Investigating the causes and impact of a high turnover rate on a medium sized company

Abstract

This research focuses on the causes and the impact of a high staff turnover rate on a medium sized organisation. Staff turnover can be both functional and dysfunctional for any organisation. A high staff turnover rate may jeopardize efforts to attain organisation goals. The case study approach was used to determine the causes and the impact of a high staff turnover on this organisation. Both qualitative and quantitative approaches were used to collect primary data. A questionnaire was structured in a point likert scale format and was distributed to the current workforce using the personal method. For the qualitative approach, structured interviews were done on former employees. The macro and micro environment of this organisation were also investigated and analysis to determine what external and internal pressures the organisation might be experiencing The study findings suggest that salary and lack of good working conditions were the primary causes of staff turnover in the organisation. It was also noted that the macro environment was also exerting pressures on the organisation. With a record low unemployment rate, employees who were not happy with their working conditions found it easy to switch jobs. In spite of a healthy economic background, the organisation was experiencing a significant reduction in revenue and profits. Recommendations highlighted that the organisation needs to pay a marketable salary to its employees. Also the organisation must be competitive towards the market especially in these favourable economic conditions.