Factors Influencing Employee Turnover in Hospitality Sector

Running head: FACTORS INFLUENCING EMPLOYEE TURNOVER
FACTORS INFLUENCING EMPLOYEE TURNOVER
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The percentage of employees leaving an organization and are substituted through the
appointment of new employees is known as Employee turnover. Calculating the rate of
turnover in an organization can help in examining the causes of the outcome (Akgunduz and
Cin 2015, pp.549). Organizations are involved in measuring the rate of employee turnover by
categorizing the organizations into demographic and departmental groups (Zhang 2016,
p.85). Employee turnover includes resignation, sudden death, termination and layoffs. The
rate regarding the employee turnover measures the efficiency of customer service,
productivity and employee satisfaction. The paper will present an extensive literature review
based on the conceptual map depicting the factors leading to employee turnover in the
hospitality sector. Developing an understanding regarding the causes and factors that
influences the reason for employee turnover will be crucial for responding to the negative
impact and will help in identifying the level of employee concerns or inefficiency. The
literature review will include an exhaustive discussion regarding external factors, personal
factors and work-related factors. The paper will be concluded by presenting a summary of the
key findings followed by a recommendation for addressing the concern or potentiality of
employee turnover in an organization.
External factors
Employee turnover has become a critical concern in today’s business environment.
The culture of employment is also changing. Employee turnover reflects extensive costs due
to the loss in the social capital (Lu and Gursoy 2016, pp.212). For responding to the
increasing concern arising from employee turnover, organizations should be involved in
identifying the causal factors responsible for the negative outcome of employee turnover.
Causes of employee turnover may vary from one organization to another and depends on
individual perception. External factors majorly influence the outcome of employee turnover
(Dubey et al. 2016, pp.210). External factors for employee turnover include employment
perception, accession rate, union presence and unemployment rate. According to Al Mamun

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and Hasan (2017, pp.66), the staff members decide on leaving an organization depending on
the attractiveness of opportunity that is being depicted by the organization. Ease of movement
is considered as the influencing aspect, which determines the decision of staying or leaving
an organization. Accession rate determines the total number of employees that are added in
the payroll in a given period, generally in a year. The accession rate in an organization
reflects the practice of replacing the vacant position by recruited employees in the place of an
employee who has left or has been terminated. Employee turnover can be the amalgamation
of various activities, lay off, termination, retirement and voluntary-involuntary resignation
(Dubey et al. 2016, pp.210). Another sub-factor that influences the outcome of employee
turnover is employee perception. According to few researches, the process that involves the
practice of organizing and deducing the sensory impression for connecting the meaning of the
experiences stimulus is known as employee perception (Dubey et al. 2016, pp.210).
Perception of employees is not the depiction of reality but is considered a single view for an
experienced situation (Dubey et al. 2016, pp.213). The behaviour or decision-making criteria
of the employees in an organization are based on employee perception. Understanding the
perception of employees for determining the pattern of behaviour for different roles and
responsibility in an organization can be crucial for identifying issues and concerns amongst
workforce and efficiency for the allotted tasks (Zhang 2016, p.85). Simply changing the
reality of working conditions may not reflect positive result on employee turnover, changing
or addressing the specific perception of employees about their reality will affect the outcome
of employee turnover (Dubey et al. 2016, pp.210). The human nature is simple and complex
at the same time, thus being considerate and appreciative of employee perception or the
leadership strategies for changing the established perception may lead to the reduction of
employee turnover rates. Presence or absence of union in an organization can majorly
influence the state of employee turnover as a union is considered to be the representatives of
employees, which takes care of the employee concern and efficiency level with the

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communication of required resources and amenities (Zhang 2016, p.85). Australia is
witnessing a decreasing rate of union membership, which may be indirect or direct reason for
increasing employee turnover in the hospitality sector. Hospitality sectors do not include the
practice of forming unions; the demands and concerns are expected to be communicated by
the managers in the organizations. However, another set of researches depicts that the
management roles are not solely dedicated to the needs and concerns of employees, thereby
causing a gap in the employer and employee goal perception (Lu and Gursoy 2016, pp.212).
Union presence has the capacity of influencing employee satisfaction and can address
employee demand. However, union presence can also lead to the employees’ decision of
quitting the job role in the form of a strike or disagreement. Influencing employee behaviour
in response to a disagreement, can lead to the state of sudden dismissal or resignation. Thus,
union presence can be considered as one of the major influencing factors that can directly
affect the decision regarding employee turnover. Employee turnover also includes the
practice of replacing the employee who has left or being terminated by newly recruited
employees. The unemployment rate can also be linked to the decision regarding employee
turnover as due to lack of job opportunities, and employees will be restrained from leaving a
job. From a reverse understanding, the high unemployment rate can indicate the state of low
employee turnover, as the existing employees are not leaving the organization, thereby
restricting the process of replacement. Most of the external factors are usually not in the
control of organizations operating under the hospitality sector. However, few sub-factors like
employee perception and union presence can be carefully structured by organizational
practices and management intervention. The hospitality sector is considered a major
employer in all across the world. Although the hospitality sector is growing at a faster rate
but experiences numerous workforce challenges, including high employee turnover rate. In
the hospitality industry, employee turnover cost may include pre-departure disengagement,
recruiting employees for replacement, training and orientation practices, loss of productivity