The Impact of Employee Turnover on Organizational Profit

Business Research
Dissertation

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Contents
TITLE – “The impact of employee turnover on Organizational profit”..........................................4
CHAPTER 1 – INTRODUCTION..................................................................................................4
Background of research..........................................................................................................4
Research Aim.........................................................................................................................4
Research Objective.................................................................................................................4
Research Questions................................................................................................................4
Significance of research.........................................................................................................5
Scope of research....................................................................................................................5
CHAPTER 2 – LITERATURE REVIEW.......................................................................................5
Concept of employee turnover...............................................................................................5
Key causes of employee turnover within the organisation.....................................................5
Interlink between employee motivation and employee turnover within the organisation.....5
Impact of employee turnover on performance and profits of organisation............................5
Different theoretical frameworks, models and ways that assist in reducing employee turnover
and improving motivation......................................................................................................5
CHAPTER 3 – RESEARCH METHODOLOGY...........................................................................5
Research Philosophy..............................................................................................................5
Research Approach.................................................................................................................6
Research Choice.....................................................................................................................6
Research Strategy...................................................................................................................6
Data collection method...........................................................................................................6
Sampling.................................................................................................................................6
Time Horizon..........................................................................................................................6
Cost and Validity of research.................................................................................................6
Ethical consideration..............................................................................................................6
Limitations of research...........................................................................................................6
CHAPTER 4 – DATA ANALYSIS................................................................................................7
CHAPETR 5 – CONCLUSION AND RECOMMENDATIONS...................................................7
Conclusion..............................................................................................................................7
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Recommendations..................................................................................................................7
REFERENCES................................................................................................................................8
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TITLE – “The impact of employee turnover on Organizational profit”
CHAPTER 1 – INTRODUCTION
Background of research
Today, employee turnover is one among the leading issue that is facing by business
organisations. It is the number employees who leave the company and are replaced through new
employees. In many countries of the world, employee turnover is serious issue and is a global
phenomenon. Employee turnover defines a number and percentage of workers who leave the
business enterprises or replaced by organisation by hiring new employees. It is one of the major
issue that many organisation would face due to several reason such as insecurity, more work
pressures, negative feelings towards boss, Family and life event, lack of work life balance,
involuntary departure, lack of opportunity for growth or career development etc. This issue has
captured much attention of human resource practitioners and experts. High turnover of
employees is very harmful for the productivity of company if skilled employees are often
leaving. This research project is based on the title "the influence of employed turnover on profit
of organisation" and it aims to analyse the issue of employee turnover and its influence on the
performance and profits of organisation. To effectively complete the research, Marks and
Spencer is to be undertaken that is a leading organisation in the UK who deals in several types of
projects such as clothing, financial services, home wares etc. It is one of the British multinational
retailer, headquartered in London that specialised in selling food products and clothing’s mostly
of their own label. The company was founded on 1884 by Michael Marks and Thomas Spencer
and now have worldwide presence in around 1463 location. In marks and Spencer around 78000
employees are working and helps organisation to gain sustainable results in the competitive
marketplace . This Report covers the several chapters to effectively solve the research problem
so that valid and authentic conclusion would be drawn at the end of dissertation. In literature
review chapter, researcher gathered the information of research objectives by using published
data books, articles, journals etc. so that valid and reliable information will be collected that
develops investigator knowledge about the impact of employee turnover within an organisation.
Further in research methodology researcher selects the best methods, technique to complete the
research and gather information to conclude effectively at the end of whole researcher. In this
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data analysis and interpretation helps in presenting the views of several people on specific topic
so that researcher get valid information that helps in drawing conclusion at the end of research.
Research Aim
The aim in relation to this particular study is “To assess the issue of employee turnover
within the workplace and its impact on organisational performance and profits. A case study on
Marks & Spencer”
Research Objective
The objectives associated with this particular research study are provided below:
1. To understand the concept of employee turnover.
2. To identify the key causes of employee turnover within the organisation.
3. To assess the interlink between employee motivation and employee turnover within the
organisation.
4. To analyse the impact of employee turnover on performance and profits of organisation.
5. To ascertain different theoretical frameworks, models and ways that assist in reducing
employee turnover and improving motivation.
Research Questions
The research questions in regards of this particular study are provided below:
1. What do you understand from the concept of employee turnover?
2. What are the key causes of employee turnover within the organisation?
3. What is the interlink between employee motivation and employee turnover within the
organisation?
4. How employee turnover impacts on performance and profits of organisation?
5. Which are the different theoretical frameworks, models and ways that assist in reducing
employee turnover and improving motivation?
Significance of research
This research study is very significant as it helps in assessing the issue of employee
turnover along with its main causes. This study is also beneficial in analysing the interlink
between employee turnover and employee motivation. By the assistance of this research study,
researcher will enable to analyse the impact of employee turnover on the organisational profit
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and performance. This also help in determining different theoretical frameworks, methods and
models which assist in reducing turnover of employees and improve motivation.
Rational of research
The main reason of conduct this research project to examine the issues of employee
turnover at workplace and its impact on the overall company performance. This research helps in
developing the knowledge and skills in relation to employee turnover that is very crucial in terms
of creating more job opportunities within the researcher professional field. Researcher chose this
topic because it is based on its personal interest (Verma and Kesari, 2020). However, selecting
this topic for dissertations is crucial from the education and personal development point of view.
In terms of education, this research develops communication, time management skills and
several other attributes of researcher that develops personality to sustain in the corporate world.
Scope of research
The scope of this research study is wide as it not only support researcher in assessing the
serious issue of employee turnover, but also help other scholars in carry out further research on
the similar topic effectively as this study act as a base for them to perform further investigation.
CHAPTER 2 – LITERATURE REVIEW
Concept of employee turnover
As per the view point of Ruth Mayhew, (2019), employee turnover can be stated as the
number of workers who leave the company and are replaced through new employees. It is very
important to measure turnover of employees as it can be helpful to the organisation who want to
examine the cause for turnover and estimate the cost incurred in hiring the employees for budget
purposes. It is a major concern for all the businesses that needs to be taken into consideration. At
some point, if the organisation is more than one individual, then it possibility to deal with
employee turnover (Employee Turnover Definitions, 2019). As per a study, it has been found
that around 51% of employees are looking actively for a new employment at any given time. In
case, when any of the individual actually leave the organisation, the cost is not trivial. It has been
estimated by the analysts that the backfilling roles cost organisation roughly 20% of salary of
that position in hiring and onboarding cost. On an average, the process of hiring takes 36 days.
However, learnings of way to calculate the rates of employee turnover, assuming some costs
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with lost employees, developing a business plan that forecast some amount of turnover of
employees can better prepare the employer for voluntary terminations.
As per the viewpoint of Nicole Roder, (2019), employee turnover is defined as loss of
talent in employees over time. It involves departure of any employee, involving retirements,
resignations, layoffs, location transfers, termination or even death. Organizations often calculate
employee turnover rate as a means of predicting the influence on customer service, morale and
productivity of employees as well as organisation. The main reasons that workforce give for
quitting their job are lack of organizational fit, lack of opportunity for career advancement, lack
of support training or resources required to perform their jobs well and poor management from
supervisors. These all are the main reasons why an employee quit their job. All these issues can
be addressed through effective hiring process, onboarding as well as management practices. The
top most reason why employees leave an organisation is that they are not the right fit for
company. Thus, it is very important for the organisation to hire individuals who are in right
alignment with values, mission and culture of company. It is very significant for employees to
have adequate skills for performing their job well. But, if they are not match for business, they
will soon disengage. If the employees lack motivation and sense of purpose, then they do not feel
happy in the organisation and they leave. It has been found from the research that the individuals
who go through a highly structured process of onboarding are around 58% more possibly to stay
in the company for 3 years or more(What Is Employee Turnover (and Why It Matters), 2019). A
well designed process of onboarding increases the engagement of employees as well as assist the
new members of staff to feel like a part of organisation. When an organisation put its time and
effort to onboard new employees, it depicts the interest of company in them. It is very important
for the management to make employees feel that they are the crucial part of organisation and
develop a sense of belongingness among them will help in reducing the employee turnover rate
and encouraging employees to stay more in the organisation.
Key causes of employee turnover within the organisation
As per the opinions presented by Katie Martinelli, (2017), employee turnover is used to
define percentage of employees who leaves the organisation and required to be replaced within
certain time period. High turnover of employees is taxing and cost money and precious time and
outcomes in lack of staff morale. There are many causes of high employee turnover in the
organisation. Some of the common reasons of employee turnover includes natural career
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