Type of paper: Essay

Topic: Workplace, Employee, Employment, Company, Organization, Information, Organisation, Turnover

Pages: 5

Words: 1375

Published: 2020/11/04

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Activity 1: 3

Costs of Employee Turnover 3
Reasons for Leaving or Remaining Employed 4
Reasons for Leaving ABC Ltd 5
Employee Retention 5
Strengths of Retention Strategies 5
Weakness 6
Employee Turnover at ABC Ltd 6
Recommendations for ABC Ltd 6
Activity 2 7
Primary Data Collection 7
Experimental Method 7
Survey Method 7
Observation Method 8
Secondary Data Collection 8
Internal sources 8
External sources 8

References 9

CIPD LEVEL 5
Activity 1:
Employee turnover is a serious concern for an organisation as the employees start leaving the business and find alternatives in the market. Employee turnover increases the costs of the business and requires investing time as well as money in hiring a replacement (Croucher et.al, 2011, pp. 605 – 620). Employee turnover creates multiple challenges for an organisation as it hinders the ongoing work process as well as burdens the other employees. In addition, the business losses the experience and expertise of the employee gained over time that increases the quality of work as well as increases efficiency. Furthermore, the business needs to engage in hiring and recruitment processes that would increase the costs and require time. For a business, it is important to measure the financial as well as other impacts of employee turnover on the business. There are direct as well as indirect effects of employee turnover that affect the ability of the business to perform effectively.
Costs of Employee Turnover
Hours of loss in productivity before the employee leaves
Time spent in recruiting a replacement
Overtime allowances paid to employees in order to manage excess work due to understaffing
Hours of loss of productivity after the employee leaves
Recruitment costs of hiring new employee such as advertisements, scheduling interviews, etc.
Conduction training and development programs for the replacement employees
The loss of customer satisfaction due to underemployment that would affect their future business
It is important to keep in mind the above factors while calculating the employee turnover cost (CIPD Conference Report, 2007, pp. 14 – 15). Hence, the actual costs incurred in employee turnover are as follows:
Vacancy costs
Orientation and training costs
Before departure costs
Hiring and administrative costs
Miscellaneous cost of hiring
Therefore the formula for calculating the cost of employee turnover = Vacancy costs + Orientation and training costs + before departure costs + Hiring and administrative costs + Miscellaneous cost of hiring
For calculating the cost of employee turnover and analyzing the effects of the cost it is important to know and calculate the employee turnover rate which is calculated with the help of the following formula:
R = S / {(B + E) / 2}
Here, R = turnover rate, B = No. of employee in the beginning, E = No. of employee at the end
The calculation of the employee turnover rate has been shown in the following table for ABC Ltd.
Reasons for Leaving or Remaining Employed
Employees have several reasons for continuing or leaving an existing employment opportunity. An employee needs to consider several factors before switching a job. The social and economical factors play a considerable role in influencing the decision-making of employees (Watty-Benjamin & Udechukwu, 2014, pp. 58 – 82). In order to understand the factors that affect the decision-making of employees, it is important to understand Maslow’s Hierarchy of Needs.

Maslow’s hierarchy of needs would allow understanding the reasons behind continuing or leaving an organisation (McLeod, 2007, p.n.d). An employee may leave a job in order to attain higher income to meet the basic requirements. Similarly, an employee may decide to leave the organisation due to safety concerns. Furthermore, an employee may leave a job due to work-life imbalances. Moreover, an employee may quit the organisation in order to attain a high social status (McLeod, 2007, p.n.d). Lastly, an employee may leave the organisation in order to attain higher self-satisfaction.
Reasons for Leaving ABC Ltd
The questionnaires and exit interviews conducted by the business reveal multiple reasons for leaving the organisation. Twelve exit interviews conducted revealed the major reasons and factors that influenced the employees towards leaving the organisation. One of the major reasons that employees reported during the exit interview is the inconvenience caused by the unavailability of parking spaces. Most of the employees that left the organisation reported to have faced challenges due to the parking problems. Furthermore, many employees reported the reason behind their separation from the company is due to low growth opportunities. Lack of growth and development opportunities is the second highest reported factor behind employees leaving the organisation. Lack of growth and development could be a result of poor succession planning by the organisation that would make the employees feels stagnant in their career.
Similarly, another factor that made employees quit from their positions is the nature of the job. Some of the employees felt that their job positions lack competitiveness. Lack of competition in workplace would give rise to a sense of monotony and eventually result in boredom (Watty-Benjamin & Udechukwu, 2014, pp. 58 – 82). Moreover, employees that feel their tasks are monotonous would lose their commitment towards the business. Some other factors that caused employee turnover are the lack of resource availability for the employees, lack of training opportunities, and understaffing. Each factor considerably affects the motivation and commitment of the employees (CIPD Conference Report, 2007, pp. 14 – 15).
Employee Retention
Employee retention is a process or policy through which a company keeps it valuable employees retained in the job and does not allow them to leave their job by providing proper satisfaction to the employees and taking care of the condition of the working environment and increasing their salary. In the early days organisation used to change the employees with a cheaper availability of labour in the market but in the present day it has been found that a huge cost is incurred in changing the employee for the company. The company needs to pay the cost of vacancy and hiring and administrative cost for changing the employee as well as needs to pay a cost for training of the new employee. Hence, it is better to keep or retain the old employee in changing them with a new one. There are many reasons for retaining a present employee and the company also beers some cost for retention of employee. The strength and weakness of retention of employee are as follows:
Strengths of Retention Strategies
The retention of employees saves company’s money in long run
It increases the productivity by not allowing a space for vacancy that may reduce the productivity
It reduces the exploitation by the competitors by retaining the employee and not allowing them to work for the competitors.
It keeps the valuable information of the company safe and maintains confidentiality.
Employee retention techniques tend to increase the motivation of employees that increases their commitment as well as overall performance towards the organisation
Weakness
The company bears an extra cost for increasing the employees’ pay scale.
Does not allows the company to explore better availability of employees
Increases the one time investment of the company in training and administrative work of the employee
Employee Turnover at ABC Ltd
Employee retention is one of the most negative aspects of ABC Pvt ltd, as they never want their experienced employees to leave the organisation as it would result in loss of time and money as a new official would take a lot of time to fulfil the previous employee role after a lot of hard work and understanding. There are also several employees that are not at all satisfied with the job, as they are not provided with a variety of work and not even a promotion that will help them to overtake different tasks and unveil several aspects of the company in all aspects (Rainlall, 2004, pp. 21 – 26). We also figured out several issues with communication and salary issues as it lays the foundation of going out for the employees that are quite important for the company but do not have any other options than going out of the firm just because of job satisfaction and poor communication strategies. Hence finally we can state that ABC Pvt ltd must make sure that they provide all the important facilities and salary to the employees in order to make sure that the employees do not leave the job apparently and at the same time the company cam lower the rate of employee retention. It is also very important for the company to make sure that their employees are satisfied, as it would result in the prospect and growth of the company that had laid strong contention within the emblem of the company (Rainlall, 2004, pp. 21 – 26). The sore factor for the company is lower the rate the employee retentions that all the employees work happily in the organisation and benefits the organisation at the same time and the company should make sure that they compensate with all the requirements of the employees so that they stay loyal to ABC Pvt ltd.
Recommendations for ABC Ltd
There are several recommendations that can be corporate by the organisations to make sure that all the employees are happy and at the same time are consistent with the performance of the organisation. The organisation must make sure that they provide proper promotional steps on a yearly basis that would encourage the employees to work hard for the betterment of the organisation and for grabbing the promotion to stabilize their personal life (Rainlall, 2004, pp. 21 – 26). This factor would help the company to a huge extent as it help the employees to keep on trying for a long time in order to achieve promotion. The company must also establish a plan for appraising the employees every year depending on the performance.
Hence, each and every employee of the organisation will be working hard to make sure that they get a better revision in their pay and for this factor they would be working very hard that will ultimately benefit the organisation to a huge extend in all factors. The basis operation is to control the flow of work as if even two important employees leave an organisation then it affects the entire organisation big time as the flow of work alters that affects the net profit. Another important factor that ABC Ltd must incorporate is to establish a friendly environment that will help the employees to work freely and experience a healthy environment that would be similar to their home. This is really very important as it helps in understanding all the prospects of the employees and at the same time helps them to feel attached to the environment that is quite good for the organisation to lower the rate of employee retention.
The critical success factors of the above process are the introduction of promotional strategies every year, incorporation of revision of salary, establishment of a homely environment in the surroundings. All the above factors are quite important and at the same time quite beneficiary for the company as it help the employees to work much effectively and at the same time helps them to understand every aspect of learning and being loyal to the company in all aspects (Rainlall, 2004, pp. 21 – 26). The company must also make sure that they all lower the employee retention process and helps them to prosper along with the company in all factors. We figured out that all the aspects that are mentioned above are quite effective and quite useful for the company and for the employees. The company must make sure that they enable more features that make sure that all the employees are quite attracted to the company and they make sure not to the leave the company and at the same hand the company must also make sure that they try and satisfy the employees in all aspects.
Activity 2
Data collection is the most important task for a HR manager for analyzing the situation of the company and take necessary steps for stabilizing the situation (Ghauri & Kjell, 2005, p.n.d). It involves collection of data from the primary sources through direct questionnaires and personal interviews and collecting data from secondary sources like other media and publications. The two different methods of collection of data are discussed in details in the points below:
Primary Data Collection
Primary data are collected in the form of direct questionnaires and personal interviews conducted with the people who can provide information about the particular situation the HR managers are researching about. This includes three different methods as explained below:
Experimental Method
Different types of experimental designs are used to carry out market researches. Most the four main types of designs are used to conduct experiments and market research. These designs are:
Randomized Block Design
Completely Randomized Design
Factorial Designs
Latin Square Designs (Ghauri & Kjell, 2005, p.n.d)
Survey Method
In this method several survey are carried out to know and examine the situation and collect data to analyze it. These surveys are conducted by asking people with different questionnaires and conducting personal interviews of the people from whom proper information can be gathered. It is one of the most important, easiest, and longest way of data collection.
Observation Method
In this method the observation skills of the Hr managers are checked. They need to observe that what people thinks and do at a particular situation to handle the problems. The information in this method is collected by observing the process of carrying out the work.
Secondary Data Collection
Secondary data collection method is also one of the important data collection methods that involve collection of data from the secondary sources like internet, articles, report and different media sources (Ghauri & Kjell, 2005, p.n.d). It involves two different processes.
Internal sources
Internal sources of data are available from inside the company. It is the cheaper process of data collection and is the easiest process. The internal sources of data are directly available for the HR managers and they can use it at any point of time they want. Hence it is the most appropriate and mostly used process of data collection in any organisation. Data is collected from the internal sources like accounting resources, internal experts, sales and purchase reports, miscellaneous report and different other sources that publishes information about the working and processing of the organisation (Strohmeier & Franca, 2010, p. 186). This report are helpful for the HR managers in collecting data about the particular situations that needed to be paid attention by the management team for better processing of the daily work.
External sources
Externals sources of data are the data collected from the secondary sources that are available outside the company. It involves a larger environment than the internal sources and the external data sources are mostly available in the internet. It involves the following sources:
Publications by Government departments like Registrar office, Central Statistical Organisation etc.
Publication by non-government organisations like Export promotion Council, Employee Association etc
Services provided by Syndicate like Creditors, Debtors etc (Strohmeier & Franca, 2010, p. 186)
References
'CIPD Conference Report' (2007) Development and Learning in Organisations 21.4: pp. 14-15.
Croucher, R. et al. (2011)'Employee Turnover, HRM and Institutional Contexts'. Economic and Industrial Democracy 33.4: pp. 605-620.
Ghauri, P., and Kjell G. (2005) Research Methods In Business Studies. Harlow: FT Prentice Hall,
McLeod, S. (2007). Maslow's hierarchy of needs. Simple Psychology.
Rainlall, S. (2004). A review of employee motivation theories and their implications for employee retention within organizations. The journal of American academy of business, 9, pp. 21-26.
Strohmeier, S., and Franca P. '(2010) Informating HRM: A Comparison Of Data Querying And Data Mining'. IJBIS 5.2, p. 186.
Watty-Benjamin, W., and I. Udechukwu (2014) The Relationship Between HRM Practices And Turnover Intentions: A Study Of Government And Employee Organisational Citizenship Behavior In The Virgin Islands. Public Personnel Management 43.1: pp. 58-82.

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