The Cost of Turnover - 5420 Words

The Cost of Turnover Putting a Price on the Learning Curve by Timothy R. Hinkin and J.BruceTracey Employee turnover does more than reduce service quality and damage employee moraleÂâ€"it hits a hotelÂ’s pocketbook. E mployee turnover has long been a concern of the hospitality industry, and therefore of researchers who examine industry human-resources concerns. One stream of research that arose in the past 20 years was an effort to quantify the cost of employee turnover. Although most managers agreed that turnover was bothersome, calculating a dollar figure for employee departures would provide those Timothy R. Hinkin, Ph.D., is a professorof managementorganization, human resources, and law (MOHRL) and director for undergraduate†¦show more content†¦The lodging industry sees fierce competition, with new products and branding strategies vying for the dollars of increasingly demanding consumers. Technologically, the industry has made tremendous progress in revenue-management systems, computerized reservations, and POS systems, and we can only hazard a guess what the internet will eventually mean to the lodging industry. Virtually all jobs have been altered by technology and downsizing, and hotel employees have more to learn and do than they did two decades ago. The demographic characteristics of the workforce have changed, and in many markets most of the people considered employable are already employed. With predictions of labor shortages to come, competition for qualified employees will only increase, making employee retention an important managerial objective. A recent stream of research has empirically demonstrated a significant relationship between sound human-resources practices and financial performance.3 For example, a recent study by Delerey and Doty found that three HR practicesÂâ€" namely, results-oriented perform mance appraisals, employment security, and profit sharingÂâ€"were strongly related to return on equity and other financial measures of a firmÂ’s 3 For example, see: Jeffrey Pfeffer and John Viega, “Putting People First for Organizational Success,” Academy of Management Executive, Vol. 13, No. 2 (1999), pp. 37Ââ€"48; and James L. Heskett, Thomas O. Jones, GaryShow MoreRelatedThe Cost Of Turnover Is Significant1631 Words   |  7 PagesResearch shows the cost of turnover is substantial and varies from region to region. The measurement of what costs are included are just as diverse, but according to Jones and Gates (2007), the cost of turnover can be 1.3 times a departing nurse’s salary. With this in mind, the costs of recruitment and retention cannot be underestimated nor seen as an expense, rather a return on investment. Thankfully, the costs for some of the proposed administrative solutions are minimal or cost nothing more toRead MoreNursing Turnover Costs And Its Prevention1530 Words   |  7 Pages Nursing turnover costs and its prevention Ryan Figley University of Central Missouri Nursing turnover has been a well-documented issue with regards to retention of competent staff in health care facilities throughout the country (Cartledge, 2001). Turnover is simply defined by Sullivan as the vacating of positions by staff; however, nursing turnover is a phenomenon that must be understood and guarded against (Sullivan, 2013). The effects of turnover can be seen in many aspects ofRead MoreBenefits Of Employee Turnover Cost Essay8929 Words   |  36 PagesEmployee turnover cost is usually defined as the cost to hire a replacement associate and train this new employee for the new role. Most of the time the cost for training is considering the list of activities and/or courses that a new associate should undertake in order to become productive. Figure 5 is showing the cost and Return Of Investment process during the employee`s work time. The ROI or potential revenue (in the specific case we will consider Productivity and Quality since it is an RD labRead MoreWhat Is the Real Cost of Employee Turnover967 Words   |  4 PagesWhat Is the Real Cost Of Employee Turnover The employee turnover rate and the retention of skilled employees is a major problem businesses face. Conservative estimates put the cost of replacing a lost employee at 25 percent of the annual compensation amount. For the typical full time employee who earns $38,481 and receives $50,025 in total compensation, the total cost of turnover would amount to $12,506 per employee. This being the case employee turnover is a major cost and can significantlyRead MoreThe High Cost of Employee Turnover in Business660 Words   |  3 Pagesthe costs (both real costs, such as time taken to select and recruit a replacement, and also opportunity costs, such as lost productivity), the cost of employee turnover to for-profit organizations has been estimated to be between 30% (the figure used by the American Management Association) to upwards of 150% of the employees remuneration package.[4] There are both direct and indirect costs. Direct costs relate to the leaving costs, replacement costs and transitions costs, and indirect costs relateRead MoreInventory Turnover : Cost Of Goods Sold950 Words   |  4 PagesInventory Turnover = Cost of Goods Sold / Avg. Inventory Measure of Efficiency of inventory management 2015 2014 Inventory Turnover = 387,000 / 110,000 = 3.518 times Inventory Turnover = 275,000 / 80,000 = 3.4735 times The result of inventory turnover for Smith Enterprises being so small tends to be restricted sales volume. With this, the company requires a larger investment in inventory. Days Sales in Inventory = Ending Inventory / Cost of Goods Sold x 365 Measure of Liquidity in inventory 2015Read More What Is the Real Cost Of Employee Turnover Essay947 Words   |  4 Pages What Is the Real Cost Of Employee Turnover The employee turnover rate and the retention of skilled employees is a major problem businesses face. â€Å"Conservative estimates put the cost of replacing a lost employee at 25 percent of the annual compensation amount. For the typical full time employee who earns $38,481 and receives $50,025 in total compensation, the total cost of turnover would amount to $12,506 per employee.† This being the case employee turnover is a major cost and can significantlyRead More Reducing the Cost of Employee Turnover by Managing for Retention2471 Words   |  10 PagesReducing the Cost of Employee Turnover by Managing for Retention Employee turnover and the retention of valued employees are major problems facing business in the U.S. The average turnover rate is hovering at 15%. The costs associated with that turnover can be high - generally 25 percent of the individuals annual salary. Unemployment in the United States is at a 24-year low. Employee loyalty is down. Never before has it been so critical to focus on strategies for keeping good employees. HoweverRead MoreEssay on Nursing Turnover: Costs, Causes, Solutions2923 Words   |  12 PagesIntroduction: Nurse turnover is defined as â€Å"the number of nurses changing jobs within an organization or leaving an organization within a given year† (Baumann 2010). Retaining nurses is one of the most important issues in health care as its effects range from challenges in human resource planning, to high costs in financial and organizational productivity (Beecroft et al, 2008), to workgroup processes and morale, to patient safety and quality of care (i.e. patient satisfaction, length of patientRead MoreActual Cost of Employee Turnover Ways to Improve Retention2772 Words   |  12 PagesActual Cost of Employee Turnover Ways to Improve Retention Steve Burton Morrison University ACTUAL COST OF EMPLOYEE TURNOVER WAYS TO IMPROVE RETENTION Employee turnover is one of the largest problems for many organizations, yet it is one of the most unknown cost. Although employee turnover may not seem like a big deal, it is very expensive part of the business. A study done several years back showed that less than 50% of businesses had a plan to determine what turnover