According to Martin (2005) while employees leave the company, the employer has to bear with a considerable amount as direct and indirect expenses. The Cost of employee turnover can be a staggering ranging from consuming a considerable amount of Annual budget which could be shared with its workforce itself (Linda, 2002).
Basically the cost of employee turnover can be, Advertising and recruitment cost, Training and development cost, resource management expenses, loss of time and efficiency, Work imbalance etc.(Harrie, 2002).
As per the research of Phillips (1990) identified that the direct cost of recruitment accounted only 10-15% of the total cost while 85-90% of total cost is associated with the inefficiencies occur due to post is vacant either or inefficiency of new worker.
According to Murphy (2009) companies take a deep interest by their employee turnover rate due to turnover badly affect to the smooth running of the business by developing disruptions which cause to minimize the output and profit of the company.
So if the company can identify the most common causes of the employee turnover, it would be obviously encourage to take the necessary actions to recruit and retain well qualified employees (Armstrong, 2006).
References
Armstrong, M. (2006) A Hand Book of Human Resource Management. Tenth Edition. London, Kogan Page.
Harrie,G. (2002). Career Development Interventions in the 21st Century. Fifth Edition. Columbus, OH: Merrill Prentice Hall.
Linda, H. (2002) Aligning Human Resources and Business Strategy. First edition. Butterworth, Heineman Oxford.
Phillips, J. D. (1990) The price tag of turnover, Personnel Journal, pp.58–61.
Employee turnover will negatively impact the organization since recruiting an employee will involve a large amount of time and cost. Therefore, retention is crucial in order to prevent the skilled workers from leaving the company (Nair and Malewar, 2013)
ReplyDeleteReference :
Nair,P and Malewar,S. (2013) Effective leadership-employee retention-work life balance: a cyclical continuum. IOSR Journal of Business and Management, 10(3), pp.1- 6.
Thanks Chrishnilla, I am strongly agree with your idea as according to Murphy (2009) companies take a deep interest by their employee turnover rate due to turnover badly affect to the smooth running of the business by developing disruptions which cause to minimize the output and profit of the company.
DeleteSo if the company can identify the most common causes of the employee turnover, it would be obviously encourage to take the necessary actions to recruit and retain well qualified employees (Armstrong, 2006).
Reference.
Armstrong, M. (2006) A Hand Book of Human Resource Management. Tenth Edition. London, Kogan Page.
Murphy, R. (2009) Human Resource Planning. Second edition, Pearson Publishers.
Employee retention is also a goal to an organization. Employees are the people who are going to achieve the organizational goals. So the employee retention is a must since companies spend a lot on employees. So it is so costly to loose a trained employee in two ways. One is company has spend a lot, and has to spend more on new recruitment, training and others. The second reason is, when a trained employee leaves the company, he or she will join the competitors and this is deadly situation. There for employee retention is a goal for an organization (Aparna and Ishrat, 2019).
ReplyDeleteAparna, R and Ishrat, S,. (2019) Employee Retention A real time challenge in global work environment. Journal of Research in commerce and management, 1(11), pp. 125-130.
Thank you Rohana for the valuable thought added here. Employee turnover create a huge cost for the organization always. If the organization has invested significant amount on training and development of the employees, that investment will be vain when employee leaves (Mello, 2011). Every organization strives to achieve high productivity, maximum profitability by lesser turnover. Managing turnover successfully is a must to achieve above goals ultimately.
DeleteReference:
Mello, J. A. (2011) Strategic Human Resource Management, 3rd Ed, OH, South-western Cengage Learning.