Employee Turnover in Service Industry: Causes and Impacts

This paper discusses one of the significant concerns of the service industry which is the employee turnover. Along with that, the paper evaluates the cause of the employee turnover along with the impact of the issue on the modern day organizations. The paper includes a demographics of the employees’ selection for the research and the impact of the issues on them.

Running head: HUMAN SERVICES RESEARCH
Human Services Research
Name of the Student
Name of the University
Author Note

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Executive Summary:
The paper discusses one of the significant concerns of the service industry which is the
employee turnover. Along with that, the paper evaluates the cause of the employee turnover
along with the impact of the issue on the modern day organizations. The paper includes a
demographics of the employees’ selection for the research and the impact of the issues on
them.

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Table of Contents
Introduction:...............................................................................................................................3
Needs Analysis:..........................................................................................................................3
Cause of the issue:..................................................................................................................3
Impact of the issue:................................................................................................................4
Demographics:...........................................................................................................................5
Conclusion:................................................................................................................................5
References:.................................................................................................................................6

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Introduction:
The service industry is getting significantly complex in the modern century due to the
significant amount of market competition. The considerable market demand is providing
opportunity to almost every organization. On the other hand, the abnormal rise in the market
demand has the potential to trigger the organizations for additional increment in the workload
of the employees (Hancock et al., 2014). In such cases the threat of the employee turnover is
significant. The mentioned problem is having the potential to affect the organization in a
notable manner. The paper is focused in specifying the cause of the employee turnover and
the impact of it on the service industry.
Needs Analysis:
Cause of the issue:
The cause analysis of the issue is significant for the organization as it would enable
the organization to have the inputs regarding the turnover of the employees in the
organization. The general issues that have the potential to emerge as the influential factors or
causes behind the employee turnover is dissatisfaction of the employees with the work
environment, work-time characteristics, inappropriate compensation, dissatisfaction of the
employees with the existing training activities along with ineffective rewarding policy
(Stanley et al., 2013).
The modern organizations are facing the detrimental impact of the adverse working
condition or work environment. Several organizations are observed to face the negative
impact as it is significantly visible that the employees are not able to act as a team. The
desired cohesion in the team along with the help for the other team members is getting
significantly reduced and individuals are getting more and more concerned with the
individual performances rather than the overall team performances (AlBattat & Som, 2013).

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Apart from this, the employees are observed to get significantly dissatisfied with the work-
time characteristics of many modern organizations where the organizations are found to have
an ineffective strategy for maintaining the work life balance of their employees (Memon et
al., 2014). Along with that, it is observed that the employees are not pleased with the
organization’s policy to reward the employees for the cases of overtime. The wage
characteristics is also posing significant amount of concern to the employees as a large
number of employees are observed to be expecting a better compensation for their time and
effort (Mowday, Porter & Steers, 2013). Majority of the employees of different organizations,
operating in the service industry, pointed out ineffectiveness of the training activities as the
potential reason behind their dissatisfaction generated during their faulty operation.
Impact of the issue:
The organizations are observed to suffer in a significant manner with the rise in the
employee turnover rates. The employee turnover has the potential to affect the organization
broadly in two ways in the form of reducing the company’s productivity and decreasing the
company’s consistency as a service organization (Das & Baruah, 2013).
The organizations with excessive turnover rates are observed to have large number of
new people in their workforce which makes the organization less productive as a whole
(Hausknecht & Holwerda, 2013). Along with this, high turnover rate forces an organization
to conduct repetitive hiring and that increases the expenditure as the cost of hiring and
training keeps increasing. Hence it decreases the profit and productivity of the organization.
Apart from this, the training activities generates significant amount of knowledge
among the employees which with their resignation, is lost for the organization. Along with
this, the time spent by the organization in order to increase the competency level of the
employees in the training sessions goes in vain as well.

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Demographics:
The selection of the demographics is based on employees of the service industry
sectors like the hospitality and health care providers. The general focus of the employees is
on the age group of 25-45 years as the employees of this age group are observed to be more
inclined towards the separation with the organizations. The demographics will not include
any sort of classification based on the gender of the employees.
The employees at the early stage of the mentioned age group are observed to be less
affected compared to the employees of the 35-45 years age group in case of the work life
imbalance as the majority of the employees of 35-45 years are married and having children in
their family (Ahammad et al., 2016). Hence they need to take care of their children as well.
The employees belonging to the age group of 25-35 years are observed to be significantly
affected by the inappropriateness of the employee training activities as their incapability of
delivering quality work is not seemed to be taken care by the training activities.
Conclusion:
On a concluding note, it can be said that the organizations of the service industry are
facing significant amount of issues in retaining employees due to their faulty strategies. The
organizations are in need to manage this with effective planning in the aspects like the better
rewarding policies, improved work time characteristics and effective training activities.

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References:
Ahammad, M. F., Tarba, S. Y., Liu, Y., & Glaister, K. W. (2016). Knowledge transfer and
cross-border acquisition performance: The impact of cultural distance and employee
retention. International Business Review, 25(1), 66-75.
AlBattat, A. R. S., & Som, A. P. M. (2013). Employee dissatisfaction and turnover crises in
the Malaysian hospitality industry. International Journal of Business and
Management, 8(5), 62.
Das, B. L., & Baruah, M. (2013). Employee retention: A review of literature. Journal of
Business and Management, 14(2), 8-16.
Hancock, J. I., Allen, D. G., Bosco, F. A., McDaniel, K. R., & Pierce, C. A. (2013). Meta-
analytic review of employee turnover as a predictor of firm performance. Journal of
Management, 39(3), 573-603.
Hausknecht, J. P., & Holwerda, J. A. (2013). When does employee turnover matter? Dynamic
member configurations, productive capacity, and collective performance.
Organization Science, 24(1), 210-225.
Memon, M. A., Salleh, R., Baharom, M. N. R., & Harun, H. (2014). Person-Organization Fit
and Turnover Intention: The Mediating Role of Employee Engagement. Global
Business & Management Research, 6(3).
Mowday, R. T., Porter, L. W., & Steers, R. M. (2013). Employee—organization linkages:
The psychology of commitment, absenteeism, and turnover. Academic press.
Stanley, L., Vandenberghe, C., Vandenberg, R., & Bentein, K. (2013). Commitment profiles
and employee turnover. Journal of Vocational Behavior, 82(3), 176-187.

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