Custom «Effect of Employee Turnover» Essay Paper Sample

Effect of Employee Turnover

Typically, almost all bustles of business have been affected by Labor turnover. For instance, all companies ought to pay attention to it because it is a factor that is sensational. Its impacts have as well become diverse and unfavorable. Actually, these are deemed to be the major reason for the demise of bigger corporations. Organizations with a higher rate of labor turnover ought to heavily spend, so as to be able to get hold of, and train new employees. This factor is deemed to be expensive (McBey 2002).

As indicated above, almost all bustles of business have been affected by Labor turnover. In this milieu, turnover is also having either a direct effect, or an indirect impact to the tourism sector. In a number of nations, manifold organizations that are in the department of tourism have been forced, specifically by employee's turnover, to close. To that effect, this has in overall reduced the tourist number that a nation can receive on a yearly basis. Idyllically, the number of employee turnover is very high due to manifold factors. This research paper aims at presenting a crucial assessment of the impact of a worker's turnover in the Tourist-Sector. In doing so, it will come up with a few objectives as well as planned intercessions, which aim at minimizing the worker's turnover rate as well as its overall impact in the tourism sector.

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1.0.      Problem Description and its Background, with Rational Justification

A crucial factor that is affecting manifold co-operations is the Employee's turnover. As a matter of fact, it is costly to acquire new employees. Employee's turnover is affecting the tourism sector in a number of ways. This problem has been in existence in the tourism sector in essence that it has raised concerns. This is in view of the fact that the majority of customers all over the globe are involved in this sector. To that effect, the part that is most perceptive in this sector is formed by the employees who deal directly with tourists and thus, the tourist safety is dependent on these workers (Garden 2007). Ideally, if the workers are changed due to the impact of employee turnover, then the entire tourism sector will be affected.

1.1.      Problem Setting

Nearly all corporations have experienced employee turnover problem. Idyllically, all organizations have been affected by this problem irrespective of organizational position in value-chain or their geographical location. As Jaszay (2001) observes, the tourism sector of almost all nations have experienced this problem. The causes of the turnovers being high have been associated with manifold factors. However, the majority of causes are usually within the corporate.

Fundamentally, the representatives of workers deem that employee's turnover ought to be associated with the fleeting nature of a section of the labor-force (Jaszay 2001). In most circumstances, the majority of bosses find it hard to retaining their employees because the workers may encompass a broad range of individuals, such as: older persons; students; and younger individuals. As a result, a number of these workers opt to relinquish their job and decide to go for their own training, so as to escalate their possibilities of getting a job that is relatively better. In reality, the tourism sector is heavily dependent on the restaurant/hotel firms.

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In fact, labor turnover has greatly affected the tourism industry because of the great competition, especially from other related jobs. Indeed, the job opportunities in the tourism sector are mainly physical and as such, even if the salary of a hotel/restaurant worker is similar to that of a banking staff, the hotel/restaurant is likely to loose that staff the moment an opportunity comes up for him/her. As Cantrell and Sarabakhsh (2001, p.54) assert, this is mainly due to the fact that the workers of a restaurant/hotel still believe that they are doing a physical work and thus, will opt for a job that has good working conditions even if the levels of pay are equal. Thus, the restaurant/hotel industry ought to come up with strategies that will make their workers to stay.

Nevertheless, labor turnover is also being caused by low pay. With globalization of nowadays, the globe is becoming very competitive whereby the only ones to survive are the fittest. Individuals are struggling to cope up with the high standards of living. To that effect, the majority of workers are vigilant and responsive to any corporation that will give them more money the moment it employs them. This strategy has been employed by manifold hotels/restaurants in stealing those workers that are of high profile, specifically from their gung ho partners by providing them with a pay that is higher for similar services, and thus those workers will not dither quitting their present corporations.

In addition, employee's turnover is also being caused by lack of occupational benefits or structures. As indicated earlier, the majority of jobs in hotel/restaurants are physical. A number of employees with a greater personality will be stigmatized with these jobs' nature and thus, they will be alert and respond to any available chance. But if appropriate occupational benefits and/or structures programs are put in place, then this personality will be killed and the workers will be retained. Examples of benefit programs are: increments in pay; rewards; and bonus. Likewise, a worker can be promoted on the basis of work output following a given time period.

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1.2.      Thesis: Scope and Importance

All through the problem critique, there exist manifold causes of worker turnover problems that the tourism sector does experience. A few individuals were involved in these problems and they ranged from just ordinary workers to the executives of the corporate (Dyke & Strick 2003). Nonetheless, a number of departments encompassing the HR (human resource) management department were also involved. These turnovers have resulted to frequent alterations of staff members and thereby challenging the safety of tourists. Also, it is expensive for the tourist firm to replace its workers. Therefore, the thesis scope will address the probable problems that have resulted to the high rates of labor turnover as well as their impacts on the tourism sector. These causes encompass: lack of ways to boosting the employee's morale; poor payments; and inside competition.

This thesis is of importance because it aims at pin-pointing these problems as well as their likely causes. Moreover, it will also recommend for probable enhancements that would remedy this problem. Supremely, these interventions will escalate the safety of tourists and minimize the labor turnover rates that are pricey. Likewise, if adopted, these interventions will be useful in restoring back the tourist sector to the value-chain's top as the primary foreign income generator of a nation.

1.3.      Definition of Terms

In this project, the term labor/employee turnover has been broadly used. This term refers to the assessment ratio of the employees' number that ought to be replaced by a corporate in a given epoch of time to the mean number of the total workers (Deery 2000). When the turnover rate is high then more workers will be replaced by the organization, a doing that is pricey.

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2.0.      Literature Review

2.1.      The Impact of Labor Turnover in the Tourism Sector in the US

The US is amid the leading nations with tourism sectors. As a matter fact, the labor turnover has also affected tourist firm of the US, with the main effect being experienced by the restaurant/hotel firm. The figures that the hotel industry reported were relatively more alarming when compared to those of traveling and/or tour-guide sector. With regards to a research carried out by Dr. Philip in 2000, he found out that in 1998, the yearly turnover was operating at 32.6 percent (Saks 2006). Moreover, Dr. Philip's study also indicated that with regards to the managerial level, the turnover rates were relatively lower when compared to that of line-level workers. Nonetheless, a report by the US Hotel Foundation was presented by Dr. Philips. On the basis of this report, 4,000 US dollars was the estimate cost of replacing workers per hour and the mean amount for workers of restaurants had similar figure (Saks 2006).

In America, the higher rate of labor turnover is mainly due to the fact that the conditions of working in a number of hotels are very poor. In actual fact, the unfavorable conditions of the hotels are making the majority of employees to opt for other jobs. Conversely, college students were employed by a few hotels, who later quit the moment they found good jobs with a better payment. The tourism sector has greatly been affected by high rates of labor turnover. Indeed, this has significantly lowered the recorded tourist number in a year.

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As a result, concerns have been raised and the federal government has intervened. The owners of hotels have been advised to guarantee their workers security by improving their conditions of working. Likewise, they were advised to initiate benefit programs so as to be capable of motivating the morale of their staffs. Labor unions guaranteed that the employees were insured and also ensuring that priority is given to the worker's health. The majority of organizations did so and the turnover rate reduced significantly, i.e. from 32.6 percent to 26.3 percent. This in turn escalated the number of multinational tourists from 290 thousand in the year 2003, to 570 thousand in the year 2005 (Saks 2006).

2.2.      The Impact of Labor Turnover in the Tourism Sector in Europe

Just like America, there is also a larger tourism sector in Europe, which is also being affected by the employee turnover. The continuances of this problem in Europe as well as its sundry impacts on the tourism sector have been illustrated by manifold researches.  For instance, in the United Kingdom, a study was carried out by the Institute of Development and Personnel in the year 2004 and discovered that the labor turnover rate in the restaurant/hotel firms was 41 percent. This rate was a bit higher, particularly in fast-food industry. Likewise, a report by the travel and tour-guide industry illustrated that the labor turnover rate was 34 percent (Riehle 2001).

In these researches, the high turnover rates were linked to manifold causes, with the major cause being low-wages, particularly in the restaurants. In view of the fact that the workload was heavy, the workers had no option but to work overtime without any allowances. Also, the majority of employee's quit because the programs to help boost their morale were not there. Also, the majority of employees were not willing to re-train their workers and as such, those workers moved to those organizations that facilitated training of their workers. To that effect, the exit organization received a higher labor turnover rate (Riehle 2001).

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Several measures have been put across so as to be useful in controlling the impacts of high rates of labor turnover. The European Union has carried out negotiations with regards to how the employee's working conditions can be improved. For instance, the ETUC (i.e. European trade union confederation) insists on the need to protect employees (Iversion & Deery 2004). In this milieu, protection refers to the welfare of workers, such as: their payment; their workload; and their safety. An impact that is positive has been reflected by these directives, specifically in the tourism sector and thereby minimizing the labor turnover rates. Furthermore, the tourism firms have sustained their competent know-how and thereby sustaining an output that is of high-quality. To that effect, the majority of tourists have trusted Europe, an imperative aspect in multinational tourism. 

2.3.      Summary

From the case studies above, it is clear that employee turnover is a vital factor that is capable of affecting the tourism sector globally. Idyllically, tourism is an area that is sensitive because it entails taking care of multinational visitors. Also, it mirrors multinational affiliations amid manifold nations. To that effect, the government ensures good affiliations by guaranteeing the safety of multinational tourists. Superlatively, the federal government has been forced to intervene because of the great effect of labor turnover to the tourist sector. Furthermore, the majority of companies are deeply interested in the rate of labor turnover because it is pricey (Barrows 2000).

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In fact, in order for a company to replace its exit employees, it ought to incur the following costs: advertising expenses; head-hunting expenses; and new-hire training expenses. And therefore, a number of measures ought to be employed by organizations so as to minimize the exit of employees. In doing so, the companies ought to address those factors that are likely to affect organizational morale (Iversion & Deery 2004). This will be by operating programs that will benefit workers e.g. sick leaves, rewarding, bonus, and paid-holidays.

2.4.      Literature Matrix

The literature matrix that will be employed in this research is the BCPI matrix. According to Kandadi (2006, p.33), "BCPI Matrix is a comprehensive framework for KM that is developed to overcome some of the deficiencies in the theory and practice of the discipline." BCPI simply means: Business focus; Culture; Process; and Infrastructure. Ideally, these are core dimensions of an organization. The Business focus engenders organizational motivation and it likely to arise from employee turnover. In the literature matrix, culture is correlated with organization build-up of knowledge culture, so as to facilitate knowledge creation, knowledge sharing, and knowledge usage. Also, in the literature matrix, the process is linked to optimization of organizational processes as well as the implementation process. And finally, the following are enabled by the infrastructure dimension: generating knowledge; process capturing; process organization and process dissemination (Kandadi 2006).

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3.0.      Aims and Objectives of the Research

The Aim of this research project is to recommend for apposite remedies to the problems. In so doing, it will scrutinize the current prerequisite of tourism for corporate visitors to Birmingham City. Having spot the problem and carrying out a case study of that problem in other milieus, this research aims at underlining the objectives of the intercession that has been planned. But, in order to meet these objectives, programs as well as strategic plans that will be useful in remedying these problems ought to be put in place.

Therefore, the objectives of this research are:

To scrutinize the impact of labor turnover in the tourism sector in both Europe and the United States

To suggest what can be done in order to decrease the employee turnover rate in the hotel/restaurant industry by 30 percent in a period of one year; that is to minimize the current situation in hotels. This will be by bringing in of benefit-programs. The majority of labor turnovers situations have been as result of employees lacking morale. The hotel's job nature entails physical work. Actually, a number of hotel/restaurant workers get stigmatized the moment they compare their occupation to other occupations e.g. tellers of a bank (Abassi & Hollman 2000). This personality can be dealt with through the introduction of benefit programs, such as rewarding, increments in pay, and promotions, which will be useful in boosting the morale of workers and thereby guaranteeing their stay.











To recommend what needs to be done so as to minimize the labor turnover impacts in the tourism sector by 25 percent within a year, that is, to depict manifold motivation strategies.. This will be by incrementing the worker's payment. Nowadays, the world is very competitive and only the fittest are capable of surviving. The major causes of high labor turnover rates are due to the attraction by workers to a higher pay that is being offered by a competing organization. However, this can only be controlled the moment the salary payments by all competing organizations are re-examined. Those firms that pay their employees so poorly ought to escalate their pay so as to guarantee the comfort of their workers. In doing this, the movement of employees will be minimized hence also lowering the turnover rate.

To recommend the thing that can be carried out so as to significantly reduce the labor turnover rate in a period of one year. The organization ought to emphasize working conditions that are favorable for their employees. In some cases, the hotel job's nature can be perilous. For instance, if an organization guarantees the safety of its employees, then it will be capable of retaining them (Abassi & Hollman 2000). Furthermore, the organization may try compensating those employees who injured themselves during work. This will make the staff to feel appreciated by the organization and thus would like to be associated with it.

4.0.      Methodology

This research employed both qualitative and quantitative methods to gather information. The qualitative method was used because it assisted in answering queries regarding the complicated nature of employee turnover, but with the aim of depicting and comprehending the turnover rate from the perceptiveness of the employees. Conversely, the quantitative method was used because it assisted in answering regarding correlation between employee's morale and labor turnover. This research proposed a number of methods that will be used in collecting data, which were based on the perceptions of the merits and demerits of these methodologies as per the previous researches.

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4.1.      Data Collection Methods

The methodological approach of collecting primary data will mainly be through: questionnaires and interviews. The research designs will encompass assessment of today's industries in comparison to the alterations recommended. Data will be collected and then be critiqued to establish whether the research objectives have been fulfilled (theoretical justification). However, these designs ought to be cost-effective. The plan for collecting data and evaluation will encompass interviews and questionnaires. The probable interviewees may encompass illustrious customers and employees. The aim of interviewing employees is to enable them express their feeling with regards to the recommended intercessions. In fact, tourists will be given the questionnaires so as to get imperative information, which will be used in evaluation. Secondary data will be collected from: trade journals that will give the perceptions of the practitioners; and academic journals which will give the findings and perceptions from ongoing researches. This research will also entail both ethical considerations and contingency plans.

5.0.      Statistical Review and Expected Results

The data that will be employed statistically to gather attestation of the objectives being fulfilled is provided by the research plan. The critiquing of the collected data will be entailed in the statistical appraisal process. The interviews and the questionnaires with responses that are similar ought to be categorized together and then be critiqued for familiarity. In statistical testing, numerals can be employed because the perceptions of many are represented by them (Abassi & Hollman 2000). The moment a good research is carried out, the anticipated results are presumed to be affirmative. This is due to the fact that the proposed intercessions will mirror the measures that were employed by similar organizations.

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5.1.      Limitations of the Intercessions

The intercessions may seem easier to espouse. However, the objectives of this research may be minimized by a number of factors. Superlatively, the majority of the recommended alterations entail funds. For instance, if a company opts to go for benefit programs, such as pay increments, then it ought to spend more. To that effect, adopting these intercessions can be stalled by insufficient finances (Lydecker 2003).

The tourist sector is likely to be affected by labor turnover either not unwaveringly or not directly. The tourist welfare is usually challenged by the frequent alterations of workers. Furthermore, the tourist firms, e.g. the restaurant/hotel, have suffered the expenses of recruiting and hiring new staffs. Therefore, measures ought to be set up in order to control employee turnover. This is because it is pricey to settle labor turnover than to prevent it.

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