Every challenges faced by managers in human resource department (HRM) would be employee turnover issues on retaining valuable workers in the organization. The need for employee retention is an essential element for every company to thrive in the long run as they reflect the productivity performance. However, the issues of employee turnover can be a difficult component because individuals working for the company might want to develop further career in another job to maximize their personal gains. This can cause devastating impact on the business performance especially when talented employee decided to resign from the company after long service of employment. It would be tough for the managers to spend more time and higher costs for new recruitment activity to find new replacement who have the same skills and knowledge that previous employee possessed. Moreover, recruiting procedure required a hefty time of investment period to go through potential employee screening and interviews for the perfect candidate. The human resource management held the responsibility of holding the employees by accessing to an extent of possibilities that can lure their interest to stay in the organization. An organization workforce will stay loyal when they understand the corporate values and trust the management board with genuine engagement in the workplace.
In a study by Tett and Meyer (1993), turnover intention of employee to step down from their job role is a conscious behavior as they are fully aware with their decision to leave the company. Maintaining the employee on the organization staffs is a complex arrangement with no guarantee of attaining the aims of low turnover number. The loss of skillful staffs can be impacting the corporate image negatively on the firm’s clients especially when the employee have earned a lot of trust from regular customers. Hence, valuable employees must be persuade for as long as they can to keep up with the company competence by encouraging them. The act of encouraging employee to stay within the organization is an effort to maximize their time spent or until the main task given has been completed can also be seen as employee retention (Das & Baruah, 2013). Job satisfaction is one of the factors that most employee look for when working for an organization. It can consist of many purposes such as the salary given, working environment, opportunity possibility for higher career development and many more. When the employees are satisfied at their workplace condition which fuels their needs and growth, they will ultimately feel happier working for the organization for long period of time.
Employee turnover can be a very challenging aspect for organization that are growing at a fast paced and required serious attention from the human resource department. The current issue that can be related with employee turnover comes from the dissatisfaction of salary given by the employers. It is without a doubt that household income expenses will increase each year to sustain a comfortable lifestyle while measuring the cost of living of those who live in urban city. According to Hassan (2014), individuals will prioritize their economic needs when working for a company in exchange for monthly income payment. Most workers will resign from work when the company fail to give them sufficient compensation for the effort they have contributed in the job given. In addition, lack of engagement and poor appraisal in the performance given by the worker can also demotivate them to stay when they are not appreciated. This could push them to be a job seeker for other company that can offer better wage and working environment. A high labor turnover rate on the company can have a disadvantages on the management board especially human resource department because hiring new worker can be very costly.
The cost of increasing turnover numbers from workforce can leave a devastating condition on the organization because it is going to impact the productivity performance, expenses and time allocating new staffs. The labor market is a complex and constantly changing in the business environment because when one job opportunity offer better exchange than the other company, employees will seek the opportunity to get into newer ones that give better personal gains. Turnover effect can be different in each organizations but higher negative consequences may occur in the organization performance when it comes to the private sector on labor turnover. Rising market competition in the current times will make it harder for human resource managers handling numbers of employees leaving the company. The replacement issue from turnover will put pressure especially on small business owners who will lose the skills and knowledge to run the organization. With the current economic condition, the workforce group will constantly look for desirable salary and better career growth in other organization causing employee turnover in the current workplace. Hence, the potential challenges must be studied by tracking down the real roots of employee turnover to find the potential problem.
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