IMBA Employability Skills: Employee Turnover at Jaguar Land Rover

This report examines the issue of employee turnover at Jaguar Land Rover (JLR), a major challenge for the company. The research investigates the causes of high employee turnover, including factors like wage disputes, workplace culture, and external economic pressures such as Brexit and market fluctuations in the Chinese market. The study employs analytical tools such as the ERC model and the Steers and Mowday Turnover Model to identify both internal and external factors contributing to employee attrition. The report correlates financial losses with employee turnover and proposes mitigation strategies to reduce turnover. The findings highlight the impact of JLR's financial instability and the termination of employees on its business performance. The research also details the research methodology, including data collection from secondary sources, and provides a comprehensive analysis of the challenges faced by JLR and recommends strategies to improve employee retention and reduce financial losses.

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Programme IMBA
Module name
Employability skills and academic practice
QAA Level 7
Schedule Term May 2019
Student Reference Number (SRN) BP0183093
Report/Assignment Title Employee turnover Jaguar Land Rover
Date of Submission 30/04/2019
Declaration of Original Work:
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work, researched, undertaken, completed and submitted in accordance with the requirements of BPP Business
School.
The word count, excluding contents table, bibliography and appendices, is 4986 words.
Student Reference Number: BP0183093 Date: 30/04/2019
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BPP Business School

What are the possible causes behind employee turnover and key
factors lead to financial loss in JLR?
BPP0183093
International MBA
Employability skills and academic practice
30 April 2019
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Abstract
Employee turnover is a great threat for the business organisations as the companies are relied on
their employees extensively. In case of Jaguar Land Rover, the company is alleged with severe
employee turnover both voluntary and the termination by the organisation. Therefore, this
research aims to find out the root causes of the high employee turnover rate in Jaguar Land
Rover. Simultaneously, a mitigation strategy is also recommended for reducing the high turnover
rate in JLR. The research cares to take a deep down research and analysed the key findings on
the basis of analytical tools like ERC model and Steers and Mowday Turnover Model and find
out a number of internal and external factors intriguing the high employee turnover rate in the
organisation. Finally, the recommendations generate a better policy making for the JLR to cope
with the issue of high employee turnover by implementing an effective framework.
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Table of Contents
1.0 Introduction................................................................................................................................5
1.1 Research aim..........................................................................................................................6
1.2 Research objectives...............................................................................................................6
1.3 Research questions.................................................................................................................6
1.4Research rationale...................................................................................................................6
2.0 Background of situation.............................................................................................................7
3.0 Research methodology...............................................................................................................8
3.1 Data collection process..........................................................................................................8
4.0 Presentation of the research.......................................................................................................9
4.1 Key findings...........................................................................................................................9
4.2 Challenges............................................................................................................................11
5.0 Analysis and findings..............................................................................................................11
5.1 ERC model of retention.......................................................................................................12
5.2 Steers and Mowday Turnover Model..................................................................................16
6.0 Conclusion and recommendations...........................................................................................20
7.0 Reference.................................................................................................................................23
Appendices....................................................................................................................................27
Appendix 1.................................................................................................................................27
Appendix 2.................................................................................................................................28
Appendix 3.................................................................................................................................29
Appendix 4.................................................................................................................................29
Appendix 5.................................................................................................................................30
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1.0 Introduction
Employee turnover, is considered to be a major threat for the organisations in order to damage
the company revenue particularly. Therefore, at first the notion of employee turnover should be
addressed. According to Balouch and Hassan (2014) employee turnover refers to the number or
percentage of employees or worker who leave the organisation. Moreover, Huang et al. (2016)
opined that the employee turnover in organisation can be identified as the termination of number
of employees within an organisation. In this regard, there are different reasons for employee
turnover that an organisation can face, such as many employees are highly motivated by higher
salary and willing to switch from his or her current company (Anitha 2016). Besides this, lack of
communication between the employees and the management is also considered to be a driving
factor for high employee turnover. In this context, Lu and Gursoy (2016) have highlighted that
the burden of work, conservative workplace environment, lack of transparency in the
employment policy and high market fluctuation are the major factors that creates the possible
employee turnover in an organisation.
Generally, there are two types of employee turnover in organisations in terms of involuntary and
voluntary turnover. For the voluntary turnover, the satisfaction of the employees are the principle
modes whereas for the involuntary turnover, the organisation is primarily responsible for the
termination of the employee. Moreover, the external factors are also responsible to compel the
organisation to terminate employees or the workers are forced to take voluntary resignation.
In this context, this research tries to find out the major reasons for employee turnover in Jaguar
Land Rover (JLR). In this regard, objectives of this research and research questionnaire are
linked with the research topic and deep insights of the relationship between employee turnover
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and financial crisis within JLR. As a matter of fact, it can be stated that the aim of the research
has also been discussed to make a clear line of purpose for this research. Based on this, the
research further illustrates the financial crisis and turnover events in Jaguar Land Rover and tries
to establish a logical explanation on the role of financial debacle in employee turnover.
1.1 Research aim
This research aims to make a correlation between financial loss with the employee turnover in
Jaguar land rover and the propose mitigation strategy to reduce employee turnover properly.
1.2 Research objectives
 To identify the possible causes of employee turnover in JLR.
 To analysethe financial loss factors in JLR.
 To correlate the factors of financial loss and the causes of employee turnover.
 To recommend relevant strategies of employee attrition in JLR.
1.3 Research questions
 What are the possible causes behind employee turnover in JLR?
 What are the key factors lead to financial loss in JLR?
 How far the financial leads to employee turnover?
 How do the recommended strategies will help JLR to increase employee turnover?
1.4Research rationale
Jaguar Land Rover (JLR) is suffering with a number of different issues and the employee
turnover rate is one of the major characteristics of recent times. A Guardian article reported that
there are more than 2000 employees are terminated from JLR (Davies 2018). It created a huge
loss for the revenue and the market orientation of the organisation was also hampered. As a
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result of that it is important for this research to understand the exact issues that resulted in the
huge employee turnover in JLR so that the company can revamp its business once again.
2.0 Background of situation
Jaguar Land Rover or JLR is one of the most well-known and prestigious car manufacturing
companies across the world. Headquartered in Whitley UK, the principal activities of JLR are
associated with design, development, manufacture and sales of vehicles. The company has a rich
history back to the 1930s when the country initiated its first business in UK. After that there are
huge financial fluctuations that the organisation faced and finally the Tata Motors of India took
over the company in 2013. Currently the company has a number of more than 40 thousand
employees with an annual turnover of £25.8 billion in the financial year of 2017-18
(jaguarlandrover.com 2019).
The company is going to terminate more than 2000 staffs in UK due to the reduction of its
production. Moreover, the workers issue is not new in case of JLR. In 2013 also the company
was alleged to have contract labour issues as most of thelabourers were demanding a hike in their
wages. This growing trend leads to carry out further investigation on the factors behind high
employee turnover in JLR. In addition to this, the financial condition was not as sufficiently
stable as the annual report of the company shows huge gap in the financial revenue and
descending curve of the organisational profitability. Figure 1 states that the annual cash flow of
the organisation has been reduced spectacularly from £3,399 million in 2016 to £2,626 million in
2018. A range of factors are responsible for this fall in the financial condition of JLR. According
to Milligan (2019) the Brexit event curtailed the organisational profitability in a rapid pace that
was supported by Figure 2 where it can be seen that the annual revenue of the organisation had
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been highly promising since 2011. Nonetheless, in 2016 and specifically 2017, the Brexit event
damaged the annual global profit of JLR intensely. On the contrary, insider.co.uk (2019)
articulated that the failure in the Chinese market was a major factor in the backdrop of the
financial loss of JLR. Figure 3 shows that there was a sharp decline into the number of JLR’s car
sells. A number of reasons were behind the decline with huge impact on the employee turnover.
It gave a super blow to the international business of JLR and led to financial debacle.
3.0 Research methodology
3.1 Data collection process
The data collection process of this research is also associated with the framework of qualitative
analysis on the secondary resources. According to the research of Johnston (2017) it can be
stated that company annual reports and the peer reviewed journals and articles will be taken for
this research along with the newspaper articles so that the authenticity of the collected data will
be proved effectively. As a matter of fact, the online news articles are taken from renowned
online newspapers like the Guardian and The Telegraph. No primary data will be collected in
this regard due to the basic focus of the research connotes the importance of collecting secondary
researches. In addition to this, the analysis of the findings will be discussed with the help of
different strategic frameworks like Steers and Mowday Turnover Model and ERC model of
employee retention. This data collection method is primary put a great deal of emphasis on the
collecting and analysing important information regarding the employee turnover practice in
Jaguar Land Rover. Moreover, the financial problems are also collected in order to understand
the financial situation of the organisation in current times. Therefore, it can be stated that the data
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collection process is highly relevant and significant in order to conduct a thorough research on
the topic.
4.0 Presentation of the research
4.1 Key findings
In 2013, the Jaguar Land Rover Company (JLR) was facing severe accusation with exploiting
the contract labourers. A huge protest was conducted over hike in wage among the workers. The
Unite Trade Union, one of the largest trade union in Britain demanded a rise in wage with 12.8%
over two years for the contract labourers (statista.com 2019). In this regard, it is important to
understand the contract labourers in JLR were primarily the workers who sort vehicle parts and
bring them for production. Moreover, a demand was also placed for the drivers with a proposal
of 20.6% rise in wage. The report from the Castle Bromwich manufacturers who produced
Jaguar F Model was under the supervision due to pushed the workers to do their jobs 24 hours a
day with three shift system (insider.co.uk 2019). As a result of that the workers were highly
dissatisfied and tried to switch on other companies where they place their demands effectively.
As a result of that JLR faced huge employee turnover due to their bad policies and lack of
considering the employee satisfaction as one of the major factor for the development of the
organisation.
The situation was further stirred up due to the huge employee termination conducted by JLR in
2018. More than 1,000 people lost their jobs due to the organisation aimed to reduce its
production and willing to adjust the expenses in the production schedules in Castle Bromwich
plant. There are several factors responsible for such decision of the organisation. As per the
research of Taumar (2018) it can be stated that the workplace culture in JLR was deteriorated in
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course of time and the employees did not get adequate facilities as they expect. Moreover, the
report of Gibbs (2019) also ventilated the same notion by stating that it was within the
organisational framework that created a barrier between the employees and the management.
Lack of communication was considered to be one of the major factor behind this (Tovey 2019).
On the contrary, Milligan (2019) pointed out the external factors like the Brexit memorandum
that created a huge deal of problem for all the automobile companies to practice their business
effectively. The report in the wake of Brexit mentioned that the government decisions to step out
from the European Union created a vulnerable environment for the automobile companies and
tens of thousands jobs in the automobile sector in UK would be at risk. Furthermore,
insider.co.uk (2019) pointed out a different approach behind such situation. The decline in the
Chinese market gave a fatal blow to the business expansion of JLR in recent times. The company
faced a loss of £90 million due to the US-China trade war. An overall fall in the sales with 43.8%
cost great for the organisation that compelled JLR to shut down one of its manufacturing units.
Both the internal and external environment are equally responsible for JLR to set its stronghold
into the market effectively. However, in this context, it can be stated that most of those events
are new for the organisation. For an instance, the trade war between US and China was the most
recent case that affected the business orientation of the company intensely. It was further
intensified due to the Brexit situation. Though the Brexit motion was occurred before the
hostility between US and China. Nevertheless, the impact of Brexit was an aftermath of the US-
trade relations that shut all the possible market opportunities for JLR to expand their market
internationally (Taumar 2018). An interesting fact is that the employee issues were existed in the
organisation before the debacle in the international trade relations. From that point of view, it can
be stated that there are huge lack in the organisational framework that would be the best possible
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reason for the organisation to plan and impose their policies ineffectively. The research of
Davies (2018) mentioned that the problem was within the communication gap within the
organisation. The reason behind the eruption of such issue was that a top down decision making
was always prevalent within the organisational structure that restricted the employees to discuss
and ventilate their problems with the top management. As a result of that it created high
employee turnover as they never felt satisfied to work in JLR and it had a deep impact on the
revenue collection of the company as well.
4.2 Challenges
Despite of such effective and detailed discussion, it can be confirmed that dearth of quality
information is considered to be one of the major problem for this research. There is little
information about the employee issues in JLR and the company also did not mention anything
specifically to make a better organisational environment that can deal with the employee attrition
positively. Furthermore, the authenticity of the newspaper articles is a subject of further
speculation because there is no authenticity that those figures are right. From that point of view,
it can be stated that the research is highly sensitive and puts more emphasis on the market
analysis to get more perception regarding the issues.
5.0 Analysis and findings
The analysis and findings is based on the key findings of the research and based on that the
researcher decides to take the ERC model and the Steers and Mowday Turnover Model in order
to create a link between the financial crisis within Jaguar Land Rover and the termination of
employees intensely. In fact, it is also crucial for the organisation to highlight on the correlation
between the financial debacle and the employee turnover. In this regard, the purpose using the
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ERC model is to understand the internal policy making and the workplace environment that
facilitated havoc termination in Jaguar land rover. On the other hand, Steers and Mowday
Turnover Model tries to point out the external factors that were responsible to create huge
economic damage to the company and developed a unsatisfying environment for the employees
to get employed in JLR further.
5.1 ERC model of retention
Figure 6: ERC model of employee retention
(Created by the author)
Employee Retention Connection’s model is also relevant in this discussion that points out a
number of important aspects that pave the way for effective employee retention procedure for the
business firms. Employee Connection Model is related to the practice of making effective
measure in order to deal with increasing nature of employee turnover in an organisation. As a
matter of fact, the model does not only identify the factors behind employee attrition but also
suggests to create a mitigation strategy for enhancing the rate of employee attrition in an
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