Employee Turnover

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There are some perspectives from which staff turnover-departure and replacement of staff, for whatever reason-may appear to be or in fact can be a "good thing", e.g., when "new blood", fresh approaches, etc., are required. For example, compare an up-for-tenure professor who hasn't published a thing or updated his crumpled course notes, research, knowledge or presentation in a decade with a post-doc well versed in the latest research in his field and on fire to do great research and outstanding teaching. In such instances, non-renewal of contract may be worth considering. Less desirable is employee resignation (other than at the urging of the organization), which, in general, indicates something is likely to be amiss in the organization's operations or in its recruitment activities.

Of course, some operations not only welcome employee turnover; they also engineer it. For example, companies that offer low probationary salaries and wages for jobs that require little company outlay for training may find it very profitable and therefore tempting (where it's legal) to terminate probationary staff at the end of the probation period, rather than boost their salaries.

In each concrete situation, management must review the costs and benefits of organization-initiated turnover, and carefully investigate the causes of staff resignations, to ensure that whatever staff turnover that does exist is not symptomatic of problems and threats to organizational operations and staff morale.

Employee turnover refers to the number of employees that leave an organization through attrition, dismissal, or resignation within a reported period. Organizations have found that it is better in the long run to keep employee turnover low as a high turnover rate is generally both damaging to their bottom-line as well as to the morale of the remaining staff, despite any offsetting benefits or claims from having "new blood" or "fresh ideas" (which may be associated with some instances of turnover).

There are several reasons for employees to terminate their employment with an organization, such as the following:

* The employee feels that he is not adequately compensated for his work, and that he is able to find a more lucrative form of employment elsewhere.

* The employee thinks that the organization's benefits package is insufficient, and reflects its lack of concern for general staff welfare.

* The working environment and culture in the organization do not appeal to the employee.

* The employee feels that he is unable to perform his designated job responsibilities or that he does not have the right set of skills or mindset to do so.

* The staff morale in the organization is generally low. Everyone, including the employee himself, does not feel motivated to work.

* The job involves employee responsibility disproportionate to his or her authority. In terms of one stress analysis (with implications for cardiovascular health), this represents an adverse " high load" (high demand) and "low latitude" (low control) mix-with too great a load (too much to do or not enough time in which to do it), relative to the latitude (control) allowed the employee for doing the job.

Given the above, it is important for organizations to gather and act upon the information collated from exit interviews. In general, most organizations have discovered that they are able to reduce employee turnover when they chose to address the underlying issues behind the high turnover rate. This could be done by improving the work-life balance, the performance appraisal system, as well as the staff welfare benefits. By doing so, they are also sending a signal to the remaining employees that they are taking their concerns seriously and are willing to go the extra mile to accommodate the employees' needs.

A healthy employee turnover largely depends on the nature of the organization and its business. Generally, anything below 5% on an annual basis is considered an acceptable turnover rate. A rate that is too high usually does not reflect well on the organizational working climate, and can be financially costly to the organization in the long run.
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