Effects of Employee Turnover

 

Effects of Employee Turnover 





Employee turnover, according to Mayhew, 2019, refers to the quantity or percentage of workers who leave a business and are replaced by new employees. Starting at the beginning It is one of the most troublesome issues for a company. As one can claim that employee turnover has a negative impact, others can argue the opposite.

                        Figure: Positive and Negative impact of turnover rate (Markovich, Joseph 2019)
            

How Employee Turnover rate can be Negative or positive to an organization

According to Markovich, 2019, employee turnover has a negative impact on morale, productivity, quality, and profitability. A high turnover rate indicates that the organization loses employees, which necessitates fresh recruitments, training, and growth at an additional expense to the firm. Employee turnover can lower morale among existing employees, and experienced highly motivated employees will not want to work with more workload, while new recruits will be demotivated by the workload and pressure, resulting in low productivity and service performance if the organization is a service provider.

At the same hand, according to Joseph 2019, the employee turnover rate can have a beneficial influence on organizations since it allows for growth, creativity, and diversity, which in turn helps an organization produce more revenue through new ideas and inventions. If the company is in a bad financial situation, turnover can help to maintain a minimum required rate of employees, which can lead to promotions and new recruitments, and the company can expect an increase in moral and job satisfaction, as new employees with new creative ideas will help to increase the quality and productivity of the products or services.

Conclusion
It concludes that employee turnover affects the company both positively and negatively, where for a striving company it can be a negative effect because the turnover rate demotivates employees and is a cost for the company, and where for a struggling company it can be a positive effect because new recruitments mean new ideas and the existing employees will be motivated with promotions that can be offered to fill the company's vacant positions. A highly motivated workforce with fresh ideas is a valuable asset to any firm. Furthermore, it indicates that the negative and positive effects directly contribute to the company's Return on investment by increasing or decreasing it.

Reference

Mayhew, R. 2019. Employee Turnover Definitions & Calculations. [Online]. . Available from: https://smallbusiness.chron.com/employee-turnover-definitions-calculations-11611. [Accessed 02 December 2021]
Markovich, M. 2019. The Negative Impacts of a High Turnover Rate. [Online]. Available from: https://smallbusiness.chron.com/negative-impacts-high-turnover-rate-20269. [Accessed 02 December 2021]
Joseph, C. 2019. Positive Effects of Turnover. [Online]. . Available from: https://smallbusiness.chron.com/positive-effects-turnover-10117. [Accessed 02 December 2021]

Comments

  1. Anuruddha ShanakaDecember 11, 2021 at 9:58 AM

    The very timey topic which has become more challenging in the current cooperate world with the arrival of Gen Z. The cooperate leaders have to challenge themselves and reevaluate their HR strategies considering the generational differences.

    ReplyDelete
  2. AKILADecember 13, 2021 at 7:28 PM

    Employee turn over directly affect to the performance of the organization.
    There shoul be correct plan for increase the employee retention.

    ReplyDelete
  3. Chinthaka KiulgallaDecember 14, 2021 at 6:26 PM

    With the prevailing pandemic and the economic conditions, most companies are tried to limit the benefits of their employees and the same has resulted in to increase the employee turnover.

    ReplyDelete
  4. Lasath KarunanayakeDecember 16, 2021 at 8:58 AM

    Area to be more focused in today's business context

    ReplyDelete
  5. DhammikaDecember 17, 2021 at 11:13 PM

    How Employee Turnover rate can be Negative or positive to an organization. That is very important and interesting. Thanks for you sharing valuable post.

    ReplyDelete

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