Employee Turnover

Figure 1: Employee turnover (source: Wiggan, 2021).

Employee turnover refer to employees who leaving voluntarily or involuntarily from the company, which companies often calculate to gauge if they are at a sustainable level.

In terms of human resources, employee turnover is a measure of how long employees stay in your company and how often you have to replace them. Every time an employee leaves the company, for whatever reason, it is a Turnover or separation. There are advantages and disadvantages for employee turnover. On the one hand, Low-quality staff can be replaced; creativity, flexibility and adaptability can be improved for the organization. On the other hand, the cost of leaving will increase, with costs including express costs (recruitment and training,

Loss of productivity, etc.), hidden costs (low morale, reduced company reputation, deteriorating chain of positions, loss of positions opportunity, etc.) (Zhang, 2016).

 Staff turnover is often costly for all levels of the organization, regardless of nature. In addition, it always has a negative impact on productivity and quality Organization products or services (Ali, 2008). Employee Turnover It has a significant impact on both direct and indirect costs, which can Damage organizations. Direct costs relate to costs such as costs incurred during recruitment, selection, training and Registration of new staff (Staw, 1980).

Types of employee turnover are as follows:

·         Voluntary - refers to decision mainly made by employees leaving the company, including all resignation forms.

·         Involuntary - refers to the decision of turnover mainly made by the enterprise, including fire, dismiss and other forms.

  

What causes employee turnover?

·         Job related stress.

·         Lack of commitment in the organization.

·         Job dissatisfaction.

·         Lack of role clarity.

·         extensive job pressures.

·         Poor employee selection.

·         Poor management.

·         Lack of advancement opportunities.

·         Lack of recognition.

Why is it important to calculate turnover rates?

To reduce employee turnover, you should first focus on understanding how often employees leave the company by calculating turnover rates. Calculating turnover rates in your organization can provide valuable information about your company's overall management, procedures and culture. It can also show you how much money you spend on hiring and training new employees because of the turnover of employees.

The formula for the employee turnover rate as follows:

Figure 2: Employee Turnover rate formula (source: Hagley, 2020).

 How to reduce employee turnover?

Reducing employee turnover begins with the recruitment process. By setting realistic expectations, starting with job description, conducting effective job interviews and providing the right level of support and independence once you hire an employee, you can reduce employee turnover.

Here are few steps to follow to reduce turnover:

ü  Hire the people who good fit for your organization.

ü  Offer a competitive salary & benefits.

ü  Provide a healthy work-life balance.

ü  Provide a career path.

ü  Train your Managers /supervisors.

ü  Recognize top performer.

“pay and pay-related variables have a great effect on employee turnover. Management must compensate employees adequately. They should pay employees based on their performance and in addition they should give employees incentives like individual bonus, lump sum bonus, sharing of profits and other benefits. Hence, if these are put in place they would minimize employee turnover” (Griffeth, et al., 2000).

 

 

References

Ali, N., 2008. Factors Affecting Overall Job Satisfaction and Turnover Intention. Journal of Managerial Sciences, 2(2), pp. 239-252.

Griffeth, R. W., Hom, P. & Gaertner, S., 2000. A meta-analysis of antecedents and correlates of employee turnover: Update, moderator tests, and research implications for the next millennium. Journal of Management, 26(3), pp. 463-488.

Hagley, A., 2020. goverb. [Online]
Available at: https://goverb.com/employee-retention-guide/
[Accessed 17 December 2021].

Staw, B. M., 1980. The consequences of turnover. Journal of occupational Behaviour, pp. 253-273.

Wiggan, N., 2021. dreamstime. [Online]
Available at: https://www.dreamstime.com/conceptual-display-employee-turnover-word-number-percentage-workers-who-leave-organization-typing-business-image236933322
[Accessed 17 December 2021].

Zhang, Y., 2016. A Review of Employee Turnover Influence Factor and Countermeasure. Journal of Human Resource and Sustainability Studies, Volume 4, pp. 85-91.