Impact of Employee Retention Essay

Griffeth & Hom (2001) pass water argued that employee disturbance is assuming crisis proportions for many employers who struggle to retain bulk in the miffedest labour market. Griffeth & Hom (2001, Pg 1) 52% of companies report that their turnover rate is increasing and put in rates be running risque of 1.1% a month. Turnover enkindle be a real problem in many musical arrangements. Companies give a great atomic pile of time and money recruiting and training employees and the address of replacing staff members lost through turnover are great. The pecuniary cost of replacing one employee is more a good deal than not estimated to range from 50 percent to 200 percent of the annual salary for the position, and may even be higher in very specialized fields. Furthermore, poor employee store burn down have a negative impact on workplace productivity, byplay satisfaction, and also on the overall morale of the organisation.It is proven that a high turnover percentage can cos t employers a great deal of financial distress. Depending on the size of the company, to many employers it can make the release in staying or going out of business. Phillips (2003,Pg 4) historied that, of late employee retention has captured the attention of the business, financial, and executive community as a critically all-important(a) strategical issue that can have a dramatic essence on productivity and profits. Cascio, 2000 and Johnson,1995 cited in Griffeth & Hom, Retaining Valued Employees (2001), are of the opinion that, human creations resources professionals and researchers project that the cost of one turnover incidence ranges from between 93% to 200% of a leavers salary, depending on his or her skill and level of rent out responsibility.Labour turnover has a negative impact on the organizations. Although every manager and team member is aware of problems associated with high turnover, a follow of its foremost consequences puts employee retention in the curb per spective. Patricia (2002, pg 4, 5) noted that employee turnover has a serious impact on organisations. Firstly high financial costs, which is both(prenominal) in terms of direct and indirect costs and the performance of companies has been conquer in many ways by high turnover rates. sometimes the costs alone causes turnover to become a critical strategic issue. Secondly, in terms of survival as an issue, where in a tight labour market in which the company depends on having employees with critical skills, recruiting and retaining the appropriate talent can determine the success or extendure of the organisation. thirdly in terms of productivity loses and workflow interruptions , where an employee who digresss abruptly not only leaves a productivity gap but also causes problems for others on the same team and within the same flow of work. Fourthly in terms of loss of know-how especially with regards to knowledge industry, where a departing employee may have the critical knowledge a nd skills needed for working with specific software. This can be a negative impact at least in the defraud run. Fifthly, turnover can have a serious impact on the image of the organisations. Patricia (2002) also noted that some of the other impacts of turnover on organisations may be with regards to loss of business opportunities, administrative problems, disruption of favorable and communication networks, and occupancy satisfaction of remaining employees.Patricia (2002) noted that it is important to mobilise that turnover can have a negative impact on the individual, particularly if an employee is leaving because of problems that could have been prevented. Furthermore, Patricia (2002) noted that a voluntary turnover because of problems that could have been avoided creates a variety of consequences such as loss of employee benefits or job agedity, financial difficulties, loss of social network, relocation costs, wasted efforts and uncompleted projects, and even more in terms o f career problems. Branham (2005) noted that employees quit because of the disengagement process and deliberation process. Branham (2005) also noted that there are 7 reasons as to why employees leave organisations. They are as follows1. The job or the workplace was not expected.2. The mismatch between job and person.3. precise unretentive coaching and feedback.4. Few growth and advancement opportunities.5. Feeling degrade and unrecognised.6. Stress from overwork and work-life imbalance.7. Loss of trust and confidence in senior leaders.There is no set level of employee turnover that determines at what smudge turnover starts to have a negative impact on an organisations performance. Everything depends on the type of labour markets in which you compete. Where it is relatively indulgent to find and train crude employees quickly and at relatively little cost (that is where the labour market is loose), it is possible to sustain high look levels of service provision despite having a high turnover rate. By contrast, where skills are relatively scarce, where recruitment is costly or where it takes several weeks to call for a vacancy, turnover is likely to be problematic for the organisation. This is especially square of situations in which you are losing staff to direct competitors or where customers have genuine relationships with individual employees. Some employee turnover positively benefits organisations.This happens when a poor performing artist is replaced by a more productive employee, and can happen when a senior retirement allows the promotion or acquisition of welcome newfangled blood. The more valuable the employees in question the more modify the resignation, particularly when they move on to work for competitors. Moderate levels of staff turnover can also help to reduce staff costs in organisations where business levels are unpredictable month on month. When business is decompress it is straightforward to hold off filling recently created va cancies for some weeks. Staw (1980 cited in Griffeth and Hom (2002), argues that turnover is not always bad. For instance, vacating employees or employees who quit can annex promotional opportunities for other employees or can infuse new ideas and technologies when new employees replace those who left. Dalton, Krackhardt and Porter (1981cited in Griffeth and Hom (2002), are of the opinion that certain(a) kinds of jobs exits or quits among marginal performers are even desirable.Abelson & Bay singer (1994, cited in Griffeth and Hom (2002) that a certain quit rate might be tolerated as a cost of doing business in a particular industry. Stephen Taylor (2002, Pg 15) noted that for many HR specialists, rising staff turnover is seen as being an important organisational problem. It follows that improving retention rates should be high on the management agenda, and it is proper for resources to be devoted to achieving this aim. However a certain amount of turnover is actively welcomed by m any managers. Nonetheless, Griffeth & Hom (2001) have observe that organisational-level research and corporate studies report that high exit rates generally worsen organisational effectiveness.Though there are diverse opinions from various authors, and taking the above argument into consideration, it is clear that employees play a fundamental single-valued function in the success of any organisation and therefore by retaining knowing or rather key employees is a very important childbed that the managers should undertake. Phillips & Connell (2002) noted that, some organisations do a superb job of managing retention, whereas others fail miserably. The issues are not always externally driven but often lie within the organisation.