Employee Retention & Employee Turnover
Employees who are dissatisfied with their current
situation will look for work elsewhere when the global economies improve (Gupta-Sunderji,
M., 2004). If employee stay – Retention, If employee leave – Turnover (Walker.,2001).
Furthermore, Retention is not only
important just to reduce the turnover costs or the cost incurred by a company (Sandhya,
K. and Kumar, D.P., 2011). In
today's highly competitive business world, retaining competent workers are the
most important differentiator for most businesses (Samuel, M.O. and Chipunza,
C., 2009).
Employee retention and turnover are influenced by
employee motivators and demotivators (Samuel, M.O. and Chipunza, C., 2009).
Employee retention and turnover in organizations are influenced by extrinsic
and extrinsic motivational factors (Thirupathy, A. and Dhayalan, C., 2016).
Extrinsic factors involve company policy and administration, supervision,
interpersonal relationships, working conditions, compensation, status, and
security, as well as intrinsic factors like achievement, recognition for
achievement, the work itself, responsibility, growth, and advancement
(Gupta-Sunderji, M., 2004).
Employee turnover refers to when employees leave
their employment and must be replaced (Chaminad, 2007). Organizations pay a
high price to replace existing employees, and as a result, the quality of service
decreases (Chaminade, 2007). Employee retention is a procedure
in which employees are encouraged to stay with the company for as long as
possible or until the project is completed ( Sandhya, K. and Kumar, D.P.,
2011). Even though employee retention has become a difficult task, it is
beneficial to both the company and the employee ( Sandhya, K. and Kumar, D.P.,
2011).
Employee Retention
& Employee Turnover Factors
This has an impact on teamwork, raises expenses,
diminishes production, and causes knowledge loss. (Reggio 2003) Rather than
possibilities for advancement into better professions, high turnover appears to
reflect serious workplace issues. As a result, management should realize the
importance of employee retention strategies. (Wissoker and Holzer, 2001)
Based on
these studies, six human resource management practices were selected as some of
the major factors that affect employee retention and turnover which are;
(Agyeman, C.M. and Ponniah, V.M., 2014 ).
- Ø Supervisor support
- Ø Employee
communication
- Ø Compensation,
recognition and rewards
- Ø Work
environment
- Ø Career
development opportunities
Figure 1 - Veldman’s employee commitment model
(Kotze et al.,2005,)
According to the Veldman employee commitment model, which analyzes the relationship between several elements that influence an employee's inclination to stay or leave an organization,
Figure 01 –
In the first
scenario, a person's perception of his or her employer as an Employer of Choice
influences his or her decision to join and stay with the organization (Kotze et
al., 2005). Organizational climate and culture are the results of a collection
of people who share similar views and behaviors and live in the same place.
(Gjuraj 2013).
Job Satisfaction and Employee Well-Being all influence the decision to stay or leave (Kotze et al., 2005). This is reflected in an organization's climate and culture. Job satisfaction is used to evaluate employee engagement in the workplace. Employee Wellbeing is the link between organizational climate and job satisfaction. This position reflects the employee's positive and/or negative feelings about his or her general work environment (Agyeman, C.M. and Ponniah, V.M., 2014).
List of References
Agyeman, C.M. and Ponniah, V.M., 2014. Employee
demographic characteristics and their effects on turnover and retention in
MSMEs. International Journal of
Recent Advances in Organizational Behaviour and Decision Sciences, 1(1),
pp.12-29.
Chaminade B (2007). A retention checklist: how do
you rate? www.humanresourcesmagazine.co.au. Accessed, 28 November, 2007
Gjuraj, E. (2013). The importance of national
culture studies in the organizational context. European Scientific Journal,
9(11), 160-180
Gupta-Sunderji, M., 2004. Employee retention and
turnover: The real reasons employees stay or go. Financial management institute journal, 15(2), pp.37-40.
Holzer, H., J., and Wissoker, D., (2001). How can we
encourage Job Retention for Welfare Recipients. The Urban Institute Series, No;
A-49, (October).
Kotze , Koos., Roodt ,Gert., (2005). factors that
affecting the retention of managerial and specialist staff : an exploratory
study of an employee commitment, A Journal of Human Resource Management, 2005,
3 (2), 48-55.
Reggio, E., A., (2003). Introduction to
Industrial/Organizational Psychology (4th Ed.). Prentice Hall, New Jersey
Samuel, M.O. and Chipunza, C., 2009. Employee
retention and turnover: Using motivational variables as a panacea. African journal of business management, 3(9),
pp.410-415.
Sandhya, K. and Kumar, D.P., 2011. Employee
retention by motivation. Indian Journal of science and
technology, 4(12), pp.1778-1782.
Thirupathy, A. and Dhayalan, C., 2016. EMPLOYEE
RETENTION AND TURNOVER USINGMOTIVATIONAL VARIABLES AT INDIA. International
Journal of Research-Granthaalayah, 4(8 (SE)), pp.1-9.
Walker, J. W., (2001). Zero defections? Human
Resource Planning, 24(1), 6–8.
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ReplyDeleteAccording to the survey results, dissatisfied salary, lack of career development, lack of promotion, unsafe work condition and work stress have been identified as another set of major factors which directly affected to increase the employee turnover, while providing job responsibility, to motivate employees, abundant with transparent promotional scheme, efficient and productive working environment and involving employees to decision making are major factors of increasing employee retention from the organization (Ogony, 2017). As you mentioned, Employee retention is not a affect of single factor but cluster of factors (Kalgora, 2016). The key factor of increasing employee retention in the same organization is training and development (Deery, 2008) and also it will increase the loyalty of employees (Leidner, 2013).
ReplyDeleteThank for your valuable comment and the terms "Training" and "Development" are interchangeable. It can, however, be distinguished from the others. Training is for specific job needs; however development is about more than that. Development encompasses more than just actions that increase job performance (Nda, M.M. and Fard, R.Y., 2013). Furthermore, As you mentioned, the existence of a substantial link between employee training and development and employee retention has been established (Rosenwald 2000).
DeleteThank you for the valuable comment, as you mentioned most employers do not consider factors such as work-life balance, management and leadership team, top performance recognition, health, and well-being. This kind of factor leads to employee dissatisfaction and It will affect the company all operations. Job Satisfaction and Employee Well-Being all influence the decision to stay or leave (Kotze et al., 2005).
ReplyDeleteAgreed. Further, employee retention is considered as the heart of organizational success. It is defined as “A process in which the employees are encouraged to remain with the organization for the maximum period of time or until the completion of the objectives” (Singh & Dixit, 2011)
ReplyDeleteIf an employee stays, this is referred to as retention; if an employee leaves, this is referred to as turnover (Walker.,2001). Furthermore, retention is important for more than just lowering a company's turnover expenses or costs (Sandhya, K. and Kumar, D.P., 2011). In today's increasingly competitive business world, most companies' most critical differentiation is their ability to retain skilled employees (Samuel, M.O. and Chipunza, C., 2009).
DeleteThis comment has been removed by the author.
ReplyDeleteI agreed with the above and would like to suggest that the most vital factor of the organization is employee retention. In the competitive market, reluctant to stagnate employees can move to other companies—various influences are not limited to salary increment, better growth, and psychological needs. Sustain successfully; HR needs to solid strategy to overcome these issues (Rakhra, 2018).
ReplyDeleteYes amila, as you mentioned employee retention is the most vital factor to any organization. In today's highly competitive business world, retaining competent workers are the most important differentiator for most businesses (Samuel, M.O. and Chipunza, C., 2009). that’s why any organization needs to attend to employee retention strategy.
DeleteAgreed.In additionaly training and development programs help individuals in learning the soft, functional, and technical skills necessary to perform their jobs. They achieve higher level of job satisfaction, because they feel they are investing in their own future. They feel that their role within the organization has a real purpose. Since the individuals’ loyalty tends to increase substantially, they invest more of their time and effort in achieving the bottom line for the organization which decrease the employee turn over (Rodriguez and Walter,2017).
ReplyDeleteYes menupa, as you mentioned training and development playing a vital role within any organization. The terms "training" and "development" are interchangeable. It can, however, be distinguished from the others. Training is for specific job needs, however, development is about more than that. Development encompasses more than just actions that increase job performance (Nda, M.M. and Fard, R.Y., 2013).
DeleteAgreed. I would like some more points in regards to the factors that affect employee retention as explained by Gieseke (2020). According to him, ability to do what they do best, work-life balance and personal well-being, greater stability and job security, significant increase in income and great company brand reputation and culture. On the other hand, employers need to ensure these factors within the company to minimize the employee turnover.
ReplyDeleteThank you for your feedback; however, most employers overlook factors such as work-life balance, management and leadership teams, top performance recognition, health and well-being. Employee dissatisfaction is a result of this type of aspect, and it has a detrimental impact on the company's overall operations. Employee Satisfaction and Well-Being All of these considerations play a part in determining whether or not to stay (Kotze et al., 2005). Employees that leave their jobs will have an impact on the business. As a result, employers become aware of the problem and design strategies to address it (Cloutier, .O et al., 2015).
DeleteTotally agreed. According to Hebenstreit, 2008, Expenditure on recruiting a new person to the organization costs half to 200% of the former employee's pay. Hence currently the organizations strive to be "best company to work for" which leads to lower rates of turnover (Phillips and Connell, 2003).
ReplyDeleteYes. In fact, employer more concern on employee turnover through the employee retention strategies. Furthermore Employee retention strategies will help to decrease following factors According to (Hebenstreit., 2008).
Delete Filling vacant roles cost,
High staff turnover raises the cost of resources,
Recruiting and time.
The cost of recruiting a new employee to a company ranges from half to 200% of the previous employee's compensation.
Agreed with your statements. Employee turnover is costly to every organization which cannot measure exactly in monetary values. Sometimes employee turnover is necessary to replace the poor or marginal performers however, highly employee turnover gives negative effects to the organization (Blake, 2006).
ReplyDeleteWhen employees quit their jobs and must be replaced, this is referred to as employee turnover (Chaminad, 2007). Organizations spend a hefty premium to replace existing staff, lowering service quality as a result (Chaminade, 2007). Employers must be worried about retention methods because of this. When faced with staff turnover issues, managers have a number of policy options (Ongori, H., 2007). In order to develop a well-balanced work design and control system that will keep employees in their firms, managers must set up training and learning programs on how to focus on crucial employee satisfaction and dissatisfies (Al Mamun, C.A. and Hasan, M.N., 2017).
DeleteAgreed. Employees are the backbone of any organization, skillful employees are an asset for the organization’s competitive advantage in today’s global market (Jehanzeb and Bashir, 2013).
ReplyDeleteAny organization needs to keep its talented employees on board. Employers are concerned about employee retention because of this. Employee retention refers to encouraging employees to stay with the company for as long as possible or until the project is completed ( Sandhya, K. and Kumar, D.P., 2011). Despite the fact that it has become a difficult task, staff retention is beneficial to both the company and the person ( Sandhya, K. and Kumar, D.P., 2011).
DeleteAgreed with your view, and Main changes have happened in organizations, both internally and externally, making this issue extra critical today than in past years. Unfortunately, these changes will only worsen the crisis in the future Suzanne Dibble (1999)
ReplyDelete• Economic growth.
• Slower growth of job seekers
Yes, as you indicated, both internal and external changes have occurred.
DeleteWhen the global economy improves, employees who are dissatisfied with their existing circumstances will look for job elsewhere (Gupta-Sunderji, M., 2004).