Research: Voluntary Employee Turnover and Retention in Mozambique

This report examines the critical issue of voluntary employee turnover and retention within a small-sized logistics company in Mozambique. The study delves into the company's background, its operational challenges, and the impact of high turnover rates on its performance and cost structure. It explores the research question concerning the causes and effects of voluntary employee departures, differentiating it from general turnover. The literature review analyzes factors influencing turnover, including compensation, job satisfaction, and external opportunities. The research methodology outlines the philosophical approach guiding the investigation, addressing ontological and epistemological considerations related to knowledge acquisition and the nature of reality. The report highlights the detrimental effects of high turnover, such as workflow disruption and increased costs, emphasizing the need for effective retention strategies in a competitive environment. The report also looks at the specific challenges faced by the company in Mozambique, where the scarcity of skilled labor and the presence of a developing economy makes retention more difficult. The report concludes by summarizing the key findings and suggesting potential strategies for improvement.

Research Philosophy and Literature
Review
(Voluntary employee turnover and
retention in a
Small Size Company)

Contents
Contents...........................................................................................................................................2
ABSTRACT....................................................................................................................................1
INTRODUCTION...........................................................................................................................2
Background (review) of the Company........................................................................................2
Purpose of the study.....................................................................................................................3
Research question........................................................................................................................4
LITERATURE REVIEW................................................................................................................5
Analysing the specific or thematic issues that seeks to review both its cause(s) or
manifestations or characteristics and possible methods to reduce its occurrence.......................5
RESEARCH METHODOLOGY..................................................................................................11
Reviewing the philosophical role of a research paradigm in directing the research associated
with the organisational problem................................................................................................11
Discussing the ontological basis for researching the organisational issues and the philosophical
narrative associated with the nature and character of reality.....................................................14
Reviewing the epistemological issues associated with the manner by which knowledge is
obtained and the relationship between the researcher, the subject matter under investigation
and what is associated as knowledge and alternative notions of truth......................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................17

ABSTRACT
High employee turnover and retention had been a critical factor in almost all the companies
in Mozambique, one of the poorest nations in the world (Radelet, 2015). High levels of poverty,
scarcity of skilled workforce, education level, lackluster attitude and cultural barriers had been a
challenging factor for many companies for recruitment of skilled labor and retention. Human
resource management is a vital factor for the success of any organization and special emphasis is
given to retain employer (Steffensen, Ellen, Wang, & Ferris, 2019). This research aims to show,
how high employee turnover can disrupt workflow continuity, performance level and credibility
of the organization. There could be various factors that could influence high employee turnover
rate. In an emerging economy with more businesses are being established on a daily basis, the
demand for skilled workforce could be limited (Waddell, 1998). Low income levels, work
overload, adverse working conditions, recognition could be few areas for high employer turnover
(Cottini, Kato, & Westergaard-Nielsen, 2011). High employer turnover could also be costly in
terms of training and development as well as high replacement cost as the replacement positions
could demand high wages. In addition, the existing employees could also have threatened high
wages, understand the pattern and vulnerability of the organization in terms of retention of staff.
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INTRODUCTION
The concept of employee turnover is different from employee retention. Employee retention
is a percentage of employees who leave the organisation and new employees are hired in place of
old personnel. High employee turnover is a crucial situation for any organisation which can arise
due to multiple reasons. Low employee satisfaction is one of the most influential reason due to
which employees leave their current workplace (Ahn and McLean, 2008). Other reasons for this
situation are considered to be low job security, discrimination amongst employees, demotivating
superiors and many more. This situation of employee turnover can result into issues such as high
cost of hiring, high cost on training and development etc. Employee turnover can be of many
types such as voluntary, involuntary, desirable and undesirable. The situation of such issues
arises in an organisation due to internal and external affairs of a company. It must be noted that
not at all the situations, employee turnover is harmful for the organisation; it can be even
beneficial for the company too. For example, situations where company needs their employees to
leave their job as they do not fit for the job profile anymore due to their increasing age;
employment turnover can be beneficial. Employee retention is different from employee turnover
as it is the set of techniques by which an organisation can be saved from the problem of high
employee turnover. Employee retention is a process which helps organisation to conduct such
actions which can retain their employees for longer period of time (Asiedu-Appiah, Mehmood
and Bamfo, 2015). This procedure is based on the basic phenomenon of first finding the reason
behind high employee turnover, then make plans and finally conduct activities by which issue
can be solved. There are various techniques by which employee retention can be done in an
organisation. These techniques are: rewards, employee satisfaction, motivation and leadership
etc.
Background (review) of the Company
Recent discovery of LNG in Mozambique, there had been renewed interest in logistics
companies to provide resourceful service levels to meet the demands and challengers faced by
the LNG companies (Bay & Hong, 2017). Since one of the greatest challengers confronted by
the companies had been high level of employee turnover and retention to perform a high service
levels to these client’s companies. The researcher has identified a small size logistics company of
100 employees approximately, who provide customs clearance, road, air and sea transportation
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primarily targeting LNG companies and retailers. Key factor for the existence of the freight and
logistics provider is to offer a high-quality service levels to its clients. Thus, a skilled workforce
is vital factor to maintain such service levels to the demands of the clients. A high level of
competencies and expertise are required to sustain a competitive advantage (Ahn & McLean,
2008).
WHELSON GDC TRANSPORT is a small scale logistics company which relies on
electronic commerce and online public platform. Activities of this organization include freight
forwards, network marketing promotion etc. This company is an efficient, reliable transport
organization which offers variety of transports including chemicals such as LPG, food items such
as tea, sugar, flour etc. and all other general cargo. Despite of being a small organization, this
company even established in South Africa, Zimbabwe and in other parts of Africa along with
Mozambique. Additional services which are provided by this organization includes warehousing,
custom clearance, bagging, transit bonds, trade finance and any more logistics related services.
This organization works as a small scale organization in the region of Mozambique with
approximately 100 employees. After the discovery of LPG in Mozambique, this company
devotes their operations majorly for companies engaged in processing LPG. From few years, this
organization is facing the issue of Voluntary employee turnover which has resultant to increase
cost involved in their operations as it is considered difficult to hire trained and well skilled
workforce in poor region like Mozambique (Bay and Hong, 2017).
Purpose of the study
The main purpose of the research is to critically analyze the voluntary employee turnover
rate and retention in a small size organization in Mozambique within a period of 10 years. The
research is done in different levels of staff from clerical workers to the managerial staff of the
company. Quality workforce always has an impact on the success stories of most organizations
(Gialuisi & Coetzer, 2013). All factors contribute in some way or another to the growth of these
organizations. High employee turnover could incur high costs. For an example cost of training
and development, loss of business, new recruitment costs to name a few. High turnover rate
could be harmful in the long run, when continuously recruiting new staff could give negative
impression in the industry, which would be beneficial to the competitors (Gandy, Harrison, &
Gold, 2018).
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Research question
Voluntary employee turnover and retention in GDC Whelson Transport.
The above research issue is related with high voluntary employee turnover which is faced by
a small scale company of Mozambique which is GDC Whelson Transport. Voluntary employee
turnover is a different from normal employee turnover as in this situation, employees of an
organisation leaves the organisation by their own will and not by any pressure or actions of the
company. This type of employee turnover is worst among all as this result in degrading
organisation’s brand equity. In the situation of voluntary employee turnover, employee gives a
number of reasons for leaving the job. These reasons are made which makes it looks impossible
for those employees to work in that organisation anymore. These reasons can be relocating to a
new area, personal reasons etc. The situation of voluntary employee turnover is even more
harmful for an organisation as there are only few techniques by which employees working in
those organisations can be retained. This type of issue is faced by ample number of small
organisations nowadays as once the employees get trained in such small organisations, they aim
to work in a large scale organisation where they can get more benefits apart from salary (Chalkiti
and Sigala, 2010).
This research question aims to investigate the impact and reasons of voluntary employee
turnover on a small scale company engaged in activities of logistics. The question selected for
the investigated aims to collect suitable literature and process of investigation. It is important to
study the concept of voluntary employee turnover as it will help companies to understand
reasons due to which employees leave their organisation in shorter periods of time. Along with
the reasons, this question will also help in identifying and recommending techniques for
employee retention which can help organisations in retaining their employees so that cost of
training and development engaged in staff can be decreased and satisfaction amongst employees
can be enhanced. Voluntary employee turnover and retention are two ends which are experienced
by most of the small scale companies. One of these companies is GDC Whelson Transport. This
company has a small staff but then also facing high voluntary employee turnover and it is
important for companies like this to identify reasons behind this issue so that appropriate
retention techniques can be used (Chung, H and van Der Lippe, 2018).
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LITERATURE REVIEW
Analysing the specific or thematic issues that seeks to review both its cause(s) or manifestations
or characteristics and possible methods to reduce its occurrence
Voluntary Employee Turnover and Retention in Small Companies
According to Paul M Muchinsky and Paula C Morrow, 2019, it has been said that there
are different types of turnover which an organisation comes across at the time of dealing in the
business environment. The reasons to this turnover may also differ from organisation to
organisation and from the perspective of employee. Voluntary Employee Turnover refers to the
situation in which the employees working in an organisation makes their own decision to leave
an organisation. In voluntary employee turnover, there is no role of company behind resignation
of employees. The only reason is the employee himself/herself who takes the decision to leave
that organisation. The authors are also described about the different perspective of employees
due to which an employee makes his decision to voluntarily leave the organisation. It generally
occurs in case of small companies. These perspectives are related to psychological, economical
and sociological perspectives which makes an employee to take decision to leave the company.
In addition to this, there are also some other important factors which makes the employees to
leave the organisation such as individual factors, work related factors and the states of certain
economic variables. These factors are also called as the determinants of voluntary employee
turnover.
In Mozambique, the turnover in small companies is very high. As the company is deals
in transportation of chemicals like LPG, the cost of operations is high and it is difficult for firm
to hire skilled candidates. So, voluntary employee turnover in company is very high. In small
companies, the another reason behind leaving of employee may be related to compensation, as
they may think that they are not provided with enough salary and wages for the work they have
done. Small companies are not able to provide their employees with good salary and benefits so
the possibility is high for an individual to leave the organisation.
According to Iulia Alina Cioca, 2018, it has been said that it is possible that some
candidates join an organisation to acquire knowledge about the area in which the organisation
deals and after coming across the work which is done in the organisation, they may not feel
comfortable with it and make their decision to leave the organisation. So, after taking an
experience of some period of time, they resign from the organisation from their own in order to
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find out some new and better opportunity with which they will be able to gain knowledge of
some more areas that helps in their future career growth. Along with this, in today's world,
employees not only expect good salary amount from the firm but, they expect other things also
such as rewards for their good work, health benefits etc. In case, the company is not providing
their employees with sufficient amount of rewards or benefits, then also employees make their
decision to leave the organisation. Career growth and development is also considered among one
of the most important reason which is considered by employees while doing any job. As the
requirement of each individual differs from that of others, some of them may expect monetary
benefits and others may expect non-monetary benefits such as promotion. So in case, the
employees expecting monetary benefits and if they are not provided with it then, it could become
a reason of their resignation and for employees who wants to get non-monetary benefits, if not
provided to them, it will also provide the company with negative results. So these are some of
the important factors which could become a reason for an individual to leave the organisation.
According to Corey Moseley, 2019, employee turnover impacts upon the performance of
an organisation in negative way. The reasons for the turnover of employees are also provided by
author. These includes the working environment issues which impacts much upon the working
styles of employees, their nature and behaviour. In case, the employees are not able to make
themselves adjust according to the situations prevailing in the market, then in this case, they will
leave the company. The culture of the company may be toxic which makes it impossible for an
individual to adjust in that working culture. Improper communication in between the employees
and the upper level of management of the company is also one of the important reason due to
which employees prefer to leave the organisation. It is because unclear communication leads to
misunderstandings and employees are not communicated properly with seniors that leads to
creates dissatisfaction among them and they decide to leave the organisation. As working with
shared purpose is important and considerable for the welfare of an organisation but, in case the
company is not having proper working environment and shared values and beliefs, it declines
the morale of employees and they are not feel happy in working with such organisation.
According to Jason D. Shaw and Shuisheng Shi, 2017, it has been said that turnover
whether voluntary or non voluntary, impacts very much on the organisation in different ways.
Taking an example of training which is provided by the company to their employees for the
betterment and growth of organisation. So, an organisation when provides training to its
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employees, it invests high amount in it with the expectation of getting more productivity. And if
the employees are not become that much productive after getting training, then organisation
sometimes start to treat them badly. This is also one of the reason when employees decide to
leave the company after a certain period of time. Another bad impact is related to reduced
productivity of the company. For an new employee, it is difficult for them to adjust in the new
work culture and work effectively to that extent as the existing employees do. They needs some
time to make themselves adjust in accordance with the environment prevailing in the
organisation and to know about the ways with the help of which different tasks are completed in
an organisation. But for the existing employees, these things are not much harder to do as they
know about each and every way of performing different tasks in the organisation.
In addition to this, there is also a difference in between the level of productivity of
existing and new employees. So, much pressure of work sometimes leads new employees to
dissatisfactions and they voluntarily decide to leave the organisation. Overall, it can be said that
with high employee turnover, an organisation is going in losses as it is impacting upon its
operations along with its productivity and hence impacted negatively the profits of company. So,
it becomes important for the company to adopt suitable ways with the help of which it enables to
retain employees in the organisation for a long period of time so as to prevent itself from
unwanted expenses and to maintain long term relationships with the employees working in the
organisation. Not only this, the negative culture of an organisation and high employee turnover
also impacts upon the brand image of firm in the marketplace as it is not able to retain
employees in the organisation for a long period of time.
According to Corey Moseley, 2019, there are also some ways with the help of which an
organisation could improve its relation with employees. Good relations will make it possible for
the company to retain its employees for a long period of time and to avoid the issues related to
voluntary and involuntary turnover of employees from the small scale organisation. The very
first way is the analysis of needs and preferences of employees such as related to working
environment, salary, compensation and benefits and many more which impacts upon their
decision to work in an organisation or not. As with the help of knowing the needs and demands
of their employees, an organisation could provide them with those so that there could be some
reason for them to stay and serve the organisation. For example, the working environment related
issues could also be solved by the GDC Whelson Transport by providing their employees with
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flexible working hours, more time, involvement in the decision making process etc. as this helps
to make employees feel that they are the important part of organisation. With the help of this, not
only the company will be able to retain them in the organisation but, also it will be possible to
make improvement in the working and efficiency. There are also some issues prevailing in the
organisation related to improper communication, so the improvements in this regard is also
important to maintain the level of interest of employees in the organisation. So, by considering
these factors and measures, it will be possible for an organisation whether small or big to make
reduction in the employee turnover rate of the company in short span of time.
In an organisation, retention of motivated employees is crucial for its success. Employee
retention includes all the practices which let the workforce stick to the organisation for long time.
it is the ability of company to retain its employees at workplace. To groom a new candidate,
organisations invest lot of money and time to make them ready and bring them at par with the
employees that already exist at workplace. Retention strategies are implemented by employers to
manage turnover of employees and attract quality workforce. Various measures are taken by
organisation whether it is large or small to retain employees for maximum time period. The
major reason found behind leaving an employee from organisation is frustration and continuous
friction with team members and superiors. Low motivation, lack of growth prospects and low
salary are also the reasons of leaving workforce from firm. The management and line managers
are responsible to ensure that workforce are satisfied and their job offering them learning and
new challenge every day. There are various ways that small organisations use to improve
employee retention. Some of these strategies are mentioned below:
For the success is of business, retaining employees is crucial. Orientation and on
boarding is the way to retain employees. It is the element which can last for months or weeks
that depends on organisations. The main aim of developing and on boarding process is to
familiar employees to the organization. It helps them in providing learning about the job and
culture of the GDC Whelson Transport. By this employee learn to contribute and thrive with
discussions, opportunities and goals to address issues and questions as they arrive. The another
way to retain employees is to provide them adequate compensation. In the today’s competitive
labour market, it is very essential for small companies to offer appropriate compensation
packages which includes not only salaries but also paid time off, bonuses, retirement plans,
health benefits and various perks that differentiate one organisation from another. Each
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employee must have complete understanding of all the advantages and benefits they receive from
company. employees who retain in the organisation for longer time are loyal towards the
company and its management.
Training and development is the key strategy used by small organisations for retaining
employees at work place. They invest in professional development of workers and seek
opportunities to them to grow. This will help in improving motivation level of employees and
encourage them to stay at work place. Constant communication and feedback is necessary for
retention of work force. Direct communication with employees make them feel motivated and
helps organisations to know about the concerns and ideas of employees. This will enable firm to
make improvements where it lacks. To foster team work within the organisation is also the
another way that help in employee retention. When people work collectively they can attain
more than they will have individually. It is needed by an organisation to foster a collaboration
culture at work place that accommodates working styles of individuals and let their talent shine.
This can be done through clarifying the goals of company, team objectives, business roles and
encouraging each employee to contribute their solutions and ideas. Each individual wants to feel
appreciated for the work they have done at work place. So it is necessary for GDC Whelson
Transport to introduce reward and recognition system that helps in encouraging employees to
work towards attainment of goals and objectives of company. This helps in improving
satisfaction level of work force and ensure their retention at work place.
There are various factors that can cause an individual to withdraw and look for other
opportunities. Some of the common factors which lead to less engagement or disengagement
from employees include low employee morale, financial insecurity, absence of clear path and
lack of commitment and satisfaction. All this will lead to decrease of productivity of employees
and exhibited an adverse change in their attitudes. Employees start to arrive late and left early
from work more frequently than usual. Employee retention is one of the critical issue in today’s
market as firms compete for talent. Poor employee retention leads to loss of firm’s knowledge as
when an individual leaves the company, they take their valuable knowledge with them. It is also
a disadvantage for company as for hiring a new employee, adequate time is required and high
cost needs to invest for train them. This will lead to temporary loss in effectiveness and
efficiency of company.
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