Impact of Employee Turnover on Organizations
What is Employee Turnover?
Employee turnover, or employee turnover rate, is the measurement of the number of employees who leave an organization during a specified time period, typically one year.
There are two types of Employee Turnover: Voluntary Turnover and Involuntary Turnover
Voluntary Turnover - This occurs when an employee chooses to leave himself. This can happen as a result of better job opportunities elsewhere, conflict within the workplace, disengagement etc.
Involuntary Turnover - This occurs when the employer chooses to terminate an employee or remove them permanently from the group in question, possibly because of poor performance, toxic behavior, or other reasons.
Reasons for Employee Turnover
There are many reasons why employees leave a department or an organization, and while some reasons for turnover are negative, some turnover is expected and perfectly normal.
Some of the most common reasons for turnover include the following:
- Lack of opportunity for growth or career development
- Natural career progression
- Internal promotion or transfer
- Feeling overworked/burnout
- Negative feelings towards boss or management
- Toxic work environment
- Family or life event
- Competitive offer
Literature Review on Employee Turnover
1) According to Abbasi et al (2000) employees are seen as major contributors to organizations competitive advantage and as such for the competitive advantage to be maintained, labour turnover should be discouraged by management.
Cost implications of Employee Turnover
- vacancy
advertisement/headhunting fees
- Interview
& recruitment
- training
of new hire
- loss
of productivity and cost of inefficiency of the new staff
(Akinyomi, O.J., 2016)
How to Reduce Employee Turnover
1) Hire the Right People - Recruit the most suitable person for the position. If employees are given a job that suits their skills and capabilities, they would be motivated and contribute their maximum to the job role.
2) Offer Competitive pay and Benefits - When determining compensation for your employees, it’s good to do market research on wages. Find out what your competitors pay their employees.
3) Give Positive Feedback and Recognition - This will create an encouraging and positive work environment.
4) Transparent career path - Most employees want to increase their skills and knowledge and move up the career ladder. If they are stagnant in their career, they tend to look for other job opportunities.
Conclusion
It is very important to manage the staff turnover of an organisation as it has many cost implications in addition to loss of productivity, less employee engagement and demotivation of existing staff.
References
https://www.bamboohr.com/hr-glossary/employee-turnover/ (Accessed 17 April 2022 2.44 pm)
https://www.forbes.com/sites/mikekappel/2017/08/09/5-ways-to-reduce-employee-turnover/?sh=1dbb690b5001 (Accessed 17 April 2022 3.00 pm)
Abassi, S. M. (2000) ‘Turnover: The real bottom line’,
Public Personnel Management, 2000 vol 2 no. 3, pp214-218
Dwomoh, G. & Korankye, T. (2012). ‘‘Labour turn-over and
it impact on performance of Banks in Ghana’ European Journal of Business and
Management Vol 4, No.7, 201-208
Shukla, S. and Sinha, A.(2013). ‘‘Employee Turnover in
banking sector: Empirical evidence’’. Journal Of Humanities And Social Science,
Volume 11, Issue 5, PP 57-61
Bean, (2009) Employee Turnover in banking sector: Empirical
evidence. Journal Of Humanities And
Social Science 2013 Volume 11, Issue 5, pp57-61
Reduced productivity, increased recruitment costs, wasted time spent training new personnel, and missed sales are all consequences of high staff turnover. Employee morale and productivity are often low in businesses with substantial worker turnover. in this article you have nicely describe the way to reduce the turn over. Nice piece of writing. Good Luck Dilini !
ReplyDeleteEmployee turnover direct impact to organization performance. You explained it clearly. All the best...
ReplyDeleteConsidering current society most reasons for turnover is by people seeking more money, better benefits, an improved work/life balance, more opportunities to progress in their careers.Appropriate topic.
ReplyDeleteUnderstanding the factors that
ReplyDeletecontribute to employee turnover
can assist firms in making the
required changes to keep their
workforce at the optimal level.
Good job Dilini..
Employee turnover is one of the major problems in an organization which directly affect the productivity. Now a days employees are not just seeking better salary but they are also concerns on recognitions, career path and other benefits as well. Nicely written article. All the best..
ReplyDeleteI highly agree with you because most employees want to increase their skills and knowledge and move up the career ladder. If they are stagnant in their career, they tend to look for other job opportunities.👍all the best
ReplyDeleteEmployee turnover is a critical issue that must be addressed right away by every company. Employees who are dissatisfied do not produce decent and quality results. The article clearly explains how to handle the situation. Best wishes!!
ReplyDeleteWith the prevailing pandemic situation, the employee turnover has been increased drastically due to various reasons. In Sri Lanka context most of the financial institutions faced for high employee turnover these days due to greater extent of job dissatisfaction.
ReplyDeleteThis article argues the cost implications of employee turnover and remedial actions to reduce the same. Well done Dilini.
Employees does not want to stay if there are no opportunities for progress in the company. This is also caused by poor management and senior management behavior. It is critical to provide sufficient benefits, training, and support in order to keep people in the organization. good one
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ReplyDeleteTalented employees are a valuable asset to any organization. A high rate of employee turnover will result in an unstable work atmosphere or culture where uncertainty is high in the workforce of the organization as well as significant lack of employee motivation can be found. This can make the decision-making process for the leadership of an organization rather difficult. This article clearly mentions the reasons for employee turnover as well as the methods to reduce employee turnover. Well done.
ReplyDeleteCompanies may lose employee productivity, be compelled to hire new employees, suffer from decreased morale, miss out on sales opportunities, and incur additional expenses as a result of employee turnover that could have been prevented if the person had been retained in the first place. Appropriate topic to be discussed specially during this post pandemic era.
ReplyDeleteEmployees are one of a most important part of an organization which directly involves with the performance of an organization. Hence retaining skilled work force will be a definite advantage to an organization by mean of organization’s stability, growth and revenue. You have identified the causes for turnover intention and methods of retaining employee with the organization. Nicely written article. Well done and all the best.
ReplyDeleteEmployee turnover is commonly defined as the loss of talent in the workforce over time. Employee departures include resignations, layoffs, terminations, retirements, location changes, and even deaths. It is a responsibility of HR team to find the reason for employee turnover and take necessary action to reduce the employee turnover. Any organization can save considerable money by reducing employee turnover. You have summarized the reasons and approaches to reduce the employee turnover.
ReplyDeleteCompanies may lose employee productivity, be forced to acquire new employees, experience lower morale, miss out on sales opportunities, and pay additional costs as a result of employee turnover that could have been avoided if the employee had been retained in the first place. This is an important matter to discuss, especially in this post-pandemic era.
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