Why People Leave or Remain With Organizations

Subject: Employee Management
Pages: 3
Words: 662
Reading time:
3 min

Meeting the needs of employees, the market status of the organization, and other criteria are factors that influence turnover indicators as a phenomenon that not only affects labor productivity negatively but also entails high costs. If a person decides to leave the enterprise voluntarily, this may be due to various reasons, including motives for personal growth or dissatisfaction with wages.

For an employer, the retention of subordinates is an important aspect of activities; otherwise, dysfunctional employee turnover may result from incompetent management work. This issue, in turn, is fraught with costs, both direct and indirect. Indirect costs, as De Winne et al. note, include “disruptions in production processes, loss of human capital, or productivity losses”. As direct costs, expenses for recruiting, staff training, and other aspects of hiring policies occur.

In general, dysfunctional employee turnover is a negative phenomenon for any business. One of the items of expense in case of turnover is the need to replace employees. According to De Winne et al., in this case, risks are that an employer may hire subordinates with lower qualifications than previous ones, which will affect productivity negatively. Another type of expense that the authors mention is selection costs, which are inevitable in the case of turnover.

Managers are forced to spend additional funds on the implementation of hiring strategies and engage in effective selection tools, which requires financial investments. Finally, there is a direct correlation between turnover and declining productivity since managers cannot control and maintain high performance if new employees are recruited regularly. As a result, costs are high, which explains the need to implement effective retention strategies.

Talent management is of high importance for organizations with a large number of human resources and areas of activity that require professionalism and initiatives. In conditions of competition in the labor market and high turnover, retention strategies for talented employees gain additional importance and are responsible practices that HR specialists promote. There are many approaches that allow implementing and maintaining productive strategies for retaining a highly skilled workforce, and one of them is reward management.

Creating the conditions under which employees are satisfied with their position in an organization is an essential task if managers support a talent retention strategy. According to Mohammed, reward management is a strategic solution that is designed to maintain the interest of professionals in fulfilling their immediate responsibilities productively and take the additional initiative to achieve high production results. The main advantage of this approach is employee engagement, which may be achieved due to material incentives and offers of valuable bonus payments.

At the same time, such a strategy may have a disadvantage, for instance, staff dissatisfaction with the unfair distribution of premiums in case managers encourage only talented workers. In order to avoid this result, a competent management award system should be promoted in a team. Another potentially effective approach to retaining talented employees is recognition. Mohammed analyses this topic and notes that subordinates are more industrious and diligent if they realize that their management appreciates their activities.

The recognition of workers’ contribution to the achievement of the organization’s ultimate goals motivates talented personnel to show even greater interest in fulfilling their assigned duties competently. In addition, as Mohammed argues, this approach makes it possible to retain talent in the long run. Highly qualified employees do not intend to leave their organizations if the provided working conditions are objectively positive.

Thus, the main advantage of recognition is the corresponding motivation for talented subordinates, although this approach may have such a disadvantage as too high demands on the part of the staff. The awareness of personal significance for the company may be an incentive for employees to move to another organization with more profitable payment terms. Therefore, competent talent management involves covering various aspects of retention.