One of the common HR terms is Employee Turnover. It is one of the most complex and challenging realities faced by most organizations in world. U.S. employee annual voluntary turnover is likely to jump nearly 20% this year, from a pre-pandemic annual average of 31.9 million employees quitting their jobs to 37.4 million quitting in 2022, according to Gartner, Inc. When it comes to employer-employee relationship and best places to work Gartner Research is most respected globally. It is founded in 1979 and currently has employed more than 8,800 associates. One research of Gartner indicates that one in five employees, on average, is actively looking for a new job. Some industries and functions are feeling even more acute pain; workers in IT sector actively sought new jobs.
India witnessed overall attrition rate of 20.3% on an average since 2020. This is sharply higher than the previous periodic averages. The pandemic has caused nearly seven in 10 employees rethinking the role of a job in their lives. The world has seen a shift in behaviours, the economy, medicine and beyond due to the COVID-19 pandemic. Covid pandemic has shaken people’s psyche. People have started giving importance to mental and physical health.
High labour attrition and high turnover gives a poor impression of an organization. It implies that such an organization is not a good place to work. A company incurs high cost because of big staff turnover. Replacing trained staff is an expensive process for businesses because cost incurred on training and development, philosophy of branding and brand knowledge, quality and productivity, building morale everything needs to be redone with new employees coming on roll. HR is responsible for tracking employee turnover and providing insight on trends.
Zoetis, Novo Nordisk and OneMagnify are recognized as the Top 3 Best Places to Work in India for 2022. Best Places to Work is an International Certification Program. Zoetis is world’s leading animal health company, Novo Nordisk is a global healthcare company known for its innovation in healthcare business and is founded in 1923, and OneMagnify is leading marketing and branding company in India. Despite the challenges faced globally around employee turnover and declining engagement level, the average level of engagement of the top performing companies in India is 84%. The credit goes to good HR practices in these companies. That is strong commitment and superior performance through excellent people practices which enhance long-term success and sustainability.
Nevertheless, being unhappy in a job is not the only reason why people leave one employer for another. If the skills that they possess are in demand, they are lured by higher pay, better fringe benefits, or better job growth potential. While organizations cannot control what happens in job market, they can keep employee morale high because it is connected directly to employee engagement, job satisfaction, employee retention, and overall productivity. Organizations with high employee morale tend to have healthy cultures and engaged employees.
Some of the common reasons for high employee turnover in businesses is because of a mismatch between the employee’s skills and the job. Skills mismatch is a difference between the skills that are sought by employers and the skills that are possessed by individuals. Insufficient information about skill requirements that are needed to fill a position may result in the hiring an under skilled or even overqualified worker. The requirements of a specific job should be carefully studied for a required skill, and workers should be tested for the requisite qualifications and experience.
A skill gap study conducted by the National Skill Development Corporation (NSDC) over 2010-2014 indicated an additional net incremental requirement of 10.97 crores of skilled manpower in 24 key sectors by 2022.
On the other hand, when employees who are talented and multitask but do not get recognized by their bosses get disgruntled and quit. The saddest part is many organizations is underutilization of employee strengths and talent waste.
When workplace lacks important facilities such as proper lighting, furniture, restrooms and other health and safety provisions, employees don’t like to put up with the inconvenience hence they quit. One of the vital HR practices is attention to career development of employees. It helps to attract talented staff and retain experienced and talented employees. Supporting career development and growth of employees is mandatory in the Philosophy of Human Resources Management.
In some organizations employees wait for many years for moving up the ladder. Challenges pop up for career advancement opportunities, such as a lack of higher-level positions, a lack of mentors and ‘glass ceiling’ bias that may prevent women from getting top-level positions. Each can be a real and even depressing experience.
Getting appreciated at workplace improves employee engagement, it boosts their productivity. It strengthens their commitment towards work and it helps in retention. Even the most seasoned employees need to be told that they are the asset of the organization.
Inadequate or lacklustre supervision mars the employee morale. Inadequate or substandard wage structures, inequity in pay structures, low pay package are glaring causes of why employees quit organizations. Organizations must have a wage and job evaluation system in place to comply with legal requirements.
There are two kinds of employee turnover: regretted and unregretted. Regretted or undesired turnover occurs when high performers leave. Unregretted turnover happens when bad performers leave. Some amount of regretted turnover is inevitable. However, high levels of regretted turnover are catastrophic for an organization. One of the key responsibilities of HR should be to manage and retain high potentials and key talent in the organization.
Organizations must mitigate people turnover as much as possible. When turnover rates are high, the immediate consequences are severe in terms of loss of valuable knowledge and experience, loss of morale for those left, and loss of belief in the team’s competence.
