Business Research Dissertation: Employee Turnover Impact on Profit

This dissertation examines the impact of employee turnover on organizational profit, focusing on Marks & Spencer as a case study. The research investigates the concept of employee turnover, identifies key causes, and assesses the relationship between employee motivation and turnover. It analyzes the impact of turnover on organizational performance and profits and explores theoretical frameworks and strategies for reducing turnover and improving motivation. The study includes a literature review, detailed research methodology, data analysis, and conclusions with recommendations. The project aims to understand the significance of employee turnover in the business context and provide insights for improving employee retention and organizational profitability. The research covers various aspects, including the causes of turnover, its impact on performance, and methods to mitigate its effects, offering a comprehensive analysis of this critical business issue.

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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progression, toxic work environment, involuntary departure, feeling burnout, family or life event,
competitive offer, negative feeling towards management or boss, internal transfer or promotion,
lack of work life balance and lack of opportunity to develop and grow (Causes of Employee
Turnover, 2017). Having proper understanding of all these causes of employee turnover can
assist organisation in putting some efforts to make necessary changes in order to maintain their
employees at desired level. These causes in detail are discussed below:
1. Lack of progression and growth - it is very important to provide employees with the
opportunity to grow and develop in order to retain them for long term. If an individual
feel trapped in dead end position, they are possibly to look towards distinct organisation
for the chance to enhance their income and status. If an organisation not provide
employees with opportunities of progression and growth, then it reduces the moral of
employees and results into leaving the organisation.
2. Lack of feedback and recognition - providing employees with consistent feedback and
recognition for the work they have done is very important in order to provide them with
right path and boost their morale to perform well. If the organisation avoid to provide
feedback to their employees, then it might be pushing them away. Feedback is the initial
step to make sure that employees are succeed, thus avoiding this procedure can be
detrimental to the success of employees. At the time of struggle, honest feedback assists
employees to manage their workload as well as refocus. Ignoring this opportunity or
administering unhelpful feedback will leave employed to struggle, flounder, become
disheartened and eventually give up.
3. Toxic culture - one of the common cause of turnover of employee is poor culture fit. If
the culture of an organisation is not good, then it declines morale of employees, scares
away new talent as well as actively drives away its best talent. If the company exhibit a
toxic culture, then employee retention rates will suffer. The organisation might have best
people for job, but those will run for hills as they connect with increasing levels of stress,
tanking mental and physical health as well as eroding motivation with toxic culture.
4. Poor employee selection - finding out perfect employees is very difficult for the
organisation, but forcing a match with a worker who is clearly not right for the culture
and values of organisation will never end well. Picking up a poorly matched individual is
bad for the organisation. Thus, it is very important to select the employees as per the need
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of organisation. Poor selection will result into declined productivity of company and
ultimately the profitability suffers. So, it is very important to select the right employee for
right position so that they enable to perform their duties well and work towards
accomplishment of organizational goals in an effective way. This will also help in
retaining them in the workplace for long term.
Interlink between employee motivation and employee turnover within the organisation
The turnover rate of employees and employee motivation are highly linked with each
other. They are directly proportional to each other as if the motivation of employees is decline, it
ultimately impacts on the turnover rate of organisation in an adverse way. Motivation is a
mixture of all forces both internal and external which stimulates the energy and desire in people
as well as meet them consistently committed and interested in job and enable them to put efforts
for accomplishing organisational goals and objectives. If the employees are less motivated then it
can cause low performance, employees burnout, bad inspiration for co-workers. Every
organisation tries to use its employees in optimal way however, motivation and morale of
employees does restrict their desired objectives and goals. Motivation is very important factor
that leads to improve the retention rate of employees in organisation. If employees are not
motivated and do not feel a sense of satisfaction and belongingness in organisation, then the try
to leave the organisation which in turn increases its turnover relate that ultimately harm
productivity and performance of company along with its competitiveness in market.
Impact of employee turnover on performance and profits of organisation
Employees are the backbone of the business they helps in increasing the profit of the business in
the business if the organisation will not not provide healthy working environment to the
employees then they will be forced to leave the organisation which can affect the productivity of
the business if the business wants to achieve more profit in the market they it is important for the
business to provide job satisfaction to the employees so that growth of the business can take
place effectively in the market. Providing the job satisfaction to the employees helps in
increasing the productivity of the business in the marketplace if the employee turnover rate will
be increased then organisation will have to hire employees so that chances of loss can be avoided
in the business and profit can be earned in the market. New employees will take time to learn and
understand the activities of the business due to which revenue generating power of the business
will also get affected due to which goodwill of the business will also get affected if the business
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wants to achieve more profit in the market then it is important for the provide healthy working
environment to the employees so that growth chances of the business can be increased and more
profit can be earned. Retaining the best employees in the business is very important for the long
term survival of the company because they known how to increase the profit of the business by
giving their best if the business. Managers and leaders should communicate with the employees
on the daily basis so that chances of conflicts can be avoided in the business and discipline
environment can be provided to them if effective communication will take place in the business
it will develop the confidence of the employees which will further reflect in their work which is
assigned to them. Employer should provide the work as per the skills of the employees so that
employees can give their best in the task and increase the profitability of the business in the
market. Organisation should provide job satisfaction to the employees by providing them various
facilities so that their needs and requirement can be satisfied properly they should also involve
their employees in the decision making so that effective decision making can take place in the
business and competitive advantage can be gained. If the employees will be motivated towards
the business then the services of the business will also gets improved which will help in
attracting the customers towards the business. if the employees of the business will leave then it
can affect the overall functioning of the business and will provide competitive advantage to the
other organisation due to which image of the company will also gets destroyed in the market
because employees are the one to provides services to the company if the capable employees will
leave the business then it will affect the overall revenue and goodwill of the company in the
economy which can create a risk factor for the company.
Different theoretical frameworks, models and ways that assist in reducing employee turnover and
improving motivation
In the organisation retaining the best employees helps in increasing the profit of the business
in the market if the organisation will not retain its employees then it can be big loss for the
business so to avoid this factor company applied various theory and model of retain their
employees in the business
Maslows hierarchy of needs
This theory suggest that individual will remain motivated towards the work if the needs and
requirement of the individual is satisfying properly.this theory involves fives different types
of individual needs that are given below:
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 Physiological needs: these are basically the biological needs of the individual like
food, water, shelther etc. If these are satisfied properly then it will motivate the
individual to work smoothly so that there need can be satisfied properly in the
business. organisation should fulfil these needs of the individual on priority basis so
that there productivity can be developed in the market and employees can also
retained in the business. organisation should identify whether the needs of the
employees are satisfying or not so that business can helps the employees in satisfying
their needs.
 Safety needs: every individual wants safety in the workplace so that there work can
be performed properly without any issue providing proper safety and security helps
in increasing the morale of the individual. If the organisation will provide all the
safety measures to the employees then it will helps in developing the confidence
level of the employees in the company which will enhance their performance. In the
organisation chances of injuries are more if the organisation will analyse this risk
factors then it will helps the business to increase it goodwill in the economy due to
which demand of the business will also gets increased.
 Social needs: this is one of the important part in retaining the employees if the social
needs of the individual like trust, friendship, love and belongingness are not
satisfying properly then it can affect the mental ability of the individual which can
affect the growth chances of the individual in the market. Organisation should
develop healthy relations with their employee by analysing their needs and
requirement so that social needs of the individual can be satisfied properly can
performance of the individual can be enhanced in business which will increase the
revenue generating power of the company.
 Self esteem needs: This needs of the individual is related with the self respect and
diginity of the individual every individual wants to be treated with respect so that
their self eteem cannot get affected. Organisation should treat its employees with
respect so that employees can feel that they are the part of the business it helps in
motivating the employees the services of the business and also helps in enhancing
the performance of the individual in the business. self esteem needs helps in buiding
the morale of the individual in the society.
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