Cost of Employee Turnover on Organizational Profit: A Study on ASDA

CW1 Dissertation
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Chapter 1: Introduction....................................................................................................................3
Background to research topic.................................................................................................4
Background to research organization.....................................................................................4
Research aims and objectives.................................................................................................5
Research aim.........................................................................................................................5
Research question (s)..............................................................................................................5
Research rationale..................................................................................................................5
Chapter 2: Literature review............................................................................................................6
Introduction of literature review.............................................................................................6
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Chapter 1: Introduction
Employee turnover is defined as a concept which refers to the total number of employees
who leaves in organization over a certain period of time. High employee turnover is define as a
situation in which higher number of employees leaves in organization, that can be due to lack of
communication, organization culture, support and many other factors (Chiat and Panatik, 2019).
While on the other hand, low employee turnover is basically defined as a situation in which
organization relatively have small number of employees those who leave during a given period
of time. In terms with today’s business environment there is significantly high competition
among rivals in every industry. This makes organization to significantly implement strategies in
order to make sure that employees are highly satisfied and engaged within organization, as
negligence of this will lead organization to face the issue of high employee turnover which can
affect organization in number of ways such as decrease in productivity, profitability, lack of
competition from other rivals in industry and damage to company image in market (De Winne,
2019). Understanding the causes of employee turnover can help businesses make the necessary
changes to maintain their workforce at the desired level. Because of the many variables affecting
turnover, benchmarks for acceptable or ideal turnover vary. It’s important for organizations to
take individual and industry-related factors into account as they pinpoint their target turnover
rate, study the reasons behind their voluntary and involuntary turnover, and make changes to
impact the employee turnover rate for their own workforce (Zimmerman, Swider and Boswell,
2019). With the help of implementing strategies and practices to satisfy employees company can
lower down the increase in the rate of high turnover. Employees are one of the most important
asset for any organization irrespective of its size and scope. In this it is essential for business
organization to make sure that they are highly satisfied and engaged within organization as it not
only help company to have a positive image in the market segment but also allow them to make
less investments on hiring new employees and overall selection procedure of a new worker.
Present research is conducted on the topic of the cost of employees higher turnover rate on
organizational productivity. It has been analysed that there is a direct link associated to the
employee turnover rate and the organization productivity, as high turnover of employees affects
productivity and profitability of organization in adverse manner. While on the other hand low
turnover helps in enhancing company productivity and their investment on hiring and selecting
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cost of new workers. With this research the concept of employee turnover is being analysed in an
effective manner. Along with this the cost of employee turnover rate on company profitability
and image within market is also been analysed, along with the positive impact of employee
turnover which allow company to gain overall competitiveness and advantages in industry.
Present research report is conducted ASDA which is one of the leading organization of
breeding in retail industrial sector in the provinces of United Kingdom. This organization is
British supermarket headquartered in Leeds, England, United Kingdom and offer wide range of
production services to consumers. This company is having an aim to provide high quality
services to customers in order to ensure higher competitiveness in industry. For this company the
respective organization is facing the issue of high employee turnover which is affecting their
profitability. This research helps in analysing the strategies through which company can
overcome this challenge and can gain more competitive advantage over other rivals.
Background to research topic
Business organization nowadays are operating its roles and responsibilities in a highly
competitive business environment which is inclusive of number of complexities. In this
employees are facing many challenges which is affecting organisations productivity and
performance in an adverse manner (Ekhsan, M., 2019). The issue of high employee turnover
include low productivity within company and its also affecting organization to assure higher
growth and competitiveness in environment. Present research is duly conducted to analyse the
cost of employees turnover rate on organizational profit. It has been analysed that the cost of
employee turnover is mainly associated to management expenses and advertising expenses and
other forms of expenses which have tendency to affect overall budget of organizations.
Present research include discussion on the concept of employee turnover within
organization along with its impact on company productivity profitability and its image in market.
Furthermore positive impact of employee turnover within Asda which help them to gain
competitive advantage is also discussed in this research. The selected topic is analysed with the
help of literature review in which view point of various authors, articles is being evaluated along
with the selection of suitable research methodologies.
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