Employee Turnover in the Hairdressing Industry: Hershesons Case Study

This report examines the issue of high employee turnover in the UK hairdressing industry, focusing on a case study of Hershesons. The research aims to identify factors contributing to high turnover rates, analyze the impact of performance management systems on employee behavior and performance, and suggest strategies for improving employee retention. The report includes a literature review exploring various perspectives on employee turnover, such as job satisfaction, organizational commitment, work-life balance, and career opportunities. The business issue is identified as high employee turnover, which negatively impacts productivity, profitability, and customer service. The report highlights factors like ineffective human resource management, inconsistent performance management systems, and inadequate reward systems as contributing causes. The study proposes that Hershesons should focus on improving its performance management system, creating effective reward systems, and enhancing human resource practices to address the issue. The report also considers the impact of external factors such as changes in employment law and the need for investment in human resource development. The conclusion stresses the importance of addressing turnover to improve organizational performance and maintain a skilled workforce.

Business Project

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1. Research aims and Objectives............................................................................................1
2. Business Issue.....................................................................................................................2
2. Literature review..........................................................................................................................3
Case analysis and discussion...........................................................................................................6
Reliability and validity of data.............................................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
Hair dressing industry in United Kingdom is growing at a rapid rate. The hair dressing
industry in United Kingdom is contributing a lot towards generation of employment in nation.
Besides this, organisation operating business in hair dressing industry has to face major issues
due to increase in competition and continuous changing business environment. Different
problems faced by an organisation have direct impact on the business performance and it also
has some influence on employees' performance. There are several issues faced by hairdressing
industry in context of employment, working condition, etc. Companies operating in hairdressing
industry make huge investment in training and development of employees. But still, due to
ineffective as well as inconsistent performance management system, there is high level of
dissatisfaction in workers due to which organisation has to face the issue of high employee
turnover rate. This specific problem has significant influence on the employees as well as
organisational performance.
Purpose of report is to analyse impact of performance management system on employees'
behaviour as well as performance in Context of Hershesons organisation.
1. Research aims and Objectives
Background of the study
Employees are considered to be as an important resource which drives firm towards
achievement of success. Retaining the highly talented as well as skilled workforce is very much
important in context of business growth. Hairdressing industry in United Kingdom is the fastest
growing sector. This industry is known for innovation in both hairdressing techniques and style.
An organisation operating business in hair dressing sector make huge capital investment on
providing training to workers. Many of the companies in hair dressing industry has their own
training schools as well as academies. In context of
Hershesons, business entity has two training centres (Hendry, 2012). This organisation is best
known as the professional hair dressing saloon in UK which operates blow dry bars and operates
online business for professionals styling tools. Despite this, business entities operating in this
sector have to face difficulty in attracting the highly talented as well as skilled employees, as
people have perceives that hair dressing business is low or unskilled occupation.
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Aim of the study - To access the factors which has led to the high employee turnover rate in
hairdressing industry – A case study of Hershesons
Research Objectives:
 To develop understanding about the factors which has contributed to high employee
turnover rate in Hershesons.
 To analyse the impact of employee performance management system on employees'
behaviour and performance at workplace.
 To Identify the issues or challenges faced by Hershesons in retaining employees.
 To suggest the strategies which can be adopted by Hershesons for dealing with issue of
high employee turnover rate.
Rationale of the study:
Reason for selecting specific topic is to determine factor which has led to employee
Turnover rate. This is the major issue faced by majority of an organisation operating in
hairdressing industry in United Kingdom. The various debates have been on the topic factors
contributing to the high employee turnover rate in hairdressing industry in UK. In addition to this
another rational is that scholar want to find out the root cause of problem. Another reason for
selecting the specific research topic is that scholar intends to support companies facing the issue
of employee turnover rate to overcome problem. Rise in operational performance such as
attaining large numbers of consumers will result in effective fund raising.
2. Business Issue
In present dynamic business environment, it is becoming a challenging for an enterprise
to hire the right people who can do the job as well as those individuals can easily adjust
themselves into an organisation working culture. Failure to overcome this issue can result in high
turnover of employees. High employee turnover rate is the major issue which has direct as well
as significant effect on organisational performance as well as customer services. Staff turnover
rate is defined as the number of permanent employees leaving the company. In context of
Hershesons organisation high employee turnover rate lead to decrease in productivity. In
addition to this employee turnover rate major issues which has built barriers in operational
activities which has led to the decrease in Firm profitability and sales. There are several factors
which have given rise to the problem of high employee turnover rate these are ineffective human
resource management. Few other factors are inconsistent performance management system is
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major factors which has negative effect on employee behaviour as well as performance within a
company. Improper reward system has led to the increase in high level of dissatisfaction in
workers which has given rise to high employee turnover rate in Hershesons. High employee
Turnover rate is major issue of concern for management as this problem have great effect on firm
reputation as well as direct influence on working culture. Due to high employee turnover rate an
enterprise is facing difficulty in achieving business objectives. In addition to business entity has
to face short as well as log term losses which has negative effect on growth of firm. In context
of, due to the high employee turnover rate and changes in laws, business entity has to face
regulatory pressure (Kusluvan and et. al., 2010.). There are several other constituents which lead
to high employee turnover rate. These are environmental factors, business policies, recruitment
practices , personal factors etc. Influences of various issues has affected the operational practices
as well as improper allocation of funds in all the tasks.
Hershesons organisations is taking high initiates in order to deal with the issue of high
employee turnover rate. It is required by an organisation to bring consistency in performance
management system and to create effective reward or incentive system. Business entity need to
bring improvement in human resource practices as well as business policies. Human resource
manager in an enterprise needs to concentrate on identifying the problems faced by workers. In
addition to this manager in firm should concentrate on assessing the methods or techniques for
providing high level of satisfaction to workers (Armstrong and Taylor, 2014.). Changes in
employment law in the future will give rise to other issues as well as challenges for companies in
context of managing human resources. It is required by the firm to make huge capital investment
in developing human resources, as it will support business in dealing with human resource
management or employee turnover issue.
The focus of present study is to develop in depth understanding or gain knowledge about
factors which has led to high employee turnover rate in Hershesons .In addition to this
consideration will be made on analysing the impact of performance management as well as
reward system on employees' behaviour and performance at workplace.
2. Literature review
As per the view of Simile and Minear, (2003), who stated that financial situation of
companies operating in hair dressing organisation is making difficult for business entity to offer
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reliable career prospects. On the other hand, Loquercio et al., (2006) argued that inflexibility in
performance management system is the root cause of employee turnover rate in hairdressing
sector, career prospect is the issue associated with hiring new employees. According to the
perception of Hom and Kinicki (2001), higher job retention is related to the factors such as job
satisfaction, organizational commitment and behavioural intentions. The author (Emmens and
Parry (2006) believes that workers tend to be satisfied with their job and exhibit a strong
affective attachment to their company if they are completely satisfied with their job. Author
Loquercio et al., (2006) argued that workers or employees might leave job despite having strong
commitment as well as intention to stay. As an organisation might terminate the workers after
completion of specific project. According to the perception of Tziner and Vardi (1984) who
perceives that high altruistic values is the factor which encourage employees to retain their job.
The Authors Mehay (1990) believes that altruistic values is the important factor which motivates
employees to remain committed and work for benefit of an organisation (Bowen,1986).
According to the author Steel and Lounsbury (2009) attitudinal models of turnover, is successful
in hairdressing industry which can support companies in dealing with the issue of high employee
turnover rate. As per the view of Loquercio et al., (2006) who believes that difficulty in making
work life balance as well as lack of career opportunities are important factors which has direct
influence on employees decision to leave or retain job.
According to the opinion of Benkhoff (1997) retention is driven by different important
factors such as business strategy, culture within a company, career development as well as
performance management system (Schneider and Bowen, 1993). The author Day (2000) argued
that , if in case an organisation fails to rein highly talented workers, this issue can have negative
impact on financial performance of company. As per the view of Davies (2001) high employee
turnover might lead to production loss, poor customer relationship etc. He highlights the
significance of retaining the highly talented as well as skilled employees.
According to the perception of Rosenfeld, (1992) who stated that unclear policies as well
as poor working condition is the crucial factors which give rise to high employee turnover rate
in hairdressing industry. As per the view of March (1994), working experience by an employee
in an enterprise plays have effect on the workers decisions related to retaining job (Bowen and
Lawler, 1992). The author Cardozo (2003) believes that stressful environment as well as
traumatic experiences can lead to the high level of dissatisfaction in employees which might
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further result into high staff turnover rate. According to the view of Curling and Simmons (2010)
who perceives that Security concerns as well as cultural challenges are the two major sources of
stress. The author Danieli, (2002) perceives that security situation often constitutes a major
stressor for employees. As per the opinion of Stoddard, (2009), who think that unsafe physical
conditions in context of hygiene, medical facilities, transportation are the main factors which
influence the decision related to retaining the job. If in case, company fails to provide these
facilities, it gives rise to issue of high employee turnover rate. Author Naumann, (1992)
perceives personal factor such as difficulty in executing work can lead to the demotivation as
well as dissatisfaction in employees, due to which an individual might take decision to leave the
job.
According to the view of Koenigsberg, (1994) who think that Individual personality and
skilled posses by them have influence on employment opportunities as well as affect re
enlistment decisions. As per the perception of Garet and Rosenbaum (1994), few constituent like
marital status, gender, are essential factors which force or encourage people to leave job.
According to thinking of Feldman, (2009) existing workers have strong attachment with
their company or employer, generally exhibit lower rates of job mobility. As per the study
conducted by Krecker (1994),limited availability of better employment alternatives and the
reduced focus on career advancement are the two causes of high employee turnover rate in hair
setting industry in United kingdom (Medsker, Williams and Holahan, 1994). According to the
research conducted by Royalty,(1998)key predictor for job turnover is gender, Men are less
prone to exit the job as compared to women. The author Hakim argued that men as well as
women have different preferences which further result into divergent labour market pattern. As
per the study conducted by Reilly (1994) who during his investigation process found that limited
career promotion opportunities at workplace is the important reasons due to which female
managers have decided to leave the job.
The author Mills and Blossfeld (2006) believes that permanent relationship has positive
effect on retention. As per the view of Mulder and Wagner, (2001) who said that it is required by
manager to develop strong relation with employees by listing to their problems as well as
providing with them with suitable solution. As this strategy will assist business entity in retaining
the highly talented as well as skilled employees.
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According to the opinion of Telford and Cosgrave, (2006) who have said that employee
turnover rate has direct as well as major effect on operational effectiveness and efficiency. As
per the opinion of Curling (2010) who said that it is required by companies to provide safe
working environment and organised leisure activities for workers, as this strategy will help firm
in providing high level of satisfaction to employees. As per the perception of Arthur (1994) who
has stated that commitment strategies can assist an organisation in motivating employees top
improve their performance. It will also support human resource manager in dealing with the
issue of high employee turnover rate. According to the study conducted by Ramlall, (2004)
manager in an enterprise is required to develop employee retention programs which will aid
business entity in reducing turnover cost which will further help an organisation in increasing
productivity.
Case analysis and discussion
An organisation invest lot of time, resources and efforts in developing their employees.
Staff turnover rate not only lead to loss of talented and skilled workers but represents a loss of
the company resources invested in making workers professionals.
The average number of employee in hair dressing industry in United kingdom from 2012 to
2017, split by full-time and part-time workers. For full-time salon employees, the UK there is
great decline that is from approximately 2.4 in 2014 to 1.5 employees in 2016 (Boxall and
Purcell, 2011). There has no change in the ratio of part-time workers during 2012 and 2013. This
data has been collected by facilitating the online survey.
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The Hershesons has highly talented as well as skilled workforce. Business entity make
investment in developing resources. Despite this an organisation have to face high employee
turnover rate, as workers are not paid with extra amount of money or incentive for the extra work
done by them. High staff turnover rate is the major issue for management in Hershesons
(Hershesons. 2018). As this specific problem has direct as well as significant effect on business
performance. In addition to this high employee turnover rate also have great impact on firm daily
operation as well as productivity. In context of Hershesons organisation, high mobility of staff
which has great influence on customer services as well as effect on financial performance of
company.
Ineffective reward system has led to the high level of dissatisfaction in employees. The
another factors which has given rise to employee or staff turnover rate is that once an individual
get expert in particular field or activities, He or she has been forced to execute same task. There
has been high workers turnover from assistants to reception. Employees as well as workers are
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Illustration 1: Average number of employees in hair and beauty
salons
Source: (The Statistics Portal,2018)

being paid with minimum wage. Inappropriate training are provided to workers which has direct
as well as negative influence on their as well as business performance. In addition to this
business entity has to face legal issues due to failure to comply with employment law. There is
no other career opportunities for workers which has given rise to the issue of high employee
turnover rate. Due to political culture within an enterprise as well as strict rules, the company is
facing difficulty in hiring talented employees as well as retaining existing workers.
An organisation has ineffective human resource management. Employees are not paid
money for sick leaves. Due to long working Hours employees face difficulty in maintaining the
work life balance. Company have strict polices for instance, human resource management in an
enterprise expect an individual to have a sick note if a person. Employees are not provided with
real structure to the hair training. There is in no refreshment and other basic facilities are
provided by Hershesons to its workers which has given rise to the issue of employee turnover
rate. During the survey, the fact which has been found is that staff turnover in Hershesons has a
negative financial effect due to the cost of recruiting, hiring, and training a replacement
employee. In addition to this human resource manager in Hershesons company faces difficulty
in replacing staff. Business entity experience regular problems with employee retention.
There are several methods as well as techniques can be used by manager Hershesons, for
retaining the employees for long time. But before that let have look at the tactics or approaches
used by other organisation in hair dressing industry for reducing the staff turnover rate.
Strategies or tactics adopted by other companies such as Gielly Green salon, manager of
company have focus on developing as well as maintaining the working environment. Creating
the effective and safe working environment assist firm in attracting more number of customers.
Environmental Employees retention strategy covers mainly three fundamental aspects such as
ethics , values and company policies (). As three factors have direct as well as significant
influence on employee behaviour, performance and decision related to the retaining the job.
Other companies such as Gielly Green salon have consistent recruitment as well as performance
management system, which has assisted business entity in retaining employees.
In context of Hershesons organisation, dilemma facing business entity is whether to
invest more time and money fine-tuning their recruitment strategy or to pay extra attention to
retain the existing employees (Becker and Huselid, 2006). As hiring new workers can be more
costly, stressful and time consuming procedure. It has been analysed that in Hershesons
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majority of workers in an organisation are completely dissatisfied with performance management
and reward system. Human resource management in order to overcome the issue of high staff
turnover rate need to concentrate on developing the effective reward system.
Hezberg theory of motivation, which states that there are two dimensions of job
satisfaction such as satisfiers as well as dis-satisfiers (Hendry, 2012). As per, Hezberg theory
business entity can retain its employees by providing high level of satisfaction to workers. The
dissatisfying factors include management system, working condition, leadership, working
conditions etc. Hezberg theory, is based in the assumption that there are several constituents such
as promotion, responsibility, recognition, achievement helps an individual to get high level of
Job satisfaction (Brewster and Hegewisch, eds., 2017). These variable encourages individual to
remain committed to their tasks and positively influence employees to work for benefit of an
organisation.
According to a collection of recent surveys on employee retention, only twenty-five
workers during the interview has stated that financial stability motivates them to stay in a job. On
the other hand, majority of workers that is seventy five percent have said that health care and
insurance concerns keeps them in their job. In context of Hershesons, human resource manager
in an enterprise is required to develop that money has much value for employees as compared to
other things or factors.
In context of Hershesons, management in an enterprise has decided to make linen
policies as well as rules in order to provide satisfaction to workers. New fair as well as
important rules are designed as well as enforced by management in an organisation (Love and
Singh, 2011). Manager in an organisation to ensure that salaries or wages which company is
providing to its workers should be comparable to monetary benefits provided by other business
entities to employees.
Motivating the staff will be an adequate technique in bringing the suitable control and
operational advantages to the firm. Professionals in entity needed to have effective management
of each issues and operations which will enhance the operations. along with this implicating the
leadership theories will be effective in executing the operational performance made by
employees in the organisation.
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Nature of the job is the important determinant of employee turnover. Many of employees
in a firm leaves the company as they find difficult to perform the task allotted to them. This is the
factor which also leads to demotivation as well as high level of dissatisfaction in an individual.
Human resource manager has frame policy that each and every employee in an
organisation will be allotted work on the basis of their skills, capabilities as well as core
competencies. In addition to this management in Hershesons, has taken decision that promotion
as well as incentive will be provided to employees who make their significant contribution in
driving firm towards accomplishment of objectives (Kusluvan and et. al., 2010. ). There are three
basis parameters are being fixed by human resource manager on the basis of which employees
performance will be judged. These parameters are Loyalty, productivity and quality of work.
It has been analysed during the survey that manager in Hershesons, found that strategy of
hiring of new employees are doing so with the expectation that more employees will be quitting
in the future has led to the increase in staff turnover rate. According to the view of managers in
Hershesons who perceives that new employees will retain in job for long time, if they were
better informed during the hiring procedure. Many authors have opinion that a poor onboarding
experience for a new candidate or worker builds a foundation of negativity in the new job.
The other strategies which can be used by human resource manager for reducing
employee turnover rate are workers growth strategy. It has been analysed through research that
Over 50 % of leave their Job within two years due to lack of career opportunities (Hendry,
2012). Manager in Gielly Green salon, organised timely training and development programs for
its employees. It has been analysed that in workers in Hershesons organisation are not being
provided with appropriate guidance as well as training by leaders. This factor has lead to the
high level of dissatisfaction as well as demotivation in employees (Hendry, 2012). It is required
by management in an enterprise to provide personal as well as professional growth opportunity
to workers. As employees wants to develop new capabilities as well as skills in order to increase
their value in corporate world. Manager or leader in business entity should invest some time in
exploring the needs of workers and should identify the way to fulfil their demand. As this tactic
will assist manager in developing long term relationship with employees and positively
influencing them to retain their job. Many authors also have opinion that if an organisation
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