Employee turnover and key personnel retention; a review and analysis of Trident UK

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Abstract

Employee turnover and retention are two factors that are becoming increasingly important in business, particularly in the current job market where unemployment is low and obtaining those with the necessary skills and abilities is becoming harder.

Staff turnover rates have a significant impact on business, particularly in a professional service organisation such as Trident UK where the ‘personal relationships established between employees and clients are central to ongoing success’ (Torrington et al. 2002).

Lewis et al. (2003) consider the term psychological contract which in addition to the formal contract of employment ‘refers to the expectations of employer and employee’ (Lewis et al. 2003:12).

The study and research will largely be of a qualitative nature and key points will be drawn from the findings of the employee satisfaction survey, directors’ and leavers’ interviews.

The findings conclusiveness is affected due to the sample being of around 30%, where 100% would be ideal.

A possible key to Tridents current prosperity could be down to the factor that the differences between shop floor and the directors are so small.

Review basic supervision practices: - The employee satisfaction survey indicated that only 56% of employees agree that they receive sufficient supervision and feedback from line managers, whilst the employee questionnaire results also show that lack of confidence in management and lack of recognition could leave to employees to consider their position. A review of these practices to ensure that company standards are met in terms of regular and effective supervision for all employees could highlight areas of weakness that need addressing.

Acknowledgments

I would like to acknowledge the directors and management at Trident UK for their ongoing support and assistance throughout the preparation and research involved with this study, particularly Brenda Dowds and Dave Keel. I would also like to thank David Tucker at the University for his quick-wit, useful comments and help towards the completion of the study. I would also like to pay tribute to Jen Hall for her ongoing critique of my work.

Contents

Introduction

Turnover and Retention

Employee turnover and retention are two factors that are becoming increasingly important in business, particularly in the current job market where unemployment is low and obtaining those with the necessary skills and abilities is becoming harder.

When referring to turnover and retention there are generally two key perspectives. The first is an organisation-wide view where turnover rates are looked upon in line with industry and regional norms before a generic organisational policy on retention is developed. The second focuses primarily on the retention of key personnel that have the ability to make a difference on a company’s competitive position; something that is referred to as ‘the war for talent’ by authors such as Hiltrop (1999), Woodruffe (2000) and Cappelli (2000).

Staff turnover rates have a significant impact on business, particularly in a professional service organisation such as Trident UK where the ‘personal relationships established between employees and clients are central to ongoing success’ (Torrington et al. 2002), although some organisations, e.g. fast food restaurants, can be successful with high turnover rates. Other factors against staff turnover include:

  • Cost – Thompson (2000) argues that the recruiting and training of a new employee ‘average between half and one and a half times the annual salary for the post in question, depending on the approaches used.’
  • Poorer performance from less experienced, new employees
  • Loss of a resource – time and money invested in training of an individual

Staff turnover, however, cannot just be looked upon as a negative aspect and Torrington et al (2002) argue the following positives associated to a certain level of turnover:

  • Organisations can be ‘rejuvenated with fresh blood…new ideas and experiences’
  • Assists in control over labour costs where business levels can be unpredictable
  • Poor performers can be replaced by effective employees

Staff turnover can be contributed to three key factors:

  • Push – elements such as boredom, insufficient development and personality clashes
  • Pull – associated to interest in rival employers and usually down to salary and career progression
  • External – factors that are generally not work related such as family issues or relocation.

In relation to employee retention Torrington et al. (2002) argue that the most ‘straightforward answer…to retain staff is to provide them with a better deal…than they perceive they could get by working for alternative employers.’ Following this they put forward five measures that have a positive effect on retention itself consisting of pay, employee expectation management, effective induction, family-friendly HR practices and training and development.

Trident UK

Trident UK is a packaging and brand management company situated in East Yorkshire and is currently enjoying great success. The company has moved from strength to strength in recent years and as a result its workforce has expanded from eighty employees to over a hundred and sixty over the last eighteen months. The last year alone has seen the organisation move to a new purpose built site as well as plan for expansion into the U.S., alongside this activity a great deal of strain and pressure has been placed on its workforce. Considering the strain and pressure placed on the workforce during such an extensive growth period it is pivotal that Trident does its utmost to retain its existing employees, especially their most experienced and highly skilled personnel.

1.0 Literature Review

This study is primarily aimed at deciphering the key issues that Trident UK faces in relation to its own employee turnover and key personnel retention. Considering this aspect there is, therefore, no existing literature, reading or theses that are so targeted. There is however a considerable level of such documentation in circulation that considers employee turnover and retention in relation to motivation and more generic organisational practices.

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1.1 Knowledge Management

Knowledge management takes the understanding that people have an economic value to an organisation through the skills, experience and knowledge that they posses; something that is particularly important for a specialist service organisation such as Trident. Robinson and Stern (1997) argue that organisations that desire a competitive advantage should move to develop systems to leverage the value of knowledge, with Snell and Dean (1992) adding that it is the skills, experience and knowledge that enhance productivity. Therefore profitability is maximised where investment in skill building has taken place when ‘the longer the period over which ...

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