased and this elevates their motivation, determination and desire to participate in the progress of the organization (Marchington & Wilkinson, 2008). Apart from employment development, remuneration and benefits also contributed to the turnover rate at ABC as depicted by the results of this study. Out of 24 respondents, 13 felt that the salaries were delayed and the work life balance among the employees was promoted. The turnover at ABC is directly associated with the dissatisfaction among employees due to the inability of the organization to meet their intrinsic needs. Remunerations, benefits, work-life balance and lack of career development and training opportunities have been attributed to the high-level employee turnover. Cost of employee turnover In costing, the financial impacts of employee turnover is done based on the factors that it affects such as the rate of production and the reduction in sales. In turnover costing, the cost needed to cater for a vacant position by a fellow employee or a new recruit is done. The cost of productivity at a minimum of 50% is also done based on the person’s compensation and the impacts on productivity. In the event that a new employee is brought in to cover for the exiting employees, the cost of training is considered during the turnover costing process. Department productivity is also affected when some employees leave the organisation voluntarily and its financial impacts must be considered during the costing process. Each and every employee at ABC was trained upon recruitment and given the power and knowledge to tackle the different challenges associated with the job. Employee turnover results to loss of knowledge and creates a gap which must be filled, thus leading to knowledge loss costing. Recommendations Due to the high costs of employee turnover, ABC publishing limited must institute a number of changes that can help in the mitigation of the current situation and increase employee retention. Though the level of retention is high, it remains low as compared to the turnover and these calls for mitigation measures, which can enable the employees to commit to the organization. In this section, the recommendations will be provided in line with the issues that have been singled by the employees in this survey (Horn, 2009). First, ABC publishing limited must appreciate the changing dynamics of the industry and the need to improve the employee skills and ability to handle the changing industry. As a result, internal and external training opportunities should be provided to the employees to enable them acquire new and advanced skills that can assist in meeting the challenges of their work. Lack of room for career growth, progression and development lowers the spirit, motivation and satisfaction of the employees and this leads to the development of turnover intent. Therefore, the company must ensure the employees that there is room for development, growth and movement along the management hierarchy based on the performance, commitment and qualifications (Horn, 2009). Though the terms of engagement may be associated with the level of salary and benefits offered to the employees, improvements are necessary to psych up the employees and enable them feel comfortable working within. Success factors for the recommendations Motivation and satisfaction is the key catalyst in improving the retention level in an organization and the elimination of high turnover rate. Mitigating the situation must therefore begin by improving their willingness to remain in the organization and work towards achieving its key goals. The provision of training opportunities for example increases the ability of the employees to meet the challenges presented at the workplace and therefore reduce the stress and tension. A balance between the life and work situation will also reduce the work-associated stress and thus improve the willingness of the employees to commit to the organization (Marchington & Wilkinson, 2008). References Anderson, V 2009, Research methods in human resource management, 2nd ed. London: Chartered Institute of Personnel and Development.  Horn, R 2009, The business skills handbook, London: Chartered Institute of Personnel and Development.  Horn, R.2009, Researching and writing dissertations: a complete guide for business and management students. London: Chartered Institute of Personnel and Development. Marchington, M. and Wilkinson, A 2008, Human resource management at work: people management and development, 4th ed. London: Chartered Institute of Personnel and Development. Silverman, D 2007, A very short, fairly interesting and reasonably cheap book about qualitative research, London: Sage.  Holtom, B, Mitchell, T, Lee, T, & Eberly, M 2008, Turnover and Retention Research: A Glance at the Past, a Closer Review of the Present, and a Venture into the Future, Academy Of Management Annals, 2, 1, pp. 231-274.  Read More