10<\/p>\n
Staffing Turnover<\/p>\n
Salha Alnuaimi<\/p>\n
Saudi Electronic University<\/p>\n
HCM 565: Healthcare Finance <\/p>\n
Dr. Kaylarge Eloi<\/p>\n
Nov. 27, 2021<\/p>\n
Staffing Turnover<\/p>\n
Investment in individuals is considered as an expensive affair for most organizations. However, a consideration of the employee turnover rates makes them be considered as a less expensive affair. Retaining of staff bear several benefits (Lim, Loo, & Lee, 2017). Within the healthcare industry, just as the other several industries, COVID-19 is putting so much strain on the employees in the industry. Owing to the strain, issues of burnout and Potential Post-Traumatic Stress Disorder (PTSD) become major concerns going forward (Hamed, Abd Elaziz & Ahmed, 2020). It is against this background that the paper seeks to expound on the financial issues relating to retaining staff and the ones linked with recruiting and training new staff whenever there is high staff turnover. There are also non-financial costs linked with losing personnel who have several years of experience working in the institution (Lee, 2018). The paper offers recommendations on what the institutions should do to avoid staffing turnover. The benefits linked with the adoption of the recommendations are also explained. <\/p>\n
Financial Issues<\/p>\n
Financial Repercussions of Retaining Staff when there is high Turnover<\/p>\n
In most cases, the employees who affirm satisfaction are often likely to stay in an organization. Therefore, the organizations recording high retention rates register greater employee satisfaction and engagement. The cost of retaining a staff when an organization is facing high turnover rates is much lower. Each time a business replaces a salaried worker, they end up losing on the average salary for 6 to 9 months. This means that the cost of retaining staff is much lower than the cost of losing an employee due to employee turnover; for instance, a manager earning a salary of $120,000 a year that is approximately $60,000 to $90,000 salary that will be lost (Merhar, 2016). Hence, it is better to retain such an employee. <\/p>\n
Training Costs and Employee Turnover<\/p>\n
There are also financial issues faced by the organization in recruiting staff when there is a high Turnover. The financial cost will be approximately $60,000 to $90,000 for the managerial position (Merhar, 2016). Recruitment, in this case, will include hiring and training. The costs of the training staff are even much higher when a company is faced with serious concerns of employee turnover. In the last two to three years, the costs of training are that which is invested in the business and is estimated to be at 10% to 20% of the employee’s salary or even more (Merhar, 2016). The organizations with high turnover rates are losing future leaders and innovators. <\/p>\n
Replacement Costs and Employee Turnover<\/p>\n
The costs involved in the replacement of the employees are high and entail recruitment costs, hiring, and training. The cost of employee turnover remains very high as it is estimated that employees lose 1.5-2 times their salary. The cost is pegged on the level of seniority of a person. For the hourly workers, the cost is, on average, $1,500 for every worker (Heinz, 2020). Those occupying technical positions have the cost at 100-150 percent of their salary. At the high end, the c-suite turnover rates may be at 213 percent of the salary. <\/p>\n
Non-Financial Costs Associated with Loss of Personnel<\/p>\n
Apart from the financial costs of employee turnover, there exist non-financial costs. <\/p>\n
Damage to Employer Brand<\/p>\n
The first cost is the damage to the employer brand. All the companies have to deal with Turnover. The manner in which it is managed leads to a big difference in the way employees, partners, and the customers want (Belete, 2018). Whenever there is poorly managed Turnover can end stressing the employees and even impact the relationships with the clients and partners. The outcome is that when there is an increase in the rate of dissatisfaction, the turnover rates increases (Heinz, 2020). The brand ends up being dysfunctional. The outcome will be a reduction in the number of persons that are required for the positions to be filled. There is also an increase in the time of filling jobs and increase the cost of every hire. It is the worst instance and never occurs at night (Heinz, 2020). One may avoid it through comprehending and management the other costs of the staff turnover.<\/p>\n
Loss of Valuable Knowledge and Relationships<\/p>\n
The other non-financial cost is the loss of valuable knowledge and relationships. When an employee works in an organization, they build knowledge over a defined time (Heinz, 2020). The knowledge is usually unique and helpful to the company. For instance, when a company loses a sales team who is a key player and they end up losing the detailed knowledge that the employee had on the needs of the customers, the budgets, and contact preferences (Heinz, 2020). In case the customers feel that the team’s service has reduced after the employees leave, then the firm may lose business. For instance, in a manufacturing company, a senior line worker departing may imply that the company loses knowledge on the critical items of operations whenever maintenance may be required (Heinz, 2020). The knowledge loss may lead to costly production and emergency repairs if equipment breaks. <\/p>\n
Loss of Personnel <\/p>\n
The loss of personnel is a negative impact on team productivity (Heinz, 2020). In most cases, when one individual leaves a team, the team is affected in two ways. The first effect is the impact that the departed employee leaves, and the second one is the effect on the person responsible for finding and training a replacement (Zhang, 2016). Up to the time when the position remains vacant, the manager will have to focus on getting the appropriate person. When a new person is hired, the manager or even the top-performing team member will have to devote their time to training the new employees. The need to focus on hiring and training the new member is likely to affect the whole team as they pick up the former employees to work (Heinz, 2020). In instances where the team members have so much to deliver on, their level of engagement and effectiveness is seriously affected.<\/p>\n
Stalled Out of Employee Development<\/p>\n
Stalled out of employee development is a serious non-financial cost. The opportunity cost of frequent employee turnover is development. The managers whose role is to fill in positions and train the new hires may not have the latitude to keep up with succession planning, engage in cross-training and ensure the development of employees (Heinz, 2020). The outcome is negative feed on the hiring and development of existing workers and the team members.<\/p>\n
Disruption of Team Dynamics<\/p>\n
The Turnover is likely to disrupt the team dynamics. Therefore, the departure is likely to impact the way team works together (Merhar, 2016). Having a knowledge-sharing plan in place helps in the management of the expectations for productivity and development, and during hiring, the searches may be of help. It is also necessary for one to monitor the way an open spot impacts the team members at the individual level. The top performers are mostly affected by the Turnover (Merhar, 2016). The effect is because they are affected by teamwork and shared goals. Hence, they are likely to be impacted by leaving of the teammate. The other employees may also complain of the additional work assigned to them or the uncertainty that may arise when the open position is filled. Counteracting changes in the team\u2019s attitude and ensuring that the top performers know you appreciate their work (Heinz, 2020). <\/p>\n
Recommendations<\/p>\n
In order to avoid such problems, there are a few recommendations put across. The first is to create and follow a defined succession plan for the team or department when in need. It is also necessary to make time for the junior staff so that they can get the required knowledge (Merhar, 2016). Within the organization, there is a need to prioritize sharing of information as a way of cross-training employees regarding other team members’ roles. Through building the culture of sharing knowledge and proper planning for the knowledge transfer, one ends up reducing the chances of turnover-related losses in an organization (Merhar, 2016). <\/p>\n
It may never be very easy to avoid the reduction in team productivity after an employee leaves. Nonetheless, certain strategies can be put to help address the problem and ensure that issues of staffing turnover are reduced (Merhar, 2016). First, avoid a bad hire as it may be very costly as it is likely to lead to more Turnover and lost productivity. The second strategy is to determine the best way that the management may support a team up to the time that they get a qualified candidate. In case the position is just tactical, it is advisable to have somebody under temporary terms up to the right time when one is hired. It is also necessary to address the team on the redistribution of the responsibilities up to the time when one makes a new hire. This will need an emphasis on getting a person who is a good fit for the role and team. The process may be lengthy. Through the management of the team\u2019s expectations and getting their input on the division of additional work, one can reduce the rate of being overwhelmed (Heinz, 2020).<\/p>\n
Avoiding such problems in the future requires that the organization in charge gathers information from the people. Information gathering can be aided by existing interviews. Through the interviews, people get to understand why others left. It is also necessary to manage the complainers when others leave as a means of managing their attitudes (Lim, Loo, & Lee, 2017). This ensures that the venting of the individuals does not result in a contagious culture of negativity within the institution. Through the management of expectations, keeping communication open, and supporting a team, one reduces all the hidden costs of employee turnover and keeps persons right on track to achieve their goals (Lim, Loo, & Lee, 2017). The most important element is an assessment of the company’s culture. When the culture is assessed, individuals will be able to create a fun environment to ensure persons are satisfied (Lim, Loo, & Lee, 2017). The elements may include hosting parties, having friendly competitions, and celebrating wins. <\/p>\n
Benefits of Strategies to Reduce Employee Turnover Rates<\/p>\n
Several benefits accrue from the reduction of employee turnover rates. Reducing the Turnover lessens the costs of recruitment (Lim, Loo, & Lee, 2017). Usually, when a worker leaves a company, the company has to contend with meeting some costs of filling in the position. The actual recruitment cost is often dependent on many factors, including the salary level of the individuals, the position they occupy, the size of the base of candidates to be filled. For the specialized work, the cost of filling in the positions becomes costly. Some of the recruitment cost elements include employment advertising and search agency fees. <\/p>\n
Productivity<\/p>\n
One of the benefits of strategies to address the rising issues is productivity level and growth. Work productivity is often a factor that is arrived at by estimating the goods and services that employees may produce at a defined time. Usually, leaving the company for most of the employees affects the productivity level (Lim, Loo, & Lee, 2017). When the right strategies are employed, the productivity levels of the co-workers will be boosted. It implies that more time will be spent on work as opposed to discussing the departure of the other workers. The productivity levels will easily be sustained and improved in case the employee turnover is lower (Heinz, 2020). <\/p>\n
Reduction in the Administrative Cost<\/p>\n
The administrative costs will be lower when proper strategies are put in place. It implies that the organizations will be having a very stable workforce made up of long-tenured employees. Whenever the rate of Turnover is high, the administrative costs such as the paycheck discontinuance also become high (Merhar, 2016). A stable workforce will mean that there will be manageable healthcare service notifications, proper existing interviews, and the right employee orientation that will manage the costs. <\/p>\n
Reduced Costs of Operations<\/p>\n
Having lower Turnover also reduces the operations costs. For example, until a time when the organization fills in a vacant position, they may have to consider hiring outside employees (Merhar, 2016). A stable workforce means that the overtime costs are better managed and controlled as long as the staffing levels are adequate. <\/p>\n
Conclusion<\/p>\n
In conclusion, employee turnover comes with a significant share of financial concerns for an organization because of high costs in trying to retain the remaining employees, recruitment, and training of the new hires in an attempt to recover from the high turnover (Merhar, 2016) (Heinz, 2020). Moreover, non-financial costs related to staff turnover, including damage to employer brand, loss of valuable knowledge and relationships, loss of personnel, stalled out of employee development, and disruption of team dynamics (Lee, 2018). Unfortunately, employee turnover became a significant problem during the COVID-19 pandemic causing most organizations to suffer a significant financial blow threatening their stability (Hamed, Abd Elaziz & Ahmed, 2020). Therefore, organizations need to ensure that they take the necessary measures to avoid employee turnover and avoid its financial costs. Reducing turnover is also vital for organizations because it reduces recruitment costs, administrative costs, productivity, and the cost of operations (Merhar, 2016) (Heinz, 2020).<\/p>\n
References<\/p>\n
Belete, A. (2018). Turnover intention influencing factors of employees: an empirical work review.\u00a0Journal of Entrepreneurship & Organization Management,\u00a07(3), 1000253.<\/p>\n
Hamed, R. A., Abd Elaziz, S. Y., & Ahmed, A. S. (2020). Prevalence and predictors of burnout syndrome, post-traumatic stress disorder, depression, and anxiety in nursing staff in various departments.\u00a0Middle East Current Psychiatry,\u00a027(1), 1-8.<\/p>\n
Heinz, K. (2020). Dangers of Turnover: Battling Hidden Costs. Retrieved from https:\/\/builtin.com\/recruiting\/cost-of-turnover<\/p>\n
Lee, S. (2018). Employee turnover and organizational performance in US federal agencies.\u00a0The American Review of Public Administration,\u00a048(6), 522-534.<\/p>\n
Lim, A. J. P., Loo, J. T. K., & Lee, P. H. (2017). The impact of leadership on turnover intention: The mediating role of organizational commitment and job satisfaction.\u00a0Journal of Applied Structural Equation Modeling,\u00a01(1), 27-41.<\/p>\n
Merhar, C. (2016). Employee Retention\u2013The real cost of losing an employee.\u00a0Zane Benefits Small Business Employee Benefits and HR Blog.<\/p>\n
Zhang, Y. (2016). A review of employee turnover influence factor and countermeasure.\u00a0Journal of Human Resource and Sustainability Studies,\u00a04(2), 85-91.<\/p>\n","protected":false},"excerpt":{"rendered":"
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