Employee Turnover and Morale Problems in the Automobile Manufacturing Industry

Employees quit organizations for a variety of reasons, both voluntary and involuntary. Wilson (n.p) said in the automotive news that attrition in the automotive industry is one of the leading obstacles that cost dealers billions of dollars per year. Turnover is caused by both personal and corporate causes. Notably, elevated rates of staff turnover are often dependent on a manager's ability to maintain the workforce by increased mood and satisfaction, among other factors. The automotive manufacturing industry is facing difficulties in terms of workforce recruiting and retaining. The data from National Automobile Dealers Association (NADA) shows that the turnover rates have consistently increased and ranges between 35-40% from 2011 to 2015 (Wilson n.p). Similarly, the retention has also progressively declined even for the leading players such as BMW, Mercedes, and Ford. It is on these grounds that this write-up will examine employee turnover and morale issues in the automobile industry with a focus on the causes, consequences as well as possible solutions.
Causes of Employee Turnover and Low Morale in the Automobile Manufacturing
Automobile industry offers a wide range of career options including sales professionals, mechanics, and other lower-level opportunities. Management policies in the automobile industry determine how the various positions are filled. According to Ongori (052), inadequate selection procedures are a principal cause of employee turnover that has noticeable effects in automobile manufacturing. Managers in the auto industry use various approaches to hiring new staff. Automotive news indicated how AutoNation In., develop new compensation plans as well as sourcing for analytical scientists to aid its recruitment and retention processes (Wilson n.p). Most companies in the industry focus on single factors such as skills and experience of workers while ignoring expectations and attitude of the new employee. Additionally, some auto-businesses fill positions without proper vetting. For instance, they may oversell the positions, inadequately assess the candidate, or lack of background checks on the employees. The approach to employee selection is a crucial determinant of their long-term commitment to the position of appointment.
The reward system in the automobile manufacturing is cited as a significant cause of turnover (Ongori 051). The auto industry faces high competition due to the substantial number of notable players such as BMW, Ford, and Mercedes among others. Globalization necessitates the contest for both local as well as international market shares. Employees especially those with malleable skills look for better pay as the main driving force. However, most of the automobile manufacturing firms fail to recognize the need to employ retention programs for their critical skills. Financial incentives can attract and retain employees since they feel identified and are likely to be more productive. On the contrary, insufficient reward result into low morale and high chances of quitting in search for better pay in the rival business. Therefore, lack of competitive compensation has mostly increased turnover in the industry (Ongori 051). It implies that auto firms have a prominent role in ensuring the reward system is competitive and suits the workers' performance. Other factors that increase workers turnover in the automobile industry include poor job design, policy framework in the organization as well as unstable work environment.
Conversely, employee morale is an essential aspect in the success of automobile manufacturers (Wilson n.p). It is defined by the attitudes, and general feeling about the work and the environment are created through policies and culture. Low employee morale result from poor leadership approaches. It is important that workers opinions are considered in the decisions that impact their roles in the firm. However, top-down decision criteria fail to meet the basic communication needs thus resulting in low morale among the employees. When managers fail to build positive relationships with their employees, they create an environment which promotes negative spirit. In as much as the leadership must provide direction on goal achievement and oversee the implementation of programs for the success of a firm, they also need support from the employees and coworkers (Allen n.p). Typically, the inability of the existing leadership in the industry to promote relevant policies and effective communication among the workers often result in low morale.
Moreover, the working environment determines the employee morale (Allen n.p). The culture of a business organization which is shaped by the values defines the prevailing conditions under which employees perform. Morale tackles intangible facets of an individual’s life such as attitudes, satisfaction, and perception of work. It implies that they cannot be given to the employees. Instead, the management creates an environment which is favorable for the growth of positive morale. The working conditions, as well as interactions between employees, may generate dissatisfaction and negative attitudes especially when goals remain unclear. As stated above, it is necessary that the reward system is aligned with the performance, so employees feel appreciated for their efforts and develop positive morale. The employees serving in the auto industry sometimes face unrealistic targets and more extended working periods (Allen n.p). In most cases, there is limited involvement of junior employees in making decisions that have direct impacts on their roles. As a result, several employees develop negative morale which translates into a turnover.
Consequences of Turnover and Low Morale
Employee turnover results into the direct and indirect cost to the automobile manufacturing firms. Firstly, it reduces the profitability index especially when the vacant position is not filled for an extended period. The resources required hiring and train new employees are equally expensive. Ongori (051) contends that replacement process will need approximately 50% of the intended salary. Moreover, there is a significant drop in the productivity levels due to the learning curve and loss of sales among other impacts. Notably, automobile manufacturers such as BMW have comprehensive training and development programs for their critical labor. In cases when they are faced with turnover, they do not only lose the intellectual skills but also give an advantage to the rivals who absorb the exiting employee. The investment in skill development is an expensive undertaking that continuous stagnant training due to employee turnover significantly affects the profit margins in a firm. There are also indirect costs associated with turnover including reduced morale among the remaining team members as well as loss of social capital (Ongori 052). The performance may also be adversely affected due to increased pressure on the remaining workforce to cover the vacant position while the organization seeks a suitable replacement.
Low morale among the workforce also has similar outcomes in performance and productivity (Ongori 053). When employees are motivated, they are can readily achieve the set objective and the overall organizational goals. In the automobile industry, managers in the manufacturing companies accord employees autonomy to enhance their morale. In the process, new ideas are generated, and the product's improvements result in improved sales returns. When the resolve is low, and workers remain unhappy due to inadequate leadership approaches or failure to incorporate junior staffers in the decision-making process, innovation is limited. Moreover, the employees who are less motivated may quit their roles and further subject the organizations to the above stated tangible and intangible costs. It implies that turnover and low morale in the automobile manufacturing industry is detrimental to the overall output (Wilson n.p). It can affect the customer satisfaction and limit an organization’s competitiveness.
Possible Solutions to the Turnover and Low Morale in Automobile Manufacturing
Automobile Manufacturers have substantive control over the turnover that is commonly experienced. Allen (n.p) posits the importance of understanding the factors that necessitate exit tendencies among employees through the organizational equilibrium model. Proper feedback from exiting workers especially those resulting from firm-related factors will enable the automobile manufacturers to develop relevant policy approaches that prevent similar occurrences in the future. The management can also gain employees’ commitment to positive engagement practices such as competitive compensation, flexible work schedules, and relevant working environment among others (Allen n.p). Similar approaches are vital in enhancing working morale except for the need to involve the employees in the decision making process.
Conclusion
Apparently, employee turnover and low morale in the automobile industry originate from poor selection procedures, reward systems, working environment, and inefficient leadership approaches. Notably, the stated factors stem from policy frameworks applied by the management. Meanwhile, employee turnover and low morale are costly to the organization since it reduces the profit margins, productivity, and performance outcomes. However, the automobile manufacturers can establish feedback systems to inform improvement decisions to prevent and mitigate occurrences of turnover and low morale.

















Works Cited
Allen, David G. "Retaining talent: A guide to analyzing and managing employee turnover." SHRM Foundation Effective Practice Guidelines Series (2008): 1-43.
Ongori, Henry. "A review of the literature on employee turnover." UBRISA, Innovation Scholarship Archives, (2007):50-53.
Wilson, Amy. Employee Turnover Costs Dealers Billions. Managers experiment with the new ways to attract the right people. Automotive News, 2017. http://www.autonews.com/article/20170123/RETAIL06/301239850/employee-turnover-costs-dealers-billions?CSAuthResp=1%3A173663941089054%3A423309%3A1%3A24%3Aapproved%3A86FB2D5E1678EF216206867AD98ACC4D. Accessed 11 November, 2017.