Causes and Effects of Employee Turnover - Coursework Example

EMPLOYEE TURNOVER Name Institution Course No Date Introduction According to Urbancova & Linhartova (2011), employees are the most important assets in an organization since they determine the productivity and ultimate success of an organization. Currently, employees from several organizations have a range of networks that allow them either to stay on their jobs or quit, depending on the provisions of their employers. Unlike in the past when employees could stay on a job for a long period, employees of this age do not retain their jobs for longer periods, leading to poor organizational productivity. Additionally, the existence of social networking sites such as LinkedIn allows employees to seek new opportunities and organizations that have better offers compared to their current organizations. Consequently, organizations experience high employee turnover today than in the past. Fursso (2015) describes employee turnover as the number or percentage of workers that leave an organization and are replaced by new workers. It is one of the most important issues in an organization to which special attention should be given. Staff turnover in any organization is a warning sign to the management of the organization that employees are not motivated. It is one of the issues that adversely affect several organizations in the current age. Moreover, employee turnover can either be voluntary or involuntary depending on the prevailing circumstances. This paper investigates various factors that cause employee turnover in organizations and its human resource management implications. Moreover, the paper evaluates the success of the retention strategies that the human resource practitioners implement to address this issue. Causes of Employee Turnover Employees in different industries across the globe leave their jobs because of multiple internal and external factors. One of the causes of employee turnover in several organizations across the globe is the issue of met expectations (Melaku 2015). The writer suggests that each employee has his or her expectations when joining an organization. The failure of the organization to meet these expectations result in dissatisfaction of the employees. Thus they leave the organization. Moreover, when the expectations of the employees are not meet while on a particular job, they are likely to have a negative evaluation of the job leading to job dissatisfaction. The result is that the employees will have the thought of quitting. This situation results in low organizational productivity. Another factor that influences employee turnover in organizations is the lack of training and development programs. Training and development of employees involve the learning activities that organizations undertake to help their employees acquire and apply the necessary knowledge and skills for their jobs (Yawson 2009). Employee training and development gained attention in the field of management in the 1950s and continues to be an important requirement in the management of human resources presently. The realization that the qualified employees in an organization do not simply emerge, has led to the injection of huge sums of money by the management of various organizations to support employee training and development programs. For new recruits in organizations, training is important since it serves as a basis of transition from the theoretical approaches to practical situations. However, not all employers conduct training for the employees in their organizations. In such organizations, the lack of training of the employees and the poor handling of training cause the workers to quit. Recent research reveals that the lack of training and poor training handling systems is one of the major factors causing employees to quit their organization. Regardless of the positions and titles held by the employees, they leave their organizations due to the lack of adequate training. Moreover, the other factor that influences employee turnover in organizations is the leadership style and the characteristics of the work environment. The leadership style of an organization may cause the employees to have the intention of leaving an organization. In several institutions, the leadership style has profound effect on how the employees evaluate their jobs. Bad leadership styles results in employee dissatisfaction, thus causing them to seek better job opportunities elsewhere. Conversely, in the organizations where there is adequate leadership in terms of employee engagement and motivation of the employees, there is high job satisfaction, thus improved organizational productivity. Furthermore, the job environment is another factor that determines whether or not employees will retain their jobs in organizations. Generally, some jobs are more attractive than the others. Thus, employees tend to settle for the better jobs. In cases where organizations do not offer safety measures to the employees when dealing with dangerous materials, employees are likely to be dissatisfied with the jobs, causing them to quit. The attractiveness of a job depends on various elements such as its challenges, dangers, repetitiveness and the perceived capacity to elicit a sense of completeness among the employees. Provision of information to the employees is another important component of the job environment that determines employee turnover. Organizations with effective communication systems experience lower employee turnover that the organizations with poor communication systems. Employees are bound to feel comfortable in their workplaces when they are involved in decision making processes of their firms. To this effect, the management of companies should allow employees to have a clear understanding of the various issues that affect their work environments. However, in organizations where the workers cannot access important information due to the absence of openness in information sharing and employee empowerment, employees are likely to feel disengaged and thus, quit their jobs. Moreover, job instability can also cause employees to move from one organization to another. In the labor market, workers can only stay in an organization when they are certain of the future of the organization. Company instability causes employees to quit and move to better and stable companies. Additionally, employees move from unstable to stable organizations as a way of ensuring career advancement. The other factor that causes employee turnover in organizations is the lack of career development. Career development in human resource management refers to advancements that the employees in their lines of work or the pattern of work experiences that span the professional life of an individual. It is the guarantee of an employee to be promoted from one position to another. Career development programs in organizations help the employees in developing better career potential. Organizing workshops and career gap analysis in organizations is important in ensuring that employees have the capacity to be promoted. Therefore, well-structured career development programs in organizations enable the employees to be promotable in their firms. In firms that do not offer career development programs for the employees, there is the likelihood that employees will retain their positions for longer periods of time. Moreover, the lack of career development programs in organizations causes the lack of enrichment of the human resources in an organization, causing them to quit. It is important for organizations to develop and implement career development programs to enable them retain their employees. Finally, the employee turnover is also influence by the pay and benefit conditions that are offered by organizations (Armstrong 2010). The payment level of an organization is directly linked to the voluntary employee turnover. In many cases, employees are likely to quit their jobs and move to other organizations that offer better payment for the same position. The situation is worsened by increase in knowledge this era, which cause employees to opt for better paying jobs that can improve their living conditions. Consequently, organizations that offer low wage rates to the employees are likely to suffer high employee turnover and separation. Apart from the pay level, the pay system also impacts on the employee turnover. In several organizations, the pay system depends on the seniority of the employees and the performance appraisal. Employees are satisfied with the pay system in an organization only if they believe that it is fair. In situations where the employees are dissatisfied with the pay system, they are likely to be less motivated hence quit the job. Effects of Employee Turnover in Organizations Employee turnover has detrimental effects on organizations, especially to the clients of companies and the remaining employees who struggle to offer quality services to customers. The situation is especially worse when the vacant positions resulting from turnover are filled by in experienced personnel. For these reasons, employee turnover has received special attention from the managers and supervisors in many organizations who seek to ensure high productivity of their organizations. Moreover, the issue of employee turnover is considered one of the most challenging and intractable human resource challenges facing many organizations across the globe today. According to Armstrong (2010), one of the implications of employee turnover in human resource management is low productivity. Organizational productivity is defined as the capacity of an organization to achieve its desired goals with the means of workforce, strategies, machinery and equipment. Since employees are the most important assets of an organization, increased turnover leads to reduced capacity of organizations to perform well in their industries. In assessing the impacts of turnover on the, Armstrong (2010) further states that the employee turnover has direct effects on the productivity of organizations. First, the newly replaced workers may not be as effective as the previous ones. Therefore, a lot of time and resources have to be used in training the new employees, who also take time to be conversant with the new environment. Secondly, the co-workers face a lot of problems ensuring quality of the work in the absence of the other employees. The workers still have to do extra work training the new recruits after replacement have been done. Other factors such as cultural differences between the previous and recruited employees can also slow down the job performance of individuals, thereby resulting in reduced organizational productivity. Another impact of human resource implication of high employee turnover is increased costs of training and recruitment of new workers. When employees leave an organization, the human resources department is mandated with the role of recruiting new employees. As a result, the organization has to provide resources for sourcing the right talent and experience that is needed for the vacant job position. As Alkhatni (2015) argues, once new workers are recruited in an organization, they are required to go through the normal procedures of induction and training. These activities take place at an extra cost depending on the frequency of their occurrence in the organization. The result is increased expenditures by the organization. If the employee turnover is low, such costs can be avoided by organizations. Different scholars agree that the cost of replacing one employee in an organization is equivalent to one or three times the annual salary, benefits and the additional coast of revenue that the seasoned employee would have generated (Ernsberger 2011). Moreover, an increase in employee turnover in an organization results in the loss of skilled personnel. In cases of labor turnover, skilled and experienced employees move to the organizations that have better payment systems, leadership and career development. Employee turnover results in reduced performance and poor organizational productivity since quality tends to suffer. Moreover, it takes time for the new employees to have complete knowledge and control of their respective roles. The ultimate result is increased organizational losses. Furthermore, employee turnover results in negative organizational reputation. As a form of corporate social responsibility, it is important for organizations to have positive public image especially within the communities where they are situated. Increased employee turnover, however, results in poor organizational reputation. When very many employees quit an organization, the public begins to lose confidence in the operations of the company. With such negative public perception, the future of an organization becomes blurred. Additionally, the loss of public confidence in an organization can pose the challenge of getting qualified employees to replace those who leave such organizations. Retention Strategies and Effectiveness According to Ankrah-Kusi (2012), it is crucial for organizations to effectively manage employee turnover in the current competitive business environment. Naturally, employees look for jobs that are more satisfying and challenging jobs and organizations that have perfect working environments where they can thrive. Providing all these needs to the employees is costly to organizations and may be cumbersome. At the same time, organizations need to retain their talented and experienced employees to improve productivity. Consequently, organizations have devised various strategies to deal with the issues of labor turnover. One of the strategies used by organizations across the globe in retaining employees is communication. To avoid the cases of employee turnover, it is important for the employers to be in constant communication with the workers on matters concerning their welfare and the organization at large. According to Goodman and Hirsch (2010), effective communication helps in establishing positive relations with the employees, thereby increasing their job satisfaction levels and their stay within an organization. The authors argue that effective communication with the employees must begin early during employment. Communication plays a critical role in the retention of employees in organizations in a number of ways. First, it creates an atmosphere of fairness and openness in organizations, thus increasing employee job satisfaction. Secondly, it increases the level of consent, participation, and motivation of the employees, thus enabling them to stay longer on their jobs. Furthermore, effective communication creates a sense of trust and common purpose among the workers, making them feel comfortable with each other. This way, employers are capable of reducing conflicts within organizations, hence increase their capacity to retain employees. Another important strategy used by employers to retain their employees is training and development. One of the expectation of workers when joining an organization is to feel valued. Training of both new and continuing employees is a significant way of emphasizing the role of the employees in an organization. Many organizations develop and implement raining programs for their employees as a way of showing respect and the desire to see them grow. Training and development of the employees helps the organizations in retaining their employees in different ways. Through training, employers create a positive work environment for the workers where they are capable of advancing and getting promotions (Melaku 2015). Creation of good working environments boosts the morale of the laborers, making them stay in organizations for longer. Also training increases the loyalty of the workers to their firms, hence retention. By training their employees, the managers prove to them that they are valued, thus increasing their loyalty to their firms. This way, organizations are capable of keeping their employees for longer. Moreover, through training, employees are capable of acquiring new skills, which are important in their personal and professional growth, thus increasing their stay in organizations (Costen &Salazar 2011). Moreover, employers retain their workers by ensuring high levels of job satisfaction. Although an organization may be very competitive in terms of remuneration of the employees and providing training programs to the employees, the relationship of the relationship between the workers and the management also determines their capacity to stay in an organization. For the management of companies to increase their capacity to retain employees on their jobs, there is the need to increase the interaction between the management and the employees. Workers want more self-satisfaction, more responsibility and more control over the decisions that affect them for them to stay on their jobs. Ensuring high levels of job satisfaction helps the employers to keep their employees in various ways. First, by engaging the staff members in decision making, organizations increase the loyalty of their employees and boost their morale, causing them to be satisfied with their jobs. Secondly, high levels of job satisfaction can be achieved by recognizing and rewarding individuals and teams for outstanding performances. This kind of motivation increases the level of attachment of the workers with their firms, thus enabling them to stay for longer. As part of employee job satisfaction, various departments within organizations have the mandate of offering advancement opportunities to the workers. This way, organizations are capable of retaining talented and experienced workers. The other strategy that is used by organizations in retaining the employees is the pay and benefits. The pay and benefit of an organization is one of the important factors that determine whether or not employees will stay in an organization. In organizations where employees perceive the pay systems as unfair, there is likely to be high labor turnover. One of the ways through which better pay systems in organizations result in employee retention is that it promotes fairness. This way, the employees are capable of being satisfied with their jobs and can stay for longer in such organizations. Moreover, employers seek to increase the salaries of their employees on the agreed term basis as a way of ensuring that they remain loyal to the firms. Apart from the pay systems, the human resource practitioners also offer a range of benefits to the employees, thus enabling them to stay longer. In many organizations, the benefits that are given to the employers include; vacation, health insurance, transport and house allowances. These benefit enable the employees of organizations to stay longer. Moreover, the organizations also offer their employees other non-traditional benefits such as availability of childcare, flexible work hours and discounts on services offered. This way, employees are made to feel special, thus prolong their stay in their organizations. Conclusion With regards to the discussion above, it is evident that employee turnover is one of the most serious problems that is affecting several organizations across the world. The movement of employees from one organization to another in the current knowledge era is promoted by the social networking sites that allow the employees to seek better opportunities. The Australian Human Resources Institute (2013) views increased labor turnover in organizations as a big problem that should be addressed as quickly as possible to ensure the continuity of such organizations. Employee turnover poses a range of threats to organizations including reduced productivity, increased costs of training and development for the newly recruited employees and a negative organizational reputation. The employee turnover can be detrimental to organizations if not taken seriously. Currently, many organizations have devised various ways to deal with the situation, thus increasing their capacity to retain their workers. Implementation of these strategies is important in enabling organizations reduce the labor turnover rates. References Alkhatni, A.H. (2015). Investigating the Factors that Influence Employee Turnover Intention: A Review of Existing Empirical Works. International Journal of Business and Management. Vol 10, No 2. Armstrong, M. (2010). A Handbook of Human Resource Management Practice: A Guide to Action. London & Philadelphia. Ankrah-Kusi, V. (2012). The Effect of Retention Strategies on Labor Turnover in the Wood Processing Industry. A Thesis Submitted to the School of Business. Kwame Nkrumah University of Science and Technology. Australian Human Resource Institute. (2013). Pulse Survey-Turnover and Retention. AHRI, Melbourne. Costen, W & Salazar, J. (2011). The Impact of Training and Development on Employee Job Satisfaction, Loyalty and Intent to Stay in the Lodging Industry. Journal of Human Resources in Hospitality and Tourism. 10 (3), pp 273-284. Ernsberger, M. (2011). Solution for Leadership and Organizational Excellence. Accessed from https://. www. farr.net. Fursso, A.R. (2015). Employees’ Turnover: The Case of Oromia Water Works and Supervision Enterprise. A Thesis Submitted in Partial Fulfilment of the Requirements of Maters in Business Administration. Goodman, M. B., & Hirsch, P. B. (2010). Corporate communication: strategic adaptation for global practice. New York, Peter Lang. Urbancova H., Linhartova L. (2011). Staff Turnover as a Possible Threat to Knowledge Loss. Journal of Competitiveness Yawson, F. (2009). Training and development of human resource in customs and preventive Service. A thesis paper Kwame Nkrumah University; Ghana, Read More