Business Problems Caused by High Turnover of Staff and Potential Solutions

This essay discusses the negative impact of high staff turnover on an organization, including decreased productivity and low staff morale. It suggests two potential solutions: developing a happy, safe, and healthy organizational culture and providing recognition and rewards to employees. The essay also highlights the importance of addressing employee turnover for the growth and development of a company.

Discussion of two business problems caused by a high turnover of staff, and suggest two
potential solutions.

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Problem -1 Decrease in the productivity of the company............................................................3
Problem – 2 Another major issue is low staff morale..................................................................4
Solution-1 Developing a happy, safe and healthy organizational culture ..................................4
Solution-2 Recognition and rewards ...........................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................1

INTRODUCTION
Employee turnover can be defined as the total number of employees who leaves an
organization within a particular period of time. The employee turnover includes employees that
leaves the company voluntarily and also the ones that have been fired by the company because of
their ineffectiveness and low contribution within the organization (Chiat, and Panatik, 2019). It
has been identified that the higher will be the rate of employee turnover within an organization
the more it will be disadvantageous for a company within the market. There are several
disadvantages of employee turnover with respect to a company. These disadvantages include an
increase in the training and development cost of the company, the reduction in the existing
productivity of the organization, a significant reduction in the profitability of the company within
the market. All of these factors are the major impact that have been caused to an enterprise
because of the high turnover rate of the staff in the company. It has been identified that the
growth and development of a company gets affected negatively because the company has to keep
on spending on the training and development of new employees as the existing ones left too
soon. This also hinders the operations and functioning of an organization within the market and
affects the profitability and productivity of the enterprise (Liu, and Xie, 2020). The present
essay aims to determine two major consequences caused by the high staff turnover within an
organization. The current essay aims to determine two major consequences caused by the high
staff turnover within an organization. The present study will identify the problems and
challenges that have been raised within the company as there is high rate of employee turnover
within the organization. The present essay will also present and suggest the relevant solutions
that can be found helpful to an enterprise in eliminating these problems from the enterprise.
MAIN BODY
Problem -1 Decrease in the productivity of the company
It has been determined that one of the leading challenges faced by an organization
because of high staff turnover is that it affects the productivity of the company. This happens
within the company because the employees who have sufficient experience within the field
leaves the company (Ju, and Li, 2019). Because of the same, the company asks the
inexperienced employees to carry out the same within the company that affects the productivity
of an organization. It has been determined that one of the major problem caused by the high staff
turnover within an organization is the decrease in the productivity of the company within the

market. When the existing employees of a business enterprise that have sufficient amount of
knowledge with respect to their job roles and responsibilities leaves the organization, there is a
significant fall in the productivity of the company (Ali, and Anwar, 2021). This happens because,
the workforce that was experienced and could do effective work within the company has left the
company and the other employees might not have sufficient knowledge about the same. Now,
either the organization will have to stop the work within that particular department or will need
to ask inexperienced employees to carry out the same within the company. The inexperienced
employees might not be able to provide the company with the expected outcome which affects
the productivity of the company (Kurniawaty, Ramly, and Ramlawati, 2019). Or, the company
need to hire someone by paying the individual with extra incentives and pay scale within the
company. This leads to an increase in the expenditure incurred by the company for the purpose
of getting the expected outcome with respect to the company within the market.
Problem – 2 Another major issue is low staff morale
When a high number of employees leave an organization within a specified period of
time, it affects the morale of other employees within the organization. High staff turnover of an
enterprise influences the existing employees to doubt their work within the company and makes
them feel lack of encouragement and deteriorating their morale. It has been identified that when
a huge number of employees working within an enterprise starts to leave the organization
rapidly, the new employees who have recently joined the company gets demotivated because of
the existing culture of the company (De Winne, and et.al 2019). The high rate of employee
turnover leads to discouragement within the new employees and influence them to think why the
old employees have been leaving the company. This deteriorates their level of enthusiasm and
thus affects the overall performance of the organization. Also, it has been noticed time and again
that the high rate of employee turnover from an organization affects the performance and
behaviour of the new employees within the company and thus, affects their performance
associated with the company.
Solution-1 Developing a happy, safe and healthy organizational culture
In order to eliminate the issue of a decrease in the productivity of the employees, it is
important for the company to inculcate a happy, safe and friendly organizational culture (Al-
Suraihi, and et.al 2021). This will help the company in enhancing the employee satisfaction and
thus increase the productivity of the company. When the employees working within an

organization feels that the existing working environment and condition of the company is happy,
safe and healthy. It helps them in boosting their productivity within the company. When the
organization provides the employees with happy, healthy and safe working environment, it
allows the employees to feel comfortable within the working environment of the company and
increases their level of job satisfaction. When the employees are satisfied with their job, it
automatically makes them happy with working within the company (De Winne, and et.al 2019).
When the employees feel happy in working within the enterprise, it will automatically encourage
them to work hard in order to achieve the organizational success. It has been identified that the
level of job satisfaction is directly proportional to the productivity of the employees working
within an organization. If the enterprise provides the employees with a friend, happy and safe
organizational culture, it will help the company in enhancing the employee productivity and if
the organization is unable to provide the employees with comfortable environment, then the
company might have to face the negative consequences. Therefore, the organization must try to
provide the employees with safe working environment in order to increase their productivity
within the enterprise and thus, enhance their quality of life.
Solution-2 Recognition and rewards
Similarly, for the purpose eradicating the issue of low staff morale, the organization will
implement the strategy of recognizing the efforts made by the employees within the company
and thus reward them for the same (Chiat, and Panatik, 2019). This will help the company in
boosting the employee morale within the enterprise. When an enterprise makes efforts in order to
determine the efforts and the hard work that they have put in order to achieve the organizational
success, it influences and encourages the employees to work hard on a continuous basis. When
the efforts of the employees are recognized by the enterprise and then reward them on the basis
of the same, it allows the individuals and the employees to motivate themselves as their hard
work is being recognized by the organization. Also, it allows the employees to feel that they are
important for the company and then carry out the same in an effective manner. The rewards can
be made in the form of promotion, changing the designation of the workforce, providing them
with different sorts of incentives and bonuses (Santhanam, and Srinivas, 2019). It has been
determined that when the organization treats the employees by providing them with these
benefits, it helps them in improving their standard of living, and enhancing their quality of life
and thus increases their level of satisfaction from the job as well as their personal life. Therefore,

it can be stated that using rewards and recognition can help the company in motivating the
employees and boost their morale.
CONCLUSION
From the above report, it can be concluded that an organization has to various issues
because of its high employee turnover rate. The major issues that are caused by the high rate of
employee turnover within a company includes low employee morale and a decrease in the
productivity of the employees working within the company. It has been determined that because
of the rate employee turnover rate, it has been determined that the new employees of the
company get demoralized and their organizational performance gets affected. Similarly, another
major issue associated with the problem of high turnover of employees within the company is the
issue of low employee morale. However, the present report suggests solutions in order to
increase the employee productivity of the company and boost the employee morale. The present
report suggests that in order to enhance the productivity of the employees within the
organization, the company should focus on providing the employees with a safe, happy and
healthy working environment in order to encourage them to work hard. Similarly, for the purpose
of boosting the employee morale within the company, the organization should provide the
employees with rewards and recognition. It has been identified that there are several
consequences of the employee turnover within an enterprise in context of the future. The higher
the rate of employee turnover of the company the higher will be the cost of hiring and recruiting
new employees within the organization. Moreover, the cost of training and development
programs will also increase in the long run as the company will need to hire new employees that
have no experience within the field.

REFERENCES
Books and journals
Al-Suraihi, W.A., and et.al 2021. Employee turnover: Causes, importance and retention
strategies. European Journal of Business and Management Research. 6(3). pp.1-10.
(This has been used to cite the solution of happy, safe and healthy organizational culture in the
company. This article has suggested the concept of providing the employees with a
friendly working environment.)
Ali, B.J. and Anwar, G., 2021. Employee Turnover Intention and Job Satisfaction. Ali, BJ, &
Anwar, G.(2021). Employee Turnover Intention and Job Satisfaction. International
Journal of Advanced Engineering, Management and Science. 7(6). pp.22-30.
(This is also relevant to the study and has been used as reference in the section of decrease in the
productivity. This has been found helpful in understanding the reasons behind employee
turnover and how it is related with the employee productivity.)
Chiat, L.C. and Panatik, S.A., 2019. Perceptions of employee turnover intention by Herzberg’s
motivation-hygiene theory: A systematic literature review. Journal of Research in
Psychology. 1(2). pp.10-15.
(This article has suggested the strategy of providing the employees with rewards and recognition
as a part of improving employee motivation in the workplace.)
De Winne, S., and et.al 2019. The impact of employee turnover and turnover volatility on labor
productivity: a flexible non-linear approach. The International Journal of Human
Resource Management, 30(21), pp.3049-3079.
(This is used with respect to the description of problem associated with low staff morale. This
article has been used to understand the issue of employee turnover and how it
significantly impacts the morale of other employees.)
Ju, B. and Li, J., 2019. Exploring the impact of training, job tenure, and education-job and skills-
job matches on employee turnover intention. European Journal of Training and
Development, 43(3/4), pp.214-231.
This reference has been used in the discussion of the problem-1, i.e., decrease in the productivity
of the company. This has been used to develop relevant conclusions and determine the
reasons that leads to decrease in the employee productivity.
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Liu, M. and Xie, Z., 2020. The impact of high-performance work system on new generation
employees’ turnover intention: Psychological capital as mediator and perceived
organizational support as moderator. American Journal of Industrial and Business
Management, 10(2), pp.360-373.
(This reference has been been used in the introductory paragraph of the essay. This was valid and
relevant in understanding the how performance of employees is linked with the
organizational culture and environment.)
Santhanam, N. and Srinivas, S., 2019. Modeling the impact of employee engagement and
happiness on burnout and turnover intention among blue-collar workers at a
manufacturing company. Benchmarking: An International Journal.
(This has been found helpful in supporting the rewards and recognition as a strategy of
increasing employee engagement and help the company in motivating the workforce
boost their morale.)
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