Turnover is the ratio of the number of employees who have left their position during the period being considered, divided by the average number of people in that organization during the period (Price 1977). In simpler terms, turnover is the measurement of the action of employee quitting its current job and the effectiveness of the organisation in finding a replacement for that position.
Generally, employee turnover had been classified into 2 broad categories, voluntary and involuntary. Voluntary turnover occurs when employees willingly initiated the termination of job regardless of reasons, while involuntary turnover occurs when termination of employment is initiated by their employer especially higher management (Im 2011). Besides initiation from employer, involuntary turnover may also be caused by employee unwillingly leaving the orgaisation.
Undoubtly, involuntary turnover enables organisations to eliminate less productive employees and retain highly productive employees, improving the overall performace of an organisation. In addition, the impact of involuntary turnover is of minimal minimal as it can be controlled. Nevertheless, involuntary turnover are sometimes unavoidable by the organisation such as retirement, illness and deaths. Thus, in today's society, it is almost impossible for an organisation to control its employees but preventive measures can be implemented to minimise high turnover.
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To narrow down the research area, this research proposal will only consider and bring into discussion voluntary leaves, regardless of whether employees' position are being replaced or not. Aligning with Cintrón (2006) argument, turnover is actions of employee leaving being replaced, hence, temporary workers who are hired for a period of time will not be involved in this research proposal.
There are several causes to employee turnover in an organisation, which can be categories into three main category; individual, organisation and environmental.
Research aim and objectives
The overall purpose of this research proposal is to study the constraints of employee turnover: the causes of employee turnover and the various retention strategies used by the organization to retain knowledgeable and skilful employees.
The 4 main objectives to be achieved in this research proposal are as follows:
To understand why employees choose to leave or stay in their organisation
To investigate the underlining reasons to employee leaving the organisation
To examine the reasons behind some employees not leaving the organisation
To assess both positive and negative effects on productivity and efficiency of an organization
Theoretical rationale and justification for the investigation
In the early years, employee turnover rate in Singapore has been alarmingly high, to the extent that this issue was brought up to the country's parliament (Khatri and Chong 2011). According to a press release by Straits Times (1996), the frequency of job-hopping in Singapore have been a great concern for foreign investors. In fact Chang (1996) reports, 'there is a deep concern at the national level that job-hopping is adversely affecting Singapore's competitiveness' (Naresh and Chong 2011).
Figure 1 below shows the average employee turnover of Singapore, in 2010, the monthly recruitment and resignation rates averaged to 2.6% and 1.8% respectively while in 2011, it is averaged to 2.7% and 2.0%. As presented, turnover in Singapore have been fluctuating over the years with unstable recruitment and resignation rates. Thus, this topic is worthy of research because, despite turnover being a serious problem in Singapore, there is a dearth of investigation, in particular, the underlining reasons to the fluctuations every year.
Figure 1: Average Employee Turnover
Source: Annual report of the Ministry of Manpower, Government of Singapore, 2012 http://www.mom.gov.sg/statistics-publications/national-labour-market-information/statistics/Pages/labour-turnover.aspx
In the 21st century, globalisation has increased the competitiveness of today's business world. For an organisation to be one of the best, productivity is very important. Employee turnover is one of the factors that affect productivity and has since been a challenging issue to organisation's Human Resource managers (Shumon 2007). As a result, it is considered important for an organisation to manage employee turnover and through developing a greater understanding of employee turnover. This propsal aims to understand what affects the employee's decision to leave or stay which causes turnover as well as how it impact the organisation's success and therefore, is creditable to most organisations and researcher.
The phenomenon of employee turnover have been proven by several to be one of the most significant, potentially costly, relatively clear cut and challenging issues for human resource managers of an organisation and have been an interest to numerous organisations and theorist (Shumon 2007; Price 1977). Shumon (2007) further argues that, the goal of 'effective management of turnover' dictates that a high level of complexity needs to be accomplished by organisations so as to influence the turnover process. However, he added stating that the phenomenon has not so far proved agreeable to prediction. Therefore, this research topic is worthy for research as there are still uncertainty about employee turnover in the society, especially in an ever-changing envirnonment where change is inevitable and unpredictable, causing managers to understand the reasons to employee turnover in their organization.
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In fact, employees are by far the most important shareholders of any organisation and are deem as an assets to organisations. Organisations rely heavily on their employees in achieving success for their business. The success of an organisation is argued to be dependent on the calibre of its employees as well as how effectively they are managed that aid the organisation in achieving its mission and objectives (Cheng and Brown 1998, p.136). This is supported by Ongori (2007), who argues that "[e]mployees are the backbone of any business success and therefore, they need to be motivated and maintained in organization at all cost to aid the organization to be globally competitive in terms of providing quality products and services to the society". Organisations have put in tremendous time and effort on their employees through inductions, socialisation and standard operating procedures (SOP) training etcetera, to develop their employees (Jha "Determinants of Employee Turnover Intentions: A Review"; Ongori 2007). As a result of endless effort place forward, most managers would ultimately want to retain trained skilful employees, minimizing employee turnover. Therefore, organisations would show interest to this proposal as it will be addressing a range of retention strategies.
On top of that, most academic researcher assumes that salary is the primary causes of employee turnover in an organization. Bowden (1952) introduces a simple solution to employee turnover problem that being to pay them more than your competitor for comparable job scopes will decrease their likelihood of quitting. Ongori (2007) supported by concluding in his article, "that pay and pay-related variables have a great effect on employee turnover" (Griffeth et al. 2000). Although perceived by most that the main cause of turnover relates with salary and benefits issues(Cintrón 2006), there are still a considerably amount of different views to this issue, which draws the researcher's attention to research the factual primary causes of employee turnover.
Employee leaves organisation for several reasons, yet some chooses stay and continue contributing to the organisation's achievement. Most researchers have disserted the issue of why employees leave an organisation that affects turnover. However, little have academic researcher or theorist researched on the reasons of some employees remaining in the organisation despite the high turnover level of an organisation. The researcher will be examining the various reasons to employees continuing serving the organisation and hence may be of interest to some researcher and organisations. Furthermore, as mentioned, employee turnover have been fluctuating every year, which interest the researcher in understanding the relationship between the decisions made by employee and the fluctuations of employee turnover.
Research method use for this research proposal would be qualitative - interview and focus group as well as quantitative - survey questionnaires.