Research Topic: Employee Turnover Causes and Retention Strategies in Organizations
Research Topic: Employee Turnover Causes and Retention Strategies in Organizations –
PART 2:
selecting and applying methods for data collection, and time series data analysis and hypothesis testing.
Data collection
Identify the sources that will offer the information that you need to answer the research question (journals, books, internet resources, government documents, people, etc).
1. What data do you plan to acquire to answer your research question? Why? What kinds of instruments, variables, materials, or sources will you use (i.e., will you use observations, surveys, interviews, case studies, focus groups, experiments, documents, media, data base searches, etc.)? If you plan to use mixed methods, will they be sequential, concurrent, or transformative? Why?
2. List the kinds of data/information that you plan to collect (e.g., testimonials, statistics, business/government reports, other research data, audio/video recordings, etc.). Also, consider two or three alternative ways you could gather data/information for this research.
3. If you plan to use research participants, where will they come from? How will they be sampled? How many participants will you require? If you are not using research participants, who will you use as the target audience of your data? Who would most benefit from your research, and why?
4. Business research topics relate to events that develop in time.
· Explain how you would acquire a snapshot of data relevant to your research question. Within the snapshot, the data become effectively stationary.
· Consider the evolution of data with time. How would you acquire the time series data relevant to your research question?
5. What ethical issues will your research project present? What biases might you bring to the research and how will you address that bias?
Analysis of stationary data
1. What method will you choose to analyze the stationary data that you plan to collect?
2. Has this method of data analysis been applied in similar situations by other authors? Include references and illustrations from the literature to show the advantages and disadvantages of the method.
3. Attach a worked-out example of application of the method using simulated or previously published data.
4. How will you validate your findings/conclusions?
Testing hypotheses
1. State your hypotheses.
2. Explain whether your hypotheses will be tested using frequentist or Bayesian approach, and justify the choice.
3. Have similar hypotheses been tested by other authors? Include references and illustrations from the literature.
4. Attach a worked-out example of hypothesis testing using simulated or previously published data.
5. How will you validate your findings/conclusions?
Analysis and forecasting of time series.
1. What method will you choose to analyze and forecast the time series data that you plan to collect?
2. Have these methods of data analysis and forecasting been applied in similar situations by other authors? Include references and illustrations from the literature to show their advantages and disadvantages.
3. Attach a worked-out examples of analysis and forecasting using simulated or previously published data.
4. How will you validate your findings/conclusions?
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Part 1 -Proposal for reference to answer Part 2 questions
Introduction –
An organization’s most valuable resource is its employees. In today’s constantly changing business environment, Multi-National Companies (MNCs) in India are experiencing high employee turnover and retaining their core employees has become one of the significant challenges. Turnover of employees is influenced by many variables, including individual, organization, and work environments (Zhang, 2016). Consequently, it is essential for organizations to effectively manage and reduce employee turnover to meet their business objectives.
The purpose of this research proposal is to identify the factors associated with employee turnover and to help MNCs focus on their human resources practices and policies to reduce the turnover rate and improve their ability to retain their highly skilled, committed, and motivated employees. My proposed study aims to consolidate and summarize previous studies conducted by various researchers to develop a model that discloses multiple factors contributing to a higher rate of employee turnover and how it affects the employees and their organization’s performance.
Understanding these factors of employee turnover and setting effective and efficient measures would benefit the organizations to identify their problems and analyze the information that helps improvise the rate of turnover with employee retention strategies (Mamun and Hasan, 2017).
Therefore, Part 1 of my research proposal begins with a brief introduction, Literature review, problem and purpose statements, and research questions.
Literature Review
Employee Turnover
The turnover of employees refers to a circumstance in which employees leave an organization for various reasons which negatively impacts the organization’s costs and capability to fulfill its minimum needs. In addition to impacting the organization, employee turnover also affects the overall workforce of the organization. Individual turnover can also negatively affect a group’s performance (Hale, Ployhart, & Shepherd, 2016). Morale of the remaining employees may also get affected by turnover (Wynen et al., 2018).
Employee turnover is a well-studied phenomenon. Management and researchers have shown a keen interest in the turnover of workers within organizations. They have attempted to determine the effect of certain aspects of work on turnover within organizations (Mudor, 2011). Several studies indicate that over 25% of employees stay with their employers for less than a year, and more than 40% stay for less than 3 years (Holtom et al., 2013). However, there is no one particular reason why people leave organizations. Many factors contributing to turnover are combined in multivariate models, which are empirically tested to predict why an individual leaves an organization. Most studies are solely based on few variables that account for a tiny proportion of turnover variability. Studies on turnover have also been criticized for failing to capture the complex psychological processes involved in individual decisions to depart. As per Boxal et al. (2003), a study of turnover confirms that motivations for a job-change are multi-dimensional and that cannot be explained by one factor alone.
There has been a vast amount of research in the past few decades on voluntary employee turnover, defined as the act of an individual voluntarily and permanently terminating employment with an organization (Mobley, 1978). Studies have also shown that some of the significant causes of employee turnover in organizations are job-dissatisfaction, lack of commitment towards organizational, job stress, and job attitude that contribute to the high employee turnover (Iverson and Currivan, 2003). Employees feel that their workplace or job is not what they expected, and there is a discrepancy between the job and their personality. How the company treats the employees also has a significant influence on whether they stay.
According to Ma et al. (2003), “Young, inexperienced and highly educated employees tend to have a low level of satisfaction with their jobs and careers and have a lower commitment to organizations. These negative attitudes are related to turnover intention”. A long-term employee becomes tired of working in a position or unit and decides to quit. They also feel devalued, unrecognized, and stressed due to overwork or the working conditions, which creates an imbalance between their personal and professional lives. The last reason is a loss of trust in leaders. Indirectly or directly, these various factors also influence turnover intentions.
Interpersonal relationships among different departments also influence employee turnover intentions. When an organization or department has an enormous number of sections or small groups, it might be challenging for workers to work out how to relate, or when workers need to invest a lot of energy in building relations within the department or organization, are more likely to quit the position (Zhang, 2016). Employee retention will also be significantly affected by training and learning opportunities. If employees are not provided with opportunities to learn, they find it hard to improve their skills and ability to grow in their career, which causes employees to lose motivation and leave the company. Due to this inability to achieve self-realization, employees may be tempted to quit their work, thereby hindering their ability to grow while employed at the company (Liu et al., 2006).
Employees’ turnover is also impacted by the level of economic development, the labour market, job opportunities, transportation facility, housing, educational and medical resources, their living costs, and quality of life (Huang and Huang, 2006). Employees may sacrifice their current job to take a higher paying job to improve their quality of life.
According to a Comprehensive literature review, employee turnover results in high-costs and significant effects (Mobley, 1978). In addition to direct costs associated with the recruitment of new staff, the company incurs numerous intangible and indirect costs. Recruitment and training new employees are two of the greatest costs associated with turnover. A new business often takes several years to become profitable due to rising costs, and high turnover in starting a brand-new business venture to attain profitability. The cost of scheduling candidates for an interview and the hiring process is relatively high for businesses. Management’s time is affected by turnover, which creates pressure in workforce planning. It is most often resolved with the help of temporary workers or agency workers, but this is only a temporary fix. Some of the intangible costs are adverse effects on culture, employee morale, damage to social capital, and erosion of organization memory. Several experts claim that company culture also determines employee turnover. The other significant factor which may lead to turnover is a lack of recognition.
Employee Retention Strategies
Retention of employees is an effort on the part of a company to maintain a working environment that supports retaining existing employees. As employee turnover at national and global levels continues to rise, retention of skilled employees will be a major concern for organizations (Samuel and Chipunza, 2009). The term retention of employees was first mentioned to the business world in the late 1970s and early 1980s. The nature of an employer-employee relationship, which predominated during the early and mid-1900s, had not been established until then, and had a statement of the status quo: “you come work for me, perform a good job, and so long as economic conditions allow, I will continue to employ you ” (McKeown, 2002). Majority of people entering the job market during 1950s and 1960s stayed with one employer for a long time, or even their entire careers. Someone who changed jobs frequently and often was considered out of the ordinary. A career and life change were usually viewed as a significant decision. Consequently, the status quo model started to lose relevance as job mobility and voluntary job changes rose dramatically in 1970. A new phenomenon emerged for employers to consider: Employee turnover (McKeown, 2002).
The employee turnover problem remains one of the most underappreciated and underestimated challenges facing businesses. In the past decade, all multinational companies in India, found employee retention a severe and complex challenge during the past decade. Maintaining employee retention and keeping turnover rates under industry norms and target levels has become a major obstacle for businesses (Lee, 2017).
Literature has tremendously shown that retaining a valuable or functional workforce is essential to an organization’s survival and have a detrimental effect on profitability and productivity (Bogdanowicz and Bailey, 2002). According to experts, a company’s retention strategies address the various needs of employees to make them happier and reduce significant costs incurred in training and hiring new employees. To maintain a corporate strategic advantage, it is crucial that an organization retains hardworking and talented employees. Therefore, managers of the multi-national companies should be able to distinguish between valuable employees and employees who don’t contribute much to the organization, to design strategies to retain them. These strategies can vary from competitive rewards to engaging employees in all aspects of the organization’s operations (Mak and Sockel, 2001).
The authors argue that a human-resource management (HRM) strategy of the organization in general should be analyzed for local determinants and requirements in their retention strategies. Using this argument as a starting point, the study examines some of the key factors for turnover, and their consequences. A study also examined how human resource practices relate to retaining core employees. Several HR practices are analyzed specifically to identify elements that influence employee retention and determine why employees are not committed to their jobs.
Previous studies have observed that competitive salaries, friendly work environments, good and strong interpersonal relationships, job-satisfaction, and job-security are the key motivating factors leading to employee retention (Samuel and Chipunza, 2009; Maertz and Griffeth, 2004). Hence, each organization must determine the best ways to retain its employees. Biswas and Varma (2007) suggest that Indian MNCs should be more sensitive to employee perceptions of the workplace and provide a productive and supportive environment by caring and showing concern.
Trust, morality, and respect from the management team are the most important factors for employees. They will stay in an organization if they are appreciated, treated with respect and care. Building a strong relationship within the organization is key to avoiding employee dropout, as this problem affects many organizations besides trust and morality. Employees prefer a workplace that provides open communication and access to management has approachable and respected executives who provide clear and understanding direction (Huselid, 1995).
Effective communication and valuable feedback lead to interpersonal relationships and makes them feel valued and heard. It helps them openly share their views and opinions, which can help in the growth and success of the organization. Furthermore, the study suggests that to overcome the most significant challenges of retaining employees, HR managers should transition to custom-made HRM systems (Agarwala, 2003) which indicates that employee’s intention to leave decreases by half when the employee’s perception of HRM practices increases by 1 unit. Employees’ perception of their organizational fit is determined by their perception of their compatibility in the organization they work (Ghosh & Gurunathan, 2015).
Organizational culture plays a significant role in a worker’s fit (Ma et al., 2018). A well-developed organizational culture is vital in influencing employees to stay within the organization. If the work environment, culture, or organizational structure is unsatisfactory, there is a high probability of employees leaving their jobs (Mowday et al., 1982). Therefore, implementing the best organizational culture impacts employee’s behaviour and performance resulting in job satisfaction. Companies can get the best quality of employees, promote employee performance and engagement, and encourage them to become more committed to the company.
Training programs, seminars, workshops, professional development programs, and career opportunities help employees to improve their performance and productivity. Providing a tailored training program makes employees more capable and efficient in their roles and appreciates their talent and value leading to professional and personal growth. Hence, management can create opportunities for employees to develop their skills and competencies by working on tasks that challenge them and encourage them to take responsibility.
Recognizing employees’ achievements and rewarding employee efforts is a manager’s responsibility. The employees who exceed their management’s expectations and targets desire to be praised and acknowledged by their supervisors or managers for their accomplishments (Bussin & Van Rooy, 2014). Appreciating employees for their work serves as incentives brings satisfaction and a feeling of importance that motivates them to stay and contribute more to the organizational goals. Additionally, Gonzalez et al. (2016) also specified that employers might increase organizational embeddedness recognizing and enhancing achievements and by introducing work-life programs that promote a family- and friend-oriented environment.
Competitive pay and benefits are imperative factors – such as flexible schedules and hours, coupons, perks, and bonuses. Providing additional benefits such as dental insurance, educational benefits, and pension schemes also reduces employee turnover, making them more productive, dedicated, and engaged in their work and organization. According to Kaushalya, & Perera (2018), work-life balance is gaining attention in corporations, becoming a concern for employers, and affecting employee retention. When employees find a balance between their work and their free time, they are more likely to remain at their jobs (Ambrosius, 2016). de Sivatte, Gordon, Rojo, and Olmos (2015) find work-life balance serves as a mediator to address work-related issues, such as health stress, absenteeism, and labor retention, and to promote a sense of social responsibility in corporations. Employers and managers should provide emotional support to their employees to reduce employees’ stress caused by overwork and provide better work-life integration.
Therefore, to build a lasting, sustainable retention-rich culture, Employee Retention Strategies helps organizations understand the underlying contributors to retention and make the necessary changes. Developing and implementing a good employee retention strategy is an absolute necessity at the same time inevitable in any organization. However, human resources must keep the basic practices in mind when planning their employee retention strategies –
· Start by hiring the right people.
· Empower them by giving absolute authority to accomplish things in the best way possible.
· Make employees realize that they are valuable assets of the organization.
· Encourage employees to realize they are a vital part of the organization’s success.
· Have faith, trust, and respect in them
· Share information and knowledge with them
· Provide continuous feedback to them on their performance.
· Appreciate and acknowledge their accomplishments
· Ensure their morale remains high
· Provide fun and fulfilling working environment for employees.
These retention strategies are critical for the successful operations of multi-national companies and any other organizations. Implementing and practising these retention strategies effectively strengthens the relationship between employees and employers. It not only increases the commitment in employees but may further boost the management efforts in promoting a social change. Thus, a reduction in turnover may enhance employee and organizational productivity, growth, and success.
Problem Statement
Multinational companies (MNCs) in India are experiencing high turnover rates of employees, which have become an organisational issue that cannot be adequately addressed individually. The study examines the factors influencing employee turnover and aims to develop a motivation and relationship-building model to help manage employee dropouts and retain them. Forbes reports that Mercer’s survey demonstrates that 54% of Indian workers are seriously considering quitting their job, and that number spikes to 66% among young workers. As per KPMG’s 2017 Compensation Trends Survey India, the top 3 reasons for attrition are:
· Better Pay Elsewhere (28.1%)
· Better Career Opportunities (23.4%)
· Personal Reasons (19.6%) (Sayak,2019)
The high turnover rate among individuals after they are trained and experienced causes them to move on to different organizations for better employment opportunities. Lucrative salaries, flexible schedules, and an opportunity for advancement are factors forcing employees to consider a change that alienates customers hampers productivity and threatens the company’s continuing profitability. In addition, they demoralize remaining employees by overloading them with work to cover the quitters’ work and train their replacements, thus igniting a wave of resignations and leading in a spiral of employee turnover. Therefore, it is imperative for an organization’s management and human resources team should act immediately whenever a talented employee states that they are willing to move on.
Purpose Statement
The primary purpose of this qualitative study is to determine the factors and reasons for employee turnover in MNCs of India and discover various possible strategies for minimizing turnover and retain employees in the organizations based on the perspectives of relevant literature. The study evaluates a bundle of HRM practices and organizational commitment concerning employee intentions to leave and the mediating effect of HRM practices on their relationship. It aims to protect people’s interests in organizations with the aid of coordinative and collaborative action between employees and workers to achieve effective and healthy working relationships.
Research Questions
· What are the key reasons high employee turnover rates in MNCs?
· How does the organization’s hiring and retention process influence employee turnover base on employees’ perceptions?
· What are some of the most influential HRM factors that encourage core employees to remain in the organizations?
· What are the key barriers encountered in implementing employee retention strategies?
· What incentives or initiatives, from the employee’s perspective, are the most beneficial for employee retention?
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