ase: Churning About to Heat Up Traditionally, the US workforce has had on of the

Question

ase: Churning About to Heat Up

Traditionally, the US workforce has had on of the highest rates of voluntary turnover in the world, and this is actually considered a source of competitive advantage. Unlike layoffs that reduce the overall size of the economy, people who turn over voluntarily often have lined up better jobs already, and thus, create a new job opening for someone else after they leave. Thus, this kind of "churning" does not affect the size of the economy and results in a better person-job fit for many people. It also rewards good employers who fail to meet the needs of the workforce, thus "thinning the herd" at the firm level.

The churn rate for the US economy. however, is not what it used to be, and many have pointed to this factor as one of the reasons for the weak nature of the most recent recovery. Many workers during the recession were very reluctant to leave their jobs, and this aversion to risk reduced the number of job openings and above what might be attributed to the bad economy. One study suggested, for example, that 80% of the reduction in hiring during the 2007-2009 recession was due to a reduction in churn rather than a decline in job creation.be changing, however. Turnover rates that stood at 9% in 2008 and 2009, jumped to 15% in 2010 and 2011. In addition, all signs pointed to even higher increases in 2012 and 2013. A national survey conducted by the Society of Human Resource Management indicated that job satisfaction, a leading indicator of voluntary turnover, was down over 80% in 2012, and a separate survey conducted by HR software vendor Cornerstone OnDemand estimated that 25% of employees were looking to change jobs in the 2013-2015 time period. Many of these workers suffered through years of increased workloads without increased pay during the recession and are looking to improve their situation as the economy continues to hear up.

For businesses, the cost of this churning is close to $2 trillion due to the need to recruit and train new workers. This cost is not distributed evenly across employers, however. Organizations that were not able to keep up employee morale are about to lose a large percentage of their most valued employees, whereas companies that met their employees' needs are likely to experience stability or growth. Thus, churning streamlines the economy and creates efficiency by eliminating weak competitors and strengthening the most competitive firms.

Analyze and answer these questions.

-How do employee development, career development performance management and employee engagement reduce voluntary turnover?
- What measures of employee development, career development performance management, employee engagement, and turnover do you think are most beneficial as an HR leader?
- How does turnover contribute to competitive advantage?
Write a 5-page paper with clear citations and bibliography.

Churning About to Heat Up Traditionally, the U.S. workforce has had one of the highest conducted by HR software vendor Cornerstone OnDemand rates of voluntary turnover in the world, and this is actually estimated that 25% of employees were looking to change considered a source of competitive advantage. Unlike lay- jobs in the 2013-2015 time period. Many of these work- off's that reduce the overall size of the economy, people who ers suffered through years of increased workloads with- turn over voluntarily often have lined up better jobs already. out increased pay during the recession and are looking to and thus, create a new job opening for someone else after improve their situation as the economy continues they leave. Thus, this kind of "churning" does not affect the For businesses, the cost of this size of the economy and results in a better person-job fit $2 trillion due to the need to recrui t also rewards good employers who can This cost is not distributed evenly across employers, how- meet the needs of the workforce, thus "thinning the herd" at the firm level. t workers and punishes employers who fail to ever. Organizations that were not able to keep up employee morale are about to lose a large percentage of their most val- ued employees, whereas companies that met their employ- The churn rate for the U.S. economy, however, is not what ees' needs are likely to experience stability or growth. Thus, is used to be, and many have pointed to this factor as one of churning streamlines the economy and creates efficiency by the reasons for the weak nature of the most recent recovery. eliminating weak competitors and strengthening the most Many workers during the recession were very reluctant to competitive firms. leave their jobs, and this aversion to risk reduced the number qUESTIONS of job openings over and above what might be attributable 1. What are some of the steps organizations take to reduce to the bad economy. One study suggested, 80% of the reduction in hiring during the 2007-2009 reces- 2 How does an increase in churn rates create strategic for example, that and avoid turnover among employees? sion was due to a reduction in churn rather than a decline in job creation. opportunities for firms with strong reputations in the All of this seems to be changing, however. Turnover labor market? rates that stood at 9% in 2008 and 2009, jumped to 15% in SOURCES D kan al Timo r Rae Inching UptPR web. June27 2010 and 2011. In addition, all signs pointed to even higher 2013, www.prweb.com; G. Kranz, "As Career Development Lags, Employees increases in 2012 and 2013. A national survey conducted by the Society of Human Resource Management indicated Retention," Washingion Past, January 22, 2013, www.washingtonpos.com that job satisfaction, a leading indicator of voluntary turn- B. Caselman,. "Litle Room for New Workers" The Wal Street Journal, over, was down over 80% in 2012, and a separate survey February 8, 2012, www.wsj.com. Are Going Places." Workforee, Febeuary 2013, p. 10. S. Halzack, "Worker Turnover Is Poised to Pick Up, Adding Urgency to Employers' Focus on MANAGING PEOPLE

Explanation / Answer

Ans:- A satisfied employee is not going to leave the company. There are various factors which lead to employee satisfaction. Employee development, career development performance management and employee engagement reduce voluntary turnover in following ways:-

1. Every employee want to see himself/herself growing in the company. He has aspiration of better perks, better profile and bigger work role. If these conditions are met then there is hardly any chance for the employee to leave the company.

2. Performance management is a process of setting objectives and monitoring performance over a period of time to analyse the contribution of employee to the organisation. Performance mangement system gives an understanding to the employee as well in terms of his progress and mistakes he has commited in past.

3. Employee engagement gives an idea about involvement of employees to the organisation. More closely associated employees are more loyal to the company and more productive. Thus by having better employee engagement a compnay can reduce voluntary turnover and it can retain its skilled workforce.

There are various measures of employee development, career development performance management, employee engagement, and turnover that are most beneficial as an HR leader:-

1. Compensation and benefits

2. Goal setting and achievement in a period

3. Recognition to employee

4. Wellness initiatives

5. Training and development

6. Diversity at workplace

Voluntary turnover is a source of competitive advantage. Unlike layoffs that reduce the overall size of the economy, people who turn over voluntarily often have lined up better jobs already, and thus, create a new job opening for someone else after they leave. Thus, this kind of "churning" does not affect the size of the economy and results in a better person-job fit for many people. It also rewards good employers who fail to meet the needs of the workforce, thus "thinning the herd" at the firm level.

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