Business Problems Caused by High Turnover of Staff and Potential Solutions

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