JAY-MHAR C. GAOIRAN
Master in
Business Administration
ABSTRACT
The word
"employee turnover" is commonly used in commercial contexts. Even
though there have been many studies on this topic, very little research has
been done on examining the causes and contributing factors of turnover as well
as providing some practical strategies that managers can use to ensure that
employees remain in their respective organizations to increase organizational
effectiveness and productivity.
The main
objective of this paper is to understand the motivations behind employee
turnover as well as its causes and essential components as shown in the
relevant literature. This conceptual paper also provides several potential
strategies for preventing employee turnover and keeping people with the
organizations.
Thus, this paper has
discussed key factors in explaining the occurrence of staff turnover and
discusses reasonable retention strategies to deal with these concerns.
Keywords: employee, turnover,
factors, causes, retain, strategies, organization.
INTRODUCTION
Employee turnover
rate can influence a company's bottom line. High turnover typically indicates a
problem because satisfied employees tend to stay with their company. For some
reasons, not all employees who leave the company is unhappy - others may retire,
move away, leave for personal reasons, want to change careers, or even start
their own business. A company's finances and morale may suffer from a high
employee turnover rate. Business owners should take action to discover probable
causes, assess turnover rates, calculate turnover costs, and then handle
turnover issues if management has reason to believe that staff turnover is a
problem within the organization.
Based on the
research conducted by Al-Suraihi, et al., (2021), there are numerous factors,
including job stress, job satisfaction, job security, work environment,
motivation, pay, and benefits, might cause individuals to leave their jobs. An
organization's productivity, sustainability, competitiveness, and profitability
can all be adversely affected by personnel turnover, which also has a
significant financial impact on businesses.
Consequently, to
adopt specific tactics in enhancing employee performance and lower turnover,
businesses must first understand the demands of their workforce. Implementing
solutions will boost employee's motivation, productivity, and job satisfaction,
which can lower employment issues, absenteeism, and employee turnover.
The Negative Outcome of
Employee Turnover to Businesses
Markovich (2019)
emphasized that high turnover rates can have a negative impact on a company and
its employees' well-being in many ways. It is easy to stray away from the
organization's primary mission and vision given the constant requirement to
hire and train new employees. Businesses may provide a higher-caliber staff
that improves their bottom line by keeping their current employees. Businesses
may lower employee turnover by providing staff with the right training,
rewarding them for a job well done, and building a culture of trust within the
workplace.
Similarly,
according to Nielsen (2021), she pointed out in her article titled Identifying
and Addressing Employee Turnover Issues, that when an employee leaves the
organization, it costs the company mainly in productivity, money, and time.
·
Productivity
– when a person leaves, productivity typically suffers because other employees
may have to temporarily take on some of the previous employee's
responsibilities.
·
Money
– along with the financial expenses of lower production, employer might need to
pay staff overtime to pick up the slack left by the former employee until
a replacement is located. Additionally, employer can be required to pay for the
costs of hiring a replacement and filing for unemployment benefits.
·
Time
– replacing a former employee will also need to invest time and money in
advertising, doing interviews, and other recruitment methods. Employers must
keep in mind the time and effort they put into finding and educating the former
employee. When they lose a lot of staff, they waste time and money.
Hence, even after
a company recruits and hires a new employee, productivity will still suffer as
the person adjusts to their new position. Depending on the job, temporary
employees may occasionally be able to pick up the slack. In other words, losing
an employee cost the company money because it requires more resources to resume
productivity or performance at the previous level. Given the high costs
involved in turnover, businesses generally want to avoid it as much as they
can.
Sources of Job Dissatisfaction
Employees do not
always switch jobs because they are unhappy in their current position. They can
be drawn away by higher income, better benefits, or better employment
opportunities if the talents they possess are in demand. Employers can take
efforts to boost morale in their companies and make individuals be satisfied
and productive, since they have no control over what is happening with other
businesses, how much they pay, or which perks they provide. Because of this, it
is crucial to distinguish between employees who quit because they are
dissatisfied and those who do so for other reasons.
The following are
some of the most common reasons for high turnover in businesses as explained by
Nielsen (2021):
·
A
mismatch in the job's requirements and the employee's skills – Employees who
are given tasks that are too challenging for them or whose skills are not fully
used may get demoralized and leave their jobs. Lack of knowledge of the
qualifications needed to fill a position may lead to the hiring of either
underqualified or overqualified employees.
·
Inadequate
equipment, tools, or facilities – If working circumstances are poor or if the
workplace lacks necessary amenities like enough lighting, furniture, restrooms,
and other health and safety regulations, employees won't be ready to put up
with the inconvenience for very long.
·
Lack
of potential for growth or advancement – Before hiring, this should be stated
to avoid misleading the employee if the role is essentially a dead-end
proposition. It is important to give a clear description of the job without
giving the employee unrealistic expectations of future growth or progress.
·
A
sense of being unappreciated – It makes sense that since most employees want to
do a good job, they would also like to be acknowledged and commended for it.
Companies must make sure to show they value their employees.
·
Inadequate
or poor training and supervision – Employees require direction and instruction.
An unfamiliar job may require additional assistance for new hires to learn.
Similarly, employees may have performance gaps and a lack of confidence in
their skills if there is no training program in place.
·
Unfair
or inadequate wage arrangements – Low compensation or unequal pay are major
sources of frustration that can lead some employees to leave their jobs.
Even businesses
with strong employer branding are not going to be perfect. The objective is to
establish a positive work atmosphere where employees feel supported. Business
owners can build a company where problems can be rapidly addressed and remedied
when they encourage employees to share their knowledge and comments.
Factors to Consider Before
Terminating Employees
Companies must
take immediate action if one of their employees is failing to live up to
expectations. Acting hastily to fire an employee is harmful for a company. To
lessen the liabilities and offer the employee plenty of room to develop,
business owners may use a reasonable and fair method.
According to an
online article published in staffleasing-peo.com, the following can be
considered before terminating an employee. A company should find out when the
employee began underperforming. Managers should review the employee's work to
determine when the performance problems started if they feel employees are not
performing according to expectations. Another is if companies ever need to
defend their choice to fire an employee, documentation will be their strongest
ally. These records demonstrate efforts to support employee's success. It is
crucial to be thorough because this evidence of mediocre performance might be
what prevents companies from facing legal action.
Another
consideration is setting clear expectations. Managers cannot just assume that their
employees are aware of what is required of them. It is important to communicate
expectations clearly, which can be greatly helped by effective performance
assessments. Also, one must be a helpful coach. Business owners serve as their
staff members' coaches in numerous ways. It may be less expensive to improve
their skills than to start the hiring process over. Managers may also create a
performance improvement plan. when mentoring an employee at the same time noticing
significant performance difficulties.
With the right
human resource support, managers may decrease some of the risks and
responsibilities associated with being an employer. They should make sure to
attract, retain, and develop the best employees. To explore strengthening human
resource practices, most business owners provide trainings to human resource
personnel especially on trends in human resource development and management.
How to Prevent Employee
Turnover
If a business
wants to retain its personnel on board, it must identify the advantages of its operations
that motivate them to do so. Employees' desire to stay may be influenced by a
few internal factors such as desirable benefits, pleasant working conditions,
opportunity for growth or advancement, pay, and job security.
Some strategies
that businesses or managers can use to prevent employee job dissatisfaction at
work are providing clear set of goals and instructions, constant communication
with subordinates, maintaining no favoritism policy, and giving employees
recognition.
Along with
internal reasons that influence whether employees want to leave or stay,
external influences might also have an impact on turnover rate. A company may
try to make the job as desirable as they can to lessen the probability that
unnecessary causes may tempt employees away, even while employers cannot do
much about these conditions. Reducing undesired turnover by providing employees
with perks that they regard as privileges that "make or break" a
position.
Honing and Developing
Employees
The most valuable
asset in any company is probably its employees. Employee development is the
process of assisting them in honing and improving their abilities in accordance
with personal and organizational objectives. The performance of a firm is
directly impacted by the skilled and motivated staff that results from employee
development.
Working toward
professional growth is the responsibility of each employee. But both the
company and the employee gain from promoting and allowing opportunities for
growth. According to Herrity (2021), there are many key tactics for developing
employees such as train for success, coaching, nurturing professional networks,
and others.
·
Train
for success – for the development of current employees as well as the
onboarding of new ones, training is a significant task. Training promotes both
hard and soft abilities, knowledge, and confidence necessary to execute jobs.
An employee is more likely to perform well at work when their confidence is
increased.
·
Coaching
- it entails a senior staff member collaborating closely with junior or less
seasoned workers, which contributes to the continual development of
organizational leaders in the future. Employees that receive coaching gain new
perspectives and learn how to solve challenges on their own.
·
Nurturing
professional networks - giving employees the chance to network with others in
the industry helps to develop them. Managers may introduce mentors,
businessmen, and professional organizations to their staff. Their minds are
widened, and their perspectives are changed by networking.
Other ways companies develop their employees include setting as a good example and encouraging self-development, creating individual development plans, setting performance metrics, simulating situations, giving regular feedback, delegating responsibilities, engaging in cross-training, taking career progression seriously, dedicating resources, retention, and eliminating barriers.
CONCLUSION
An organization's
success and the output of other, apparently loyal employees suffer from high
employee turnover. Having a high turnover rate results in losing valuable
employees who are expensive to replace. Additionally, high employee turnover
reduces productivity since surviving employees may be forced to perform many
tasks at once or be given assignments that are outside the scope of their
training.
Employers must
use certain tactics to increase employee retention through increased job
satisfaction. An employer should first evaluate his compensation packages,
interpersonal dynamics at work, opportunities for career and professional
growth, and workplace assistance. Depending on the qualifications, experience,
and length of employment of their staff, employers should provide competitive
wage packages.
Both employee
productivity and attrition rates are impacted by the company culture. Since a
supportive work environment increases job satisfaction and decreases turnover,
management must foster it. The quality of the workplace is also impacted by
relationships at work. Employers must therefore develop plans that encourage
internal harmony. Additionally, a good workplace must have supplies and
equipment, and the personnel must be trained in how to use the supplies that
are available.
REFERENCES
Al-Suraihi, W., et al, (2021). Employee Turnover: Causes, Importance and Retention Strategies. Retrieved from https://www.researchgate.net/publication/352390912_ Employee_Turnover_ Causes_Importance_and_Retention_Strategies
Carey, S. (2017). 6 Ways to Overcome Job Dissatisfaction. Retrieved from https://www.inspiringinterns.com/blog/2017/11/6-ways-to-overcome-job-dissatisfaction/
Charaba, C. (2022). The real cost of losing an employee. Retrieved from https://www.peoplekeep.com/blog/employee-retention-the-real-cost-of-losing-an-employee
Five Things to Do Before Terminating an Employee. (2020). Staff Leasing. https://staffleasing-peo.com/employer/5-things-to-do-before-terminating-an-employee/
Herrity, J. (2021). 14 Effective Tips for Developing Employees. Retrieved from https://www.indeed.com/career-advice/career-development/developing-employee
How to Improve Employee Satisfaction. (n.d.). Talent Bridge. https://talentbridge.com/blog/how-to-improve-employee-satisfaction/
Markovic, M. (2019). The Negative Impact of a High Turn Over Rate. Retrieved from https://smallbusiness.chron.com/negative-impacts-high-turnover-rate-20269.html
Nelson, N. (2021). Identifying and Addressing Employee Turnover Issues. Retrieved from https://www.wolterskluwer.com/en/expert-insights/identifying-and-addressing-employee-turnover-issues
Panda, I. (2019). Employee Retention in Workplace. Retrieved from https://ivypanda.com/essays/employee-retention/
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