EMPLOYEE’S TURNOVER

 

Organizations invest a lot on their employees in terms of induction and training, developing, maintaining and retaining them in their organization. Therefore, managers at all costs must minimize employee’s turnover.  Although, there is no standard framework for understanding the employees turnover process as whole, a wide range of factors have been found useful in interpreting employee turnover.

Definition for Turnover

         Employee turnover is the rotation of workers around the labor market; between firms, jobs and occupations; and between the states of employment and unemployment. The term “turnover” is defined as the ratio of the number of organizational members who have left during the period being considered divided by the aver-age number of people in that organization during the period.  Frequently, managers refer to turnover as the entire process associated with filling a vacancy:  Each time a position is vacated, either voluntarily or involuntarily, a new employee must be hired and trained.  This replacement cycle is known as turnover. This term is also often utilized in efforts to measure relationships of employees in an organization as they leave, regardless of reason.

Voluntarily vs. involuntary turnover

         There are some factors that are, in part, beyond the control of management, such as the death or incapacity of a member of staff. Other factors have been classed as involuntary turnover in the past such as the need to provide care for children or aged relatives.  Today such factors should not be seen as involuntary turnover as both government regulation and company policies create the chance for such staff to come back to work, or to continue to work on a more flexible basis.

Effects of employee turnover

      Employee turnover is expensive from the view of the organization. Voluntary quits which represents an exodus of human capital investment from organizations and the subsequent replacement process entails manifold costs to the organizations.  These replacement costs include for example, search of the external labor market for a possible substitute, selection between competing substitutes, induction of the chosen substitute, and formal and informal training of the substitute until he or she attains performance levels equivalent to the individual who quit. Addition to these replacement costs, output would be affected to some extend or output would  be  maintained  at  the  cost  of  overtime  payment.

Strategies to minimize employee turnover

 

Strategies on how to minimize employee turnover, con-fronted with problems of employee turnover, management has several policy options viz. changing (or improving existing) policies towards recruitment, selection, induction, training, job design and wage payment. Policy choice, however, must be appropriate to the precise diagnosis of the problem. Employee turnover attributable to poor selection procedures, for example, is unlikely to improve were the policy modification to focus exclusively on the induction process. Employee engagement, the organization’s capacity to engage, retain, and optimize the value of its employees hinges on how well jobs are designed, how employees' time is used, and the commitment and support that is shown to employees by the management would motivate employees to stay in organizations’.


References:

 

Comments

  1. pradheep mbaDecember 18, 2021 at 5:09 AM

    Employee is very vital to a company and finding suitable employee and sustaining him in the company is even hard. In order to be successful tale Ted employees is a must. Strategy explained well

    ReplyDelete

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