The previous two chapters focused on the processes used to mobilise a workforce, activities which are often expensive and time consuming. It is estimated that the costs associated with recruiting and training 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 (Branham 2005: 3). In this chapter we consider the most important ways in which HR managers seek to maximise the return on this investment, that is by seeking to maximise levels of employee engagement and to minimise levels of voluntary staff turnover.
While use of the term ‘engagement’ in the context of the worlds of work and employment has often been imprecise and nebulous, most would agree that a workforce which is ‘engaged’ or, better still, ‘actively engaged’ is much more likely to be productive and to meet its objectives than one which is either ‘disengaged’ or ‘actively disengaged’. It follows that enhancing levels of engagement, for all the confusion about what precisely this means, must be a major aim of any professionally managed HRM function.
Similarly, while arguments about the wisdom of investing extensively in initiatives aimed at maximising employee retention rates can sometimes be finely balanced, it is clear that for most organisations, most of the time, the loss of talent in which investment has been made is damaging. It follows that HR managers are right to view levels of voluntary staff turnover as a means of judging the success of people management in an organisation and are right to be concerned when the number of voluntary resignations rises higher than that of their major competitors.
The straightforward answer to the question of how best to retain staff is to provide them with a better deal, in the broadest sense, than they perceive they could get by working for alternative employers. This will also help to engage them. But it is much more than a question of getting the terms and conditions of employment right.
There is also a need to provide jobs which are genuinely satisfying, along with career development opportunities, as much autonomy and involvement as is practicable and, above all, competent line management. Indeed, it can be argued that most of the practices of effective HRM described in this book can play a part in enhancing engagement and reducing staff turnover. Below we look at five interventions that can be shown to have a positive effect.
Labour Force Survey statistics show that between 5% and 10% of employees leave their jobs for ‘family or personal reasons’ (IRS 1999: 6), while Hom and Griffeth (1995:
252) quote American research indicating that 33% of women quit jobs to devote more time to their families − a response given by only 1% of men. UK employers believe that 21% of their leavers resign ‘to have children or look after them’, a further 7% leaving to look after other family members (CIPD 2009: 31). Official statistics also show that average job tenure among women with children in the UK is over a year shorter than that of women without children and almost two years shorter than that of men. Taken together these statistics suggest that one of the more significant reasons for voluntary resignations from jobs is the inability to juggle the demands of a job with those of the family. They indicate that there is a good business case, particularly where staff retention is high on the agenda, for considering ways in which employment can be made more family friendly. Research into the antecedents of employee engagement also strongly suggests that the ability of people successfully to combine work and home responsibilities is one of the most significant factors in explaining high levels of engagement (Peccei 2013: 346−9).
As a result of legislation, UK employers, like those in many countries, are now obliged by law to provide their employees with a range of family-friendly rights. Many, however, have decided to go a good deal further down this road than is required by law. The most common example is the provision of more paid maternity leave and the right, where possible, for mothers to return to work on a part-time or job-share basis if they so wish. Crèche provision is common in larger workplaces, while others offer childcare vouchers instead. Career breaks are offered by many public sector employers, allowing people to take a few months off without pay and subsequently to return to a similar job with the same organisation. Flexitime systems are also useful
to people with families and there is also growing interest in ‘eldercare’ arrangements aimed specifically at providing assistance to those seeking to combine work with responsibility for the care of elderly relatives.
Green et al. (2000: 267−72) report research on perceptions of 1,539 employees on different kinds of training. The authors found that the overall effect is neutral, 19% of employees saying that training was ‘more likely to make them actively look for another job’ and 18% saying it was less likely to do so. However, they also found the type of training and the source of sponsorship to be a significant variable. Training which is paid for by the employer is a good deal less likely to raise job mobility than that paid for by the employee or the government. Firm-specific training is also shown in the study to be associated with lower turnover than training which leads to the acquisition of transferable skills. The point is made, however, that whatever the form of training, an employer can develop a workforce which is both ‘capable and committed’ by combining training interventions with other forms of retention initiative.
The evidence linking training and career development opportunities to employee engagement is much less unambiguous. Meta-analyses investigating the antecedents of relatively high levels of employee engagement place ‘opportunities for development’ close to the top of the list of factors that have a positive influence (Peccei 2013: 348). This is unsurprising because, in financing courses and training events, employers are sending a very clear signal to the employees concerned that their contribution is valued sufficiently for money to be invested in their personal development and potential career advancement.
If it is the case that many, if not most, voluntary resignations are explained by dissatisfaction on the part of employees with their supervisors, it follows that the most effective means of reducing staff turnover in organisations is to improve the performance of line managers. Investing in improving the quality of line management can also be shown to improve the chances that staff will be more engaged with their work, ‘leader−member exchange’ being a significant factor in determining how engaged any individual employee is likely to be (Peccei 2013: 348).
Too often, it appears, people are promoted into supervisory positions without adequate experience or training. Organisations seem to assume that their managers are capable supervisors, without recognising that the role is difficult and does not usually come naturally to people. Hence it is common to find managers who are
Albrecht, S. (ed.) (2010) Handbook of Employee Engagement: Perspectives, issues,
research and practice. Cheltenham: Edward Elgar.
Auer, P., Berg, J. and Coulibaly, I. (2004) Is a Stable Workforce Good for the Economy? Insights into the tenure−productivity−employment relationship. Geneva: International Labour Organization.
Bevan, S., Barber, L. and Robinson, D. (1997) Keeping the Best: A practical guide to
retaining key employees. Brighton: Institute for Employment Research.
Black, C. (2008) Working for a Healthier Tomorrow: Review of the health of Britain’s
working age population. London: The Stationery Office.
Branham, L. (2005) The Seven Hidden Reasons Employees Leave. New York: The American Management Association.
Breaugh, J.A. (2008) ‘Employee recruitment: Current knowledge and important areas for future research’, Human Resource Management Review, Vol. 18, No. 3, pp. 103−18.
Cappelli, P. (2000) ‘A market-driven approach to retaining talent’, Harvard Business Review, January/February, pp. 103−11.
Carroll, M., Smith, M., Oliver, G. and Sung, S. (2008) ‘Recruitment and retention in front-line services: The case of childcare’, Human Resource Management Journal, Vol. 19, No. 1, pp. 59−74.
CIPD (2009) Recruitment, Retention and Turnover: Annual survey report 2009. London:
Chartered Institute of Personnel and Development.
Conway, N. and Briner, R. (2005) Understanding Psychological Contracts at Work: A
critical evaluation of theory and research. Oxford: Oxford University Press.
Daniels, K. (2010) ‘Employee engagement’, CIPD Factsheet, www.cipd.co.uk.
DiPietro, R., Thozhur, S. and Milman, A. (2007) ‘Hourly employee retention factors in the United Kingdom quick service restaurant industry’, Journal of Foodservice Business Research, Vol. 10, No. 4, pp. 39−61.
Gerhart, B. (2009) ‘Compensation’, in A. Wilkinson et al. (eds), The Sage Handbook of Human Resource Management. London: Sage.
Green, F., Felstead, A., Mayhew, K. and Pick, A. (2000) ‘The impact of training on labour mobility: Individual and firm-level evidence from Britain’, British Journal of Industrial Relations, Vol. 38, No. 2, pp. 261−75.
Gregg, P. and Wadsworth, J. (1999) ‘Job tenure, 1975−98’, in P. Gregg and J. Wadsworth (eds), The State of Working Britain. Manchester: Manchester University Press.
Griffeth, R.W. and Hom, P.W. (2001) Retaining Valued Employees. Thousand Oaks, CA:
Harter, J., Schmitdt, F.L. and Hayes, T.L. (2002) ‘Business-unit-level relationship between employee satisfaction, employee engagement and business outcomes: A meta-analysis’, Journal of Applied Psychology, Vol. 87, No. 2, pp. 268−79.
Herzberg, F. (1966) Work and the Nature of Man. Cleveland, OH: World Publishing.
Hom, P. and Griffeth, R. (1995) Employee Turnover. Cincinnati, OH: South Western College Publishing.
IRS (1999) ‘Benchmarking labour turnover: Annual guide’, Employee Development Bulletin, No. 118, October.
Kahn, W. (1990) ‘Psychological conditions of personal engagement and disengagement at work’, Academy of Management Journal, Vol. 33, pp. 692−724.
Leiter, M. and Bakker, A. (2010) ‘Work engagement: Introduction’, in A. Bakker and M.
Leiter (eds), Work Engagement: A handbook of essential theory and research. New York: The Psychology Press.
MacLeod, D. and Clarke, N. (2009) Engaging for Success: Enhancing performance
through employee engagement. A report to government. London: Department for Business, Innovation and Skills.
Peccei, R. (2013) ‘Employee engagement: An evidence-based review’, in S. Bach and
M. Edwards (eds), Managing Human Resources, 5th edn. Chichester: Wiley.
Ritzer, G. (1996) The McDonaldization of Society: An investigation into the changing
character of contemporary social life, rev. edn. Thousand Oaks, CA: Pine Forge.
Rousseau, D.M. (1989) ‘Psychological and implied contracts in organizations’, Employee Responsibility and Rights Journal, Vol. 2, pp. 121−39.
Samuel, M. and Chipunza, C. (2009) ‘Employee retention and turnover: Using motivational variables as a panacea’, African Journal of Business and Management, Vol. 3, No. 8, pp. 410−15.
Seligman, M. (2003) Authentic Happiness: Using the new positive psychology to realise
your potential for lasting fulfilment. London: Nicholas Brealey.
Stairs, M. and Gilpin, M. (2010) ‘Positive Engagement: From employee engagement to workplace happiness’, in A. Linley et al., Oxford Handbook of Positive Psychology and Work. Oxford: Oxford University Press.
Sturges, J. and Guest, D. (1999) Shall I Stay or Should I Go? Warwick: Association of Graduate Recruiters.
Taylor, S. (2002) The Employee Retention Handbook. London: CIPD.
Taylor, S. (2010) Resourcing and Talent Management. London: CIPD.
Towers Perrin−ISR (2006) The ISR Employee Engagement Report. London: Towers Perrin.
Truss, C., Soane, E., Edwards, C., Wisdom, K., Croll, A. and Burnett, J. (2006) Working Life: Employee attitudes and engagement 2006. London: CIPD.
Waddell, G. and Burton, A. (2006) Is Work Good for Your Health and Well Being? London:
The Stationery Office.
Wanous, J.P. (1992) Organizational Entry. Reading, MA: Addison-Wesley.
White, G. (2009) ‘Determining pay’, in G. White and J. Druker (eds), Reward Management: A critical text, 2nd edn. London: Routledge.
Torrington-Hall-Taylor-Atkinson. Original materials from Human resource management © copyright 2014 Pearson. All rights reserved.
Once you have read the article, if you have understood the reading, you should be able to answer the following questions competently.
A model answer is available for each question, but try to answer on your own first. Your responses won’t match the model answers exactly, but you should compare your performance with the models and consider whether you took all the relevant factors into account. Rate your performance honestly. If you haven’t performed as well as you hoped, you may need to go over parts of the chapter again.
We recommend that you now complete your topic progress log. This should allow you to monitor and assess your progress and your understanding of the topic before you move on.
Holding a PhD degree in Finance, Dr. John Adams is experienced in assisting students who are in dire need...
55 - Completed Orders
Canada, Toronto I have acquired my degree from Campion College at the University of Regina Occuption/Desi...
52 - Completed Orders
Even since I was a student in Italy I had a passion for languages, in fact I love teaching Italian, and I...
102 - Completed Orders
To work with an organization where I can optimally utilize my knowledge and skills for meeting challenges...
109 - Completed Orders
JOB OBJECTIVE Seeking entry level assignments in Marketing & Business Development with an organization...
202 - Completed Orders
Current work profile Project manager- The Researchers Hub (2nd Jan 2016 to presently working) Researc...
20 - Completed Orders
Sales Assistant, Mito Marina Assigned to the Stationery dept – assisted in merchandising, stock taking...
100 - Completed Orders
Personal Profile Dedicated and highly experienced private chauffeur. High energy, hardworking, punctua...
200 - Completed Orders
I'm Lizzy, full time education specialist in English, Essay Writing, Economics and Maths. Having Assi...
109 - Completed Orders