Employee Retention in the United Kingdom - Case Study Example

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This study "Employee Retention in the United Kingdom" focuses on the measure of the employees’ willingness to remain with the company in the future. It often reflects the employees’ belief in the mission and goals of the company, willingness to expend effort in their accomplishment…
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Employee Retention in the United Kingdom
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Download file to see previous pages Commitment is usually stronger among longer-term employees, those who have experienced personal success in the company and those working within a committed employee group. Organizationally committed employees will usually have good attendance records, demonstrate a willing adherence to company policies, and have lower turnover rates. In particular, their broader base of job knowledge often translates into loyal customers and even pay the premium price.
Employee retention is an issue since the turnover levels from various industries are rising. Statistics show different percentages related to turnover rates as well as the reasons for the increased turnover.
"Turnover levels vary very considerably from industry to industry. The highest levels of turnover (22.6%) are found in private sector organizations. Successive surveys of labour turnover show that the highest levels are found in retailing, hotels, catering leisure, and among other lower paid private sector services groups. The public sector has an average turnover rate of 13.7%." (Stone, 2007)
Almost a quarter of employees in the UK have been in their current jobs for five years. As a proportion of aggregate turnover, the percentage of people leaving organizations through redundancy remains small. There was a slight decrease from 28% to 24%of organizations making more than ten people redundant during 2006 and in those operating a recruitment freeze from 24% to 22%in the course of the year.
The cost of high staff turnover can be substantial. Not only are there the direct financial costs of replacing staff but also other repercussions such as the potential loss of key skills, knowledge, and experience, disruption to operations and the negative effect on workforce morale. In addition, high turnover represents a considerable burden both on HR and line managers as they are constantly recruiting and training new staff.
When seeking to resolve the problems associated with high turnover, companies must first investigate the underlying causes. They need to have in mind an appropriate level of attrition by benchmarking against similar organizations and taking into account the real costs of turnover to the company.
Different theories of employee retention
People are vital components for the effective operation of the organization; as a matter of fact, managers often say that people are their most important assets. The human assets are never shown on the balance sheets as a distinct category, although a big amount of money is invested in the recruitment, selection, training of personnel. Rensis Likert suggested maintaining accounts of valuable human assets through human resource accounting. The importance of the employees cannot be overemphasized because it can determine the success or failure of the organization.
Make-You-Happy Action Teams (MAT) plays a critical role in managing employee retention. This is Z-Theory management. To briefly state, Z-Theory management means everyone that is affected by a decision for the company gets a "say" or a "vote" in the decision (tons more on Z-Theory Management in another article). This means employees are directly involved in decision making that affects them. When then make decisions that directly affect them, they stay around longer.   ...Download file to see next pagesRead More
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