Challenges of Low and High Staff Turnover Rates for the Human Resource Management of Organizations - Research Proposal Example

CHALLENGES OF LOW AND HIGH STAFF TURNOVER RATES FOR THE HUMAN RESOURCE MANAGEMENT OF ORGANIZATIONS By Abstract Employee turnover can be considered as an important aspect in the field of HRM. This assignment has discussed the challenges that are faced by the modern day organisational managers in both high and low employee turnover rate. The mentioned issues and challenges will help the upcoming and emerging managers to develop effective business operation strategies in near future. Most importantly, it is highly important for the leaders and managers to focus on employee motivation and job satisfaction aspect in order to maintain effective employee retention aspects. Table of Contents Purpose 4 Effective human resource management practices can be considered an important aspect of organisational growth. They are used by organisational leaders while developing any strategy. Staff turnover is an important human resource management aspect that must be considered by the management of the organisation throughout the year. Staff turnover can be defined as the company’s work force’s percentage that willingly gives up during one year (Allen & Bryant, 2012, p. 132). The organisational leaders try to maintain a low employee turnover rate in order to maintain consistency and stability in the organisational workforce and retain its skilled and effective employees. According to Ikwukananne (2009), high employee turnover rate creates much instability in an organisation and is a strong point of concern. That will compel the management of the organisations to develop effective workforce development strategies to reduce the high turnover rates. 4 The assignment purpose is to analyse the challenges of both high and low employee turnover rate for the human resource management of the organisation. This analysis will highlight several contemporary examples so that the emerging leaders and managers can consider these aspects while developing business operation strategies. This study will all assess the research evidence to determine most effective and significant staff or employee retention strategy. 4 Methodology 5 Research methodology can be considered as one of the important aspects of research work to help a researcher gaining effective research outcome (Bapir, 2000, p. 109). Qualitative research methodology generally focuses on the inner feelings, motivation, thoughts, attitudes and behaviour of people. It can be applied in research work based on its exploratory nature. In this aspect, it can be stated that adoption and qualitative research methodology will be effective for the researcher. In addition to this, qualitative research methodology helps a researcher to gain positive research outcome within limited time period. The choice of qualitative analysis is to make sure that there is provision for a holistic view of the phenomena being investigated. Therefore, the methodology will involve a survey that will be carried out through a research questionnaire. After that, further qualitative analysis methods will be used in which the patterns that will be realised in the data collected will be analysed. 5 Data Collection and Data Analysis 6 Data Collection 6 Data Collection and data analysis help a researcher to gain positive research outcome based on the effectiveness of data. In this case, the methodology will involve a survey questionnaire (Appendix 1) to twenty human resource managers of various companies in London. The questionnaire was sent to these HRM personnel upon their consent to take part in the exercise and adherence to all ethical practices by the researcher. Therefore, a pilot study was carried out to find out the viability of the companies to suit the requirements of the study purpose and to test the viability of the questionnaire. Two weeks were allowed for them to fill the questionnaire and send them back through the same means for analysis. The choice of the primary method was to get the latest trends in the employee turnover rates in the 20 companies. However, a literature review of the same will be relevant to underscore the prior research done. This helps justify the changing trends in the human turnover rates in the past times and the present. 6 Ten of the companies were high-level multinational companies (MCNs) while the remaining ten were middle-level SME’s with an average labour force. In the pilot study, it was noted that all the questions were viable but two companies had to be removed from the study purpose list due to lack of cooperation and were duly replaced respectively. 7 After the two weeks, 18 of the 20 companies had their human resource managers sending their duly filled questionnaires. This represented 90% response rate and was considered viable for analysis. 7 Data Analysis 7 The analysis of the information was based on the responses to the questionnaire. The first five questions sought to find satisfaction levels of the HRM’s as representatives of the other employees. It is noted that they are also employees of the respective companies. In these sections, an average of 40% of the employees cited that they could not clearly state that they were satisfied with their workplaces and conditions. This means that the satisfaction levels on average in the companies was at that rate. Employees cite various reasons for their lack of satisfaction but the final impact of leaving rests on the organisation. 7 The most informative questions were the open-ended questions that cited the costs and challenges of high employee turnover. When sampling all the responses, it was noted that the following challenges face the companies; 8 • High costs of re-hiring 8 • Lost time during replacement 8 • Lost team dynamics 8 • Lost productivity levels 8 • Broken levels of consistency in company continuity 8 These were the reasons that were cited by the HRM professionals at all the respective companies and they stand to be justified by a comprehensive literature review. 8 Review of the Literature 9 Evaluation of theories, models and Literature quoted 9 It is true that the global business market is becoming highly competitive. Therefore, it is important for the organisational managers or leaders to retain its effective and skilled employees in order to enhance effective business performance (Anderson, 2005, p. 112). 9 Effects of high employee turnover 9 Several organisational leaders or managers are trying to reduce the rate of employee turnover as the negative impacts on the business performance of the organisation (Banfield & Kay, 2012, p. 71). The high employee turnover rate is both cost and time-consuming. 9 First of all, the management of the organisation has to find for new effective and skilled workforce. The recruitment and selection process is highly cost consuming as recruitment and selection process includes several activities, such as job advertisements, interviewing and talent pooling. These processes take quite a long time to get completed. Apart from all these things, the new employees need special training and development programme in order to become skilled and competent. In addition to this, the high employee turnover rate can create several critical internal organisational challenges that may affect the collaborative workplace performance of an organisation (Beardwell and Claydon, 2007, p. 29). High turnover rate may create a negative perception in the minds of the existing employees. It may hamper the workplace performance of employees as well as organisations. 10 High employee turnover rate can also affect the organisational culture (Cooper & Burke, 2011, p. 198). Most importantly, it reduces self-confidence and motivation of the skilled and effective employees. Employee turnover generally happens through some common aspects, such as external employee poaching by other organisations, employee termination by employers and job quitting by employees. All of these aspects create a negative impact on the self-confidence and motivation level of the existing employees (Currie, 2006, p. 19). In addition to this, high employee turnover rate always ensures low job satisfaction of other employees. 10 High employee turnover also can hamper the stakeholder engagement aspect. Overloaded employee termination and the turnover rate can give a negative signal to the shareholders and stakeholders of an organisation. Therefore, shareholders and stakeholders play an important role in the decision-making and strategy development process. Most importantly, an organisation cannot develop various strategic options without the involvement of any stakeholder (Marchington and Wilkinson, 2008, p. 38). Inadequate stakeholder and shareholder approach and interest can affect the organisational as well as the business performance of an organisation. It can ultimately affect the brand image of an organisation. 11 An example of Tesco Plc. can be considered in this case. Tesco Plc. can be considered as one of the leading retail chains around the globe. The organisation is known for its offering of high-quality products at the low price level. The management of the organisation generally focuses on the effective customer centric approaches and strategy development process. In doing so, the organisational management used to put huge pressure on its employees (Muller-Camen, Croucher and Leigh, 2008, p. 9). Over time, long working hours, inadequate performance appraisal, poor employee value, high workplace stress and too much centralization has affected the workplace culture of the organisation. Effective and skilled employees generally try to get better employment opportunities against their effort and hard-work. The employee turnover rate of Tesco is too high comparing to other organisations within the global retail industry. The management of Tesco Plc. fails to retain their skilled and effective employees due to lack of motivation and employee job satisfaction aspect (Dartey-Baah, 2013, p. 167). Therefore, several legal agencies used to create different challenges for Tesco Plc. in its business operation process due to inadequate moral and ethical practices. 12 Effects of low employee turnover 13 Anderson (2005) determined the truth behind several organisational leaders or managers thinking that low employee turnover rate are actually good for organisations. But, there are some hidden challenges that may be considered as internal challenges that can hamper the business performance of the organisation in near future. It is true that the global business environment is becoming highly competitive. Each and every organisation within the global business environment is trying to strengthen its workforce in order to gain effective business growth rate. Therefore, some organisations go for employee poaching as recruitment and selection of effective employees from other organisation to build a strong workforce (Price, 2011, p. 89). Low employee turnover rate also can be a major consequence of the limited interest of other organisations in the employees of that particular organisation. It means that employees are not competent and skilled. This may create a serious impact on the business performance of an organisation as low skilled and competent employees may cause the inadequate business performance of an organisation (Cooper & Burke, 2011, p. 117). 13 Effective staff retention strategies 14 According to Anderson (2005), it is highly important for the management of each and every organisation to retain its skilled and effective employee in order to maintain competitive position global business environment. Many strategies may be considered by the management of the organisations in order to retain employees. First, it is importantly necessary for the organisational leaders and management to focus on the employee motivation aspect (Mullins, 2010, p. 71). Employee motivation can be enhanced by some important aspects, such as standard compensation, reward distribution, effective performance appraisal and significant social recognition. The management of the organisation should base on appropriate salary or wage to the employees according to their efforts and performance level. Moreover, the management of the organisation should also consider rewards distribution aspect in order to influence the employees for better workplace performance (Robinson, 2006, p. 82). This reward distribution aspect will help the organisations to influence several underperform employees to improve their workplace performance level. Effective performance appraisal for employees is another important motivational tool that can help the employees to improve their organisational workplace performances. 14 Need for self-esteem and self-actualization of employees should also be fulfilled by the organisations (Edwards & Kuruvilla, 2005, p. 98). The management of the organisation should try to give appropriate social value and social recognition to the performing employees based on their performance level. Effective communication approach between the top level management and employees are also required to retain effective and skilled employees. Effective organisational communication approach will help the organisational leaders to understand the needs and expectation of the employees (Banfield & Kay, 2012, p. 62). 15 Conclusion 15 There was a link between what was realised in the primary research and the findings in the review of the literature. Moving in line with the purpose of the paper, it is worth noting that the primary research underscored to explain the challenges of low and high staff turnover. It was noted that a collection of factors are factored in determining the sufferings that companies go through in the process of experiencing turnover changes. All the challenges associated with that are explained in the literature review as linking the findings of the primary research through the survey questionnaire to the findings of the literature review. To this end, it is therefore stated that the purpose of the research has been justified. 15 Purpose Effective human resource management practices can be considered an important aspect of organisational growth. They are used by organisational leaders while developing any strategy. Staff turnover is an important human resource management aspect that must be considered by the management of the organisation throughout the year. Staff turnover can be defined as the company’s work force’s percentage that willingly gives up during one year (Allen & Bryant, 2012, p. 132). The organisational leaders try to maintain a low employee turnover rate in order to maintain consistency and stability in the organisational workforce and retain its skilled and effective employees. According to Ikwukananne (2009), high employee turnover rate creates much instability in an organisation and is a strong point of concern. That will compel the management of the organisations to develop effective workforce development strategies to reduce the high turnover rates. The assignment purpose is to analyse the challenges of both high and low employee turnover rate for the human resource management of the organisation. This analysis will highlight several contemporary examples so that the emerging leaders and managers can consider these aspects while developing business operation strategies. This study will all assess the research evidence to determine most effective and significant staff or employee retention strategy. Methodology Research methodology can be considered as one of the important aspects of research work to help a researcher gaining effective research outcome (Bapir, 2000, p. 109). Qualitative research methodology generally focuses on the inner feelings, motivation, thoughts, attitudes and behaviour of people. It can be applied in research work based on its exploratory nature. In this aspect, it can be stated that adoption and qualitative research methodology will be effective for the researcher. In addition to this, qualitative research methodology helps a researcher to gain positive research outcome within limited time period. The choice of qualitative analysis is to make sure that there is provision for a holistic view of the phenomena being investigated. Therefore, the methodology will involve a survey that will be carried out through a research questionnaire. After that, further qualitative analysis methods will be used in which the patterns that will be realised in the data collected will be analysed. Data Collection and Data Analysis Data Collection Data Collection and data analysis help a researcher to gain positive research outcome based on the effectiveness of data. In this case, the methodology will involve a survey questionnaire (Appendix 1) to twenty human resource managers of various companies in London. The questionnaire was sent to these HRM personnel upon their consent to take part in the exercise and adherence to all ethical practices by the researcher. Therefore, a pilot study was carried out to find out the viability of the companies to suit the requirements of the study purpose and to test the viability of the questionnaire. Two weeks were allowed for them to fill the questionnaire and send them back through the same means for analysis. The choice of the primary method was to get the latest trends in the employee turnover rates in the 20 companies. However, a literature review of the same will be relevant to underscore the prior research done. This helps justify the changing trends in the human turnover rates in the past times and the present. Ten of the companies were high-level multinational companies (MCNs) while the remaining ten were middle-level SME’s with an average labour force. In the pilot study, it was noted that all the questions were viable but two companies had to be removed from the study purpose list due to lack of cooperation and were duly replaced respectively. After the two weeks, 18 of the 20 companies had their human resource managers sending their duly filled questionnaires. This represented 90% response rate and was considered viable for analysis. Data Analysis The analysis of the information was based on the responses to the questionnaire. The first five questions sought to find satisfaction levels of the HRM’s as representatives of the other employees. It is noted that they are also employees of the respective companies. In these sections, an average of 40% of the employees cited that they could not clearly state that they were satisfied with their workplaces and conditions. This means that the satisfaction levels on average in the companies was at that rate. Employees cite various reasons for their lack of satisfaction but the final impact of leaving rests on the organisation. The most informative questions were the open-ended questions that cited the costs and challenges of high employee turnover. When sampling all the responses, it was noted that the following challenges face the companies; • High costs of re-hiring • Lost time during replacement • Lost team dynamics • Lost productivity levels • Broken levels of consistency in company continuity These were the reasons that were cited by the HRM professionals at all the respective companies and they stand to be justified by a comprehensive literature review. Review of the Literature Evaluation of theories, models and Literature quoted It is true that the global business market is becoming highly competitive. Therefore, it is important for the organisational managers or leaders to retain its effective and skilled employees in order to enhance effective business performance (Anderson, 2005, p. 112). Effects of high employee turnover Several organisational leaders or managers are trying to reduce the rate of employee turnover as the negative impacts on the business performance of the organisation (Banfield & Kay, 2012, p. 71). The high employee turnover rate is both cost and time-consuming. First of all, the management of the organisation has to find for new effective and skilled workforce. The recruitment and selection process is highly cost consuming as recruitment and selection process includes several activities, such as job advertisements, interviewing and talent pooling. These processes take quite a long time to get completed. Apart from all these things, the new employees need special training and development programme in order to become skilled and competent. In addition to this, the high employee turnover rate can create several critical internal organisational challenges that may affect the collaborative workplace performance of an organisation (Beardwell and Claydon, 2007, p. 29). High turnover rate may create a negative perception in the minds of the existing employees. It may hamper the workplace performance of employees as well as organisations. High employee turnover rate can also affect the organisational culture (Cooper & Burke, 2011, p. 198). Most importantly, it reduces self-confidence and motivation of the skilled and effective employees. Employee turnover generally happens through some common aspects, such as external employee poaching by other organisations, employee termination by employers and job quitting by employees. All of these aspects create a negative impact on the self-confidence and motivation level of the existing employees (Currie, 2006, p. 19). In addition to this, high employee turnover rate always ensures low job satisfaction of other employees. High employee turnover also can hamper the stakeholder engagement aspect. Overloaded employee termination and the turnover rate can give a negative signal to the shareholders and stakeholders of an organisation. Therefore, shareholders and stakeholders play an important role in the decision-making and strategy development process. Most importantly, an organisation cannot develop various strategic options without the involvement of any stakeholder (Marchington and Wilkinson, 2008, p. 38). Inadequate stakeholder and shareholder approach and interest can affect the organisational as well as the business performance of an organisation. It can ultimately affect the brand image of an organisation. An example of Tesco Plc. can be considered in this case. Tesco Plc. can be considered as one of the leading retail chains around the globe. The organisation is known for its offering of high-quality products at the low price level. The management of the organisation generally focuses on the effective customer centric approaches and strategy development process. In doing so, the organisational management used to put huge pressure on its employees (Muller-Camen, Croucher and Leigh, 2008, p. 9). Over time, long working hours, inadequate performance appraisal, poor employee value, high workplace stress and too much centralization has affected the workplace culture of the organisation. Effective and skilled employees generally try to get better employment opportunities against their effort and hard-work. The employee turnover rate of Tesco is too high comparing to other organisations within the global retail industry. The management of Tesco Plc. fails to retain their skilled and effective employees due to lack of motivation and employee job satisfaction aspect (Dartey-Baah, 2013, p. 167). Therefore, several legal agencies used to create different challenges for Tesco Plc. in its business operation process due to inadequate moral and ethical practices. Effects of low employee turnover Anderson (2005) determined the truth behind several organisational leaders or managers thinking that low employee turnover rate are actually good for organisations. But, there are some hidden challenges that may be considered as internal challenges that can hamper the business performance of the organisation in near future. It is true that the global business environment is becoming highly competitive. Each and every organisation within the global business environment is trying to strengthen its workforce in order to gain effective business growth rate. Therefore, some organisations go for employee poaching as recruitment and selection of effective employees from other organisation to build a strong workforce (Price, 2011, p. 89). Low employee turnover rate also can be a major consequence of the limited interest of other organisations in the employees of that particular organisation. It means that employees are not competent and skilled. This may create a serious impact on the business performance of an organisation as low skilled and competent employees may cause the inadequate business performance of an organisation (Cooper & Burke, 2011, p. 117). Effective staff retention strategies According to Anderson (2005), it is highly important for the management of each and every organisation to retain its skilled and effective employee in order to maintain competitive position global business environment. Many strategies may be considered by the management of the organisations in order to retain employees. First, it is importantly necessary for the organisational leaders and management to focus on the employee motivation aspect (Mullins, 2010, p. 71). Employee motivation can be enhanced by some important aspects, such as standard compensation, reward distribution, effective performance appraisal and significant social recognition. The management of the organisation should base on appropriate salary or wage to the employees according to their efforts and performance level. Moreover, the management of the organisation should also consider rewards distribution aspect in order to influence the employees for better workplace performance (Robinson, 2006, p. 82). This reward distribution aspect will help the organisations to influence several underperform employees to improve their workplace performance level. Effective performance appraisal for employees is another important motivational tool that can help the employees to improve their organisational workplace performances. Need for self-esteem and self-actualization of employees should also be fulfilled by the organisations (Edwards & Kuruvilla, 2005, p. 98). The management of the organisation should try to give appropriate social value and social recognition to the performing employees based on their performance level. Effective communication approach between the top level management and employees are also required to retain effective and skilled employees. Effective organisational communication approach will help the organisational leaders to understand the needs and expectation of the employees (Banfield & Kay, 2012, p. 62). Conclusion There was a link between what was realised in the primary research and the findings in the review of the literature. Moving in line with the purpose of the paper, it is worth noting that the primary research underscored to explain the challenges of low and high staff turnover. It was noted that a collection of factors are factored in determining the sufferings that companies go through in the process of experiencing turnover changes. All the challenges associated with that are explained in the literature review as linking the findings of the primary research through the survey questionnaire to the findings of the literature review. To this end, it is therefore stated that the purpose of the research has been justified. References Allen, D., & Bryant, P. (2012). Managing employee turnover: myths to dispel and strategies for effective management. New York : New York, Business Expert Press. Anderson, B. A. (2005). Expatriate selection: good management or good luck? The International Journal of Human Resource Management, 16(4), 567-583. Banfield, P., & Kay, R. (2012). Introduction to Human Resource Management. Oxford: Oxford University Press. Bapir, M. A. (2000). Is it Possible for qualitative research to be valid and reliable? Retrieved 2 16, 2014, from http://www.academia.edu/997438/Validity_and_Reliability_in_Qualitative_Research Beardwell, J. And Claydon, T., 2007. Human Resource Management: A contemporary approach. 5th Ed. Harlow: Pearson Education Ltd. Cooper, C. L., & Burke, R. J. (2011). Human Resource Management in Small Business: Achieving Peak Performance. London: Edward Elgar Publishing. Currie, D., 2006. Introduction to Human Resource Management; A Guide to Personnel Practice. London: CIPD. Dartey-Baah, K. (2013). The Cultural Approach to the Management of the International Human Resource, An Analysis of Hofstedes Cultural Dimensions. International Journal of Business Administration, 4(2), 1001. Edwards, T., & Kuruvilla, S. (2005). International HRM: national business systems, organizational politics and the international division of labour in MNCs. The International Journal of Human Resource Management, 16(1), 1-21. Ikwukananne, U. (2009). Correctional officer turnover, of Maslows needs hierarchy and Herzbergs motivation theory. Public personnel management, 38(2), 112. Marchington, M. and Wilkinson, A., 2008. Human Resource Management at Work – People Management and Development, 4th Edition, London: CIPD. Millmore, M., Lewis, P., Saunders, M. Thornhill, A and Morrow, T., 2007..Strategic Human Resource Management: Contemporary Issues. Harlow: Pearson Education Ltd. Muller-Camen, M., Croucher, R. and Leigh, S., 2008..Human Resource Management – A case study approach. London; CIPD. Mullins, L. J., 2010. Management and Organisational Behaviour. Harlow: Pearson Education Ltd. Price, A., 2011. Human Resource Management. United Kingdom; South-WesternCengage Learning. Robinson, I., 2006. Human Resource Management in Organisations. London: CIPD. Torrington, D., Hall, L., Taylor, S. and Atkinson, C., 2009. Fundamentals of Human Resource Management; Managing People at Work. Harlow: Pearson Education Ltd. Tracy, S. J. (2012). Qualitative Research Methods: Collecting Evidence, Crafting Analysis, Communicating Impact. Washington : John Wiley & Sons. Reflection of Assignment (Google Plc) Google Plc. can be considered as one of the leading multinational organisations. The organisation has introduced several diversified and differentiates products and services. The organisation used to follow flatter human resource management process, in which the employees are given huge priority. But, Google has ranked fourth organisation in terms of the high employee turnover rate. This aspect has increased the recruitment and selection activities of the organisation. It is true that the management of Google effectively supports and motivates the employees of different culture to work freely. But, high employee turnover rate is increasing the business operation cost and time of Google. In addition to this, each and every time, the organisational leaders had to give extra efforts to train the fresher. It is increasing overall business operation cost. Moreover, separated HRM functions, increase in employee poaching activities, introduction of strict legal employment policies and change in demographic nature within the organisation has increased the employee turnover rate of Google. The organisation needs to focus on these aspects in order to overcome recent internal HRM conflicts. Read More