Employee turnover rate is the influx of entry or exit of employees from an organization within a specificied period of time. The exit from formal employment can be as a result of dismissal, resignation, retirement or death. Involuntary turnover is viewed as an act of dismissing employees with the organization accruing some benefits while the decision to resign by employees is a major loss to an organization. Company`s decisions that are driven by unavoidable turnover must be made without hesitance like in the case of an employee that expensive for retention. An organization should strive to achieve a balance between the need to retain employees and the actions that involve turnover because the company will incur costs.
The high turnover rate is a recipe for troubles in an organization because it shows a longstanding human resource problem as turnover costs. However, it is important to highlight the voluntary turnover that is conducted by an organization after an employee audit can be beneficial to a company because it leads to high level of productivity. Furthermore, employee turnover in a business establishment gives the owners an opportunity to make some changes in the workforce so as to encourage workers to be innovative. The expenses that are associated with employees` turnover include administrative costs for training the new workers, the selection process and allocation of offices. Additionally, there are output losses with regard to the reduction in quality as a result of a position that has been vacating by an employee voluntarily. The turnover costs can be high in case an employee is replaced by a less productive one, increasing the overall expenses of organizing for training.
2.0 Introduction
An organization`s employee turnover is in some cases viewed as a trade-off in which the company can accrue benefits, and in other situations incur costs. The main loss that organizations incur is when employees that were trained to perform specific tasks cease being part of the labor force. Companies are majorly affected if they fund the training of their employees without the anticipation that they may lose them to other organizations, primarily because trainees as viewed as a source of cheap labor. The most appropriate tool that has been used by employers to combat employee retention problems on pay alterations. Noteworthy, incentives such as an increase in compensation cannot be gainfully said to have an influence on the behavior of an employee with regard to being cost-effective for an organization. This essay will focus on the factors that result to a high turnover rate.
3.0 Discussions
Essentially, an organization must keep track of its turnover costs so that it can inform decisions with regard to retention of employees in accordance with the results of performance. Every organization that is committed to retaining their employees must invest in aspects of the job environment that makes them happy by addressing their welfare needs. High turnover rate shows that there is a lot of dissatisfaction among the employees on such things as pay levels and the efficacy of the policies implemented to address problems faced by the workforce. The economic perspective of the problem is that labor is inherently elastic and a response by employees on increase in remuneration is usually led to long hours of working and high retention rates.
The negative consequences that are associated with a high turnover rate go beyond the costs incurred due to the reduction in the level of productivity that result from delays in production or delivery of services before the vacant positions are occupied. The indirect costs of losing workers have a substantial negative impacts. Consequently, the organization can no longer secure the necessary technical expertise of the employees that resign on their own volition (Jain, 2013). Studies reinforce the argument that most employees resign because of the existent disagreement with the immediate managers as a result of poor leadership. Additionally, employees resign because their employer does not provide a plan for them to advance in their career which contributes to a lot of dissatisfaction in an organization leading to high rates of turnover. The mismatch between an employee and the position in which he or she designated can lead to resignation.
Organization`s management must be aware of the role that human resources play in the achievement of the company’s goals. Employees are a valuable resource that is characteristically volatile. The toughest challenge is the ability of human resource managers to attract talented people, optimize their performance and additionally, retain them for the long haul. Knowledge management and an element of teamwork among employees are only achieved under participative leadership where employees are encouraged and inspired to be creative (Rice, 2013). Employees’ outcomes can only be enhanced if the organization`s leadership inspires them to the right direction. Leaders have the ability and the capacity to influence the level of performance by the employees. An aspect of participative leadership can contribute immensely to employee retention rates and a better performance in terms of the job outcomes.
Retention emerges as a critical issue in modern times because of the upsurge in employee turnover and lack of skilled manpower. Organization managers have a crucial date with regard to the development of strategies that will ensure that employees are retained and they feel satisfied with being part of the company. The current business environment is dynamic human resource managers must come up with strategies that steer organizations in the competitive environment by ensuring that employees feel that they are valuable asset to a business (Ng'ethe et al., 2012). A company will be able to maintain its competitive edge if there is an effort by the management to maintain the highly talented employees.
Effective leadership among the company`s executives will ensure that there is proper identification of the skills and the that allocation of duties is done in accordance with the established system of qualification to guarantee optimum performance. Managers must create a culture of teamwork which makes the employees to be committed to remaining in a particular organization despite better opportunities in other places. Coercion by the management is not desirable and it may contribute to demotivation.
The most effective strategy that an organization can develop in an effort to attract employees is by ensuring that the organizational culture is welcoming and the responsibility of workers retention should not be a specialty under the department of human resources. Another element that can lower the rate of employee turnover is by investing in proper communication to build a team of cohesive employees that are aware of their roles in the organization (Mathis " Jackson, 2011). Technology has also been identified as a major factor that makes employees leave the company because they may feel that a particular job environment as not challenging enough for their skills. Notably, employees may also be retrenched because of remaining redundant in a dynamic work environment where the demands for workers to be tech-savvy are very high.
4.0 Recommendations and Conclusion
The structure of management must be effective so as to reduce instances of piling up of pressures to the different cadres of employees which leads to high rates of employee turnover. Company executives should be viewed as role models by the employees in lower cadres and should play a role in mentoring them into future leaders. Furthermore, companies should invest in technology training for their employees to gain the skills necessary for them to be competitive in the industry. Another important aspect of the balancing of turnover rates and retention is on ensuring that there proper definition of roles that are allocated to different employees.
Human resource managers must spearhead policies that ensure that provide an ample working environment for the employees so that they can be free from stress, and kill the existent boredom in routine job assignments. Managers should be trained on better ways of managing employees so that they can identify different issues facing employees by detecting the changes in behavior. Team-building activities are some of the engagements that bring a new perspective to the employees that they a family working towards shared goals and aspirations. Conclusively, the remuneration policy adopted by an organization must be developed after a benchmark of the best in the industry to enhance the employee retention levels.
5.0 References
Jain, M. (2013). Employee attrition-causes and remedies. Journal of Social Welfare and
Management, 5(2), 69.
Mathis, R. L., " Jackson, J. H. (2011). Human resource management: Essential perspectives.
Cengage Learning.
Ng'ethe, J. M., Namusonge, G. S., " Iravo, M. A. (2012). Influence of leadership style on
academic staff retention in public universities in Kenya. International journal of business and social science, 3(21).
Rice, A. L. (Ed.). (2013). The enterprise and its environment: A system theory of management
organization
(Vol. 10). Routledge.
