Leaving? A question all employers ask of their staff if they leave the company is, why are you leaving and what might make you stay?
Abstract
Leaving? A question all employers ask of their staff if they leave the company is, why are you leaving and what might make you stay? The manager of Company X has such questions. He wishes to find out how the current employees feel and how he can reduce the labour turnover at Company X. This report looks into all the possible reasons for high level of labour turnover, specifically the reasons at Company 1X and how it can be reduced.
Acknowledgements
I would like to take this opportunity to thank all the staff at Company X who helped me successfully complete my study. I would also like to thank my parents and friends for their constant support throughout this year, which has been extremely difficult for me due to some personal problems. Their constant help and support has made it possible for me to be able to complete my final year.
Table of Contents
ABSTRACT 1
ACKNOWLEDGEMENTS 3
. INTRODUCTION 5
.1 Aims of the Study 7
2. LITERATURE REVIEW 8
2.1 Labour Turnover 8
2.2 Labour turnover in the UK 8
2.3 Labour turnover in the retail industry 9
2.4 Costs for companies with high labour turnover 11
2.5 Ways to control turnover 14
2.6 The reasons for labour turnover 17
2.7 Labour turnover at Company X 20
4. FINDINGS 27
5. CONCLUSIONS AND RECOMMENDATIONS 39
BIBLIOGRAPHY 43
APPENDICES 45
. Introduction
Leaving? Why do people leave companies? Labour turnover is a serious problem for many companies across all UK industries, and is also very costly. This case study looks into the retail industry and specifically into one store, which is part of a large retail outlet group. For security reasons the company cannot be named and will therefore be referred to throughout the piece as Company X.
It has been ascertained that the head office of Company X has conducted its own research into the issue of labour turnover. It has been looked at as a company wide issue and they do aim to reduce labour turnover. One the main areas they seem to have focused on is the induction procedure into the company. This study is looking at one store specifically and how labour turnover can be reduced at that store. All suggestions made are intended to improve staff turnover at shop floor and lower management levels, as that was no opportunity to interview or question members of the higher management team. All suggestion made could be useful nationally with amendments to take account of different dynamics in different locations. The store manager at Company X is treated as the top manger for the purpose of this study.
Company X is a large retail company with the stores and distribution centres spread throughout the UK. Company X has many different competitors and is fighting to maintain and hopefully to gain market share. The opinions of the managers and employees at Company X, most of whom have worked in the retail industry for some years, are that jobs in the industry are particularly difficult, as dealing with the demands and expectations of the buying public can be stressful. This creates a hard environment in which to work and the constant threat from competing retailers heightens the pressure for all employees.
The Derby branch of Company X is being focused on in this study. The store is being treated as Company X, with the store manager as the top manager, as this study needs to be focused on a specific area. There are constraints placed on the store manager as the companies' head office makes a lot of the decisions and he is controlled by these decisions.
This study will research into the background of labour turnover using previous studies to base the primary research on for Company X. The reasons for high labour turnover will be ascertained and which specific reasons apply to Company X. From these reasons solutions will be advised for Company X.
The manager at Company X was consulted about the research study and was asked if there were any areas of worry within the store that he wanted researching. The manager had only been at the store for a few months after replacing a temporary manager appointed when the previous manager was asked to leave the company. The current manager expressed his concern for the amount of staff that had left in the past year. He was aware of the reasons why they left, but wanted to know if the current staff still had any of the same concerns and if they may also be considering leaving. He also wished to be given an idea of possible ways these concerns could be resolved. The researcher having worked at the store had witnessed the effects the high turnover levels have had on the remaining staff.
The researcher was aware that the turnover levels at the store have had a negative effect on the staff. Times of low staffing have been experienced which resulted in longer hours for some staff members and customer service difficulties. This was followed by periods where the new staff were being trained. The existing staff, thereby increasing their workload even more and affecting the level of customer service, carried out part of this training. The staff that stayed at the store during this time became demoralised as their workloads increased. The changes in management seem to have settled the problem. However, there is still discontent among the workforce about the company.
.1 Aims of the Study
* To investigate the causes of labour turnover
* To examine the labour turnover problem at Company X
* To offer solutions in order to reduce the labour turnover at Company X
2. Literature Review
2.1 Labour Turnover
According to Adams (1993) 'Labour Turnover is the rate at which staff leave an organisation and are replaced by new employees. Too high a Labour Turnover rate may mean that there is something unsatisfactory about working for the organisation and that action therefore would need to be taken'
There are various ways in which labour turnover or wastage can be measured. The Labour Turnover Index is the traditional method of measurement this is the most common method of measurement as it is easy to calculate and to understand. 'Labour turnover rates provide a valuable means to benchmarking the effectiveness of HR policies and practices in organisations'. Armstrong (2001)
A report from ACAS explains that even though turnover can be a problem for businesses, especially in cases of management turnover a certain amount is beneficial. Bringing new ideas and creativity into a company can improve the company's performance.
2.2 Labour turnover in the UK
One of the main problems facing organisations today is Labour Turnover. The CIPD has found that labour turnover rates and the cost of labour turnover are at an all time high. The average labour turnover figure is 26% a rise from 18% last year and average cost of turnover per employee at £ 3,933.00.
The length of service of the employees leaving may indicate their reasons for leaving and will be reflected in the exit interviews. The reasons people leave can alter depending on how long they have been at the company, e.g. someone leaving after just starting may have found that the job did not suit them, whereas an employee leaving who has worked for the company longer may have problems with job satisfaction or more complex issues. This will have an effect on the possible ways of controlling the level of turnover.
When looking at a report from the CIPD it is possible to see that employees leaving within the first six months of employment have stayed at a similar percentage over the last few years and was at 22.6% in 2000. Employees leaving after a length of service of 7 to 23 months have risen from 26.3% in 1998 to 29% in 2000. Employees serving 2-5 years and then leaving have also risen from 21.1% to 23.8%, and those leaving after serving over 6 years have fallen from 30.2% to 24.6%. Where employees are leaving within the first few months the companies may wish to address their recruitment requirements, induction and training. Where employees are leaving after a longer period of time more difficult issues are raised.
2.3 Labour turnover in the retail industry
The CIPD have stated that 'the wholesale and retail trade has the highest turnover in the UK - at 56% the wholesale and retail trade lead the labour turnover table' It is also possible to look at the retail industry closer and break down the turnover rate into occupational classes.
The following graph shows the retail industry turnover figures broken down by occupational class, taken from information from the CIPD.
This graph is significant as is shows the increase the changes in labour turnover figures over that past few years for each of the occupational groups appropriate to the retail industry. This also shows the difference in turnover levels from one job class to another. The turnover of managers is lowest of all the classes but similar to the admin positions has risen in 2000. However, when managers leave they are more costly and difficult to replace due to the specialist nature of the job. The routine, operative and sales positions have reduced from 1998 to 2000, which shows an improvement. However though the cost of replacement would be lower than the mangers a substantial amount of loss will be made by the companies this level of turnover.
Along with the problems of high labour turnover companies are reporting problems with recruitment. According to the CIPD 'overall 77% of organisations experienced recruitment difficulties in the first half of 2001, the same as in 2000'. The time lags for filling vacancies will cause companies problems with their customer service. This also causes problems with the remaining employees as a knock on effect will occur, the remaining staff will be required to fill the void of the unfilled positions further perpetuating the cycle. The average number of weeks taken to fill a vacancy was around 11 weeks during 2001 this amount of time would prove highly problematic. Management positions seem to have been the hardest to fill with an average time of 14 weeks to fill positions. Sales positions taking around 10 weeks to recruit. Administrative positions were generally filled in round 7 weeks. Routine and operative positions across all industries were looking at around 5 weeks to fill positions.
2.4 Costs for companies with high labour turnover
According to the Charter Institute of Personnel and Development (CIPD) it costs over £3500 pounds per employee every time someone leaves. This is actually an 11% increase from 1999 to 2000. The costs can be broken down into the costs of leaving, replacements, transition and indirect. The leaving costs are the payroll and the personnel administration of the employee leaving. The replacement costs are spent on recruitment of potential employees, the money and time spent on interviewing and any placement fees involved. Transition costs for a company include the training costs of new employees the unproductive time while the new employee is learning the skills required and any induction costs for the new employee. The indirect cost to a company is the potential loss of revenue because of decreased levels of customer service.
These costs have been broken down into the occupational groups by the CIPD to ascertain how much money is spent on the turnover with in each group. The following graph shows the cost of turnover of employees by occupation.
This graph shows the cost of turnover per employee divided by each class appropriate to the retail sector. This information is significant as it indicates how much it costs companies each time an employee leaves and reiterates why labour turnover is such an important factor due to the high costs involved. Linking to the previous graph though managers are least likely to leave each time one does they cost more than twice as much as any other member of staff. The retail industries managers cost £5219 per leaver; the Administration staff £1871, Sales £1852, Operational £1543 and the Routine employee cost £626.
Company having high labour turnover leads to excessive amounts of money spent on recruitment and training. This is why high labour turnover is a problem for companies however the problems run deeper than just money. A report from the ACAS website (cited 2002) explores the costs, over and above money, that high labour turnover causes. Loss of customer service due to staff shortages is one of the problems that occur in companies with a high staff turnover. The high staff turn over will result in new staff having little training and experience, which is a cost to the company in the terms of customers and the quality of service they receive. There will be an increase in the risks of accidents in the work place. The company's local reputation may be tarnished as a result of the decreased levels of customer service and high labour turnover. The employees choosing to stay will feel demoralised and this will lead to loss in the quality of service provided. The remaining staff may also become unsettled due to the increased pressures placed on them because of low staff levels causing even more people to leave.
ACAS also states that ' if labour turnover is excessive it can indicate management problems'. Management problems have actually been identified as one of the main reasons employees have left Company X. Surveys carried out by Company X's head office identified problems with superiors as one the main reasons for the high labour turnover across the company.
High labour turnover can be major negative effect on a company, causing problems with motivation of remaining staff members and customer service issues. As ascertained by the CIPD during 2000 the percentage of organisations experiencing major negative effects from ...
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ACAS also states that ' if labour turnover is excessive it can indicate management problems'. Management problems have actually been identified as one of the main reasons employees have left Company X. Surveys carried out by Company X's head office identified problems with superiors as one the main reasons for the high labour turnover across the company.
High labour turnover can be major negative effect on a company, causing problems with motivation of remaining staff members and customer service issues. As ascertained by the CIPD during 2000 the percentage of organisations experiencing major negative effects from turnover was 12.7%. 55.5% experienced minor negative effects to the organisation. Around 26.9% of organisations experience no effect at all. Only 4.8% of the companies experienced a positive effect as a result of turnover.
2.5 Ways to control turnover
According to Armstrong (2001) 'The analysis of the number of leavers and the reasons why they leave provides information which will indicate whether any action is required to improve retention rates'. Most companies conduct exit interviews. However are they used to their full potential? They could highlight the reasons why existing employees may also leave or why some may be dissatisfied.
A report taken from the ACAS website looks at the possible ways of controlling labour turnover dependent on the length of service on the employees who are leaving. When a company is looking at the possible ways to get the control over labour turnover. The company should keep records of the employees leaving and their reasons for doing so. Exit interviews can be useful in gaining this information. The level of turnover if determined to be excessive should be analysed to ascertain who is leaving. Is it the new starters or the longer term more experienced staff?
There are many ways to control labour turnover. Companies employ a variety of different strategies to control the levels of labour turnover. The main way used is to take action as the result of exit interviews. Some companies make changes to there pay and benefit structures in order to retain staff for longer. Employers also increase the development opportunities within their companies to encourage employees to develop their skills and remain with them as opposed to moving. Alterations in employees shift patterns to increase the length of service. Some employees will respond to improved career opportunities. The introduction of bonuses and or incentive schemes can also prove effective. Changes in physical working conditions can affect the employees as well.
The report from ACAS also identifies ways to reduce the turnover of newer staff. Attention should be paid to the induction and training procedures. Ensure that the advertisements offer a realistic description of the job to be undertaken and the person specification is clear. The standards should not be set too high and suitable selection test are used when they are appropriate. The trainees should be actively involved with there supervisors during there first few weeks and be settled in appropriately.
When long-term employees are leaving at a higher then average rate the ACAS report identifies that the staff may be feeling that they need to be more involved with company procedures and decision making. Some may feel discriminated against, which is an issue that should be addressed for all staff. There may be some harassment or bullying in the work place, which would need to be investigated. Employees may also be being placed under undue stress and this will be a problem for the staff. Employees, especially long term ones, need to feel that they have the opportunity to grow and develop with in the working regime. The management style may need to be addressed in order to deal with the employees better. The softer side of management is becoming a much bigger aspect of the job. Managers need more interpersonal skills. Pay is another problem employees may be experiencing. If pay levels become lower then competitor's employees will be tempted to change jobs. The health and hygiene at work will effect employee's motivation and turnover. The hour's employee's work will affect them.
The companies need to look at the reasons why employees are leaving and to rectify those situations in order to retain the remaining staff. The already departed staffs are irrelevant to the business now, however the company should learn from their dissatisfactions and make improvements accordingly to retain their remaining employees.
The reports of the Japanese companies Maxell and Copy Company which were set up in Telford look at the reasons the turnover was high in these two unique environments. The reports indicate why the turn over was high and how problems were dealt with. Maxell was one of the first Japanese companies to arrive in Telford. Telford is the ideal place for Japanese firms to transfer their employment relations and working methods, as the town was new with a fast growing population and a lower age of workforce. 'Maxell's recruitment and selection processes were more elaborate than standard British practices for assembly work, with more testing and selection, designed to identify those individuals it considered had the appropriate attitudes to work under its regime' (Elgar, 1998). The company recruits young workers and aims to develop supervisors from within, creating a strong internal labour market. The employees are given long on the job training to take up any management roles. The company promotes teamwork quality circles and continued improvement. Trade unions are excluded. Grievances are dealt through company council. Other Japanese companies, such as Copy Co and Carpart Co, have followed this structure and working regime.
These Japanese companies actually experienced high labour turnover initially, some years being up in to 200 per cent turnover. These companies finding that the younger low skilled workforces had a higher turnover experienced a genuine culture shock. It can be suggested that their expectations of workers behaviour were different. The personnel manager at the Copy Co said 'when I arrived here there were lots or 16 and 17 year olds. I think the Japanese attitude is to get them young and train them, develop them mould them into what you want. In this country that is quiet naïve - it would not work'. The companies also experienced high absenteeism.
The dynamics of the labour turnover in Telford has a combination of factors contributing to it. They are the high amount of jobs in any one company, and the newness of the factories and their regimes. The company experienced low costs for employees leaving and so made no attempts to tie employees to the jobs via pensions or seniority allowances. The small wage differences between jobs gave staff little incentive to take on more responsibility. The absence of unions created a problem for staff, as they had no way of voicing their grievances. The work force experienced difficulty in acclimatising themselves to the modern assembly line.
In order to combat the high labour turnover the companies increased the mix of the work force. Word of mouth recruitment was encouraged and financial rewards for workers introduced new workers. Some of the firms used attendance and bonus awards to decrease the absenteeism and high labour turnover. This proved successful but had high costs so was not continued for a long period of time by any of the companies. The employees were offered employment security the Copy Co received a loyalty reward in 1990 for carrying surplus labour.
The problems experienced by the Japanese companies in Telford when introducing these new regimes and working procedures were mainly part of culture shock. However, the techniques employed to control the turnover issues and help the staff through the change in working regimes may be useful when companies look at making alterations to reduce staff turnover.
2.6 The reasons for labour turnover
The CIPD has commented that Turnover may be a function of negative job attitudes, low job satisfaction, combined with an ability to secure employment elsewhere, i.e. the state of the labour market. On the other hand, turnover is a normal part of organisational functioning, and while excessively high turnover may be dysfunctional, a certain level of turnover is to be expected and can be beneficial to an organisation.
There are a number of reasons why labour turnover can be high according to Armstrong (2001) 'The analysis of the numbers of leavers and the reasons why they leave provides information that will indicate whether any action is required to improve retention rates.' The reasons for leaving can be classified into a variety of reasons.
According to the CIPD most people seem to leave a company to move to a higher paying job or for a chance of promotion. This controls around 68% of the reasons for labour turnover with in a company. The second highest reason accounting for 38% is for a job or career change. 35% leave their employment for unsatisfactory levels of pay. These seem to be the top reasons for the level of staff turnover in a company. Other reasons include redundancy, retirement, family reasons, and perception of the job insecurity, the amount and timing of working hours, ill health or difficulties with other employees.
One of the reasons for employees leaving could be poor pay. Sixty years ago the socialist economist GDH Cole declared that 'the most urgent of all social reforms is the extension of the guaranteed minimum wage' Red Pepper (2002). However even with the introduction of the minimum wage many people are still dissatisfied with their pay. As the minimum wage only applies to those paid hourly and not salaried pay in some cases it will not help.
Taylor (2000) explored the relationship between staff turnover and the provision of an occupational pension scheme. The papers research suggests that the extent of the relationship is not high. However the importance of a pension scheme varies with different groups of workers. Taylor stated that 'While pension schemes are frequently perceived to play a roll both in the attraction of staff to an organisation and in reducing employee turnover, it is on the latter that most attention has been focused in public research'.
Many people open their own pension scheme, which they pay into over their entire working life. This is a more recent development so is more likely to apply to younger members of staff. Older members of a workforce who still wish to have a job for life will expect there to be a company pension scheme provided.
Hanna's (1986,1987) historic research has showed that the introduction of organisational pension schemes, in the late nineteenth and early twentieth century were for the purpose of staff retention. There are numbers of surveys and research papers that focus on pension schemes as a means of reducing staff turnover. It can be questioned however, that employees can pay into private pension schemes so they can merely carry on making payments into it whichever job they are in.
Mano-Negrin looks at turnover in relation to people's employment options opportunities and their occupational preferences. A report about comparative evaluators and how people are attracted to one job over another. This looks at the medical profession and that the turnover rates are effected by the organisational and occupational employment opportunities and employees preferences. Moving from one job to another that has better prospects is common.
In the past it used to be the case that someone would join a company, climb up the ladder internally, and most people expected to have a job for life. It is more common now that people are looking for transferable skills that they can apply in other jobs. Though some people prefer to progress in the company they are in most will look to move from company to company for better job opportunities.
2.7 Labour turnover at Company X
Company X is a large national retail outlet. The head office has been exploring the labour turnover within the company as a whole. This research paper aims to look at one particular outlet based in Derby. Company X has ascertained that company wide the main reason for leaving the company is the employee's relationship with their supervisors. This is closely followed by job dissatisfaction, working hours, pay, personal betterment, personal or domestic reasons, working conditions, delay in the payment or salary, termination by the company and relationships with colleagues.
This information is useful as background information on which to base the primary research with the employees at Company X. The research at Company X will be looking at labour turnover from the perspective of what can be done to reduce it at store level as apposed to a company wide solution.
3. Methodology
The research methods that I have used in order to complete the aims of the researcher were primary research using questionnaires and interviews and secondary research in the form of desktop searches.
Saunders (2000) has identified that there are advantages and disadvantages to secondary data collection. The advantages are the fact that it saves time and money too collect from secondary resources. It is unobtrusive and can be obtained quickly and easily and it fits in well with constraints on time. It is also feasible to conduct a wider study and allows information to be compared and contrasted easily. Finally, it can result in unforeseen data discoveries, which can be useful prior to the primary research being conducted. It is also possible for any reader to recheck secondary data references. The disadvantages are that the information may have been collected for a different purpose than mine and data may be misleading or may be presented in a format not suited to my objectives. Access to detailed information can be difficult but on this occasion I did not experience any problems.
The possible threats to the reliability and validity of secondary information lie in the source from which the information has been taken. I would say that all the information I have collected has come from reliable sources. 'For all secondary data, a detailed assessment of the validity and reliability is necessary and this will involve an assessment of the method or methods used to collect the data' (Dale et al., 1988). This assessment has been detailed throughout this section. I believe the main threats to the validity and reliability of the data to be the initial research methods used to compile the reports differing from my own. Another problem is that the original researcher may have introduced bias into the results and older data may not now be relevant. I was aware of these issues whilst undertaking the secondary research.
The desktop research that I compiled contained information on the possible reasons for high labour turnover in the UK retail industry. I only looked at information for the specific area to limit the perspective to the key and relevant issues. I have managed to collect a number of labour turnover figures from the CIPD theses figures were for the year 1999-2000. I have searched for more recent figures however I could not locate any.
The information I have collected on labour turnover from academic texts looked at labour turnover as a process within human resource planning that needs to be accounted for, the significance of labour turnover to the company and the measurement methods used to analyse labour turnover. There is also an indication of the possible reasons for and costs of labour turnover. These texts also offer theoretical solutions for control of labour turnover.
After studying academic texts I started to look closer into the subject by getting information from the CIPD. This information consisted mainly of figures for the percentages of labour turnover in the UK broken down by industry and job type. The costs of labour turnover per employee were also calculated and detailed by Industry and job type. The CIPD have also looked into the reasons why people have left their job and those figures are also detailed.
The information in this report has been calculated from figures from the Labour Force Survey, which is carried out by, The Office for National Statistics, a government agency, The remainder of the statistics were ascertained from a questionnaire sent by the CIPD to 10,000 personnel professionals during June and July 2000. 629 organisations with a total work force of over 863 000 responded. This information was originally intended for the report and has been analysed by the CIPD this information is appropriate to this study as it is being used in this case for the statistical analysis of the UK retail industry. The problems of reliability validity and bias may exist within the primary research completed for the report. The CIPD will have avoided this.
Once the theoretical and statistical analyses had been collected and analysed I needed more information on the possible reasons for labour turnover in general and why people leave specific companies. I used Internet search engines such as Google.com to locate information about labour turnover. I also looked at academic reports i.e. Mintel, Emerald and EBSCO on the universities website. The information collected from there was mainly reports from other companies about labour turnover problems and how they were overcome. Information contained in these reports had an original purpose in mind, which may not match up with the purpose of this research. The problems with the reliability, validity and any problems with bias may be apparent within these reports.
Information has been collected from Company X's head office about the issue of labour turnover. The head office of the company maintains reports of the turnover figures within the company. They produce quarterly employment figures for each store about how many people have left the store and why. This I got from head office during a focus day in which I participated concerning induction and how it affects the company. Labour turnover figures were included as many people were leaving the company after only a short time and the management wondered if the induction process was at fault. The focus day was organised to allow people from different stores to participate in discussions. I was given a copy of the information following the proceedings. This was in 2002 and the figures were based on 2001-2002. However, this information was based on a company wide survey including head office, call centres service centres and distribution centres.
Once all this information was collected and read I decided that I wanted to see if the reasons for labour turnover in the UK from the CIPD and the figures from head office of Company X matched up with the opinions of the current employees at Company X.
I designed a questionnaire based on the information that I had read (see appendix 1 for the questionnaire). I planned that everyone who worked at Company X would fill in a questionnaire to get a census of all the employees' opinions, which would reduce the possibilities of bias through selection. Due to working hours and time constraints while researching only about 70% of the staff actually filled out the questionnaires. I also interviewed some of the staff to gain some qualitative information to apply to the quantitative.
According to Saunders (2000) 'Virtually all research will involve some numerical data or contain data that could usefully be quantified to help you answer your research question(s) and to meet your objectives'. All of the information I have collected using my questionnaires is qualitative and will be analysed using quantitative methods. However, that is not enough I need some qualititative data to find out peoples opinions and back up the quantitative information.
There are three distinct differences between quantitative and qualitative data. Quantitative data is based on meaning derived from numbers, results are collected in numerical and standardised data and analysis is conducted through the use of diagrams and statistics. Qualitative data is based on meanings expressed through words; a collection of results in non-standardized data that requires classification and analysis is conducted through conceptualisation. As advised by Saunders (2000) the information that has been collected from the interviews will be analysed in the best way possible and conclusions drawn.
The validity and the reliability of the information collected is important, as there is the possibility that the conclusions may not be true. According to Saunders (2000) 'validity is concerned with whether the findings are really about what they appear to be about'. The main threats to the validity of the research carried out are the factors of history, testing, instrumentation, morality, maturation and ambiguity about the direction as chartered by Robson (1993). These factors can have an effect on the researcher and/or the person or people being researched. These factors need to be taken into account when establishing the validity of the research.
Esterby-Smith et al have ascertained that 'reliability can be assessed by the following two questions 1) Will the measure yield the same results on different occasions? 2) Will similar observations be made by different researchers on different occasions?' The threats to the reliability of the information collected from research have been identified by Robson (1993) to be subject error, subject bias, observer error and observer bias. Bias is one of the main factors to be avoided in the research process as it can be introduced at a number of different stages.
Generalisability also known as external validity is concerned with the design of the research and the extent to which the findings could be generalised so that the findings could be applied to another research setting. The problems with the research design are the fact that some of the content will be based on a flow of logic and some assumptions. The logical steps identified by Raismond (1993) are the identification of the research population and its suitability to the aims of the research similarly for generalisability is the choice logical. Data collection looks at how logical it is to assume that the collection is going to offer valid results. When interpretation of the data is being made it is possible to make logical leaps and false assumptions threatening the reliability and validity. Development of the conclusions needs to be scrutinised to ensure they are reasonable.
4. Findings
Some information has been attained from the head office of Company X giving the Labour Turnover figures for the years 2001/2002 and 2002/2003 (see appendix 2 for full details). The average turnover figure for 2002/2003 is 43.9%, which is an improvement from the previous year of 47.7%. So there has been improvement over the previous year and as some people have indicated in interviews and general conversation a change of store manager has made a difference.
The statistical review shows the break down of the leaving staff. One of the interesting figures shows that 66% of the employees that have left were sales personnel who indicated, within interviews and general chat, that they work under considerable pressure and this may be one of the reasons why they have the highest rate of turnover.
Most of the employees leaving, around 45%, had worked at the company for 1-2 years, 45% are also under the age of 25. This indicates that the people who have left are mainly ones looking for advancement that could not find it within the company; this information was ascertained from the interviews with the current staff. Many of the younger staff are looking to advance their careers and will therefore leave if this is not seen to be possible. With employees leaving in the first year induction and training is often the problem after 1-2 years of service lack of positive incentives to promote retention is the more likely cause. The problems may be the staff not feeling involved, feelings of discrimination, harassment and working stress and the company therefore needs to address the softer side of management.
The research carried out with the employees at Company X indicated that 71% were male the split in the working environment is at lease 2:1 males to females. However, due to shift working the work force is usually predominantly male on a day-to-day basis. There are only three female sales people. The age of the participants are shown in the following graph.
There is a broad range of ages among the employees at Company X. The age of the employees may make a difference to their reasons for staying at the company. Whether they are part or full time also has an effect. People working part time may just be doing so for spare money and may not get as involved with their job. There are a few older employees who have worked for the company for a long time and who are generally happy with the company and who seem reluctant to leave due to their long experience with the job and the company. This does not stop them from complaining frequently. There are a number of student employees again who work part time and will look for advancement after finishing their course and if suitable employment cannot be found within Company X they will leave. It is possible to draw such distinctions between full time, part time and age however there are no obvious conclusions that can be drawn from the research.
The Derby Branch employees are split into long and short serving with 14% working at Company X for less than 6 month. 24% have worked there for between 1 and 2 years .33% have served for 2-5 years with the company and the remaining 29% have worked for longer than 5 years. However, this may not be a true reflection of loyalty as some staff may have worked at more than one branch. The pie chart shows the split of the staff into the job roles.
There are a variety of different job roles at the store each being completely different the employees in these different areas may have opposing reasons for remaining or leaving.
62% of the employees work full time, the rest are part time employees they all have differing motives and reasons, which has been ascertained from the research under the reasons why employees stay with the company. 77% of the employees sometimes enjoy working at Company X only one employee said they like working there all the time and the rest rarely like working at Company X.
None of the employees at Company X said that they enjoy working in their job because they get on well with the management. 28% of the employees enjoy there work because of the pay they receive these were mainly the management and sales employees as their pay rate is better than the other jobs. 32% of the employees enjoy their work this is across the board no particular job role enjoys there work more than another.
The final 40% liked the fact that they work with friends. As a lot of employees work full time being able to socialise at work adds to the enjoyment and enhances their professional relationships. Having actually worked at Company X I have personally seen and experienced the difference it can make for employees having friends at work.
The employees all identified elements of their job, or of the company, that they would wish to change if they could the. Pay and the environment topped the changes requested with 56% of employees requesting change. Pay is a Head Office issue but the environment, physical and emotional, is a local management issue. 20% of the employees would want to work different hours possibly for more hours, as some are people who stated that they enjoyed their work. Others may be looking for less hours or hours to fit in with their personal lives better. 13% would want to actually change the work that they do either to a different job role or just change elements of their current job role. 10% would change working with their friends either to be able to work with their friends at work or possibly to have to not be with their friend at work.
The main reasons the employees have given for joining Company X are that the job was the best available at the time this applied to 33% of the sample. 33% also said they wanted a career in the retail industry. 14% said that the job with Company X offered them better opportunities than their previous employment. 10% of the employees started a job with Company X to improve their financial situation. The final 10% joined to work with their friends.
62% of the employees at Company X have changed their job role in order to improve themselves at work. Most have tried more than one job role. However these changes have not always been the employee's decisions. Some have been moved by the managers for under achievement in one job role or to meet demand in other areas.
The following graph is taken from the responses to the question of 'what would your reason be for leaving your current employment'. The respondents were asked to rate the reasons 1-7, 1 being the most likely reason 7 being the least likely.
It can be seen that the main resaons are pay and dissatisfaction but management also rates highly. Personal gain, poor relations with other members of staff, hours and conditions do not present too much of an issue to the staff who seem reletivly happy with those aspects of the job.
During the interviews people commented that the pay is low for the jobs that people have to do. The sales colleagues get commision on top of there basic wage and some of them take home more than the sales managers on a regular basis. It is mainly the support staff who are dissatisfied with the low wage and one comment made would be that pay being fortnightly may help. The store managers response was that employees personal finance is not his concern and that it would not be possible as the administration cost are to great. This may or may not be a fair point.
With regards to dissatisfaction employes said that that is just the nature of the job a lot of the tasks being routine and not altering much. People may be feeling that they are not working to their full potential and wishing they could advance their career. There are limits to how many managers there can be so the possible introduction of some kind of seaniority levles may help the staff feel more valued.
The employees relation ship with the managers look more towards the softer side of management and how to deal with staff having good people skills. As has been said the jobs are high pressure due to the daily interaction with the public sales colleagues frequently comment they (the managers) pile the pressure on so much that it can become impossible to perform. Many colleagues complain about their manager. The store manager commented that even if you found someones perfect manager that could motivate them exactly the way they wished there would still be something wrong. However if enough employees find problems with the management it should be addressed
The folowing chart shows the least likely reasons why people would want to leave their job at Compnay X
This shows that the least likely resaons people would leave is because of poor relationships with other memebers of staff. Dissatisfaction, personal gain and hours are more of a factor than initially thought as they don't come up as the least likely reasons. It is also shown that some of the employees don't find pay or management as much of an issue as it is to others however it is not possible for there to be common choice everyone is different.
The final question on the questionnaire looked at the reasons why the employees chose to stay and they were again to rate the reasons from 1-6, one being the most likely six being the least. The following chart shows the amount of people rating the reasons as the main reasons for leaving.
Going against the pervious question asked, the main reason people stay in their employment at Company X is money. Though people are dissatisfied with their levels of pay they stay because they need money this was backed up in the interviews conducted and the general day-to-day chat. A few people do stay because they enjoy their job but not many this reflects a lack of appreciation by management all employees need to feel valued. The following shows the employees rating the reasons as the least likely reasons they would stay.
It can be seen that they are least likely to stay because of comfort with the managers, because working is just something to do and because they have not thought to move. Though people responded that pay was a reason they would leave the company only one responded that it is also the least likely reason they would stay. Kind of a catch twenty two situation, however employees have responded that one of the most common least likely reasons for staying is that they have not thought to move. Employees may have thought to move jobs however they don't there is a reason why they stay which seems to be money, they need the money and that is the main motivator. The staff are not generally satisfied.
It is possible to look closer into the employees at Company X by examining the job functions. As the opinions of the managers would be different than the sales staff and so on for all of the different job functions of staff.
The managers have been working at the company for longer than 2 years they find the work to be the most important part of their job. If possible they would want to alter their pay and the reasons for leaving would be for personal gain but they stay in the job for enjoyment.
The merchandisers consist of full and part time workers. They sometimes enjoy their jobs and they find pay and working with friends to be their staying reasons. They took the job, as it was the best job available to them at the time. Problems with supervisors and better job opportunities would make them leave the company. The merchandisers stay at the company, as they need the money.
The employees in the stock and service department enjoy the fact that they work with their friends but still only like working at Company X some of the time. They would look to alter the pay of their current job. Again they all find the pay rate to be the their reasons for terminating their employment at Company X. However they would not leave their job because of the pay, as they need the money.
The warehouse employees enjoy their job sometimes or even rarely and only because they are working with friends. The merchandisers seem generally dissatisfied because they would want to change most aspects of their employment pay, hours, type and the environment in which they work. They started work at Company X as the job as the best available at the time. Pay and problems with their supervisors are their main reasons for leaving their current employment. They continue to work for Company X because they need the money and because they have not thought to look elsewhere.
The administrators are mainly younger people and enjoy the pay of their employment, and would want to alter either there hours, pay or the environment in which they work. Pay problems with supervisors and dissatisfaction with the job are the key elements to there unhappiness at work. However they continue to work at Company X mainly because they need the money.
The sales people which make up a large proportion of the staff accounting for over 50% of the employees. This group contains a large range of ages and lengths of service. There is a mix of full and part time employees that is needed to cope with the demand. Pay and enjoyment seems to be the main reasons why they enjoy their job as the sales people receive a flat rate salary and commission from sales on top. However the two main changes in their employment they would make would be with pay and with their work environment. Dissatisfaction, pay and supervisors are the sales peoples problems with their employment. However, they seem to stay in their jobs for the money.
The interviews conducted have revealed more in-depth information about the feelings of the employees as well as the opinions of the store manager and how he views his staff. The staff interviewed has varying opinions of what areas of their job would make them want to leave if indeed they would want to. The store manager has strong opinions about his staff and how they feel about working at the company.
All the employees interviewed maintained that they enjoy work most of the time; mainly because quite a few of the jobs are menial. Generally employees enjoy the work they do. People that have moved jobs feel they are currently in the job best suited to them. One comment was 'this job allows me to do what I love doing everyday' the store manager is of the opinion that if any employees don't enjoy their job or if they want to leave they should leave. He dose not want people working for him that don't want to be there as they aren't as productive. However, there is nothing conclusive that the employees are so dissatisfied that they are not willing to work only that they have dissatisfaction. Some of this dissatisfaction may be more of a personal problem perhaps a feeling they should be further along with their career not necessarily against the job they are doing.
Some of the employees have commented that they enjoy their job because of the advancement opportunities. However, another employee commented that they are dissatisfied because of the lack of opportunities to advance. The employees are from different departments there is only so far a person can go in one store, as there are only so many management positions available. Some kind of seniority or length of service award may be helpful in retaining staff. The staff need to feel valued not just by the company but by their direct employers the managers they interact with on a daily basis. The company does offer employees a yearly discount voucher of 20%, which you only receive after a year of service, however is this known by the staff? From the researchers opinion no this is not as she was unaware of it until she received one so therefore it does not give the employees a reason to stay if they don't know it exists.
The managers were mentioned, one employee specifically commented that their personal line manager 'has no people skills' and that there relationships with their manager, personal and professional, has an effect on their job and how satisfied they are. The store manager believes that 'as reasons for leaving a job' being the relationship with a manger is a weak one'. However it is a reason why staff leave the company and should be looked into.
The staff seem generally contented at the company without being completely satisfied. Though they find the pay low they stay, as they need the money. Most of the employees have expressed dissatisfaction and problems with managers as issues they feel inhibit there working life.
5. Conclusions And Recommendations
Referencing back to the aims of this research they were:
* To investigate the causes of labour turnover
* To examine the labour turnover problem at Company X
* To offer solutions in order to reduce the labour turnover at Company X
The possible causes of labour turnover have been examined in the literature review. Where all the possibilities discovered during the research process are looked into and used as a basis for the examination of Company X.
The examination of Company X has not brought out any specific conclusions. There are not one or two specific areas that affect the employees to the extent that they wish to leave the organisation. There are some areas that should be looked further into as they could become problems for the staff if allowed to perpetuate.
The Problem with Company X is there is no real outstanding major problem the employees are generally contented. Though most only enjoy work some of the time that is true of any job and the main reasons for that seemed to be that all the jobs have their tough elements and some days are easier than others. In general a highly customer focused company has difficult jobs due to the nature of the work.
There is no apparent split of opinions between full time and part time staff or the length of service of the staff. Everyone has there own personal discomforts that tie in with their goals and ambitions.
Some possible solutions for labour turnover are offered within the literature review. One of the first things to suggests to the store manager would be that, although it is a small percent of his staff, their are members who really enjoy working at Company X. He did say at one of the all store meetings that any one who is not happy and does not want to work there should go. This though a solution to the problem of having unproductive employees does not really address the issues. The reasons why some individuals are so dissatisfied need to be looked into.
It has been commented on that since the last store manager change the working environment has got better and the turnover has definitely decreased. Thus proving that managers and management styles have an impact on the staff. Some employees made the comments that their line managers have limited people skills and this often makes there working life more difficult than it needs to be. This could do with being addressed; it would be difficult for employees to express these problems, as the working relationships in the store are so close. Some kind of impartial counselling facility may be useful though the store manager is open enough and states regularly that anyone should feel free to tell him about any problems, there is a definite wall with obvious them and us rivalry.
The other issue brought up by the staff is the fact that most jobs seem to have little progression prospects. Introducing some kind of stage program within each job. The in store training programme use to have levels and as people progressed through the three levels they received a pay increase. Reintroducing some kind of bonus scheme similar to this may help staff feel more valued. The company does offer staff a yearly bonus of 20% discount vouchers for their year of service and the same vouchers are rewarded to stores who meet the set targets. Again these promote longer service.
The newer members of staff leaving need to be looked at in another way as it is more likely to be a recruitment and training problem. That and possibly finding the working environment to be to pressured. The head office of Company X are already researching into making improvements to the induction programme so that will hopefully be taking effect soon in the mean time at store level when recruiting an effort should be made to make sure the recruits are aware of the job requirements. Currently new recruits have interviews and a day in store to see how they get on with it. A longer initial trial period and better training on entry to the store should increase the staying power of the new recruits. The initial welcome to the store and training will have an effect on how satisfied they are in the employment. The researcher thinking back to her first day at the store recollects that they were not even introduced to all the managers let alone their colleagues and has also noticed the same with any other new people starting. This needs to be rectified as a common courtesy as well as to improve early communications.
Pay was another problem that the employees expressed, a comment made by a managers was 'if you pay peanuts you get monkeys' this though not an appropriate way to look at staff, is true if the company wish their staff to be more satisfied, on a basic level pay will make a difference. Job satisfaction and working relationships are key issues but increase in basic pay levels will improve job satisfaction as people value what they pay for staff who are paid more feel valued.
The sales people do earn commission, which increases there earning potential and the system for commission has just been altered giving them greater earning potential. However for the other colleagues pay is low some did mention that being paid on a more regular basis might help. Not necessarily weekly but perhaps fortnightly. Logistically and cost wise for the company this may not be feasible but may be worth looking into as it may end up costing less when taking into consideration the amount it costs per employee that leaves.
There are many possible scenarios available to Company X in order to increase employee satisfaction and decrease the chances of high labour turnover. Some are matters to be dealt with at store level and others at head office. One small change to improve the feeling of worth of the employees and how valued they feel to the company are they thanked for their efforts. Some times the smallest gestures can make the biggest improvements.
Bibliography
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Easterby-Smith, M., Thorpe, R. and Lowe, A. (1991) 'Management Research: An Introduction', London Sage in Saunders, M and Lewis, P. and Thornhill, A. (2000) 'Research Methods For Business Students' (2nd Edn) London, Prentice Hall
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Appendices
The first three pages (appendix 1) are a copy of the questionnaire handed out to the employees at Company X. The last two (appendix 2) are a copy of Company X's Collegue Statistics Review fore the store that was researched.
Questionnaire
I am a final year student at the University of Derby undertaking my dissertation. For my research topic I am looking at labour turnover in the retail industry, specifically at your place of employment, which is referred to as Company X for security reasons. I would be grateful if you could fill in the following questionnaire to help with my research. All answers will be confidential.
. Are you: Male ? Female ?
2. How old are you? 16-19 ? 20-24 ? 25-29 ? 30-39 ? 40-49 ? 50-59 ? 60+ ?
3. How long have you worked for Company X
Less than 1 month ? 1-6 months ? 6 months- a year ?
year - 2 years ? 2 - 5 Years ? Over 5 years' ?
4. What is your job role? Sales ?
Management ?
Warehouse ?
Mercendiser ? Stock + Service?
Administration ?
5. Do you work?
Full-Time ? Part-time ?
6. Do you always enjoy working at Company X?
All the time ?
Sometimes ?
Rarely ?
Never ?
7. What do you most enjoy about your job? (Tick all that apply)
Pay ?
Enjoy the work ?
Working with friends ?
Get on well with management/supervisors ?
Other (Please specify)...................................................................
8. If you could change anything about your job role what would it be? (Tick all that apply)
Pay ?
Different hours ?
Work with friend's ?
Type of work ?
Environment you work in ?
Other (Please state)..................................................................
9. What attracted you to the job you chose when you first applied? (Tick one)
Wanted a career in the retail industry ?
Financial Situation ?
Offered more opportunities than previous employment ?
Friends worked their ?
Best job available at the time ?
Other (Please specify)....................................................................
0. Have you changed your job role at Company X? Yes ? No ?
1. What job roles have you done?.....................................................
2.What would your reasons be for leaving your current employment? (Please rank 1-7, 1 being the most likely reason)
Pay ?
Problems with supervisor's ?
Poor relations between other members of staff ?
Job dissatisfaction ?
Personal gain ?
Working hours ?
Working conditions ?
Other (please state)............................................................
3. Why do you stay in the job? (Please rank 1-6, 1 being the top reason)
Need the money ?
Something to do ?
Not thought to look elsewhere ?
Enjoy your job ?
Get on well with other members of staff ?
Feel comfortable with manager's ??
Other (please state)............................................................
Thank you for your co-operation all answers will be kept confidential
