Labour Turnover: One of the Key Challenges in HRM

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Labour Turnover: One of the Key Challenges in HRM
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Executive Summary
The term “employee turnover” is one of the central factors deciding the productivity of the company. The issue of employees’ turnover not only affect human resource professionals but also, the issue of labour turnover has attracted the attention of senior management and industrial psychologists. The issue of labour turnover has not spared developed countries but its effect upon organisations situated in developing countries is much worse. If there is instability within the management structure in an organisation, then employees are likely to shift to another company where they can get a stable working environment. Causes of turnover can be “Salary and Fringe benefits”, “Attitude of managers”, “Available alternative opportunities”, etc. there are advantages as well as disadvantages to employee turnover, but to an employer the disadvantages always outweigh advantages. Hence, theory of motivation can be applied in order to retain valuable employees. It cannot be denied that employees are indispensible for companies and they need to be motivated and retained in the company. Managers need to apply correct approaches so that organisations can continue to utilise their skill in attaining global competitive advantage.
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Table of Contents
Introduction ................................................................................................................................ 4
Critical Analysis......................................................................................................................... 4
Causes of Employees’ Turnover ............................................................................................ 4
Advantages of labour turnover............................................................................................... 6
Disadvantages of labour turnover .......................................................................................... 6
Conclusions & Recommendations ............................................................................................. 7
Management by Objectives .................................................................................................... 7
Expectancy Theory ................................................................................................................ 7
Hierarchy of Needs ................................................................................................................ 8
Theory X and Theory Y ......................................................................................................... 8
Reference List ............................................................................................................................ 9
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Introduction
Productivity is one of the key determinants in relation to the performance of an organisation. There are a number of factors on which this productivity of a firm depends and among them employee’s turnover is one of the most important which challenges the smooth running of business. Not only human resource professionals but also the issue of labour turnover has attracted the attention of senior management and industrial psychologists. Human resource management (HRM) comprises allocation of cost in order to come up with a counter approach (Shamsuzzoha and Shumon, 2007). Companies have to incur a lot on employing new workers such as organising induction and training, developing and retaining them within companies. Hence, it is the responsibility of managers and human resource professionals to retain employees and minimise workers’ turnover. With the advent of globalisation, the intensified competition has made it necessary for organisations to develop new products and formulate new course of action based on the strategies created by employees (Samuel and Chipunza, 2009). Hence, it illustrates the importance of employees towards an organisation and is one of the irreplaceable factors of production (Ongori, 2007). Estimates reveal that 15% of the employees in United States quit their jobs while the rate is between (10-15) percent in OECD countries (Brown, Garino and Martin, 2007).
This paper critically evaluates the reasons behind employee turn-over with a detailed explanation of the advantages and disadvantages of labour turnover. Finally, recommendations have been presented in the paper which can be utilised by managers to retain employees.
Critical Analysis
Organisational factors and job related issues are the two attributes explaining turnover rate (Arokiasamy, 2013). If there is instability within the management structure in an organisation, then employees are likely to shift to another company where they can get a stable working environment. It has been commonly observed by scholars that organisations whose production is inefficient face high turnover rate. If an organisation is able to offer stability and career growth based on the performance