High Turnover Problem

High Turnover Problem

Table of Content

Introduction3

Costs of Turnover3

The Causes of Turnover4

The Solution for Employee Turnover7

Conclusion12

Recommendation13

References15

Introduction

To say that employee turnover can be reduced by 100% is a mere fallacy. No organization can achieve this, employees come and go- they retire or die. And apart from other issues, a very low employee turnover is also not healthy for organizations' success. But a high turnover can bring about a lot of complexities, not only for the profit margin and economic cost associated with the phenomena but also the employee perception and morale. Turnover can be a positive procedure that provides a business new people, new energy and new ideas, yet turnover can also become a “profit-killing liability that debilitates a company (Gary 2003).

Costs of Turnover

Analyses of the costs associated with turnover yield surprisingly high estimates. The high cost of losing key employees has long been recognized. However, it is important for organizations to understand that general turnover rates in the workforce can also have a serious impact on an organization's profitability, and even survival. There are a number of costs incurred as a result of employee turnover. These costs are derived from a number of different sources, a few of which are listed below.

Recruitment of replacements, including administrative expenses, advertising, screening and interviewing, and services associated with selection, such as security checks, processing of references, and, possibly, psychological testing.

Lost productivity associated with the interim period before a replacement can be placed on the job.

Lost productivity due to the time required for a new worker to get up to speed on the job.

Lost productivity associated with the time that coworkers must spend away from their work to help a new worker.

The Causes of Turnover

There are a number of factors that contribute to employee turnover. We explore some of these factors in more detail below.

The economy - in exit interviews one of the most common reasons given for leaving is the availability of higher paying jobs. Some minimum wage workers report leaving one job for another that pays only 50 cents an hour more. Obviously, in a better economy the availability of alternative jobs plays a role in turnover, but this tends to be overstated in exit interviews(Curry 2004).

The performance of the organization - an organization perceived to be in economic difficulty will also raise the specter of impending layoffs. Workers believe that it is rational to seek other employment.

The organizational culture - much has been written about organizational culture. It is sufficient to note here that the reward system, the strength of leadership, the ability of the organizations to elicit a sense of commitment on the part of workers, and its development of a sense of shared goals, among other factors, will influence such indices of job satisfaction as turnover intentions and turnover rate.

The characteristics of the job - some jobs are intrinsically more attractive than others. A job's attractiveness will be affected by many characteristics, including its repetitiveness, challenge, danger, perceived importance, and capacity to elicit a sense of ...