How Organizations in the UK Today Can Reduce Staff Turnover - Essay Example

Reducing Staff Turnover in the U.K. Presented to Location Due Introduction Research reveals that inviting and holding key talent plays a vital role with regard to improving the financial performance of an enterprise. The impact that turnover has in an enterprise is considered to have both direct and indirect costs to a firm. It can cost between 50 and 150 percent of annual salary in a firm. In the case of the humanitarian sector, the negative influence associated with employee turnover affects performance of relief aid organizations and the products and services delivered to beneficiaries (Agenda Consulting 2009). Various consulting agencies stipulate that retaining staff may become an increasingly challenging task in the coming years. Although studies undertaken in U.K. organizations reveals that the rates of turnover have not shifted for some time, demographic evolution indicates that the baby boomer group will be out of the job market in the impending years. Moreover, demographic changes indicate that the skilled individuals aged between 15 and 29 years who are seeking for jobs is on a decline, increasing strain on human resources (Gray 2008). Experts stipulate that changes in work attitudes are becoming highly prevalent among young people. For instance, after experiencing their parents fall victims of corporate downsizing, many young people may develop less loyalty in their organization. They understand they are supposed to manage their career in an active manner. They are laying significant emphasis on continuing their education and encounter numerous career and job changes in their lifetime. They respect knowledge and expertise as opposed to titles (Gray 2008). As such, they are less willing to start working for an enterprise that does not provide them with an opportunity to challenge the status quo. They are embarking on initiatives that will help them to balance between careers and familial duties, reluctant give up either of them (CIPDa 2014). This paper will depict the manner in which organizations in the U.K. can reduce staff turnover. Discussion Turnover Rates and Trends Different individuals are unaware of what turnover trends and rates mean. To calculate crude turnover in a firm, the following formula is applied:  The total figure comprises of all individuals leaving an enterprise, even those retired from their jobs voluntarily due to redundancy, dismissal or retirement. It does make a distinction between dysfunctional or functional turnover. This means it plays a vital role with regard to facilitating for benchmarking purposes. Hence, it does not help to identify the specific problems prevailing in an enterprise. As such, it is vital to emphasize on the turnover that concerns real issues in an enterprise by making a distinction between intentional and unconscious turnover (Diane 2010). In this case, it is appropriate to known whether employees decided to leave the organization or the employer made the decision for them. In this case, voluntary resignations are later distinguished as either functional (exit of poor performers) or dysfunctional (exit of excellent performers). Lastly, it is vital to consider unavoidable resignations, which the employer does not take part (childbirth, family move, death, or serious illness). In this case, the group of avoidable resignations remains as the key point of focus. It also provide an opportunity for making an informed decision, where turnover rates are calculated in a departmental level to help identify the areas that cause more problems to a firm (IMF 2007). Recent research carried out in the U.K. job market reveals that the rate of turnover is about 15 percent. However, it does not reveal as to whether rates of turnover are rising over a given time. Based on the research, the biggest share results from voluntary turnover rather than contract termination by an employer or retirement (IMF 2007). Nonetheless, a broad range of differences prevails between sectors and regions. Industries such as hotels, retailing, call centres or restaurants portray turnover rates higher than 50 percent whereas the average for the public sector is approximately 11.5 percent (Loquercio 2006). The regions that have high unemployment rates are the ones that experience high rates of turnover. These rates may also differ in the same firm in a similar location. They are normally attributed to type of position or contextual factors that need to be addressed based on retention. Moreover, a different study emphasizing on the voluntary sector stipulates that the turnover rate for the voluntary sector is 21 percent while for the international development sector is 16.7 percent. Here, rate of turnover is lower in the case of managerial employees at 13.9 percent for the international development segments as opposed to the support/optional employees at 21 percent. In this case, the voluntary turnover accounts for the highest percentage where 12.4 percent represents end of contract while 2.1 percent is for rest of the redundancies as well as dismissals (Loquercio 2006). Scholars have however shown that it is not possible to calculate the rates of turnover in the case of the humanitarian segment. This is because most relief aid organizing mostly rely fixed term contracts, which are not incorporated when calculating the rates of turnover. As such, turnover rates are regarded as being of little use when performing any analysis affecting an organization. The problem in this case is acute for major managerial posts, which are normally occupied by international cadres and expatriates and in cases where humanitarian organizations find it necessary to rotate staff (Suff 2014). In this case, even the agencies that have open contracts are forced to change from one duty to another, especially on a yearly basis. In this perspective, it is appropriate to develop on other indicators that help to monitor problems affiliated with turnover as well as rotation of staff members. In this case, vacancy rates, mission duration, and seniority of staff should be incorporated in this issue. In the research, the average mission for a particular expatriate ranges between 5.2 and 10.1 months (Snell and Bohlander, 2012). Furthermore, a variety of unforeseen staffing needs prevail in an enterprise, which are related to forecasting difficulties in the case of humanitarian crises. It adds more problems with regard to surge capacity affiliated with HR problems (Loquercio 2006). When Turnover Matters in a Firm One of the major questions revolving around turnover is “what is excessive turnover? Although a broad range of consulting agencies regard turnover as a major issue to address, most firms in the UK do not regard turnover as a major problem that should be considered. It has minor impact on organizations based in the U.K. It is true, however, that most firms treat turnover as one of the major issues they encounter while few try to calculate the costs of turnover (Burke and Cooper 2008). Firstly, it is true to note that some level of employee turnover has certain benefits in a firm. This happens when a higher performer replaces a certain poor performer. It is also evident when the retirement of a certain individual creates room for the acquisition or promotion of a more productive individual (Burke and Cooper 2008). Moderate turnover levels can also help minimise costs of staff in a firm, especially when levels of business are unpredictable. Moreover, economists consider the consider turnover as a vital component that encourages employees to work efficiently and boost productivity. This helps to create better matches between workers and jobs (CIPD b 2014). It would however be inappropriate to claim that turnover can hurt past a certain level, particularly when it is possible to find as well as train new workforce faster and cheaply. In this case, it would be possible to sustain high levels of quality while providing services regardless of whether the rate of turnover is high. On the contrary, in case skills are knowledge important and relatively scarce, the relationships between stakeholders are close as well as important, particularly if the recruitment process is expensive. This issue can also emerge if it takes time to fill a vacancy (CIPD b 2014). Here, turnover becomes problematic in the perspective of the managers. However, other experts stipulate that even for jobs that do not demand elaborate skills, it is vital to introduce a retention strategy, which can influence engagement, financial performance, and turnover positively. This is particularly the case for those positions that demand strong relations with clients (Rogovsky and Sims 2006). Approaches to Addressing Rate of Turnover in the U.K. In the U.K. context, a number of approaches are efficient with respect to improving staff retention. However, it is appropriate to consider that no one single strategy fits all organization while addressing certain key issues. This is because different firms have different approaches of management organizational culture (Suff 2014). The following are the approaches for addressing the issue of staff turnover in the U.K. context. Human Resource Strategy In the case of the humanitarian sector, it mostly relies on staff in order to realize success in its operations. The sector also expects the employees to work in challenging circumstances. The sector lacks a good reputation based on the ways in which it treats its clients. This is poor approach towards attracting a pool of talented and experienced staff members (Diane 2010). This issue results mostly from poor planning and employment of nonqualified staff members in HR departments. Therefore, it is crucial for the organization to recognize the strategic role of the HR function to facilitate in the integration of strategic planning. These organizations should also address the funding issue to ensure that poor practices in the HR environment do not affect the quality of the organizations programmes in a negative manner (OECD 2011). Staff Practices and Policies It is crucial for an enterprise to ensure that it does not discriminate against its employees or subject them to any forms of unfair grounds. In the case of U.K. organizations, perception of unfairness is regarded as one of the major factors leading to voluntary resignations. When working in an enterprise, employees expect to be treated fairly and be accorded adequate recognition by their employers (Hein 2005). In this case, it is appropriate for an organization to invest in staff training even if the person does not stay with them for a long time. In this case, training is sufficient beneficial because it helps employees to adapt quickly to the needs of an organization. Additionally, employee training serves as an incentive on the side of the employees because it is possible to perceive such a policy fair encouraging them to participate effectively in the operation of the organization (Rogovsky and Sims 2006). People Management It is common to hear that workers people leave certain organizations based on the practices that their managers undertake. In all sectors in the U.K., staff members look for managers who are competent in the activities they undertake. They should portray competence in terms of fairness, technical skills, and people management (Monster 2014). This is because they are the ones having significant impact in determining whether they are employees stay or resign from an organisation. In this case, it is appropriate for the managers to be more accountable in the activities they undertake in order to address the issue of turnover. The managers who show exceptional skills in their work should be rewarded in order to encourage employees to perform optimally in their organisation (Marcon 2014). Need for Consultation and Communication Communicating with staff members has significant influence in enhancing the quality and effectiveness of the practices they undertake. In this case, it is appropriate to ensure that employees can raise their opinions with consultative bodies, attitude surveys, regular appraisals, as well as grievance systems (Monster 2014). This practice plays a vital role with regard to ensuring that dissatisfied employees gain an opportunity to sort the issues they have with a given enterprise before they decide to resign. Failure to accord them with such an opportunity leaves them with no other option and they end up resigning (Marcon 2014). Conclusion Staff turnover can influence an enterprise both positively and negatively. For instance, staff turnover can help an enterprise attain experienced workforce. Moreover, it can create room for a company attract a pool of talented employees. On the other hand, employee turnover makes an enterprise to incur huge costs while looking for tented and experienced staff. In addition, staff turnover may result to loss qualified and talented staff members, making the firm’s performance to deteriorate. As such, it is appropriate for firms to revaluate the reasons why the issue of turnover is highly prevalent and develop strategies to address it before it leads to devastating effects in a firm. Reference List Agenda Consulting 2009, People Count Voluntray Sector, Benchmarks for Human Resources in the UK Voluntary and Community Sector, Agenda Consulting, London. Burke, RJ & Cooper, CL 2008, The Peak Performing Organization, Routledge, London. CIPD a 2014, Summary of Key Findings,viewed 29 November 2014, . CIPD b 2014, Employee turnover and retention, viewed 29 November 2014, . Diane, A 2010, The Employee Recruitment, Amacom Books, New York. Gray, WC 2008, Reforming Public Institutions and Strengthening Governance: A World Bank Strategy Implementation Update, World Bank Publications, New Yor. Hein, C 2005, Reconciling Work and Family Responsibilities: Practical Ideas from Global Experience, International Labour Organization, New York. IMF 2007, United Kingdom: Financial System Stability Assessment including Reports on the Observance of Standards and Codes, International Monetary Fund, London. Loquercio, D 2006, Turnover and Retention, viewed 29 November 2014, . Marcon, G 2014, Training could reduce employees turnover, viewed 29 November 2014, . Monster 2014, Workforce Management, viewed 29 November 2014, . OECD 2011, OECD Development Assistance Peer Reviews OECD Development Assistance Peer Reviews: United Kingdom 2010, OECD Publishing, London. Rogovsky, N & Sims, E 2006, Corporate Success Through People: Making International Labour Standards Work for You, Academic Foundation, London. Snell, S & Bohlander, G 2012, Managing Human Resources, Cengage Learning, New York. Suff, R 2014, Measuring labour turnover, viewed 29 November 2014, . Read More