The Relationship Between Employee Retention Strategies And Employee Turnover

Project and Seminar Material for Business Administration and Management BAM

Abstract

This study was carried out to examine to examine the relationship between employee retention strategies and employee turnover using Nigerian Breweries Ota, Ogun State. Specifically, the study was aimed at finding out the effect of flexible work environment strategies on employee performance; To determine the effect of career development strategies on employee performance; To ascertain the various internal and external factors causing employee turnover in Nigerian Breweries Ota; To examine the retention strategies undertaken by management of Nigerian Breweries to reduce employee turnover; To investigate if there is a relationship between employee retention strategies and employee turnover in Nigerian Breweries.. The study employed the survey descriptive research design. A total of 100 responses were validated from the survey. From the responses obtained and analysed, the findings revealed that there is a positive significant relationship between employee retention strategies and employee turnover in Nigerian Breweries Ota. The study recommend that since job satisfaction of workers in an organization has been found to be a catalyst for employee turnover, organizations should realize that whatever gains they are currently making could be improved upon. Therefore organizations should sample the opinion of their workers to determine appropriate incentives that could enhance their job satisfaction and by extension lead to the performance of the organizationm and as engage different better retaintion strategies for the good of the organization.

Chapter One

Introduction

1.1 Background of the Study

Employee retention is seen as a phenomenon which is increasingly getting the attention of many organizations (Hong et al., 2012) as it leads to a serious problem when high performing employees leave the organization. Organizations faced with adverse outcomes when good talented workers opt to leave and these include decreased efficiency and productivity, increased costs and threat to the long-term survival and sustainability of the organization (Beach, Brereton, & Cliff, 2003). As such, talent retention has become more and more crucial for the management (Samuel & Chipunza, 2009). In this regard, Slattery and Selvarajan (2005) explained that human resource practices are capable of reducing employee turnover, where intention to leave among employees were found to be minimized when employees perceive that the organizations are providing positive human resource practices (e.g., better pay and benefits, job freedom, and job security) (Stewart & Brown, 2009). Retaining employees is a critical issue and if handled properly and effectively, it would add value and competitiveness to any organization. Employees are considered as to be the top assets of the organization and as such, it is pertinent for organizations to exert efforts to retain existing talents to prevent new recruitment. To this end, increasing employee retention has become a trend in the business organizations in countries, including Jordan. Employees with outstanding skills and talents can significantly contribute to the organization’s competitive advantage. Hence, organizations should retain such talents particularly in this challenging and unpredictable environment where change is inevitable (Samuel & Chipunza, 2009).

Employee retention is beneficial for the organization and the employees at the same time. Employees today have a lot of good opportunities in hand. The moment they feel unhappy or dissatisfy with the existing employer or the job they are holding; they will always hop to another employment. It is solely the accountability of the employer to retain their best employees. Failure of doing so may lead to the loss of talented employees. Good employers should realize what to be done to attract and retain their employees. Employees are the most vital resources of any organization. If employees are not able to use their full potential and not heard and valued, they would leave because of stress and frustration (Kakar, Raziq, & Khan (2015). Even when they remain with the organization, the feelings of frustration and dissatisfaction would lead to negative consequences that could affect performance and productivity. When these negative feelings get too overwhelmed, the employees would leave. Nonetheless, if employees get a sense of achievement and belongingness from a healthy working environment, the company would have satisfied and dependable employees contributing to the growth of the company.

Employee retention on the other hand refers to the percentage of employees remaining in the organization (Phillips and Connell, 2003). The top priority for any organization should be the attraction and retention of key employees. Even the most proficient companies can be seriously damaged because of failing to implement good employee retention strategies. A considerable investment in both time and money is required in order to find the right people. The key for all organization is to make rational decisions about retention strategies and prioritize employee’s interests (Putting People First: Employee Retention and Organizational Performance, 2011).

Employee retention is also defined as a process in which there is total encouragement to the employees to remain with the organization for a long period of time (Sandhya and Kumar, 2011). In order to increase employee’s performance, it is critical for organizations to ensure that they create and adopt employee retention strategies. A high turnover rate is a serious problem that most organizations are now facing and this is due to reasons such as poor working conditions, no career advancements, job dissatisfaction as well as lack of a decent salary package (Ivancevich, 2010). This in turn leads to low employee performance and as a result organizations have to come up with practices and policies on employee retention. This will also ensure that employees are more willing to stay in the organization for a longer time as well as having a positive impact on their performance.

According to Sandhya and Kumar (2011), retention of employees is not only important because of the costs incurred to recruit and train or just to reduce turnover. It is important because it helps organization to retain their most talented employees from being poached. When an employee leaves an organization, they take with them information that is very valuable about the organization, the current projects, customers as well as past history about the competitors to their new organization. Therefore, a good employer should be able to know how to attract and retain his employees. In order to accomplish an organizations goals and objectives, the retention of employees has proven to be a very significant factor. For any organization to be able to gain the desired competitive advantage, they need to be able to retain their employees first. With the many changes today in global economics, trade agreements as well as technology, employers need to be very careful because it is such issues that affect the employer/employee relationship (Nyamekye, 2012).

Turnover of skillful employees is a major concern of managers and administrators in today’s business world due to the costs incurred to replace and lost productivity of them. Employees leave their jobs due to many reasons, but research has shown the following as primary reasons; conflict or dislike of boss or supervisor, not fitting into the organizational culture, or being attracted to another employer who meets the expectations of employees (Phillips and Connell, 2003).. Therefore, reducing employee turnover by means of effective retention practices is the most important area of interest to any organization with highly skilled labor force.

According to Gberevbie (2010), employee retention strategies refers to the plans, means or set of decision making behavior that is set in place by organizations in order to effectively retain their competitive workforce to improve employee performance. Most researchers have found that employees will remain and work in order to ensure the achievement of organization goals is successful only when there is adoption and implementation of appropriate employee retention strategies. This study will focus on the relationship between employee retention strategies and employee turnover, A case study of Breweries, Ota.

1.2 Statement of the Problem

Every business desires to increase the productivity and lessen turnover, thereby leading to be profitable. Employee turnover supervision is an obligation to attain organizational goals effectively (Kakar, Raziq, & Khan, 2015).

However, high turnover would bring devastation to the business in the form of both direct and indirect costs. Direct costs are referred to costs such as expenses on recruitment, selection, orientation, workshop and training for the fresh employees (Gberevbie, 2010). Indirect costs are indicated to spending on education, condensed self-confidence, stress on the existing worker and the collapse of social capital. Moreover, high employee turnover will put at risk on reaching the organizational goal. To combat the challenges in the cutthroat business world, management has considered employee turnover as a major concern and initiated some measures to retain them in the organizations (Nyamekye, 2012).

However, due to the less attention, top management does not concentrate on this major issue. They are perhaps little capable of realizing the situations about how employee turnover has a detrimental effect on the productivity of the organization. Therefore, it is more significant to conduct the research on employee turnover to help business organizations by identifying their problems, analyzing the information and recommending possible solutions in recent time.

The strategies that an organization employs to retain their staff have great impact on an employee’s performance (Gberevbie, 2010). It is critical for any successful organization to understand the employees’ perspectives and measure their retention factors. A study conducted by Earle (2014), mentions that organizations should provide a good environment where people enjoy being, where they feel energized and valued and they will definitely want to stay and that negative associations are often reinforced when employees feel like they are always dragging themselves to an unpleasant environment on a daily basis.

1.3 Objectives of the Study

The general objective of this study is to examine the relationship between employee retention strategies and employee turnover, a case study of Nigerian Breweries, Ota.

The specific objectives include the following:

To find out the effect of flexible work environment strategies on employee performance.
To determine the effect of career development strategies on employee performance
To ascertain the various internal and external factors causing employee turnover in Nigerian Breweries Ota.
To examine the retention strategies undertaken by management of Nigerian Breweries to reduce employee turnover.
To investigate if there is a relationship between employee retention strategies and employee turnover in Nigerian Breweries.

1.4 Research Questions

The following questions guide this study:

The specific objectives include the following:

What is the effect of flexible work environment strategies on employee performance?
What is the effect of career development strategies on employee performance
What are the various internal and external factors causing employee turnover in Nigerian Breweries Ota.
What are the retention strategies undertaken by management of Nigerian Breweries to reduce employee turnover?

1.5 Research Hypothesis

H0: There is no positive significant relationship between employee retention strategies and employee turnover in Nigerian Breweries Ota.

Hi: There is a positive significant relationship between employee retention strategies and employee turnover in Nigerian Breweries Ota.

1.6 Significance of the Study

This study will be significance to managers and employers of labour to let them know the benefit that comes with drafting better strategies on how to make their employees feel satisfied with their work.

This study will also be of benefit to employees by bringing to their notice that a good turnover in an organization brings about a good retention strategies for the employees.

Furthermore, this study will add to existing literatures and serve as a reference material to scholars, reserachers and students will may carry out further research on this topic or related domain in the future.

1.7 Limitation of the Study

Finance, time and availability of materials were the major constraints the researcher encountered while carrying out this research.

1.7 Scope of the Study

This study focuses on the relationship between employee retention strategies and employee turnover using Nigeria Breweries Ota as a case study.

Chapter Five

Conclusion and Recommendation

5.1 Conclusion

In this study, our focus was to carryout to examine the relationship between employee retention strategies and employee turnover using Nigerian Breweries Ota, Ogun State. The study specifically was aimed at finding out the effect of flexible work environment strategies on employee performance; To determine the effect of career development strategies on employee performance; To ascertain the various internal and external factors causing employee turnover in Nigerian Breweries Ota; To examine the retention strategies undertaken by management of Nigerian Breweries to reduce employee turnover; To investigate if there is a relationship between employee retention strategies and employee turnover in Nigerian Breweries.

The study adopted the survey research design and randomly enrolled participants in the study. A total of 100 responses were validated from the enrolled participants where all respondent are active workers in Nigerian Breweries Ota, Ogun State.

The findings revealed that there is a positive significant relationship between employee retention strategies and employee turnover in Nigerian Breweries Ota

5.2 Recommendation

Based on the responses obtained, the researcher proffers the following recommendations:

Organizations should put in place appropriate staff recruitment strategies that will enable everyone seeking employment to have access to recruitment information (Newspapers, Magazines, Radio, Television and the Internet) and equal opportunity to compete for vacant position in the organization. However, where candidates are to be recruited to fill vacant positions without advertisement, such candidates should be made to pass through proper recruitment screening exercise in terms of appropriate educational qualifications, skills and experience. This will enable organizations in the public or private sector to bring into their employment competent staff required to achieve their goals.

Adequate staff retention strategies have been found in this study to be one of the major motivating factors that keep competent staff in the employment of an organization and propel them to work harder to achieve organizational goals. Therefore, the following staff retention strategies are hereby recommended:

Humane treatment of staff through words of encouragement from management to members of staff.
Informing staff on a regular basis on why certain actions are taken and the likely results from those actions.
Implementation of policies that show management’s confidence in members of staff in their day-to-day activities.
Organizational policies and practices that view members of staff as friends and partners in progress.
Policies on staff recognition and promotion that emphasize hard work, honesty and integrity rather than undue favouritism of staff arising from sentiment on the part of management staff.
Encouragement by management of intra-organizational transfer of staff to reflect new skills, educational qualifications and fresh desire to work in other sections or units of the organization.
Organizations’ ability to exhibit integrity in terms of implementation of all promises made to staff.
Devising other mode of sanction by organizations different from outright dismissal.

These could be in form of reduction in pay, rank or both. This is important because frequent labour turnover in an organization is an indication of poor performance of personnel functions of working through staff to achieve the goals of an organization by the personnel or human resource department of organizations.

These staff retention strategies are more likely to motivate staff for performance and retain them in the employment of their organization. This is because the above recommended retention strategies are more likely to engender in the workforce selfworth and confidence in carrying out their assignments for the achievement of organizational goals.

Since job satisfaction of workers in an organization has been found to be a catalyst for employee turnover, organizations should realize that whatever gains they are currently making could be improved upon. Therefore organizations should sample the opinion of their workers to determine appropriate incentives that could enhance their job satisfaction and by extension lead to the performance of the organization.

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Frequently Asked Questions

What is the difference between retention and turnover?

Retention is the percentage of employees who stay at an organization over a set period. It can also be measured in terms of the average or median tenure; the number of years that employees remain with an employer. Turnover is the percentage of employees who leave an organization over a set period. It is often reported monthly and annually.

How do I reduce employee turnover?

You can also reduce employee turnover by listening to your employees and ensuring they are as happy as possible in the workplace. Employee benefit packages play an important role in reducing worker turnover. Employee turnover refers to the rate at which employees enter and then leave a company.

How to better anticipate employee turnover?

How to better anticipate employee turnover? some more damaging than others. Collect Employee Turnover Data. Conduct Exit Interviews. Anticipate with Data. What is a reasonable employee turnover rate? A healthy employee turnover rate is one that allows your business to run smoothly and presents you with more opportunities than headaches.

Can you really reduce turnover?

To reduce your employee turnover rate then, look for ways to assist your team to develop. You might hire speakers to come in and run learning-based sessions; create company-specific training, or invest in your workers by paying (fully or partly) for them to attend university or other courses.