The assets of an organization can be categorized as the fixed and the current. Whereas infrastructure and machinery constitute the fixed assets, human resources and material inventories make up the current assets. Whilst most of the organizational assets tend to depreciate with the passage of time, conversely, its human resources tends to appreciate progressively. Thus, it is the manpower component that has a decisive bearing on an organization’s performance, which in turn determines the state of its functioning, so much so that it is not the technological advancement that determines the viability, no to speak of the profitability, of an enterprise as the level of the managerial and operative skills available therein.
Hence, high employee turnover is disquieting to any business venture in that it tends to drain its organization of its cream, as it is the more talented and enterprising among the employees that generally contemplate change and find new employers. An attempt is made here to examine the factors that unleash an abnormal turnover and to suggest possible measures to help check the same. These factors can be broadly divided into organizational, personal, ethical, and political.
The size of an organization has a direct bearing on the extent of employee turnover. Smaller organizations suffer most on account of their inability to keep pace with the employees’ expectations of financial gain and personal growth. In a way, the small and medium ventures become training centers of manpower in that those they train will eventually be pirated by bigger organizations with attractive offers.
The growth rate of an organization also influences its employee turnover for people tend to stick to a growing organization in the hope of personal advancement. Thus, in a stagnant setup, as the expectations of personal growth are dimmed in proportion to the level of its stagnation, there ensues a disproportionate employee turnover.
Also, the location in which an organization is situated plays a vital role not only in attracting talent but also in retaining it. Generally speaking, remote and ill-developed areas do not offer the possibilities for a way of life that the more enterprising employees tend to seek. Since the quality of life on offer in the so-called backward areas is far below the normal social want, employee turnover in the units situated therein is inevitable, notwithstanding their general organizational strengths. Just as an example, the lack of adequate educational facilities in such places makes the employees seek greener pastures for providing better avenues for their progeny.
The associated prestige of an organization, measured on the scale of public recognition, too tends to influence the turnover ratio. Normally, one tends to associate himself with reputed and well known entities as that would lend him tangible social status thereby augmenting his egotistic halo. Likewise, one would be wary to associate oneself with ill-reputed or less known firms, which tends him to lookout for greener organizational pastures.
The style of management functioning is no less a determining factor in employee turnover in that whether it is professional or otherwise has by far the most telling influence on the latter. Since self-actualization is possible only in a professional setup, the climate is conductive for heavy turnover in organizations that run on centralized practices. Add insensitive human behavior and the prevalence of bossism, the result could be an employee turnover akin to an exodus.
Wherever promotional avenues are not uniform across the organizational board, the affected departments will suffer from high employee turnover. Also, faulty personnel planning and unimaginative recruitment policy could lead to an unintended zones of stagnation even in an otherwise growing organization.
The general working standards of an organization’s manpower too influences the employee turnover in that the relatively developed and ingenious among the employees may find the experience of working with less developed or uninitiated colleagues uninspiring.
Besides, the industrial relations in an organization also have a bearing on the employee turnover. If an organization is continuously plagued by industrial unrest the incidence of manpower turnover could be high.
Nevertheless, the size of the pay packet can influence on the employee loyalty for it could push all other organizational defects and personal factors under the carpet of inconveniences. It is thus; even the best in the business can lose on this front with an inadequate compensation.
Moreover, since practical considerations preclude the possibility of a trainee rising to the top position in an organization, it is inevitable that an employee seeks to change organizations for his career growth.
Underemployment is one of the premier contributors for a high employee turnover, which aspect is not generally appreciated though it being an offshoot of unemployment that compels highly qualified people to seek jobs that ill-suit their academic standing and thus are hurtful to their perceived self-worth. Besides, the tendency of the overenthusiastic employers in raising the qualification bar out of sync with the job requirements too contributes to underemployment. What is more, the prolonged stagnation in a given job situation too leads to a lack of job satisfaction or a feeling of dissatisfaction.
Inter-personal equations, exemplified by the lack of individual rapport with colleagues, more so with the immediate superior, also play their part in the employee turnover; it is not uncommon to find talented employees leaving organizations due to the harassment of jealous or mediocre superiors.
Then there is the nativity factor to contend with. Most individuals like to work and live in their native place or ethnic region. Even intraregional displacements occur solely due to the home pull which makes an individual seek work in a place as near to his home town as possible.
State of Affairs
Besides, the ethnic composition of the organization personnel too has much to do with the employee turnover. When a particular ethnic group is dominant, especially in the top echelons of the management, it creates an apprehension among the minority groups that they may not be able to make the grade after all. This prevents them from identifying their long term interests with the organization, which, in turn, tends them to lookout for an opportune moment.
Factors such as the prevailing political system, the type of government in power, prevalence of internal disturbances, presence of external threats, lack of general economic prosperity, an undercurrent of ethnic prejudice etc., contribute to employee turnover, often described as brain drain.
The State policy of reservation for the hitherto oppressed and the suppressed, based on the philosophy of positive discrimination in public employment, essential though viewed from a larger national sociological prism, yet affects the morale of the general public. What is worse, more so in India, the out-of-turn-promotions through the reservation channels besides causing organizational upheavals cause individual heartburns, which contributes to unintended employee turnover.
Steps of Alleviation
It should be appreciated that employee turnover can only be alleviated but can never be fully eliminated. Just the same, the phenomenon of employee turnover is even desirable, to an extent, in that it creates new avenues to inject fresh blood into an organization. However, what should be of concern to the top management is an abnormal turnover that could affect the organizational health, which can be stalled with the adoption of some practical measures.
For one, along with the subsidies and incentives associated with the setting up of industries in notified backward or no-industry areas, due attention must be paid to the local availability or otherwise of skilled manpower and its impact on ensuing scale of employee turnover. This especially is the case with small and medium scale units, which cannot afford to install adequate infrastructure to upgrade the living conditions and introduce welfare measures to facilitate the ease of living of the workforce. So, the remedy lies not in the art of swimming in the troubled waters but in the wisdom of not jumping into them without ascertaining the impediments lying therein.
However, for attracting the adequate talent, and then in retaining it, the compensation package should be not only commensurate with the qualifications and experience required, but should be in consonance with the paying practices of the competitors. And as for the under-employment factor, adequate care should be taken in framing the recruitment policy. The job requirements and constraints are to be carefully evaluated and the qualifications required in the candidates have to be accordingly specified. So, the recruitment policy should be guided by practicality rather than letting fancy govern its head.
Also, to attract the best possible talent, managements tend to project a picture of their organizations which are more in line with the expectations of the prospective employees rather than what they really are. But it is a poor strategy for it leads to an expectation gap in the employees and that results in premature turnover, which hurts all. As the employer tries to evaluate the suitability or otherwise of the prospective candidates for employment, an opportunity should also be given to the prospective candidates to ascertain the organization’s work ethos and such to figure out for themselves whether or not it’s the right place for them. That way the employees’ expectation gap will be fairly reduced as those opting for the jobs would be aware of the organizational constraints that go with those jobs.
Every organization, irrespective of its size and scope, has to budget for publicity with the objective of its image building. In the case of small and medium firms, the publicity can be confined to the local or regional base for this will suffice as their ability to attract talent is also generally limited to it. Besides, the competition, in so far as the employment turnover is concerned, is also usually local at most and intra regional at best. By this way, the organization is ever kept in the local limelight, and thus it need not have to suffer on account of employee turnover associated with unexposed firms. In short, the small players have to acquire a local aura of their own to avoid the pitfalls of their life threatening employee turnover.
An organization has to maintain continuity and keep the advancement channels open to the employees in order to cater to their promotional aspirations. Unimaginative and haphazard recruitment methods that do not take into account the age factor of the employees for various positions in the hierarchy will lead to stagnation and consequent turnover or a sudden vacuum caused by their simultaneous retirement. This can be avoided by phased recruitment of and proportional promotions to various positions, in tune with the planned growth rate of the organization. In an ideal situation, occasioned by this regimen, the facilitation of the promotion of juniors on the superannuation of their seniors could be achieved.
Job rotation leads to job enrichment besides reducing individual monotony that is inimical to the organizations’ functional health. Managements should develop appropriate systems to ensure job rotation, wherever practicable, so that the employee enthusiasm for work is sustained. Besides, evaluation of the individual aptitudes and capabilities of all the employees in general, and the personnel occupying the key positions in particular, should be undertaken, to enable optimum utilization of the available human resources. This ensures a challenging working environment to the truly gifted employees that enrich the organization.
Bossism, the monster that boosts the ego of a few and hurts the sensitivity of many, which has a bearing on the organizational morale as a whole that is detrimental to its well-being should be banished from the managerial portals. Also, for creating an environment for achieving self-actualization, delegation of power should be made the cornerstone of the management edifice. The absence of bossism and the presence of an egalitarian work culture founded on decentralization form the double non-monetary bonanza for ensuring employee satisfaction and loyalty.
The recruitment policy should be so framed as to desist itself from the influences of casteism, communalism, nepotism, regionalism and such, and whenever unavoidable, an ethnic balance has to be maintained in order to avoid the feeling of domination by a particular group in the rest. In those areas where the non-natives are economically dominant, it would do good to recruit the natives in numbers, not only to gain the patronage and protection of the local population but also, in case of an agitation against the aliens, to guard against possible mass exodus of the latter. Needless to say, the location of the industrial units should be confined to politically stable and socially homogeneous areas so that the adverse effects of political instability and social discord can be avoided.
Whenever out-of-turn promotions are given to any, either on account of proven merit or due to the obligatory reservation system, a necessary evil, care should be taken to keep the official interaction to the minimum between the promoted and the bypassed. Job rotation, creation of additional portfolios and inter-unit transfers are some of ways to achieve this end. This way of removing the red herring from the sight of the affected employees not only would minimize their hurt feelings but also help dissuade them from possible resignations.
Though the causes for the abnormal employee turnover and the measures for minimizing the same discussed here are comprehensive, but by no means could they be considered exhaustive. Each organization may be confronted with unique situations leading to the problem of undesirable turnover ratios. The remedies for high employee turnovers in a given organization lay in taking corrective measures, envisaged with a professional approach and an innovative thinking to analyze its unique causes. Above all the key to the gates of employee turnover lies in human understanding and sympathy.