Factors causing staff turnover

MINISTRY OF EDUCATION AND SCIENCE OF RUSSIA

Votkinsk branch

federal state budgetary educational institution
higher professional education

Izhevsk State Technical University named after M.T. Kalashnikov”

(VF FGBOU VPO “IzhGTU named after M.T. Kalashnikov”)

Department: “Economics and organization of production”

To allow protection “____” _________ 2013

Head of Department ______________ V.G. Tarasov

Graduate work

TOPIC: Development of measures to reduce staff turnover in the Votkinsk branch of the Construction Department No. 8108 of the Federal State Unitary Enterprise of the Main Directorate of Special Construction No. 8 under the Special Construction of Russia

SETTLEMENT AND EXPLANATORY NOTE

Completed by a student of the group VZ 11-21-2 (5.6) __________ Kovalenko V.V.

The head of the work is an engineer of the 2nd category __________ M.V. Golubeva

Expert on Professor, Doctor of Technical Sciences __________ B.A. Sentyakov

labor protection

Chairman Associate Professor, Candidate of Technical Sciences ____________V.G. Tarasov

expert commission

Votkinsk, 2013

CONTENT

INTRODUCTION

The relevance of research. It is difficult to argue with the fact that the personnel of the organization is the main resource of the company. Today, most managers are convinced of the importance of personnel policy issues, because no matter how good the idea is, the employees of the organization bring it to life. And only a well-chosen work team, a team of like-minded people are able to realize the serious tasks facing the company.

One of the important and complex management problems is to ensure sustainability in the functioning of enterprises and organizations in the conditions of an economic crisis and thereby reduce the negative effects of the cyclical phenomenon. Today, the instability of economic development is directly manifested in the growth of staff turnover in organizations of all types and forms of ownership.

Turnover depends on many factors (the specifics of the business, the geographical location of the company, the stage of development of the company, the qualifications, education and age of the employee), so each company determines its ideal level of staff turnover.

In the Russian manufacturing sector, a turnover of about 10% is considered optimal. In a rapidly growing business, especially at the stage of mass hiring, the turnover rate can be just over 20%. In the restaurant and insurance business, 30% annual employee turnover is not a concern, and for some retail chains, even 80% turnover is considered normal.

In large cities with a large labor market, the average rates for all industries vary from 10% to 20%. And in a small provincial town, this figure can be as low as 5% only because in this area there are much fewer opportunities to find other work.

The percentage of the norm also differs for different levels of personnel: for the managerial level, the turnover should not exceed 5%, for line personnel 10-30%, for unskilled personnel – 80%. It has been noticed that the lower the qualification, the greater the desire to change jobs.

And yet, the rate of employee turnover depends not so much on any standards, but on the personnel strategy of the company. Practice shows that the main reason for dismissal is the dissatisfaction of employees with their position.

For many companies, high employee turnover is one of the most pressing problems. Therefore, it is important to learn how to manage staff turnover: identify its causes, keep statistics and take appropriate measures in time.

If the company has a high staff turnover, you need to constantly look for replacements for departing employees, adapt and train newcomers, and solve the problem of continuity and preservation of commercial information. Companies with high employee turnover find it more difficult to form an image of an attractive employer and create a favorable climate in the team. Therefore, it is no coincidence that staff turnover is one of the main indicators characterizing the effectiveness of the human resource management system in a company.

However, despite the demands of practice, science has not yet developed a holistic concept and technology for managing this process. In this regard, the question of finding ways to evaluate and reduce staff turnover remains relevant.

The relevance of the research topic of the diploma project “The problem of staff turnover and ways to reduce it” determined the purpose of the study:

The purpose of the study: to study the problem of staff turnover at the enterprise and develop measures to reduce it.

Research objectives:

1. Explore modern approaches to assessing staff turnover.

2. Identify factors that cause staff turnover.

3. Explore methods to reduce employee turnover.

4. Analyze the staff turnover in the branch “SU No. 8108” of the Federal State Unitary Enterprise “GUSST No. 8 at Spetsstroy of Russia”.

5. Identify the causes of staff turnover.

6. Develop measures to reduce staff turnover.

7. Assess the economic efficiency of the implementation of measures to reduce staff turnover

Object of study: branch “SU No. 8108” of the Federal State Unitary Enterprise “GUSST No. 8 at Spetsstroy of Russia”.

Subject of study: staff turnover.

The structure of the graduation project: the graduation project consists of an introduction, four chapters, a conclusion, a bibliographic list and appendices.

1 THEORETICAL FOUNDATIONS OF THE PROBLEM OF STAFF TURNOVER AND WAYS TO REDUCED IT

1.1 Modern approaches to assessing staff turnover

Today, employee turnover is also one of the many problems that modern businesses face.

When analyzing labor turnover, it is common to start with the concept of “personnel movement”.

Under the movement of personnel of the enterprise we will understand the totality of all cases of admission to the enterprise of workers from outside and all cases of departure from the enterprise.

In previous years, this problem attracted the attention of economists in connection with the undoubted damage that turnover causes to the national economy of the country.

Fluidity, on the other hand, was usually understood as the phenomenon that seems to be the direct cause of the damage indicated, namely, the spontaneous, unorganized movement of labor.

Roger Bennett, professor of sociology at the University of London, offers the following definition:

“Workforce turnover is the movement of workers to/from the company’s staff. Typically, employee turnover is tracked by registering those leaving and assuming that a new employee will be hired to replace the quit.”

Currently, staff turnover in management theory is understood as the movement of the workforce, due to the dissatisfaction of the employee with the workplace or the dissatisfaction of the organization with a particular employee.

Fluidity and its impact on the activities of the organization L. Nikiforova proposes to consider in two aspects: quantitative and qualitative.

In the first case, it is necessary to distinguish between natural and increased levels of turnover: a natural level within 3–5% of the headcount and an increased one, which causes significant economic losses.

The natural level contributes to the renewal of production teams. This process takes place continuously and does not require any emergency measures on the part of personnel services and management. Some employees retire, some leave for various reasons, new employees take their place – every enterprise lives in this mode.

As a result, there are opportunities for personnel changes and career growth for the remaining best employees, which is an additional incentive for them.

Another thing is when the fluidity significantly exceeds 3-5%. In this case, the costs become significant and increase with an increase in the outflow of personnel [34]. Then the company suffers losses, which increase with an increase in the outflow of personnel.

First of all, these are lost profits and a drop in labor productivity. High turnover reduces the staffing of jobs by performers, distracts highly qualified specialists from work who are forced to help newcomers, worsens the moral and psychological climate in the team, which prevents the creation of a team, and reduces the productivity of those who are going to leave [21].

The staff of the enterprise in terms of numerical composition, skill level is not a constant value, it changes all the time: some workers are fired, others are hired. Various indicators are used to analyze (reflect) changes in the number and composition of personnel [30].

O.P. Korobeinikov, D.V. Khavin and V.V. Nozdrin proposes to use such as: the average number of employees, the coefficients of admission, retirement, stability and staff turnover:

1. Indicator of the average number of employees ( ) is determined by the formula:

, (one)

where: P 1 , P 2 , P 3 … P 11 , P 12 – the number of employees by months, people.

2. The recruitment rate (K p ) is determined by the ratio of the number of employees hired by the enterprise for a certain period of time to the average number of personnel for the same period:

, (2)

where: P p – the number of employed workers, people;

— average headcount, persons.

3. The attrition rate (K in ) is determined by the ratio of the number of employees laid off for all reasons for a given period of time to the average number of employees for the same period:

, (3)

where: Р uv – the number of laid-off workers, people;

— average headcount, persons.

4. The personnel stability coefficient (K s ) is recommended to be used when assessing the level of organization of production management both at the enterprise as a whole and in individual departments:

, , (4)

where: — the number of employees who left the enterprise of their own free will and because of a violation of labor discipline during the reporting period, people;

– the average number of employees at this enterprise in the period preceding the reporting period, people;

P n – the number of newly hired employees for the reporting period, people.

5. The staff turnover rate (K T ) is determined by dividing the number of employees of the enterprise (workshop, section), retired or laid off for a given period of time, by the average number for the same period:

, (5)

where: P uv – the number of retired or dismissed workers, people;

—average headcount, persons. [18, p. 58-60]

L. Nikiforova offers the following calculation of the turnover rate, which is equal to the ratio of the number of all dismissed (both of their own free will and for violations of labor discipline) to the average number of employees:

, (6)

where: A – the number of those dismissed of their own free will, people;

B – the number of people dismissed for violations of labor discipline, people;

C – average number for the period, people.

Forming the personnel potential of the company, it is necessary to choose a golden mean and strive to achieve a reasonable percentage of staff turnover.

In this case, the degree of validity is determined by:

– industry specifics;

– the category of personnel (linear personnel are characterized by a higher turnover than administrative and managerial);

– seasonality of production;

– competitiveness of the company in the labor market;

– the territorial location of the company (for example, for companies in megacities, the turnover is higher than for companies located in small towns);

– individual characteristics of the company (management style, personnel policy, attitude to hiring and firing staff on the part of management).

When determining your normal level of turnover, you need to take into account many factors, analyze staff turnover statistics, focus on similar indicators of other companies in your market sector [21].

Staff turnover is the ratio of the number of employees who left the company to the average number of employees. The number of employees who left the company is made up of employees who left of their own free will (the so-called active turnover) and employees dismissed at the initiative of the administration (the so-called passive turnover).

Thus, staff turnover can be calculated by the formula:

, (7)

where: N uszh – the number of employees who resigned of their own free will, people;

Ch uia – the number of employees dismissed at the initiative of the administration, people;

H s – the average number of employees, people.

When studying staff turnover, it is of great interest to measure its value not only as a whole for the enterprise, but also for individual structural divisions, groups of workers.

The coefficients characterizing the level of turnover in individual units or groups of workers are called partial turnover rates. The methodology for calculating partial turnover rates is similar to calculating the general indicator.

The ratio of the private turnover rate to the total for the enterprise is called the turnover intensity factor:

, (eight)

where: K ut – coefficient of intensity of fluidity,

K tch – partial coefficient of fluidity.

The partial coefficient shows how many times the turnover of employees in the study group is higher (lower) than in the whole enterprise. The calculation of this indicator is of great importance in the study of social, demographic, professional and other features of staff turnover [21].

R. Bennett [5] proposes to use the following formulas to calculate the labor turnover index.

1. The rate of layoffs or losses, which shows the number of layoffs for a period (usually one year) as a percentage of the average number of employees in the same period:

, (nine)

2. Labor force stability index, which shows the proportion of employees who have worked in the company for at least one year. It is usually calculated as follows:

, (ten)

3. Variations in the labor force stability index are called the “additional turnover index”:

(eleven)

An additional turnover index shows the turnover of workers who have worked for a short time. R. Bennett also offers another method for calculating staff turnover – this is the study of a group of employees recruited over a certain period (usually three months) and taking into account the speed with which they left the organization.

An example of calculating this indicator is given in Table 1.1. The method is based on the assumption that the organization hired 500 new employees over the period.

Table 1.1

Staff turnover calculation

Period Quarterly period of work The number of people who left % layoffs % of remaining workers
First (1-13 weeks)
Second (14-26 weeks)
The third (27-39 weeks)
Fourth (40-52 weeks)
Fifth (53-65 weeks)
Sixth (66-78 weeks)
Seventh (79-91 weeks)
Eighth (92-104 weeks)

Sometimes these figures are plotted graphically, plotting the quit rate on a graph showing quarterly work periods, as shown in Figure 1.1.

Rice. 1.1 Run time curve

In this case, the resulting graph is called the run time curve.

A useful application of the work time curve calculation procedure is to determine the work time semi-time ratio for workers in various categories of employment.

The coefficient of the half-term duration of work shows how much time passes before 50% of employees of a certain group (selected on a specific basis), who entered the organization at the same time, leave it. Then you can compare this indicator across departments, age groups, and so on. to determine the “holding force” of each group of workers [5].

In order for the calculation of staff turnover to provide maximum information for making managerial decisions, it is necessary to accumulate data on staff turnover. This will allow tracking trends in changes in the personnel composition and predicting the likelihood of personnel problems.

V. Svistunov and M. Tyuleneva talk about the following forms and types of staff turnover:

– active,

– passive,

– intraorganizational,

– external.

In the case when we are talking about the movement of the labor force, due to the dissatisfaction of the employee with the workplace (working conditions, the amount of compensatory remuneration, the content of the work), it is customary to speak of an active form of turnover.

The turnover that occurs as a result of the organization’s dissatisfaction with the employee (non-compliance with labor discipline, unsatisfactory performance results) is usually referred to as a passive form of staff turnover in the organization. Thus, active and passive forms of turnover are distinguished by the reasons for the dismissal of the organization’s personnel.

When assessing the staff turnover of an organization, it is customary to single out intra-organizational and external staff turnover.

Intraorganizational turnover is associated with labor movements of workers within the same organization.

External – characterized by the movement of personnel between various organizations, industries and sectors of the economy [29].

The amount of visible economic damage from staff turnover can be determined through the totality of losses caused or caused by:

a) breaks in work; the need to train and retrain new employees;

b) a decrease in labor productivity among workers before dismissal; insufficient level of productivity and quality of work of newly hired workers.

When analyzing the state of affairs with staff turnover in relation to a particular organization, it is important to take into account not only the specifics of its business and the values of the turnover rate that have developed on the market. First of all, it is necessary to take into account the strategy of its development implemented by the organization. At the same time, for an organization at a particular point in time, the value of the turnover rate may differ from the generally accepted value, although the spread of values in each individual business area should not be significant.

After determining the quantitative flow rate, it is advisable to determine the values of natural and excessive flow. At the same time, it should be borne in mind that natural turnover (below or equal to the value of the turnover rate) contributes to the timely renewal of the team and does not require special measures from the management and personnel department, it is necessary and useful for the organization. Excessive turnover causes significant economic losses, and also creates organizational, personnel, technological and psychological difficulties in the organization [33].

An important component of the overall value of the economic damage from staff turnover is the cost to the organization of recruiting as a result of staff turnover [10].

Thus, in a market economy, the needs of an organization for employees change due to various reasons. Such changes do not always mean an increase or maintenance of demand for labor at a constant level. The introduction of new technologies, the cessation of production of certain types of products or the provision of services by an organization can lead to a reduction in demand, both for certain categories of workers and for the labor force as a whole.

However, staff turnover is an extremely painful process, both for the dismissed employees and for the organization itself.

Staff turnover has both negative and constructive consequences. If we analyze the process of turnover in more detail, then it can be noted that the consequences of turnover depend both on its quantitative size and on the qualitative composition of those who quit (dismissed employees of the organization). The consequences of high turnover can be felt over the years in the form of demotivation of the remaining employees, their distrust of managers, and a decrease in labor productivity. Given this, it becomes clear that personnel release management is one of the most important functions of personnel management and requires coordinated action by the organization’s management and the personnel management service. Naturally, the organization must take measures to bring the number of employees in line with its real needs, that is, to manage staff turnover. To do this, it is necessary to investigate the factors that cause staff turnover.

Factors causing staff turnover

The factors that cause staff turnover are diverse, have different sources, the strength of their influence is different, changeable and often difficult to quantify. Conventionally, all factors can be divided into three groups in accordance with Figure 1.2.

Factors causing staff turnover
External to the organization
Internal to the organization
Personal, characterizing the employee

Rice. 1.2 Factors affecting employee turnover

1. Internal factors:

a) low wages. Uncompetitive wage rates do not help to attract new specialists and force employees to look for better offers. At the same time, turnover can be affected not only by the amount of payment, but also by its constant delays. In such a situation, the cost of wages actually decreases, no matter how high and competitive it is. Turnover in companies with small but stable salaries can be even less than in companies where wages are delayed, because due to delays, employee confidence in the future is violated, the need for stability is not satisfied. Sometimes low wages and, as a result, the dismissal of specialists are associated with the inability to earn more. For example, for sales managers: this is an overestimated production plan, which means not receiving interest from transactions [21].

b) But often workers are dissatisfied not so much with the size as with the unfairness of wages, that is, the lack of its connection with the results of work, chaos in the ratio of salaries of specialists from different departments, a sharp difference in salaries of similar specialists at enterprises in the same region. It is possible to achieve the necessary balance in wages. To do this, it is necessary to balance the system of official salaries, build positions in steps in accordance with their value (both in the company and on the labor market), and also take into account the professionalism of the employee. The most objective approach is to assess the professional competencies of employees and determine the qualification bonus to the salary. The official salary and the bonus to the salary for qualifications constitute a constant part of the remuneration. The variable part of the salary should already depend on the specific results of the employee’s work. Moreover, one should focus not only on the momentary financial result, but also on the factors that affect the success of the company in the future. This is increasing the professionalism of employees, optimizing the company’s business processes and products, increasing customer satisfaction.

c) Lack of career growth, gaining experience, learning opportunities or skills development is one of the most common reasons for employees to leave. Often an employee, having worked in a company for about a year, is already expecting a promotion, while the employer does not have a real opportunity to move him up the career ladder, even if, according to the results of the certification, the employee deserves it. A simple increase in wages in this case will suit him only for a short time – no more than six months.

In this situation, you can build a horizontal career: that is, introduce divisions within the department, gradations within the position (manager, senior manager, lead manager, etc.), linking each level with a system of material and non-material motivation. In some companies, especially those associated with creative and intellectual work, new divisions and directions are specially created in order to avoid a “brain drain”. Of course, it will be necessary, firstly, to change the staffing table, and secondly, to develop a new system of salaries and bonuses in this group. Naturally, the most deserving of the “overstayed” employees become the leaders of new directions. At the same time, a new appointment should be accompanied not only by an increase in wages, but also by an expansion of official powers and responsibilities [13].

d) Not developing relations with the team and management, constant discomfort at work – a very strong and increasingly common incentive to change it, even with a very high level of pay in a prestigious company and in a solid position.

e) Repetitive work content is a common cause of high staff turnover. Monotony, boredom, as well as uncertainty, constant stress lead to rapid professional burnout, fatigue, and depression. A person who works in the same place for a long time gradually loses interest in the matter, his productivity drops, and, in the end, he has a desire to change his place of activity.

This problem can be solved with the help of staff rotation, enrichment of labor, encouragement to creativity. So, one of the employees can become a mentor for beginners, conduct classes, seminars. Someone will feel an interest in social activities and become the author of a section on a corporate website or an editor of a corporate newspaper. At the same time, productivity increases, but in the event of an employee’s dismissal, the company’s losses also increase.

If the company has nothing to offer the employee as a replacement (for example, this is a sales manager and there is nowhere to transfer him) and the time of his activity at the current place is equal to the duration of his work in the company as a whole, you should concentrate on increasing the return on the “overstayed” employee.

In any case, the options for solving the problem depend on the organization itself, on its capabilities and specifics [34].

2. External and personal factors are shown in Figure 1.3.

External factors of staff turnover
Demographic situation in the region
Economic situation in the region
Family circumstances
Emergence of new enterprises

Fig.1. 3 External and personal factors affecting staff turnover

The unsatisfactory demographic situation and the quality of labor resources with economic growth lead to a shortage of both qualified and unskilled employees. The shortage of personnel with high competition leads to turnover and the struggle of employers for human resources and, as a result, to an increase in wages. An increase in the cost of labor resources leads to an increase in company costs and a decrease in competitiveness. Companies that cannot pay the required salary lose their staff, which, if the critical value of staff turnover is exceeded, can lead to insolvency and further bankruptcy.

Personal factors include the age of employees, their level of education and qualifications, work experience.

It is known that the desire to move from one organization to another is inversely proportional to age. The peak of transitions ends at 25 – 30 years. Employees of the lowest qualification who do not have a family, prospects, earn less, live far away, change jobs more often.

The intensity of turnover in groups of workers with different length of service at the enterprise differs significantly. After three years of work at the enterprise, there is a sharp decrease in the intensity of turnover, which is associated with both the age factor and adaptation problems.

In addition, the low awareness of the candidate and the fact that at the time of admission the employer overestimated the positive aspects and underestimated or concealed the difficulties of working in the company, can provoke the emergence of unreasonable expectations from the employee, which will further lead to increased dissatisfaction with the company and, consequently, to dismissal. That is why it is important not to hide from the candidate the conditions, responsibilities and nature of the work to be done [21].

Some companies have a practice of conducting exit interviews or questionnaires when employees leave. After all, it is no secret that official information (reasons for dismissal recorded in the dismissal order and work book) does not always reflect the real state of affairs.

1. Dissatisfaction of personnel with work in the company: – wages – working conditions – relationships in the team – management style 2. Problems with compliance with labor discipline 3. Implementation of organizational changes 4. Changes in the situation on the labor market
1. Dissatisfaction of personnel with work in the company: – wages – working conditions – relationships in the team – management style 2. Problems with compliance with labor discipline 3. Implementation of organizational changes 4. Changes in the situation on the labor market

The exit interview (questionnaire) allows you to understand the true reasons for the departure of employees and identify negative trends in the life of the team (for example, the dismissal of employees of one of the departments due to their failure to adopt the management style of the immediate supervisor) and take corrective measures in time [33].

You can keep track of the reasons why employees leave the company in a special summary table presented in Figure 1.4.

1. Dissatisfaction of personnel with work in the company: – wages – working conditions – relationships in the team – management style 2. Problems with compliance with labor discipline 3. Implementation of organizational changes 4. Changes in the situation on the labor market
1. Decrease in labor productivity 2. Increase in personnel costs 3. Loss of the image of an attractive employer 4. Problems with the safety of confidential information 5. Demotivation of working employees 6. Weakening of corporate culture 7. Violation of communication ties
High staff turnover

Rice. 1.4 Causes and effects of high employee turnover

When analyzing employee turnover, special attention should be paid to “potential turnover” due to latent employee dissatisfaction. It must be compared with the real one and examined by groups of those who left and the reasons for leaving. If, for example, latent turnover is high and real turnover is low, internal stabilizing factors act in the team [21].

For a detailed analysis of turnover, special questionnaires and questionnaires for the analysis of motivation to work should be used.

Upon dismissal of one’s own free will, foreign organizations practice conducting a final interview.

The final interview allows:

a) to carefully assess the fact of dismissal and all the consequences associated with it;

b) provide a former employee with psychological support, if he needs it;

c) obtain additional information about the state of affairs in the organization;

d) partially or completely remove the various claims of both parties to each other;

e) in some cases, prevent dismissal, retaining a valuable employee for the organization.

The main objectives of the final interview: analysis of “bottlenecks” in the organization; an attempt, if necessary, to influence the decision of the employee to dismiss. The information obtained from the final interview can serve as the basis for the formation of measures for the development of the organization, personnel, relations between the administration and employees, the manager with his subordinates, the labor collective, etc. Conducting the final interview involves a lot of problems. One of them is that the resigning employee during the interview will not want to give the exact reason for the dismissal or will do it with a great deal of subjectivity. There are two possible ways out of this situation:

1) conducting a conversation at a high level of psychological competence;

2) transferring the conversation to a later date, when the reasons for dismissal and the general situation in the organization will be perceived by the former employee in a more balanced and objective way [15].

After the causes of staff turnover have been identified and analyzed, it is necessary to develop an action program aimed at bringing this indicator to a normal value.

Particular attention should be paid to reducing active staff turnover.

To do this, it is necessary to improve working conditions and the reward system, create opportunities for professional growth of employees, improve the competence of managers at various levels, and form the image of an attractive employer [4].

The structure of the motives for the departure of qualified specialists and managers of employees has its own specifics, different from the specifics of the departure of ordinary personnel. This category of employees turns out to be sensitive to a wider range of demotivators, including relationships with top management and opportunities for professional development.

1. Too high qualifications, lack of complex tasks, insufficient level of authority make work in the company uninteresting for a manager or a highly qualified specialist. Not finding a worthy application for his skills, he begins to look for a new employer.

2. Insufficient qualifications for the performance of assigned duties, on the contrary, makes the work too difficult. An employee who constantly fails to cope with the tasks assigned to him experiences stress from a sense of his own failure. Only a few are able to admit openly that entrusted work is beyond their strength. An employee who has crossed the border of his own competence, in most cases, will prefer a job change to a demotion in his native company. Often, the threshold for the departure of such an employee is a serious or long-term illness, which is then presented as the main reason for parting with the company.

Be First to Comment

Leave a Reply

Your email address will not be published.