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High Turnover Rate

Essay by   •  May 6, 2013  •  Research Paper  •  622 Words (3 Pages)  •  1,430 Views

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High turnover rate and absenteeism trouble contemporary corporations, especially for the hotels and restaurant. Research shows that in China for example, the average turnover rate of hotels in the main 23 cities is 23.95% in recent years. Once employed, 50-percent of employees may leave their jobs within one year, the PKF survey indicates. Overall employee turnover has risen from 47.8 per cent in 1985 to 53.2 per cent in 1995 (Donoho, 1997). High turnover rate brings a lot of cost to the firm and profit levels are also affected negatively by it. High staff turnover in hotels is a major factor affecting workplace efficiency, productivity and hotel cost structure (Timo and Wang, 2010).

What is employee turnover?

Turnover refers to the number of employees who have voluntarily or involuntarily left a given job or group of jobs during a specified period of time. It refers to the proportion of employees who leave an organisation over a set period (often in year-on-year basis) expressed as a percentage of total workforce numbers (CIPD 2012).

High employee turnover can have a severe impact on a business, both financially and emotionally. It is much more costly than you might think. Employees in hotels are significant because they are important to the development of the hotels; employee's attitudes and behaviours play a key role in the quality of work; therefore, managers must strive to tackle high turnover rates. Hoteliers who actively find ways to retain employees gain a sustainable competitive advantage

What is Absenteeism?

Absenteeism can be defined as intentionally routine absence from work by the employees (Beforeitsnews 2012). The research of Pizam and Thornburg (2000) shows that "Excessive absenteeism, defined as unscheduled or unauthorized absence from work" can cause negative impacts on any company. The total cost is hard to evaluate as it consists of both direct costs and indirect costs. Research indicates that some of the principal factors affecting employees' absenteeism rates included marital status, family obligations, and age. Also factors like morale, personnel conflicts, compensation, job expectations, training, and workplace conditions affect absenteeism.

In summary, from all the causes and cost of both high employee turnover and absenteeism looked at in this introduction, it can be seen that one of the major causes of turnover and absenteeism is due to lack of a proper reward strategy to motivate employees at work, and the after effect of this two issues usually has a negative impact on the business. Therefore for business in the hospitality industry (hotels in particular) to be able to remain competitive and satisfy its customers, it must strive to develop effective reward strategy for its employees, as this will go a long way to solving these



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