Reducing the Cost of Employee Turnover by Managing for Retention

Retention of employees is an ability to hold and retained employees that are talented and valuable to the organization. It is a great challenge to retain such employees from leaving the organization and joining the competitors. Employee retention and turnover of employees are two different things. Employees’ retention is referred as the period of the employee being employed in an organization. Whereby turnover intention referred as the number of employee wanted to leave the organization. In any healthcare organization, nurses are the majority employees and they are known to be the key person in healthcare industry (Brown, Fraser, Wong, Muise & Cummings,

As mentioned before, there many possible reasons for retention in the industry. Employee benefits can impact retention. Most organization offer benefits packages to lure employees and hope to retain them for a long time based on benefits. “Depending on the business, meeting employer business goals may be highly dependent on having the right human capital and keeping workers satisfied and motivated” (Rappaport, A. M. 2013). Assuming a healthy workplace helps with cost savings and provides less professional and personal stress for employees. Making sound business investments from the employer perspective, is to provide attractive benefits packages that help with retaining valuable employees and keeping up with the current business market remaining

It has been evident that organizations face challenges of maintaining employees within their firms, and the challenge has been in place for a considerable period. Turnover in firms has been associated with different costs that include the process of training new employees, training of the same employees and their selection which has been seen to seen to exceed 100% of the total cost on an annual basis which is usually witnessed in filling the existing position. The quit rate in the United States as indicated by Bureau of Labor Statistics is at 25% (Glebbeek & Bax, 2004). The significant issues that are associated with turnover include work disruptions, direct costs, loss of seasoned mentors and organizational memory. The other concerns that

When discussing employee turnover and retention the immediate reaction is to view turnover as a negative and retention as a positive. Psychologists have been researching and documenting their findings on the subject for over 50 years, mostly focusing on why people leave organizations (Staw, 1980, p. 253). One cannot deny there are organizational costs due to an employee’s departure; however, it would be naïve not to recognize there are benefits as well. Organizations must weigh the costs of turnover, recognize the benefits, and strive to find a balance.

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.

Employee turnover is sometimes the most expensive part of a business. It is the process of an employee leaving and then having to fill that spot on the workforce. The problem with turnover is that with each new person a corporation or small business hires, that small business or corporation is spending sometimes thousands of dollars, not to mention countless hours, be able to hire, train and get the employee used to working within the ranks of your business. This is time and money no small business or other company has to waste, but unfortunately some turnover rates are as high as 95 percent, meaning that only 5 percent of employees have been within the company for a long period.

The goal of virtually every business operating today is essentially the same: to make money. When it comes to the fine art of turning a profit, there are as many different factors that influence whether or not a company makes money as there are ways to make it. All successful companies begin by hiring people who best fit the position, and in the modern-day world of business, a considerable amount of time, effort, or money is invested in this endeavor. Once a stellar candidate has been hired, however, it does the company no good if, six months down the road, they quit because the working environment turned out not to be the right fit for them. Employees may leave a company for many

Employee turnover can occur for numerous reasons. Employers need to listen to employees’ needs and implement retention strategies to make employees feel valued and involved in order to keep them. The cost of retention is far less more brutal than the cost of employee turnover. Employee turnover has many aspects that will contribute to becoming a lot more money that a company is losing. By recognizing the reason for employee turnover, the cost associated and implementing retention strategies an organization can become a place where everyone will want to work.

Turnover intention is taking center stage in today’s business environment with organizations downsizing operations and highly-qualified and other employees seeking better opportunities where they are valued and appreciated. The competitive nature of today’s business operations brought about by globalization and technological advancement has forcing organizations to think twice before letting employees go or downsizing (Brewer & Brewer, 2010). Firms are introducing incentives to retain employees at any cost, such as knowledge sharing, continuous training, learning, and attainments, as well as introduction of software to outdo rivals (Kongpichayanond, 2009). Some organizations are engaging human resource strategies to monitor critical

Laura Michaud expresses the importance and what it takes to retain employees in her article, The Value of Retaining Employees. It’s hard to retain employees especially when opposing organizations try to influence employees with offers of more money or more perks. Michaud discusses five important retention tips that will keep employees happy; build relationships, offer praise, listen, create a fun environment, and strengthen the team. Retention is important for a company because losing employees can potentially cost a lot of money. “According to the U.S. Department of Labor, it costs a company one-third of a new hire’s annual salary to replace him or her” (Michaud 2000). The direct costs the company uses to find new employees includes

High employee turnover rates bear an overall impact on organizational performance. More specifically, the costs of turnover will impact the company’s productivity. The cost of replacing employees can exceed 100% of the annual salary for the open position (Cascio, 2006). There are two types of costs associated with managing turnover, Separation costs and Replacement costs (Allen, Bryant and Vardaman, 2010). When employees voluntarily resign the organization acquires loss time and money to separate from the former employee. These costs include recruiting, selecting and training a suitable replacement. The relationship between turnover rate and performance are inverse. As collective turnover increases, an organizations productivity will decrease (Hausknecht and Trevor’s 2011). Developing mechanisms to offset the desire for employee’s to resign could mitigate the risk of company’s falling short on productivity, and incurring those costs that affect the bottom line.

Employee retention has always been an important focus for human resource managers. Once a company has invested time and money to recruit and train a good employee, it is in their own best interest to retain that employee, to further develop and motivate him so that he continues to provide value to the organization. But, employers must also recognize and tend to what is in the best interest of their employees, if they intend to keep them. When a company overlooks the needs of its employees and focuses only on the needs of the organization, turnover often results. Excessive turnover in an organization is a prime indicator that something is not right in the employee environment. We will look at

Psychology is one of the four disciplines that contributes to the organizational behavior field, and it seeks to measure, explain, and sometimes change the behavior of humans and other animals (Robbins & Judge, 2013). From a psychological perspective, there could be many contributing factors that are causing employees to leave their jobs within the organization. Firstly, the managers within the organization may be doing a subpar job of motivating their employees. Secondly, the employees may not be receiving the appropriate amount of training. If the employees are not receiving the proper amount of training, they are more apt to become

According to Bloomberg, the retail sector is experiencing staff turnover rate of roughly 5% per month. In following the trend, Wal-Mart would lose 60% of employees on average (Mayer & Noiseux, 2015). Employees site multiple reasons for leaving voluntarily or termination due to lack of job training, and employee recognition Lieb & Lieb, 2013). Companies currently have less than stellar strategies retaining employees resulting in the high turnover rates, which affect profitability (Das, 2015).

Today, It has become the fundamental gainsay for the organizations to retain the most talented employees. Hiring knowledgeable employees on the job is essential for an employer but keeping those employees even more important than that of hiring. There are many companies who are always searching for talented employees so such employees have no shortage of opportunities. In this era, employee retention is becoming a critical issue as the result of shortage of skilled labor, economic growth and employee turnover. Many of the companies are facing problems in retaining employees. Although it is hard to measure the exact cost of turnover because a current employee holds with him the knowledge about company, costumers and the