Employee Turnover Threatens - Essay Example

What are the effects of high employee turnover? What can companies do to ensure that employees do not leave? Insert Name Course, Class, Semester Institution Instructor Date What are the effects of high employee turnover? What can companies do to ensure that employees do not leave? The human resource is among the most essential elements in an organization. This is because; the employee’s performance will affect the performance of the organization hence affecting its ability to compete with other organizations in the market. It is the responsibility of the organization’s management to create a conducive work environment to ensure that the employees are comfortable. Considering the vibrant and strenuous exercise to hire new employees, the organization seeks to develop and retain employees. The rate at which a company loses employees is commonly known as employee turnover. Employee turnover threatens the entire fabric that fosters an organization's performance (Smith, 2000). Employees move from one organization to another due to an array of reasons. Among them include; poor pay, stringent management policies, poor communication or even lack of growth opportunities. It is evident that in the instance that an organization has high employee turnover, this will be a negative sign to investors as well as potential stakeholders. It is the responsibility of management to ensure that the organization retains employees negating high employee turnover. In various platforms around the world, management heads and scholars try to explain the causes of employee turnover as it directly affects the organization's performance. The basic ideology is the notion that employee turnover is instigated by some common identifiable denominators. Certain scholars opine that in the instance managers can address the key characteristics defining the employer employee relationship the employee turnover rate would reduce significantly (Harris, 2000). The intention of this discussion is to delineate the impacts befalling an organization emanating from employee turnover and avail recommendations to rescind employee turnover. Both theoretical and empirical research clearly illustrate that employee turnover has detrimental repurcations to an organization's performance. According to various personalities dominating the field of Academia, employee turnover fosters negative with regards to the organization's performance. For instance, once an employee leaves an organization, the cumulative experience goes to waste, routine is disrupted, and the overall motivation of the remaining employees decreases. On the other hand, others opine that turnover leads to increased motivation and innovation. In regards to Ramlall, S. (2003).The conflict of ideas indicates that employee turnover largely depends on the situation as well as the nature of the environment facilitating employee turnover. According to company heads, any evaluation on employee turnover should be base on the cost implications visa vie the benefits accruing due to the staff turnover. This is because; there are employees who perform poorly and end up derailing the entire organization. The cost of replacing this category of employees with improved performance enhanced employees would be worthwhile. In addition, replacing poor performers would indirectly benefit the organization. This is because; the new generation of performing employees would encourage the current employees as well as stimulating them to perform better. Employee turnover affects an organization in a number of ways. For instance, employee turnover affects customer service. If an employee who interacts well with customers leave an organization, the sales volume will automatically reduce (Ramlall, 2003).This trickle down to reduced profit margins which will indicate that employee turnover might affect the profitability of an organization. In addition, employee turnover affects the reputation of an organization. An organization with high employee turnover will affect the reputation of a company in a negative way. This is because; all potential stakeholders will shy away from dealing with a company depicting high employee turnover. On the other hand, employee turnover is self regulating. Given the fact that non performing employees will receive low rewards, they will abhor the prevailing conditions thus look for other employment avenues. This might spark their departure, and it will be a blessing in disguise for the organization. The organization will embark on through recruitment exercise seeking to persuade quality employees. The organization might hire motivated and high performing employees that end up improving the entire organizations performance. Causes of employee turnover Before addressing the possible ways of mitigating employee turnover, it is essential to determine the possible causes of employee turnover. In any case, employees seek other employment opportunities or depart from their current employment due to lack of satisfaction. The lack of satisfaction is attributable to a range of reasons including the following; inadequate salary. In an instance where salary and remuneration are below the required or market threshold, employees will seek other employment ventures Meier, K.J. and Hicklin, A.( 2007). Additionally, in an instance where the rates of pay are not uniform among the members of one corporation, employees will seek other ventures. Salary has a absolute magnitude to employee’s performance and satisfaction and any deviation whatsoever will lead to an employee’s departure. Given the personality trait of a person, some employees desire challenging work environments. On the other hand, some work places adhere to routine and hence there are no inherent challenges in the system. Such a system will derail the work craving for certain employees, and this would result to higher employee turnover. The level of education also attributes to employee turnover. This is because; the educated employees focus on career development and advancement. In the instance that a corporation is not advancing one’s career within a given time frame even if the employee displays consistent high performance, this would result in employee turnover. Employees desire recognition. If the employees do not derive recognition or appropriate rewards from their performance, they will be de-motivated to work. Rewards or recognition may be both financial and non financial rewards. Organizational leadership also determines the level of employee turnover. In reference to Meier, K.J. and Hicklin, A.( 2007). It is the sole responsibility of an organization’s leadership to communicate the organizations goals to the employees. Communication is a key element to exploiting the full potential of an employee and hence the management should keenly focus on appropriate communication and effective leadership. Effective leadership also ensures that there is adequate teamwork among the employees. Teamwork facilitates employee’s cohesion, harmony and creates a cordial relation amongst the employees. A work environment that inhibits teamwork leads to disintegration amongst the employee’s hence instigating high employee turnover. In addition, employees working under a stringent schedule will more often than not depart from their employment. This is because; the inability of a work schedule to assimilate any deviations will be detrimental to the organization. The human life is full of unavoidable circumstances that will at times need understanding from management’s perspective. The lack of flexibility will foster increased employee turnover as employees seek more flexible ventures. The distance from the place of work to the place of residence also contributes a terrific deal to the rate of employee turnover. Employees covering long distances to get to their work places will be less motivated unless the organization bears the transport logistics. In the instance that an organization’s human resource has no trust in the organization's leadership, the organization will experience high levels of employee turnover. This is because; the employees will have reduced trust in the capacity or ability of management to carry out the expected responsibilities in the allocated time frame. An organization that has minimal training and development initiatives will experience high employee turnover. This is because; employees wish to advance in their levels of skill and expertise. An organization that overlooks this need will more often than not experience increased employee turnover. When an organization fails to provide a conducive work place for the employees, it is eminent that employee turnover will be inevitable. Why is it beneficial to retain critical employees? It is apparent that managerial team and a section of professionals in an organization add significant impact to the overall organization’s performance. Any organization looses a lot of finances and experience when any of their managerial staff depart. The need to create a conducive environment into the foreseeable future will be tremendously vital as it will mitigate the rate of departure (Ramlall, 2003).This will constitute development of an intellectual capital intensive environment as employees will directly be in touch with their contribution to the organization. By gathering deep knowledge, the organization will be in touch with the recent developments, and this will foster a competitive edge. Considering the global economy approach, each organization is searching for the niche that can sustain a competitive edge that will facilitate an organization's performance into the future. Research indicates that, the average tuner period for employees is 8.53 years. The older employees have a higher retention rate compared to the younger employee’s .In addition; there is a relationship between the age of the employees and the number of positions allocated to the respective employees in the organization. The level of education is a significant factor in relation to employee turnover. This is because; bachelor students feel that they have to put all their education into use and avoid under utilization. Such employees believe that career advancement will only be possible if they move to well paying blue chip companies. This mentality attributes to higher employee turnover. Successful employee retention strategies According to employees, the location of the organization is among the most crucial factors. Employees indicate that commuting is derailing and hence two thirds prefer a shorter distance from their place of work to their place of residence. The other factor is compensation. Employees prefer attractive payment packages accompanied with competitive benefit packages. Payment varies from one organization to the other and hence employees prefer organizations with higher remuneration as they deduce this as better appreciation and recognition. The third factor is the job description or content itself (Lake, 2000). Job responsibilities vary as some jobs are labor intensive while others are not. Job responsibilities also vary with the personality of the employee. Some employees dislike responsibilities entailing physical labor. On the other hand, other employees dislike office related duties and hence the specific responsibilities in a job will determine the level of satisfaction born to the employee. The fourth indicator is company reputation. The reputation of the company is a determinant as some employees would prefer working for reputable organizations, and this would foster employee turnover .In other instances, employees desire to work in organizations with low reputation. Ton, Z. and Huckman, R.S. (2008).denotes that publications and other employees thrust the reputation of a company to either improve or deteriorate. Career development is yet another indicator that would lead to an employee’s departure. Different organizations provide different platforms for employee development. Some corporations advance employees who indicate consistent improvement in performance and interest, in their job. Job security is an decisive factor that would enhance an organization’s retention capabilities. An organization that that affirms job security to its employees will observe a lower employee turnover. Employees need jobs with a lower risk of termination as this would motivate employees to work for longer tenure periods. Each and every organization has a distinct culture that dictates how an organization conducts its day to day operations. Through the organization culture, employees are treated in a certain way that may accelerate their satisfaction or un-satisfaction. It is the responsibility of management to come up reliable organization culture that will ensure employees derive maximum satisfaction through appropriate treatment. In addition, each company has a number of key challenges. Challenges are eminent in every aspect of human life. However, some challenges are bearable while others are not depending on the personality of the employee. It is the duty of management to allocate duties and responsibilities in accordance to the employee’s performance. This will negate the chances of allocating technical job roles than the employees can handle. It is also beneficial for employers to offer adequate training and development opportunities for their employees. Training and development ensures that the employee gain additional know how, skill and expertise on their job role. This initiative from management to develop an employee’s skills and expertise ogre’s well with the employees and hence mitigates the employee turnover rate (Abbasi & Hollman, 2000). Each and every human being has the desire to feel important. Employees are no exception and their desire of importance emanates from the fact they desire to be inculcated in the decision making process. The act of indulging employees in the decision making process facilitates empowerment. Once employees feel empowered, they own an organization and the level of performance increase simultaneously. Finally, benefits and premiums packaged attractively lure the employees. Employees immensely desire lucrative benefits as they have advanced coverage as well as low premiums. It is apparent that mitigating employee turnover is not an easy task. It is eminent that there are a number of factors that determine whether the employee is comfortable or not. Before an employee departs from an organization, a combination of factors comes into play (Smith, M. 2000).It is the sole responsibility of management to institute structures to detect un-satisfaction or any complain emanating from the human resource. This will profoundly negate lose of critical employees that would be beneficial to the organization in the foreseeable future. Conclusion In conclusion, It is apparent that employee turnover is an issue of discussion among scholars and organizations heads. This is because; the impact of employee turnover permeates the organization’s overall performance and profitability. It is the responsibility of management to create a conducive environment for their human resource team. It is noteworthy that employee turnover emanates from un satisfaction amongst the employees. Organizations heads should foster cordial working relations that will negate employee turnover. References Abbasi, S., & Hollman, K. (2000). Turnover: The Real Bottom-line. Public, Personnel Management, 29(3), 333-342. Lake, S. (2000). Low-cost strategies for employee retention. Compensation And Benefits Review, 32(4), 65-72. Smith, M. (2000). Getting Value from Exit Interviews. Association Management, 52(4), 22. Meier, K.J. and Hicklin, A.( 2007)Employee Turnover and Organizational Performance: Testing a Hypothesis from Classical Public Administration. Journal of Public Administration Research and Theory .Volume of Journal: 18 Issue of Journal: 4 Pages: 573-590 Ton, Z. and Huckman, R.S.(2008).Managing the impact of employee turnover on performance. Organisation Science Volume of Journal: 19 Issue of Journal: 1 Pages: 56-68 Ramlall, S. (2003). Managing Employee Retention as a Strategy for Increasing Organizational Competiveness, Applied H.RM. Research Volume of Journal: 8 Issue of Journal: 2 Pages: 63-72 Read More