Employee Turnover and Retention Program

1. Define the meaning of Employee Turnover and the Organization Retention

Program.

In Human Resource Management, the employee turnover is the measurement of how long
employees stay with the organization and how often the organization have to replace them.
Generally, any time employees will leaves the organization for any reason. This action of the
employees is called as the turnover or separation. This employees turnover have two types of
categories which is divided to voluntary and involuntary turnover and each of the employee
turnover have different causes.

The voluntary turnover is the act of the employees to quitting the job voluntarily. This
turnover can be cause due to the employees reason to finding a better position that offers
higher salary at another company. For example, employee A is a clerk in company A quitting
he or she current job due to new offered from the company B which offered higher salary and
position as the executive manager.

The involuntary turnover is the act of the organization to laid off or to fire the
employees. Generally, this involuntary turnover performed by the organization to reducing
the staffs due to the business downturn or change of business focus or because of the
employees wrong doing that may cause to termination. For example, organization laid off
some of the employees due to the use of machines to do works or firing the employees due to
wrong doing such as sexual harassment and theft.

The employee turnover may gave negative impact to the organization on varies based
on many factors. This may include the difficulties of filling the position, the amount of
training required for a new employees and the specific cost to pay by the organization to
recruiting new employees. For an example, the organizations have to spent new cost in
recruiting new potential employees and advertisements.

Employee retention program is the effort of the organization to maintain the working
environment which support current staff in remaining or stay loyal with the company.
Generally, the employee retention program policies are aimed to addressing the various needs
of the employees to enhance the jobs satisfaction and reduce the substantial costs involved in
hiring and training new staffs. Organization should retent employees by implement the
specific strategies such as giving compensation and benefits, workplace diversity and training
and development.

The compensation and beneficial is an organization effort to retain employees which

is the compensation is the factors of jibs satisfaction. Organizations that can pay high
compensation make employees adequately to stay to the jobs and prevent them from quitting
the jobs. Providing benefits to employees also make them loyal to the organization. For
example, providing health insurance, life insurance and la retirement saving plan is essential
to retaining employees.

Workplace diversity is the effort of the organization to create the environment where
people feel welcome and safe from harassment and discrimination that motives employees to
performs. Absenteeism and problem may decrease while the productivity, morale and
employees retention increase. For example, female workers are more likely to work on good
and safe workplace environment from discrimination toward gender and harassment.

The training and development is the effort of organization to investing in training

program to help employees develop personalities and professions. Organizations that care to
train employees to learn a new job skills or sending them to workshop to help further
employees education can retent employees. This effort can help employees to be promoted to
new job positions. For example, enroll employees to joint seminar to enhance skills and
knowledges.

In nutshell, retaining employees mean the organizations are retaining the expertise
and the specific skills that are the assets for the organization. This can prevent the
organization form spending new cost for training and recruiting new potential employees that
may take time to develop the specific skills and expertise need and loss by the organization.

2. Identify 5 (Five) factors that generally lead to employees leaving the Company
voluntarily.
Change is inevitable, but it can be costly for our business. Employee turnover is an element
of change that directly affects our bottom line. As such, it is important to identify the motives
of departing workers and devise an effective retention strategy.

Here are five factors that lead to employees leaving the Company voluntarily:

i. Motivated by Higher Pay

No matter how much someone loves working for you and believes in your business, if
they are presented with a better offer, they will likely consider leaving.

Keep tabs on what compensation is being offered by your competition and be sure
youre offering comparable benefits packages.

ii. Not Engaged

Employee engagement may sound like another corporate buzzword, but engaged
employees share a number of common traits:

They seek out challenging work

Theyre good at resolving and/or finding solutions to problems
They proactively share ideas and solutions with colleagues
They offer support to colleagues who are busy
They seek out training and development opportunities

iii. Bored

High-performing workers need to feel that they are being challenged and are moving
forward in terms of professional growth and development. Take time to meet with
your employees and be proactive in discussing career and succession plans with them.

iv. Poorly Managed

A bad boss can make any employee miserable. Even if your staff is completely
committed to the business, if their immediate supervisor creates an uncomfortable
work environment, they may consider leaving.
 Employees often voluntarily leave a job due to the relationship they have with their
direct managers. As human beings we crave routine, structure and consistency.
Generally, if the work relationships are positive and motivating, employees will
accept average wages and mundane or even highly stressful work. Without that
relationship element, employees will have a wandering eye.

v. Early Retirement and Personal Reasons

Some workers resign for personal reasons like staying home to raise children, early
retirement, going back to school or fulfilling a lifes dream.

3. Propose retention approach or program to address the 5 (five) factors above.

In a recent report by the Society for Human Resource Management (SHRM), 30% of
employees said they were likely to look for work outside of their organization.
Whether its 10% of your workforce, 30%, or more, employee turnover can be costly.

With training expenses, replacement hiring costs, and lost productivity, turnover can
cost anywhere from one to three times the cost of an employees salary. But when
employees leave, there are bigger issues to consider than controlling costs. When you
lose an employee, you lose the experience, skills, and knowledge they bring to the
table.

Here are five retention approaches to address the 5 factors of employee turnover
before:

i. Motivated by Higher Pay

Keep tabs on what compensation is being offered by your competition and be sure
youre offering comparable benefits packages. You can also conduct an annual
wage and salary survey to get insight into your employees outlook on their pay.
 In addition to traditional pay and benefit compensation, some companies also
opt to offer additional perks such as flexible schedules, remote work privileges,
on-site fitness rooms or day care, discounts on services or travel, and employee
assistance programs.

To help your employees fully appreciate how youre rewarding them, provide
each employee with an annual statement of total compensation that shows all of
their wages plus any other benefit you provide translated into a dollar amount,
such as:

Employer contributions to benefits premiums

Employer contributions to retirement accounts
Paid time off (PTO)
Stock options
Educational assistance
Adoption assistance

ii. Not Engaged

There are many ways to boost engagement among your employees, and your
approach should be based on whats right for your company culture. Here are
some engagement-boosting strategies you may want to try:

Keep your employees excited about what theyre doing through team-
building activities.
Let your employees contribute in big ways when possible and highlight the
impact theyre making for your company.
Make sure everyone knows your companys mission, vision and values.
Keep them posted in a visible spot and make sure all new employees
receive a copy of them at hire.
Communicate with your employees regularly and have an open-door
policy.
Share mistakes so everyone can learn from them.
Get down in the trenches and work side-by-side with your employees from
time to time. You can learn a lot about what is really happening in your
company just by staying involved.

Its also crucial to ensure your companys leadership is engaged. Take a proactive
approach to employee relations and make sure your managers do as well. Create
 opportunities for your leaders to spend time together discussing goals, sharing
success stories and providing feedback that reinforces your mission, vision and
values.

iii. Bored

Be sure to blend in growth and development opportunities into your employees

responsibilities when possible. No one wants to feel like theyre in a dead-end job.
This could come in the form of assigning employees to a special project or putting
them in an expanded role. It could also happen through building in opportunities
for your workers to cross-train one another.

If these suggestions dont seem like the right answer for your company, ask
yourself these questions:

Are the right people in the right roles?

Do you have too many people for the amount of work that needs to be
done?
Do you need to reorganize?
Are your people getting the feedback and recognition they need?

The answers to these questions may lead you to other root causes of boredom in
your workforce.

iv. Poorly Managed

Make sure brand-new managers in your organization have the tools and resources
they need to succeed in their new leadership roles. Provide training and
development opportunities specially designed for your supervisors. And watch out
that youre not protecting bad managers. They should always go through the same
performance evaluation process as your other employees.
Make sure that your employees have appropriate ways to communicate feedback
about their managers. Speak to them directly and include questions about their
supervisors on an annual climate survey.

By understanding the common reasons for high employee turnover, you will be
better able to protect your business from a similar fate. Employees who are well-
 compensated, challenged, engaged and properly managed will likely be loyal,
productive members of your workforce for years to come.

v. Early Retirement and Personal Reasons

You cant control personal reasons employees have for leaving, but you can
respect their decisions and wish them well in every endeavor. You never know,
they may decide to come back to work when their kids go to school or find that
early retirement is just not for them. The respect and understanding you provide
will help keep even the employees who quit loyal to you and your company.

You cant control every reason why employees leave. But, knowing why they
leave can help you change the things you can do to keep your employees happy,
engaged, and satisfied in their jobs and your workforce strong, productive, and
thriving.

4. Briefly discuss the impact of employees turnover to any Organization.

Businesses hire and train employees to carry out the tasks necessary for them to operate and
generate revenue. Businesses depend on their workers to succeed, but employees may leave
their jobs for a variety of reasons, such as taking new positions at other companies, retirement
or continuing education. Employee turnover describes the rate at which an employer has to
replace employees; high turnover can have several detrimental impacts on a small business.
 i. Productivity
Turnover deeply related with the productivity of an organization. According to AHM
Shamsuzzoha, productivity is the measures of an organization to achieve targeted
production with the means of workforce, authoritys strategies, machineries,
equipment and assets. High rates of employee turnover can lead to lower employee
productivity. Employees who have more experience and loyal will be more aware of
the companys policies, thus achieving goals and fulfil their roles in an organization.
New employees often take time to learn how to fulfil their roles since generation X
and Y employees tend to have high turnover.

ii. Financial Performance

Achieving optimal financial performance is one of the key performance goals in every
organization, as indicated by Armstrong (2011). Higher turnover within organization
has been empirically found to have negative impacts on financial performance.
According to Muhammad et al (2013), replacing employees cost an organization three
times more that the value that the employees will contribute within a year. In an
organization with low employee turnover, profits were four times higher. This will
cause an organization generate less profit and sales getting decrease. When stores or
organization experienced higher turnover, they tended to have lower profit margins.

iii. Customer Service

Personal relationships and familiarity can build customer loyalty. The rationale was
that employee built up relationship with customers that lost or disrupted whey they
left the organization. Since quality may be tangible and non tangible brand
associations, organization ought to ensure that keep talented and experienced
employees will uphold the standards required in the organization to maintain product
and service quality (Muhammad et al, 2013). Higher turnover can harm an
organizations ability to retain customers and provide high-quality customer service.
The newly replaced employee may not efficient like the previous one and tend to
takes time to get used with the system, with the co-worker and adapt new
environment.

iv. Turnover Costs

Higher rates of turnover lead to higher costs that are related to recruiting and training
new employees. Hiring human resource employees to interview and hire candidates
and training for the new employees can be a costly process that diverts skilled
employees from revenue-generating activities. If experienced employees are leaving
 the organization, internal networks developed that required to do their jobs well,
which again is difficult to replace in the short-term. It would be costly if employers
have to send new employees to training outside the country or region, usually training
in Japan. With inexperienced employees as a result of high employee turnover within
an organization, low profits or to a great extent losses because the newly acquired
employees tend to be less efficient in their job.

v. Product Development and Innovations

Innovation often results from the ability to utilize existing knowledge and information
to generate different combination and reconfiguration (Schmidt, 2008). Increasing
competition in the business environment, it has become inevitable for organization to
invest in product development innovations with the organization and improve
employee satisfaction that will leads to organizational transformation. According to
Clark-Rayner (2000), organizations that have experienced highly dynamic and
innovative product line experienced low employees turnover. This indicates that
employee turnover interferes with product development efficiencies and innovations
with the organization.

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