Employee turnover is defined as voluntary leaving of connections in an organization and is regarded as a type of removal from office. Kaplan and Minton (2012) define turnover as internal and external types. In such a definition, takeovers, bankruptcies are also considered as external turnovers. This is a significant extension and development of the definition of turnover.
A common reason for employee turnovers
The senior management is the key to any organization’s success. The senior management is responsible for providing leadership, visible and active support and demonstrates commitment so that continual improvement is implemented throughout the organization (Redman, n.d.). When it comes to senior management, there can be many switches for the experience of different organizations. This results in a vacant position and a potential problem, for the company left (Subedi, n.d.).
There are various causes of employee turnover among senior management. They are as follows.
The unfavourable working environment is one of the major causes of employee turnover in organizations, where employees are dissatisfied with the provided working conditions. In general, employees choose to work in an organisational environment that is enjoyable and accommodative. When organizations fail to provide a good working environment, employees tend to look for other organizations with good working conditions (Harris, Janes and Boonthanom, 2005). Robbins (2005) argues that employees have a penchant of comparing work environment in organizations. This way they are able to find out greener pastures, which they hunt for attaining.
No feeling of belongingness towards the organisation
An employee feeling devalued or unrecognized is also a major cause of turnover. In fact, employees who feel devalued and unrecognized in the job eventually turn out to be a burden on the organization (Derek et al., 2008). However, in the case of an organization that recognizes employee performance, can boost employee morale. This motivates them to maximize in the direction of organisational goals. On the other hand, employee turnover in organizations does not take place if it is regarded as a second home for the employees, and hence the relationship between employees and managers in the organization is decisive. The fact is that poor relations between employees create a high rate of employee turnover (Spector, 2008).
Career development opportunities
Poor career development in an organization is another reason for employee turnover (Rankin, 2008). Human resource managers in organizations are expected to recurrently work to manage employee turnover rates and further retain the potential and prospective employees. Reducing turnover of employees through retention strategies should be the focus of human resource managers in organizations.
The study of Har (2005) conducted an investigation on the effect of managerial coaching on employees’ job commitment. The researcher studied turnover intent in Malaysia using a survey that consisted of MBA students, human resource managers and employees. The results revealed that managerial coaching has an affirmative controlling effect for ensuring employees’ organizational commitment and tends to discourage turnover intent of employees. To put it more specifically, the results establish that organizational commitment guaranteed by human resource managers at the top has a negative effect on employee turnover intent. In this context, demographic factors are also found to have an effect on the role of human resource managers.
Role of HR managers in reducing employee turnover
There is ample empirical evidence that explain the role of HR managers in reducing employee turnover in organizations. The majority of the literature presents positive results. Yet, there is also some evidence against the argument that human resource managers’ role is effective in reducing senior management turnover rate. The purpose here is to critically discuss the studies presenting evidence, both in favour and against.
In this context, Babcock (2005) argued that recognizing employee retention and turnover, and putting into practice effective human resources policies holds the key to building a prolific workforce. Rankin (2008) argues that human resource managers may play an effective role in setting up a conducting work environment and improves the relationship among the employees. More importantly, human resource managers may put into practice the policies relating to career advancement opportunities for the employees. In this way human resource managers may effectively and successfully play an influential role in reducing employee turnover.
Role of job prospects in reducing employee turnover
Thornton (2008) argues that employee turnover is a major human resource issue. In contemporary Subedi (n.d.) used the data received from more than 10 banks in Nepal in the form of a structured questionnaire and suggests that the main reasons for senior management attrition are lack of career growth, recognition and motivation. However, the study is precisely based on the banking industry, and hence, may not be applicable for all organizations.
Training and development programs reduce turnover
Norouzi, Sepasi and Nourbakhsh (2013) conducted correlative research based on descriptive method with a sample of 140 employees. He found that high employee turnover can be a significant predictor of personnel and professional issues. He found that excellent training and development programs to replace managers leaving the company have been effective in reducing employee turnover rate. Efficient and effective HR management barriers can have a positive impact on employee commitment and job satisfaction. It dramatically reduces the turnover rate that mostly occurs in senior management.
Impact of organizational culture on employee turnover
The various factors affecting the intention of employee turnover and their relationship with each other were studied by Shahbazi, Akbari, Asadi and Kamel (2008) in their study. According to them, effective factors on employee turnover included:
- job satisfaction,
- environmental opportunity,
- job conflict, autonomy,
- job stress,
- organizational commitment,
- distributive justice,
- promotion opportunities and,
- social support.
In this study, employee turnover has been examined and determined that it was revealed that there was a relationship between all these factors and employee turnover.
Downsizing increases employee turnover
Ware and Fern (1997) suggest that the main reasons behind the employee turnover rate in senior management is the shrinking of the most desirable labour pool (25‐34 years). No job security, scarce promotions and minor salary increase lead to low levels of employee loyalty and less bonding with their organization.
Furthermore, other reasons include an absence of development opportunities, inequitable pays, managers unawareness. According to the study, the solution lies in tying retention in critical business activities so that senior managers can see themselves as an integral part of business success and survival. Retention strategies should be treated as a proactive measure rather than a reactive one.
Lack of communication and challenges affects employee turnover
A nationwide survey of 85 hospitals’ senior management in the U.S. was conducted by Khaliq, Walston and Thompson (2006) using structured questionnaires. The survey indicated that 67% of the senior managers reported that their departures from their previous hospitals were voluntary. Only 3.4% had a continuous tenure of 20+ years in a hospital. The average tenure of a senior manager is found to be 5.6 years. The study suggests that HR managers must be proactive and should realize that greater communication is required to motivate senior managers to stay, after an expected tenure of 5.6 years.
Role of salary and recognition in employee turnover
Yiu and Saner (2014) conducted a survey of 88 senior managers representing various industries, sizes, and years of operation. The major contributors to employee turnover were identified as salary, career development, recognition and internal relationships. The most frequent steps of intervention to mitigate labour turnover were recognized as salary increase, career advancement and recognition. Additionally, participation and decision making was also identified as a major intervening measure to combat turnover. Efforts should be made to strengthen the bonding of internal social network members to ensure talent retention.
HRM strategies to reduce employee turnover
According to the report by Sage Abra (2011), HRM must plan should:
- Develop a workforce that supports the company’s goals and customers.
- Cultivate relationships with talent.
- Develop a list of ideal candidates (internal or external) for critical positions.
- Implement referral bonuses for employees who bring excellent candidates.
HR managers must model scenarios for change in the organizational structure such as:
- layoffs and promotions,
- identifying worst performers,
- creating development and retention plans and,
- planning succession for critical positions in the event of departures.
In order to retain senior managers, they must be given new challenges in their work, opportunities to move up, and recognition and compensation that reflect their value to the organization.
- Babcock P (2005). “Find What Workers Want,” H.R. Magazine, April, ww.shrm.org/hrmagazin
- Har, Cheong L.(2005), Investigating the Impact of Managerial Coaching on Employees’ Organizational Commitment and Turnover Intention in Malaysia, http://dspace.fsktm.um.edu.my/bitstream/1812/700/1/Managerial%20Coaching%20on%20Employees’%20Organizational%20Commitment%20and%20Turnover%20Intention.pdf
- Thornton, G. (2008), Recruitment and Retention: The Quest for the Right Talent.International Business Report 2008 http://www.grantthornton.ca/resources/insights/reports/IBR_2008__Recruitment_and_Retention_Report_FINAL_15.pdf
- Norouzi, S. ,Sepasi, H. and Nourbakhsh, P. (2013), The Relationships of Human Resources Management, Motivational Skill and Turnover, Archives of Applied Science Research, 2013, 5 (1):295-300
- Harris, K. J., Janes M., and Boonthanom, R., (2005). “Perceptions of Organizational Politics and Cooperation as Moderators of the Relationship between Job Strains and Intent to Turnover,” Journal of Managerial Issues, Vol. 17, No. 1, pp. 26-42
- Derek T, Laura H, Stephen T (2008). Human Resource Management 7th Ed. Pearson Education Limited, Rotolito
- Robbins SP (2005). Essentials of OrganisationalBehaviour: International Edition. (8th Ed.). Upper Saddle River, New Jersey: Pearson Education Inc
- Spector PE (2008). Industrial and Organizational Behavior, (5th Ed.). Wiley: Hoboken, NJ
- Rankin, N. (2008). The drivers of staff retention and employee engagement. IRS Employment Review. No 901, 1 July. 13pp
- Kaplan, S. N. and Minton, B. A. 2012. How has CEO turnover changed?.International Review of Finance, 12 (1), pp. 57—87
- Subedi, J. n.d. Causes of attrition of Senior level employees: A study on selected commercial banks of Nepal. Banking Journal.
- Shahbazi, M., Akbari, A., Asadi, A., Kamel, M.J. 2008. Journal of Police Organizational Development.
- Norouzi, S., Sepasi, H. and Nourbakhsh, P. 2013. The relationships of human resources management, motivational skill and turnover. Scholars Research Library.
- Ware, B.L., Fern, B. 1997. The Challenge of Retaining Top Talent: The Workforce Attrition Crisis. Integral Talent Systems.
- Khaliq, A., Walston, S., Thompson, D. 2006. The Impact of Hospital CEO Turnover in U.S. Hospitals. American College of Healthcare Executives.
- Yiu, L., Saner, R. 2014. Talent Attrition and Retention: Strategic Challenges for Indian Industries in the Next Decade. Centre for Socio-Eco-Nomic Development (CSEND) and Organisation and International Management, Basle University.
- Sage Abra HRMS. 2011. What the CEO Needs From Human Resources.
- The concept and usage of Autoregressive Integrated Moving Average (ARIMA) in the prediction of trends - November 25, 2020
- An overview of the annual average returns and market returns (2000-2005) - October 22, 2020
- Introduction to the Autoregressive Integrated Moving Average (ARIMA) model - September 29, 2020