EMPLOYEE TURNOVER:

Causes, Effects, and Preventive Actions

Ren Cintrn
Cae!!a Universit"
A#$TRACT
T%e aut%or discusses t%e causes and effects of e&!o"ee turnover and reventive actions
&ana'ers can ta(e to avoid out of contro! turnover) Causes of turnover fa!! under t%ree
cate'ories: *o+ dissatisfaction, errors in e&!o"ee se!ection, and oor &ana'e&ent
,-%ite, .//01) T%e &ost co&&on cause of turnover is *o+ dissatisfaction 2%i!e t%e &ost
co&&on effects are t%e e3enses +orne +" a co&an" ,$%ee%an, .//01) $o&e of t%e
reventive actions inc!ude &ana'e&ent trainin' in order to cature 2arnin' of *o+
dissatisfaction and eriodic 2or(!ace eva!uation of satisfaction, an oen door o!ic"
st"!e of &ana'e&ent, and u%o!d strict %irin' standards ,Co!e&an, ./4/1) 5n order to
(ee costs do2n, a strea&!ines and efficient %u&an resource ro'ra& is reco&&ended
,-%ite .//01)
Ta+!e of Contents
5ntroduction .
Literature Revie2 6
O+*ectives 7
Resu!ts 8
$trate'ies .9
Reco&&endation and Conc!usion .0
Reference List .7
5ntroduction
Turnover is t%e ratio of t%e nu&+er of 2or(ers t%at %ad to +e re!aced in a 'iven
ti&e eriod to t%e avera'e nu&+er of 2or(ers ,A'nes, .///1) 5n si&!er ter&s, turnover
is t%e series of actions t%at it ta(es fro& t%e e&!o"ee !eavin' to %is or %er +ein'
re!aced) 5t is a +e%avior 2%ic% descri+es t%is rocess ,Currivan, .///1) E&!o"ee
turnover &a" +e &ost!" a ne'ative issue, "et it can +eco&e ositive if contro!!ed +" t%e
or'ani:ation correct!" and aroriate!") Turnover is often uti!i:ed as an indicator of
co&an" erfor&ance and can easi!" +e o+served ne'ative!" to2ards t%e or'ani:ation;s
efficienc" and effectiveness ,<!e++ee( = #a3, 6>>91) E&!o"ee turnover is a natura!
outco&e of doin' +usiness, "et it is %ar&fu! to an or'ani:ation in !ar'e ?uantities, so it
s%ou!d +e (et to a &ini&u&) T%ere are certain instances durin' 2%ic% turnover can +e
uti!i:ed to +enefit t%e co&an" suc% as ter&inatin' oor erfor&ers, a!!o2in' for interna!
ro&otion, and %irin' ne2 e&!o"ees 2it% innovative ideas) Ne2 e&!o"ees often +rin'
ositive inut into t%e co&an" if t%e turnover is %and!ed correct!" ,-er+e! = #edeian,
./4/1)
A variet" of researc% ro*ects conducted and artic!es 2ritten on t%e toic 2ere
studied to create a co!!ection of efforts to indicate t%e causes and effects of turnover and
reventive &easures &ana'e&ent and !eaders%i of a co&an" &a" e3ecute) As a
erfor&ance indicator, turnover s%ou!d +e understood +" &ana'e&ent and !eaders%i of
t%e co&an") T%is aer 2i!! discuss 2%at &a" +e t%e reasons for turnover, 2%at
conse?uences turnover %as on a co&an", and 2%at &ana'e&ent and !eaders%i in t%e
co&an" can do to avert %i'% turnover and reduce t%e effects)
Literature Revie2
<ordon #o2den ,./061 introduces 2%at %e ca!!s a si&!e so!ution to t%e turnover
ro+!e&, t%at +ein' to a" e&!o"ees &ore t%an t%e co&etition) 5f it 2as so!e!" a+out
&one" t%at 2ou!d +e a 'reat so!ution, +ut unfortunate!" e&!o"ees turnover %as a nu&+er
of so!e and co&+ined causes deendin' on a variet" of issues dea!in' 2it% 2or(@re!ated
and non@2or(@re!ated &atters dea!in') E&!o"ees +!a&e 2or( and t%us +eco&e
dissatisfied 2it% t%eir *o+s as art of t%e interro!e conf!ict caused +" t%e co&+ined
resonsi+i!ities of 2or(, fa&i!", co&&unit", and ersona! ,Ao& = Binic(i, 6>>.1)
E&!o"ers &ust accet t%e fact t%at t%ere are inevita+!e circu&stances for turnover suc%
as a'e, 'ender, and %ea!t%) A &inor e&!o"ed +" a co&an" does not %ave &uc% inut in
t%e decision t%e adu!t careta(er &a(es in %is or %er !ife suc% as &ovin' to a ne2 !ocation,
c%an'in' sc%oo!s, transortation, etc) T%e &inor %as certain %ouse ru!es to o+e" 2%ic%
&a" or &a" not en%ance 2or( caa+i!it", avai!a+i!it", and f!e3i+i!it") A certain nu&+er
of 2o&en 2i!! !eave t%eir *o+s te&orari!" or er&anent!" in order to fu!!@fi!! certain
fa&i!" resonsi+i!it") 5n toda";s societ", &en &a" +e t%e ones !eavin' 2or( to fi!! t%e
s%oes of t%e fa&i!" careta(er) Anot%er inevita+!e turnover is due to i!!ness, retire&ent, or
deat% ,#o2den, ./061) Retire&ent is so&et%in' t%at &ost e&!o"ees !oo( for2ard to)
T%is t"e of turnover can at !east +e e3ected un!i(e i!!ness or deat%) T%ere are certain
occasions durin' 2%ic% turnover is inevita+!e, t%erefore it i&ossi+!e to contro! it one
%undred ercent ,#o2den, ./061)
L"nn Co!e&an ,./4/1 offers ideas on %o2 to correct and revent e&!o"ee
turnover) $o&e of %is reco&&endations inc!ude t%e institution of e3it intervie2s and
ot%er &et%ods of findin' t%e reasons for eo!e !eavin' t%e co&an") $urve"s and
intervie2s are e3ce!!ent &et%od +" 2%ic% to find infor&ation a+out eo!e) Even t%ou'%
e3it intervie2s sound as t%e +est idea to 'et %onest infor&ation fro& an e&!o"ee
+ecause t%e t%in(in' is 2%at t%e e&!o"ee %as to !oose, t%e" %ave a!read" ?uit, t%e
e&!o"ee certain!" does not 2ant to +urn +rid'es, so even in t%at situation infor&ation
&a" not +e t%e out&ost trut%fu! and strai'%t for2ard) Possi+!" anon"&ous surve"s
2ou!d +e t%e +est, and for t%ose aranoid e&!o"ees &a"+e a t"ed surve" turned in 2it%
'!oves on)
Anot%er &et%od of ac?uirin' infor&ation in t%e effort of reventin' or
&ini&i:in' turnover is to %ave an oen door o!ic" t%at a!!o2s t%e &ana'ers to %ear of
issues rior to esca!atin' to t%e e&!o"ee !eavin') T%is cou!d +e a ver" e3ce!!ent &et%od
of revention as 2e!! as conductin' se!f@audits to identif" certain asects as *o+
satisfaction and e3%austion ,Co!e&an, ./4/1) Cindin's a+out *o+ satisfaction and
e3%austion ear!" &a" +e crucia!, since *o+ dissatisfaction eventua!!" !eads in a
ro'ressive &anner to t%e e&!o"ee !eavin' t%e co&an" ,Ao& = Binic(i, 6>>.1) T%ese
findin's %ave evo!ved to co&anies sendin' a !ar'e a&ount of ti&e and &one"
deve!oin' t%eir e&!o"&ent rocedures and %irin' efforts) T%ese efforts of findin' t%e
ri'%t candidate %ave created certain standards t%e co&an" is !oo(in' for ,#o2den,
./061) T%is is &ore t%an re?uire&ents, in addition to attainin' t%e &ost ?ua!ified
avai!a+!e e&!o"ees, esta+!is%in' standards for recruitin' assists in +ein' consistent and
&aintainin' an a+ove ar %irin' rocedure) 5t a!so a!!o2s for a +etter &atc% of co&an"
and t%e e&!o"ee ,Co!e&an, ./4/1)
E&!o"ee turnover costs t%e co&an" &one") Co&anies &a" increase t%eir
stoc( rice +" reducin' turnover ,E&!o"ee turnover, 6>>>1) T%ere are tan'i+!e and
intan'i+!e effects of turnover) Concrete costs can +e seen in t%e ti&e sent in recruitin',
se!ectin', and trainin' ne2 e&!o"ees) T%ese va!ues can +e accounted for and ca!cu!ated
as can t%e fees sent on advertisin' and t%e &ano2er used to conduct intervie2s, revie2
candidates, and conduct trainin') Mana'ers instead of &ana'in' are sendin' ti&e
searc%in', intervie2in', and %irin' ne2 e&!o"eesD not to &ention t%e aer2or(
invo!ved ,-%ite, .//01) Anot%er effect t%at turnover %as on a co&an" inc!udes t%e !oss
of inte!!ectua! caita!D t%is is !osin' eo!e t%at %ave +een trained and (no2 t%in's a+out
t%e *o+ 2%ic% &a" not +e ?uic(!" re!aced) 5t reduces t%e &ora!e 2%i!e increasin' t%e
stress of t%ose t%at sta" +ecause t%e re&ainin' 2or(ers &ust fi!! in t%e s!ot !eft oen 2%i!e
a re!ace&ent is found ,Bra&er, .///1) T%is &i'%t inc!ude 2or(in' !on'er s%ifts andEor
&ore da"s) A!! t%ese intan'i+!e costs of increases 2or(!oads create tur+u!ence 2it%in
co&anies 2it% %i'% turnover) Ne'ative u+!icit" &a" a!so resu!t fro& turnover +ein'
e3tre&e!" at %i'% !eve!s ,-%ite, .//01)
$te%en Laser ,./4>1 offers various scenarios t%at &a" cause e&!o"ee turnover)
5t is erceived +" &ost, even t%ou'% it is sti!! ?uestiona+!e, t%at t%e &ain cause of
turnover dea!s 2it% sa!ar" issues) $%iftin' va!ues &a" a!so %ave so&et%in' to do 2it%
turnover and t%e c%an'e in toda";s 2or( et%ics) Ao2ever, turnover can +e attri+uted to
t%ree &a*or causes: i&roer se!ection of ersonne!, t%e !ac( of an ade?uate orientation
and trainin' ro'ra&, and or'ani:ationa! ersonne! &ana'e&ent ro+!e&s) Noa% and
Yon'@Pin ,6>>61 a'ree t%at roer!" se!ectin' e&!o"ees is in fact a %u'e asect of
e&!o"ee turnover) Furin' t%e se!ection of ersonne! %ase of t%e %irin' rocess a
&is&atc% can occur +et2een co&an" or osition and e&!o"ee) T%e erson *o+ see(in'
is 'enera!!" !oo(in' for &ore t%an one oortunit" since %e" %ave or are 2i!!in' to !eave
t%eir resent 2or() Carefu! consideration s%ou!d +e &ade 2%en t%e *o+ is fina!!" offered
to assure t%e rosect e&!o"ee suits t%e osition 2it%in t%e co&an" and vice@versa)
More and &ore co&anies are re!"in' on Au&an Resources ro'ra&s desi'ned to
reduce turnover 2%ic% in turn can resu!t in a re&ar(a+!e ositive c%an'e to t%e +otto&
!ine ,<!e++ee( = #a3, 6>>91) Fefinite ro'ress %as +e &ade in t%e deve!o&ent of
e3ce!!ent %u&an resources ro'ra&s in order to reduce turnover, "et si'nificant &ar'ins
of error sti!! e3ist even in t%e +est testin' and intervie2in' for&s of %irin' ractices
,#o2den, ./061) Ti&e &ust +e sent revie2in' education strate'ies) An ade?uate
orientation and trainin' ro'ra& is necessar" in order to 2e!!@e?ui ersonne! 2it% t%e
roer (no2!ed'e and s(i!!s necessar" to do acco&!is% t%e *o+ efficient!" and
effective!" ,Co!e&an, ./4/1)
Ao& and Binic(i ,6>>.1 discuss t%e cause of turnover to +e *o+ dissatisfaction)
T%e" discuss t%is issue under t%e toics of interro!e conf!ict and *o+ avoidance) 5nterro!e
conf!icts, referrin' to t%e &u!ti!e ro!e e&!o"ees !a" at 2or( and t%e stresses t%at
acco&an" t%e&, decreases *o+ satisfaction and t%us increasin' t%e !i(e!i%ood of t%e
e&!o"ee !eavin' t%e co&an") Avoidin' doin' t%e 2or( necessar" for t%e *o+ is an
a!ternative to e3itin' t%e *o+ t%at occurs 2%en an e&!o"ee is dissatisfied 2it% %is or %er
2or() Go+ satisfaction &ini&i:es t%e !i(e!i%ood of *o+ avoidance occurrin') $%ee%an
,.//01 discusses t2o ot%er causes in addition to *o+ dissatisfaction) Peo!e often !eave
t%eir *o+s for a +etter *o+ or for reasons unre!ated to t%e *o+) E&!o"ees in fact &a" +e
!oo(in' for a +etter oortunit" and not suffer fro& *o+ dissatisfaction ,Noa% = Yon'@
Pin, 6>>61) Ot%er reasons !a" into t%e decision &a(in' rocess of !eavin' a *o+ suc% as
%ea!t%, fa&i!", financia! needs, etc) T%ese reasons are unre!ated to t%e *o+ direct!", +ut
t%e" %ave an effect on t%e decision rationa!e uti!i:ed +" t%e e&!o"ee ,#o2den, ./061)
$%ee%an discusses t%at so&e effects of turnover do not necessari!" affect t%e
co&an" direct!"D instead it ta(es a to!! on t%e re&ainin' e&!o"ees or as referred to +"
$%ee%an, sta"ers) T%e sta"ers, in addition to +ein' over2or(ed, +e'in to co&are t%eir
situation 2it% t%e erson 2%o !eft and start to *ustif" t%e reasons t%e erson !eft and
*ustif" t%e reasons 2%" t%e" are sta"in')
-er+e! = #edeian ,./4/1 +rin' to t%e ta+!e t%e on!" ositive sin to e&!o"ee
turnover found durin' t%is researc%) T%ere is one condition for turnover to +e ositive
and t%at is t%e co&an" &ust !ose redo&inant!" oorer erfor&ers) T%is is turn 2i!!
cause for !ess concerns a+out turnover 2it%in t%e co&an") T%e +usiness s%ou!d s%o2
concern 2%en a disroortionate!" %i'%er nu&+er of its +etter erfor&ers are !eavin' t%e
co&an") Turnover &a" +e ositive or ne'ative deendin' on 2%o !eaves and 2%o sta"s)
Anot%er 'ood notion is t%at turnover rovides roo& for advance&ent for t%ose 2%o %ave
decided to sta") 5n addition, ne2 e&!o"ees can +rin' a %i'% !eve! of sti&u!i and
innovative ideas t%at rovide t%e or'ani:ation 2it% t%e s(i!!s needed for furt%er 'ro2t%)
T%e (e" is to (ee %i'% erfor&ers and !et t%e oor erfor&ers 'o, and +e cautious not +e
+eco&e a trainin' &i!! of 'reat erfor&er to 'o e!se2%ere)
O+*ectives
T%e t%ree ?uestions discussed 2it%in t%is researc% are as fo!!o2s: 2%at are t%e
causes of turnover, 2%at effects does it %ave on an or'ani:ation, and 2%at reventive
actions can ta(e !ace to reduce t%ese effectsH
-%at are t%e causes of turnoverH
5n order to find reco&&endations to so!ve t%e issues t%at turnover +rin' to a
co&an", first t%e issue of 2%" it occurs need to +e addresses) Turnover is an e&!o"ee
+e%avior and it is caused +" a so!e or a series of incidents t%at resu!t in t%e e&!o"ee
!eavin' t%e co&an" +" c%oice or +" t%e 2is% of t%e co&an") T%e urose of t%is
?uestion is to raise a!ertness as to investi'ate for t%e why +e%ind e&!o"ees !eavin' an
or'ani:ation)
-%at effects does turnover %ave on an or'ani:ationH
An e&!o"ee !eavin' a co&an" for 2%atever reason &ust %ave an effect on t%e
or'ani:ation and t%e eo!e t%at co&ose it) 5t %as +een found t%at turnover does %ave an
effect on t%e co&an" and its eo!e) T%is ?uestion is raised in order to discover 2%at
events occur and 2%at a!terations %aen to +usiness oerations of a co&an" 2%en an
e&!o"ee !eaves and %as to +e re!aced)
-%at reventive actions can ta(e !ace to reduce t%e effects of turnoverH
T%ere are a variet" of actions co&an" &ana'e&ent and !eaders%i can e3ecute in
order to revent t%e effects of turnover) 5n order to find ree&tive &easure, t%e causes
and effects &ust +e studied) #" ensurin' t%at &ana'e&ent !earns t%e causes of turnover
and act accordin'!", turnover &a" +e reduced or contro!!ed) T%is ?uestion see(s t%ose
t"es of so!utionsD t%e ans2ers t%at 2i!! assist co&an" !eaders%i revent turnover
2%enever ossi+!e)
Resu!ts
-%at are t%e causes of turnoverH
E&!o"ee turnover is causes +" an arra" of 2or(@re!ated and non@2or(@re!ated
issues) T%e &ost co&&on reason for an e&!o"ee to !eave t%eir e&!o"&ent is *o+
dissatisfaction) $%ee%an ,.//01 discusses t%ree cate'ories for turnoverD one of 2%ic% is
*o+ dissatisfaction) E&!o"ees dissatisfied 2it% t%eir current situation at 2or( are !i(e!"
to find ot%er e&!o"&ent) Go+ dissatisfaction &a" +e a resu!t of a fe2 issues and t%us
ro'ress into turnover) E&!o"ees &a" not +e satisfied 2it% t%eir &u!ti!e duties or
sa!ar" ,Ao& = Binic(i, 6>>.1) Ot%er e&!o"ees &a" +e dissatisfied 2it% erceived
ro&otion oortunities 2%ic% in turn cause t%e e&!o"ee to consider !eavin' t%e
co&an") E&!o"ees &a" %ave reac%ed t%e e3tent of t%eir advance&ent or %ave +een in
t%e sa&e osition 2atc%in' ot%ers rise ast t%e&) ,-er+e! = #edeian, ./4/1) Go+
dissatisfaction is usua!!" fo!!o2ed +" *o+ avoidance) E&!o"ees tend to avoid 2or( +"
rocrastinatin', ca!!in' in sic(, and si&!" not s%o2in' t%e roer care at t%eir *o+)
T%ese s"&to&s are &ost!" noticea+!e and &ana'e&ent s%ou!d +e a2are of t%e actions
e&!o"ees ta(e 2%en t%e" are dissatisfied 2it% t%eir *o+s ,Ao& = Binic(i, 6>>.1)
Lo2 co&ensation and ot%er sa!ar" issues are a!so reasons for turnover, 2%ic%
can +e considered a su+@cate'or" of *o+ dissatisfaction) Most &ana'ers +e!ieve t%is is t%e
&ain reason for turnoverD t%is notion is ?uestiona+!e +ecause it is a vie2 fro& t%e
&ana'er;s ersective ,Laser, ./4>1) Co&ensation issues &a" %ave +een t%e &ost
co&&on reason for resi'nin' 'iven to &ana'e&ent for !eavin' t%e *o+ +ecause &a"+e it
can +e understood and so&eti&es uncontested +" &ana'e&ent) E&!o"ees unsatisfied
2it% t%eir resent a" 2i!! +e'in t%eir *o+ searc% unnoted ,E&!o"ee turnover, 6>>>1)
Fue to a" dissatisfaction, e&!o"ees 2i!! searc% for a +etter *o+) E&!o"ees &a" a!so
co&e across a +etter osition outside t%e co&an" 2it%out +ein' dissatisfied 2it% t%eir
resent osition, +ut t%e +etter osition itse!f +eco&es t%e reason for !eavin' a co&an"
,$%ee%an, .//01)
Anot%er factor of turnover is t%e fact t%at &an" &ana'ers are una2are of t%e true
cost of turnover, and ot%ers do not (no2 t%e 'enera! core causes and t%ose causes secific
to t%eir areas of resonsi+i!it", t%erefore cannot ta(e action ,E&!o"ee turnover, 6>>>1)
Poor &ana'e&ent deteriorates e&!o"ee &ora!e, and cannot deter&ine t%e reasons
eo!e do not 2ant to 2or( t%ere an"&ore) Mana'e&ent is not at fau!t in &ost casesD
fau!t ref!ects on oor trainin' ,-%ite, .//01) T%e !ac( of ade?uate trainin' of e&!o"ees
is a!so a cause for turnover) T%is trainin' inc!udes t%at of &ana'e&ent) Mana'ers
so&eti&es are not trained and oriented to dea! 2it% and revent certain situations 2%ic%
causes &ana'e&ent to &iss t%e si'ns and 2arnin's creatin' ersonne! &ana'e&ent
ro+!e&s 2it%in t%e co&an" ,Laser, ./4>1) 5n addition, so&e &ana'ers are under t%e
&ista(en i&ression t%at turnover is si&!" 'oin' to %aen and t%ere is not%in' to do to
sto it) <ranted, turnover cannot +e stoed one %undred ercent, "et it &a" +e
&ini&i:ed dra&atica!!" +" ta(in' t%e roer actions and recautions ,E&!o"ee turnover,
6>>>1)
Airin' ersonne! are e3ecutin' fau!t" or inade?uate ractices 2%en screenin' and
fina!!" %irin' e&!o"ees) T%is situation creates a &is&atc% of t%e co&an" and t%e
e&!o"ee ,Noa% = Yon'@Pin, 6>>61) T%e dec!ine in toda";s 2or( et%ics and record %i'%
*o+@%oin' &a(es it e3tre&e!" difficu!t for %irin' &ista(es not to occur) A !ar'e nu&+er
of e&!o"ee turnovers are due to %irin' &ista(es) Furin' t%e intervie2 rocess, t%e
e&!o"ee e3oses one facet of t%e&se!ves in an atte&t to inf!uence t%e %irin' decision
,#o2in = Aarve", 6>>.1) T%e %u&an resources deart&ent or t%e %irin' &ana'er is
so&eti&es ressured to %ire a +od" to fi!! t%e sot out t%e oo! of a!icants) T%e &ost
?ua!ified a!icant &a" not suit t%e financia! co&ensation, t%us t%e co&an" sett!in' for
t%e ne3t +est and so&eti&es a fe2 eo!e !ater ne3t +est ,#o2den ./061)
$o&e causes of turnover are inevita+!e) Minors are su+*ect to t%eir ru!es at %o&e
and &a" not +e caa+!e, avai!a+!e or f!e3i+!e to 2or() Ca&i!" issues suc% as 2it%
c%i!dren and e!der!" arents &a" arise 2ere an e&!o"ee &a" need to !eave a co&an"
eit%er te&orari!" or er&anent!") An e&!o"ee;s retire&ent is cause for re!ace&ent)
Ot%er e&!o"ees &a" +e !ost due to i!!ness or deat% ,#o2den, ./061) A!! of t%ese are
inevita+!e circu&stances) $o&e &a" +e anticiated suc% as a retire&ent, c%i!d;s +irt%,
and a &inor returnin' to sc%oo!, so t%e aroriate actions can +e ta(en to &ini&i:e t%e
effects of turnover)
Turnover rates &a" increase ?uic(!" due to an" of t%ese factors) T%e &ain
ro+!e& is t%at &ost +usinesses do not %ave ro'ra&s in !ace to assist in t%e
identification of ro+!e&s 2%ic% &a" cause turnover ,-%ite, .//01) 5t see&s t%at t%e
&ost co&&on ans2er is *o+ dissatisfaction of so&e sort) -it%out an" 2arnin' of t%e
causes of turnover, it can +eco&e detri&enta! to a co&an" in &an" for&s)
-%at effects does turnover %ave on an or'ani:ationH
An e3cessive turnover rate re'ard!ess of cause %as an enor&ous ne'ative i&act
on t%e co&an" and t%ose e&!o"ed 2it% t%e or'ani:ation) $o&eti&e even consu&er
and custo&ers suffer +" t%e a&ount of c%an'e in t%e +usiness) E&!o"ee turnover can
%ave a ne'ative effect on t%e erfor&ance of t%e +usiness ,<!e++ee( = #a3, 6>>91) T%e
&ost co&&on find of t%e effects turnover %as on an or'ani:ation is financia! !oss) T%ese
costs can +e searated into t2o cate'ories) Tan'i+!e costs inc!ude t%e ti&e sent in
recruitin', se!ectin', intervie2in', and trainin' ne2 e&!o"ees) T%ese e3enses are
visi+!e and noted in t%e cost of advertisin' and &ano2er e3enses) A &ana'er sends
ti&e a2a" fro& %is rincia! dut" to +e invo!ved in t%e %irin' rocess) A certain a&ount
of caita! is !ost due to t%e ti&e devoted to ot%er functions instead of &ana'in' ever"da"
functions ,-%ite, .//01) E&!o"ee turnover can +eco&e e3ensive if not contro!!ed +"
t%e co&an") T%e co&an" %as aid for t%e e&!o"ees trainin' and for t%ose conductin'
t%e trainin' and no2 %as to do it over a'ain ,Laser, ./4>1)
5ntan'i+!e !osses inc!ude t%e !ost of t%e (no2!ed'e t%e erson !eavin' is ta(in'
2it% t%e&) T%e 'reater t%e inte!!ect of t%e erson, t%e !ar'er t%e !oss) T%e co&an" no2
&ust create a succession !an un!ess it is a!read" in !ace due to %i'% turnover ,Bra&er,
.///1) T%e 2or(!oad of t%e re&ainin' e&!o"ees is increased due to t%e &issin' erson)
Co2or(ers &ust no2 ic( u t%e s!ac( and 2or( !on'er or &ore s%ifts unti! a ne2
e&!o"ee is %ired, 2%ic% a!so creates overti&e in certain industries) Co&anies &a"
%ave to dea! 2it% t%e ne'ative u+!icit" 2%ic% fo!!o2s +usinesses 2it% %i'% turnover
rates ,-%ite, .//01)
5t %as to +e noted t%at a financia! +urden on a co&an" is not t%e on!" effect of
turnover) 5t a!so ta(es a to!! on t%e e&!o"ees t%at re&ain 2it% a co&an") Attitudina!
and +e%aviora! conse?uences occur 2it% t%ose sta"in' 2it% a +usiness ,$%ee%an, .//01)
Ne'ative attitudes and +e%aviors can +e seen after t%e ne2 2or(!oads are issued to co@
2or(ers) Over2or(in' re&ainin' 2or(ers &a" create stress for t%e&) On t%e ot%er
%and, ositive reactions can +e e3ected if t%e erson 2as a oor erfor&er or %as !eft a
%i'%er ran( osition avai!a+!e ,Bra&er, .///1) E&!o"ees +e'in to co&are t%eir current
situation 2it% t%at of t%e for&er co!!ea'ues and start to deve!o conc!usions a+out t%e
situation) T%e" a!so atte&t to e3!ain t%e reasons t%e erson &a" %ave !eft and tr" to
*ustif" t%e& ,$%ee%an, .//01)
Most of t%e a+ove effects on a co&an" are ne'ative, costin' +i!!ions of do!!ars
and stretc%in' %u&an resources ,E&!o"ee turnover, 6>>>1) Co&anies t%at
redo&inate!" !oss oorer erfor&ers do not %ave as ne'ative of an effect fro& turnover
as t%ose 2it% a %i'%er disroortioned turnover rate !osin' a 'reater nu&+er of its +etter
erfor&ers ,-er+e! = #edeian, ./4/1) 5n t%is case t%e co&an" is usin' turnover to its
advanta'e) T%e effect is t%e oortunit" to %ire &ore effective re!ace&ents t%an t%ose
2%o !eft and ?uic(!" re!ace t%e (no2!ed'e !ost) T%e financia! !oss sti!! e3ists, +ut t%e
+urden !aced on t%e re&ainin' 2or(ers is %ard!" fe!t +ecause t%e !oss of a oorer
erfor&er can +e easi!" covered) T%e costs of turnover are not as e3tensive in certain
industries suc% as &anufacturin', retai!, 2%ere roduction *o+s are eas" to !earn, and
co&etition is vastD t%erefore it is ossi+!e to %ire a!read" trained e&!o"ees ,#o2den,
./061)
-%at reventive actions can ta(e !ace to reduce t%e effects of turnoverH
T%e 2a" to reduce so&e of t%e effects of turnover is to act durin' t%e sta'e in
2%ic% t%e cause is +ein' considered as a reason for !eavin') Mana'e&ent needs t%e
aroriate trainin' in order to detect and +e a+!e to dea! 2it% certain situations t%at &a"
arise in order to revent t%e erson fro& !eavin') E&!o"ee issues s%ou!d +e ta(en care
of +efore resi'nation is 'iven ,E&!o"ee turnover, 6>>>1) Co&an" !eaders%i s%ou!d
+e invo!ved in racticin' 'ood ersonne! &ana'e&ent tec%ni?ues 2%ic% 2i!! assist in t%e
reduction of *o+ dissatisfaction and t%us turnover) Poor &ana'e&ent is a cause of
dissatisfaction, and can +e reso!ved +" usin' 'ood &ana'e&ent s(i!!s ,Laser, ./4>1)
Co&an" trainin' s%ou!d +e eva!uated eriodica!!" as 2e!! as occasiona! audits of
e&!o"ee erfor&ances and standards eva!uations s%ou!d +e conducted to 'ain a +etter
ersective on e&!o"ee satisfaction ,Co!e&an, ./4/1)
Mana'e&ent s%ou!d +e invo!ved in findin' out t%e reasons eo!e are !eavin')
T%e" s%ou!d a!so 2or( to ro&ote *o+ satisfaction and create a stron'er co&an" !o"a!t")
T%is infor&ation can +e 'at%ered +" usin' e3it intervie2s and surve"s) E3it intervie2s
&a" +e too !ate for t%e erson !eavin', +ut it &a" %e! to (ee ot%ers) E&!o"ee attitude
surve"s 'ive t%e &ana'er a +etter understandin' of %o2 t%e e&!o"ees fee! a+out t%eir
*o+s and can %e! 'a'e *o+ satisfaction ,Co!e&an, ./4/1) Mana'ers s%ou!d reco'ni:e t%at
reventin' turnover is a difficu!t tas( 2%ic% re?uires (no2!ed'e of certain issues
!eaders%i s%ou!d !earn in order to +e &ore successfu! at (eein' e&!o"ees and reducin'
t%e turnover rate ,#o2den, ./061) Oen door o!icies are anot%er for& of 'at%erin'
infor&ation and ossi+!e insi'%t into e&!o"ee *o+ satisfaction and receive innovative
and roductive ideas to %e! (ee t%e co&an" at a %ea!t%" sta'e) ,Co!e&an, ./4/1)
T%e se!ection rocess &ust +e standard and t%ose e3ecutin' t%e rocess &ust
a+ide +" t%e standards deve!oed +" co&an" !eaders%i) E&!o"ees s%ou!d +e carefu!!"
se!ected and screened 2%ic% 2i!! resu!t in %irin' +etter ?ua!it" e&!o"ees) 5f +etter
eo!e are %ired, t%e resu!ts 2i!! +e in &utua! +enefitD 2or(ers 2i!! +e roductive and are
!i(e!" to sta" !on'er 2it% co&an") Productivit" en%ances *o+ satisfaction ,-%ite, .//01)
An e3tensive a&ount of ti&e is sent i&rovin' %irin' rocedures in order to co&e u
2it% t%e +est ossi+!e candidate fro& t%ose 2%o %ave a!ied) Pro'ress is +ein' &ade, it
is i&ortant to notice t%e !i&itations) T%ere can +e suc% t%in' as too &uc% ti&e sent
investi'atin' ossi+!e candidates) Candidates are &ore t%an !i(e!" !oo(in' at &ore t%an
one *o+ oortunit", so ti&e is crucia!) 5n addition, t%e &ore ti&e sent, t%e &ore &one"
sent and !ost if t%e erson turns over soon) T%is is not to sa" %ire at 2i!!, on!" t%at %irin'
ersonne! s%ou!d +e accurate and effective as 2e!! as efficient!" e3edient ,#o2den,
./061) A %u&an resource ro'ra& roer!" desi'ned to suit t%e needs of t%e co&an"
can ver" 2e!! reduce turnover 2%ic% in turn can i&&ense!" i&rove t%e +otto& !ine
fi'ures) Pro'ra&s &ust oerate efficient!" and effective!" in order to avoid caita! !osses
fro& turnover ,<!e++ee( = #a3, 6>>91)
Mana'e&ent s%ou!d &aintain issues in ersective) Co&anies atte&t to (ee
sa!ar" and co&ensation infor&ation rivate, 2%ic% can reduce dissatisfaction and
ani&osit" +et2een e&!o"ees ,Co!e&an, ./4/1) T%e so!ution to co&ensation issues
&i'%t +e easi!" reso!ve if t%at is t%e so!e reason for !eavin' a co&an"D a" e&!o"ees
&ore t%an co&etitors do ,#o2den, ./061) 5f t%at;s t%e case a co&an" 2i!! %ave
anot%er issue to dea! 2it% after a!! e&!o"ees fi'ure t%is out: +an(rutc") Ot%er 2or(@
re!ated issues s%ou!d not +e i'nored) E&!o"ees &a" +e usin' a" as an e3cuse or t%e"
fee! t%e" are 2or(in' &ore for !ess) T%ere is &ore t%an one reason eo!e !eave and
&ana'er s%ou!d +e a2are, as i'norin' ot%er issues can +e critica! to t%e resu!t of turnover
,Co!e&an, ./4/1)
$trate'ies
Co!e&an ,./4/1 discussed a !ist of reco&&endations to revent turnover) T%is
!ist covers *ust a+out ever" contro!!a+!e issue t%at &ana'ers &a" co&e across)
,.1 <et invo!ved in findin' out t%e causes of turnoverD
,61 #rin' attention to +otto& !ine fi'ures and %o2 turnover affects ever"oneD
,I1 Aave an oen door o!ic" st"!e of &ana'in' to a!!o2 e&!o"ees to co&&ent on 2%at
&i'%t +e +ot%erin' t%e& a+out t%e *o+D
,91 Rea!i:e t%ere is &ore t%at one ro+!e& and a" attention to a!!) $ta" a!ertD
,01 E3ecute eriodic audits of *o+ satisfactionD
,71 Aave strict %irin' standardsD do not *ust fi!! t%e oenin'D and
,81 Feve!o and constant!" udate trainin' strate'ies
T%ese seven su''estions +" Co!e&an ,./4/1 &a" %e! in eva!uatin' t%e ossi+i!ities of
e&!o"ee turnover 2it%in t%e area of resonsi+i!it")
Reco&&endations and conc!usion
Turnover can %ave a detri&enta! effect on an or'ani:ation and its e&!o"ees if
co&an" &ana'e&ent a!!o2s it) T%ere are too!s to assist in addressin' t%e causes of
turnover) $ince turnover is often used as a erfor&ance indicator, &a"+e t%e reventive
&easures s%ou!d +e as 2e!!) 5t is i&ossi+!e to e!i&inate turnover a!to'et%erD t%erefore,
&ana'e&ent &ust !earn %o2 to dea! 2it% it and t%e effects it %as on a co&an") 5n
addition, &ana'e&ent s%ou!d +e +etter reared to ta(e t%e roer actions after a
turnover event occurs) A!! efforts s%ou!d +e focused on &aintainin' e&!o"ee *o+
satisfaction and &ana'in' contro!!a+!e causes of turnover) 5n conc!usion, t%e assess&ent
of t%e 2or(!ace environ&ent is crucia! and a re'u!ar s"ste& to cature and eva!uate
feed+ac( &ust +e in !ace in order to &aintain a %ea!t%" 2or( environ&ent)
Reference List
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