Staff Turnover as a Possible Threat to Knowledge Loss
Urbancová Hana, Linhartová Lucie
Abstract The article focuses on labour turnover as a potential threat to knowledge loss. Labour turnover results in an organizations inability to ensure knowledge continuity. In this study, induction was used to identify factors within organizations that determine employees’ exit from organizations. The verifiability of these factors was tested by means of correlation and regression. Subsequently, the presented causes of employee turnover were specified as potential threat to knowledge loss. In the current knowledge economy, employees in an organization are considered the key competitive advantage and the most important asset. If an employee leaves
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It can have both desirable and undesirable effects (Reiß, 2008). The undesirable effects may include, for example, the failure to use expertise and experience gained by a leaving employee, development of unwanted features and approaches in other employees in the organization, disruption of the attitude to work and work morale, higher demands placed on other employees during the period of substitution, possible loss of other customers, increase of costs to recruit a replacement, his/her selection, training and adaptation (Armstrong, 2009; CIPD, 2005; Branham, 2007, Katcher, Snyder, 2007). On the contrary, desirable effects are that new recruits bring new inputs and ideas, there is no stagnation, a more suitable employee (with broader knowledge and experience) can be hired, an improved and less costly process of personnel planning, development management and succession management (Armstrong, 2009; Reiß, 2008; Somaya, Williamson, 2008; Stýblo, 1993). Employee turnover may also bring organizations certain benefits. For example, if a less productive employee is replaced by someone more efficient or if a retiring employee is replaced by “young blood”. A certain level of turnover may reduce the organization’s personnel cost (Milkovich, Boudreau,1993). For employers it is very important to monitor the volume of employees who leave the organization and how this factor influences the organization. That, of course, is dependent on the size of the organization, its
High employee turnover, where workers frequently leave and must be replaced, leads to increased spending on recruitment and training and can indicate management problems. Employees often have good reasons for moving on but if too many are leaving an organisation, can be very disruptive.
In the globalized and changed competitive business world, it is important responsibility to deal with employee turnover for any organization. Effective and efficient management of employee turnover is an essential task to achieve the organizational overhead goals. Significant amount of research has been undertaken to understand the major causes of employee's turnover and retentions mechanisms that organizations should develop, especially in the field of healthcare.
Like recruitment, turnover can be classified as "internal" or "external".[6] Internal turnover involves employees leaving their current positions and taking new positions within the same organization. Both positive (such as increased morale from the change of task and supervisor) and negative (such as project/relational disruption, or the Peter Principle) effects of internal turnover exist, and therefore, it may be equally important to monitor this form of turnover as it is to monitor its external counterpart. Internal turnover might be moderated and controlled by typical HR mechanisms, such as
When an employee leaves the company of his or her own volition, it is called voluntary turnover. In this essay, I will discuss why voluntary turnover is a problem for many organisations and how to retain employees.
High employee turnover has monetary costs. Though estimates vary, most experts agree that turnover costs, when all things are considered, equals at least 25% of a leaving employee’s annual wages (Silva & Toledo, 2009). For example, for an employee making $25,000 per year, the total turnover costs associated with replacing that employee would be at least $6,250. This includes cost of prescreening measures such as drug tests, background checks, application reviews, interviews, pre-employment training and other recruitment costs (Dolfin, 2006). It also includes implicit cost associated with on the job training and the productivity loss experienced by other employees that must help acclimate new employees to their environment
Retaining employees is one way the turnover rate can decrease, Branham (2000), focuses on retaining valuable employees by incorporating four key elements. The first key elements is, “be a company that people want to work for”. There are many companies that have been labeled as, “employers of choice”. These employers all have something in common, which is how they value their employers (Branham, 2000). They treat their employees with respect and like family. With being an “employer of choice,” people are the most valuable asset; not just customers but employees too. Many companies go above and beyond for their customers, but not for their employees, yet they wonder why they are losing valuable talent.
In this paper Team C has discussed the issue of poor employee retention concluding in a high employee turnover rate. This is an issue that can be common among some companies and that is a great example of
Having a high employee turnover rate can cost the company more than just people. There are many “costs” physical and opportunity that are included into high employee turnover. The physical costs of high employee turnover is training the new employee, interview expenses, and advertising costs. These are general costs, but when
There are two types of turnover, voluntary turnover happens when the employee makes the decision to leave and involuntary turnover is when employees has no choice in their termination (Schmitz, 2012). Every month or sooner managers experience some of their exceedingly qualified employees leave the company. After realizing that their company is becoming less profitable is when they begin to wonder why and brainstorm on ways to retain them. In Information Technology, “the cost of recruiting new staff is high and the loss of continuity when staff leave can also be very expensive” (Bott, 2005, p. 111). In IT, human resources strive to maintain their highly skilled employees while employees’
Nevertheless, these methods cannot predict employees’ turnover. Morrell et al. (2001) discuss about two key concepts: voluntary and involuntary turnover. Voluntary turnover relates to the employee’s decision to leave such as illness or personal reasons. While, involuntary turnover relates to company related problems such as the need to cut costs or to downsize. Even if organisations develop means to identify the characteristics that influence turnover, neither of these two types can be successfully foreseen during the recruitment process. As a result, employers need to secure long term employment since a labour turnover will have a high cost both in terms of recruitment and selection and in terms of training sessions meant to enhance the employees’ soft skills. (Beardwell and Claydon, 2010).
For the most part, attracting and retaining employees in today’s market is one of the biggest challenges that are faced by Human Resources. In today’s society, retaining employees is rather difficult as various employees are known to jump from job to job, almost always in search for more benefits or for their personal dream. Whatever the reason be, high turnover rates can be very expensive to employers as training and hiring one employee and then training and hiring a new employee requires time and money. According to Chron.com, it has been found that “employee replacement costs can reach as high as 50 to 60 percent of an employee’s annual salary.” As this is a one-time transaction, employees that are retained only “charge” the company once and so it is allowing more work for the dollar when the employee stays with the company for a longer time period. Companies that have high turn-over rates spend more money on employees which affects the bottom line of the company, this determines the state on how fast or a matter of if the company will use its money to expand.
All over the globe retaining employees is a most critical factor for the organisations. High employee turnover is more common in private sector as compared to public. In construction industry, to reduce employee turnover and to improve the productivity of an organisation, organisations have to be aware of the reasons why an employees quit the organisation?. Employee turnover can be explained as the expenses, in term of money, time, and quality of work, that an organisation bear while replacing an employee. If an organisation fails to satisfy the needs of its employees then it is obvious that the employees will look forward to fulfill their necessities. This chapter discuss the reasons why employees quit their jobs.
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
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
Therefore, since knowledge is very valuable to organisations, it can become a problem when there is a possibility of this knowledge leaving the organisation. Due to the nature of organisational knowledge being mostly tacit and stored in the head of employees, employee turnover can become a serious issue for organisations as that knowledge leaves when employees leave (Beazley H et al, 2002). This phenomenon is known as Knowledge Loss, which is a reduction in organisational knowledge. Knowledge loss should not be mistaken for Organisational forgetting (unlearning) as the latter replaces lost knowledge (voluntary) with new knowledge while the former is not replaced. When knowledge is lost, not only is their (employee) independent knowledge lost, relations relational knowledge with the internal and external social network [fellow employees and customers] (Massignham P, 2008; Parise S et al, 2006).