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How does a major technology company deals with high employee turnover.

NWT is a major technology company that has seen many of its experienced employees depart over the last few years. The impact of this is insufficient workforce to take on jobs that it takes on. Known for its quality work, NWT is concerned that further erosion of its talent base will result in further reduction of its bottom line. The company was of the opinion that it offered a generous and competitive compensation package. Concerned that further departures will begin to affect the quality of its work, NWT has retained a consultant to assist in addressing the problem.

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NWT is a major technology company that has seen many of its experienced employees depart over the last few years. The impact of this is insufficient workforce to take on jobs that it takes on. Known for its quality work, NWT is concerned that further erosion of its talent base will result in further reduction of its bottom line. The company was of the opinion that it offered a generous and competitive compensation package. Concerned that further departures will begin to affect the quality of its work, NWT has retained a consultant to assist in addressing the problem.

Retention of Human Resources

Movement of individuals into, through, and out of an organization is termed as turnover. Turnover can be statistically defined as the total number (or percentage) of separations that occurs over a given time period. The turnover rate is an important indicator of the morale and health of an organization.

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Thus a severe problem facing any corporate entity today is the issue of retaining and attracting human resources. These resources that were stable in the past are the most mobile and fickle today. Thus managing employee turnover is critical to any and every organization. According to the fratfiles "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."
Thus the employee turnover can significantly affect the profits. According to the about.com, Total employee turnover cost = Costs of hiring new employees + Costs of training new employees
Bliss & Associates, a human resources consultant firm, breaks these costs into four categories: 1) costs due to the employee leaving; 2) hiring costs; 3) training costs; and 4) lost productivity. Let us discuss the cost in a detailed manner:

Costs of Hiring New Employees

? Advertising

? Bonus signing

? Relocation pay

? Time for interviewing

? Travel expenses

? Pre-employee assessments

Costs of Training New Employees

? Training materials

? Technology

? Employee benefit set up

? Time for trainers

Other costs include:

* Excess staffing levels and overtime payments

* Delay in work

* Higher stress to the existing employees

* Adverse impact on the morale and resulting low productivity and customer service

* Reputation of the organization is hurt.

Implication of changing workforce
The implications of changing workforce demographics are important. If the age of the population is young it means entry positions will be easily filled. If the workforce is highly educated, the quality of work will be high but higher salaries will have to be paid. Usually, by the demographics changing every implication is more complex. However changing demographic realities are given to an organization and the capacity of the organization to adapt to these realities is limited. Even for the most flexible organization it takes time and resources to completely adapt to the changing workforce demographics. Thus, the importance to a changing workforce can be and HRM challenge but can be handled with time and resources. Thus rising employee turnover often becomes a 'vicious circle': low morale causes more workers to leave, increasing the dissatisfaction of those who remain, and so on. (ACAS) ...

Solution Summary

The solution discusses how NWT deals with high employee turnover.

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