Employee turnover is statistic organizations use to estimate the rate of staff turnover or the frequency with which workers leave a post that must be filled. Employees quit enterprises for various purposes; their departures may be deliberate or involuntary. However, attrition is deemed detrimental to the corporation as a whole. The withdrawal of staff harms a firm’s overall effectiveness, regardless of whether they quit voluntarily or were terminated. This paper, therefore, discusses, from the two scenarios, some of the benefits and disadvantages that worker attrition may have on a business.
The first scenario depicts a functional voluntary employee turnover within the organization as the employee makes slightly above average in the number of sales. This kind of turnover means that low-performing employees decide to quit because they cannot meet the firm’s requirements and guidelines for effectiveness (Kurniawaty et al., 2019). The benefits of functional voluntary personnel attrition to an organization and the human resource department are that it improves the competitive advantage of an institution. The individual with unsatisfactory performance costs the enterprise of finances and resources in instance 1. Therefore, employee turnover allows an organization to attract new people with new thoughts and developing abilities.
Moreover, functional voluntary labor turnover improves morale since when a low-performer leaves, the remaining staff are motivated and creates a group-oriented workplace atmosphere. The limitation of this kind of turnover to the firm is that it is more expensive since the employer must hire and replace the individual. In addition, an organization must also instruct recruits because they are unfamiliar with the workplace. Another disadvantage is that unexpected attrition may make it difficult for a company to manage daily responsibilities (Rider & Tan, 2019). As such, this staff turnover can lead to a decline in worker engagement, which could cause a corporation to fall short of its objectives if it becomes a concern.
As in the case of scenario 2, the type of employee attrition is involuntary staff turnover. When an employer requires personnel to quit their existing employment, this is considered an involuntary changeover (Rubenstein et al., 2019). If an individual is not functioning adequately in their current role, as illustrated by the person in situation 2, the firm may ask them to resign or accept a demotion. Positively, an entity with involuntary turnover will have a reduced voluntary discontinuation incidence, calculated by subtracting involuntary attrition from voluntary turnovers (Rubenstein et al., 2019). A decreased voluntary discontinuation rate can imply that staff are more committed and wish to remain with the organization, resulting in higher retention and improved worker satisfaction. Nonetheless, this may also make it more challenging to locate new employees, as fewer individuals are willingly terminating their contracts.
A limitation of involuntary staff turnover is increasing an institution’s operational costs. Consequently, this must be the greatest drawback for a corporation when workers’ contracts are terminated. For instance, when a firm loses an employee, it must determine its benefits and spend time and money advertising and recruiting a successor. In addition, involuntary employee turnover results in frequent workflow administration disturbances and stoppages. Therefore, it delays a company’s success since new hires demand their proportion of training and instruction to build competencies that will contribute to the business’s overall performance and effectiveness. In conclusion, the human resource manager should evaluate their corporation and identify some of the reasons why their employees leave to join other companies. Once these challenges are identified, HR managers must strive to enhance their internal workplace conditions to keep their essential employees and maintain their competitive advantage.
From the two illustrations discussed in the paper, irrespective of the turnover the firm experiences, there are positive and detrimental impacts on the institution. For poor-performing employees, their withdrawal benefits the company because the entity can hire skilled and hardworking personnel instead. On the other hand, attrition reduces the functional capability of a firm since there would be a labor shortage, thus reducing overall productivity.
References
Kurniawaty, K., Ramly, M., & Ramlawati, R. (2019). The effect of work environment, stress, and job satisfaction on employee turnover intention. Management Science Letters, 9(6), 877-886. Web.
Rider, C. I., & Tan, D. (2019). Retention is not a strategic imperative: On the pros and cons of employee turnover. In Handbook of Research on Strategic Human Capital Resources. Edward Elgar Publishing.
Rubenstein, A. L., Kammeyer‐Mueller, J. D., Wang, M., & Thundiyil, T. G. (2019). “Embedded” at hire? Predicting the voluntary and involuntary turnover of new employees. Journal of Organizational Behavior, 40(3), 342-359. Web.