CAUSES OF EMPLOYEE TURNOVER IN THE ORGANIZATION
CAUSES OF EMPLOYEE TURNOVER IN THE ORGANIZATION
Employee turnover is the rate increase and decrease or hiring and terminating of labor and manpower this can be controlled or manipulated by organizations depending on their present conditions. The human resource department is the one who control the flow of the turnover of employees. This can also arise according to the demand like expansion, special projects, temporary employment etc. they will hire employees in this conditions but at the same time they are given tenure of how long they are going to perform the job, especially the works of field research usually last depending on project basis. But there are also times that employee’s turnover may arise out of necessity these are external reasons of turnover like the threats of war, economic conditions or environmental factors like earthquake and flood that cannot be controlled. Through these reasons they may dismiss or terminate employees unconditionally or they may also arrange a floating condition of their employment. High rate of employee’s turnover may represent poor performance of the organizations while on the other hand if the turnover of employees in an organization is low this may show that employees and employer are satisfied in their conditions.
Organizations may hire employees but most of them will stay on the organizations according to the tenure or contract of their employment. They would hire employees on a contractual basis but the question remains; how long are they going to stay? Or what will be the ground for their retention? These are some of the simple ways that causes the rate of employee’s turnover, companies nowadays only hire employees for at least 5 to 6 months then later on change their employees they can also absorb contractual employees depending on their performance. There are also internal reasons of employee’s turnover when management believed that there are grounds to terminate employees because of their poor performance they may tend to replace them.
The contractual basis and agency hiring of organizations is also the constant reasons of high rate of employee turnover. In most countries and organizations all over the world they found agency contract workers very efficient to control employee turnover, they hire employees coming from manpower resources instead of hiring them directly. The agency will act as a middle man, a barrier to eliminate their release of benefits for employees, they are employed by the agency and not to the company that they have served this means that the company is free from any obligations coming from their employment, if they have any argument about salary and benefits they will need to seek the agency and not the company they have worked for. Through this engagement companies are protected and their employees turnover are controlled but usually it is the employees who suffered because they may not be able to get the benefits they deserve knowing that they are not employees to the company that they have worked for but a representative of the agency.
Cost cutting is another reason of employee’s turnover in most parts of the world organizations tend to reduce their overhead and maximize their workforce. Organizations also uses technology as the primary reasons for the employee turnover, in agriculture and manufacturing industries during the 60’s usually farmers and factory workers uses manual labor but during the late 70’ to the present times the works of 10 people can be done by a single person using the machineries, tractors, fertilizer and other gadgets. Through this system they may rationalize and think of utilizing the availability of low employment rate that they can easily fire and hire workers to their advantage. There are also voluntary turnover when an employees resign in their position if they feel that they are not being paid fairly or if they found another opportunities in other organizations and other personal reasons. They may also tend to resign if they believe that they are not growing in the company or they are overworked yet they seem to have no recognition or promotion this created stress and pressure to seek employment from other companies. Involuntary reasons may also arise if employees grown too old or they do not have the physical and mental capacity to work usually benefits and rewards are given to regular employees only.
Organizations tend to reduce their workers or hire workers from other locations to reduce their cost. This is the usual strategy of Business Process Outsourcing companies in most Western countries they hire the best English speaking nationalities and pay them to their advantage. Organizations like IBM, JP Morgan and Chase, Convergys and many other companies has gain enormous productivity when they outsourced this also reduced their overhead cost but they also limit the opportunity of employment in their country. Barrack Obama the US president opposed the outsourcing practices of companies in US because of the high rate of employee turnover. Obama warns BPO companies that they will withdraw their incentives according to the house bill 3696 (US consumer protection acts) this is due to 13.5 million unemployment rate in the US as of 2011, this represent unemployment rate of 8.5% considered as one of the highest employee turnover because of outsourcing although much better compared to 10% in 2009. The bill is still under scrutiny and has not yet been implemented but it poses a threat of massive unemployment of countries like India and in the Philippines if BPO companies shift back their operation in US.