MANAGING EMPLOYEE TURNOVER AND RETENTION

Abstract

We all subscribe to the adage that it is cheaper to keep a current customer than to acquire a new one. The same premise applies to employees. Recruiting new employee is a time consuming and expensive exercise that directly affects an organisation’s bottom-line. Excessive employee turnover in an organisation is a prime indicator that something is not right in the employee environment. This research is designed to analyse and determine the most effective ways of retaining the best and brightest employees(s). With the help of the sum collation of results from Questionnaires, Observations, Interviews and Surveys carried out solely for this work, the researcher analysed major retention strategies and in doing that, analysed various opinions of employees on why they leave a company, why they stay and what can be done to save them and the organisation at large. The researcher noted that a small amount of turnover is healthy because long – tenured employees generally have higher salaries and new employees bring new ideas, as such recommends that organisations should create multifaceted models/strategies to keep critical employees in the organisation.

Table of contents

Title        –      –      –      –      –      –      –      –                 i

Certification    –      –      –      –      –      –      –                 ii

Dedication             –      –      –      –      –      –                iii

Acknowledgements –      –      –            –      –      –                iv

Abstract         –      –      –      –      –      –      –                 v

Table of contents          –      –      –      –      –                vi

Chapter one

1.1  background of the Study              –      –      –        –       1

1.2  statement of the Problem     –      –      –        –       2

1.3   Objectives of the Study         –      –      –         –       3

1.4   Research Questions              –       –      –        –       3               

1.5   significance of the Study      –      –      –      –       –       4

1.6   scope of the Study               –      –      –        –       5

1.7   Limitations of the Study        –       –     –         –       5 

1.8  definition of key Terms         –      –      –        –       6

Chapter two

Review of Related Literature

2.1  demographic trend –      –      –      –      –       –         8

2.2  why Employees should be Retained      –      –       –         9

2.3  why Employees leave           –      –        –     –         12

2.4  employment Retention Strategies  –      –       –         14

2.5   Impact of Motivation on Employee Retention      –   –      21

2.6  summary –      –      –      –      –      –      –      –         24

References             –      –      –      –      –       –         26

Chapter three

Research Methodology

Introduction      –      –      –      –     –      –      –      –          27

3.1   Research Design    –      –      –      –      –      –           27

3.2  sources of Data     –      –      –      –      –       –          28

3.3 Population of the Study  –      –      –      –      –           28

3.4  determination of Sample Size       –      –      –      –           28

3.5   Data Collection Procedure     –        –      –       –          29

3.6  data Analysis Techniques      –      –      –      –      –          30

3.7  Test of Reliability       –          –         –          –             32

3.8  Test of Validity          –          –          –     –       –         32

Chapter four

Research Findings, Presentation & Analysis of Data

Introduction     –          –        –         –       –        –        –   33

4.1  discussion of Findings    –      –      –      –      –      –   33

4.2  responses to Questionnaire   –      –      –      –      –   34

4.3 analysis of Data    –     –       –        –       –         –       55

Chapter five

Summary, Conclusion & Recommendations

5.1  summary of Findings     –      –      –      –      –      –     63

5.2  conclusion      –      –      –      –      –      –          –         64

5.3 recommendations  –      –      –      –      –     –      –       66

Bibliography    –      –      –      –      –      –      –      –      67

Appendices     –      –      –      –      –      –      –      –      70

CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND OF THE STUDY

Employee retention has always been an important focus for human resource managers. Once a company has invested time and money to recruit and train a good employee, it is in their best interest to retain that employee, and further develop and motivate him so that he continues to provide value to the organization.

In today’s competitive labour market, there is extensive evidence that organisations regardless of size, technological advances, market forces and other factors are facing retention challenges. Excessive turnover in an organization is a prime indicator that something is not right in the employee environment. Employers must also recognize and tend to what is in the best interest of their employees, if they intend to keep them. When a company overlooks the needs of its employers and focuses only on the needs of the organization, staff turnover often results.

The term ‘employee turnover rate’ as used in this research effort excludes layoffs, reduction in workforce, and completion of temporary assignments. Furthermore, Fitz-enz (1997) states that the average company loses approximately $1million with every 10 managerial and professional employees who leave the organisation. Managerial and professional employees were categorised as ‘exempt employees’ (see definitions section).

The researcher identified the following four internal sources considered in determining the cost of an employee turnover (a) cost of termination (b) cost of hiring and training replacement (c) the vacancy cost until the job is filled and (d) the loss of productivity with new hires.

1.2  STATEMENT OF THE PROBLEM