According to a survey conducted by The Improved Group (2013), the turnover rate in U.S. nonprofit organizations was about 17% in 2013. It is always a challenge for organizations to retain their best employees if they do not give such outstanding employees a compelling reason to stay instead of looking or accepting opportunities from competitor agencies. The retention of competent and productive professionals in organizations has been and remains a major problem for employers. Norris (1982) indicates that most Americans change jobs about 15 times by age 35. Recent studies have shown also that retention has become the major concern of today's employers (Abbasi & Hollman, 2000; Kiger, 2000; Taylor, 1999). Job retention is closely related to job satisfaction, which is "an employee's affective reactions to a job based on comparing desired outcomes with actual outcomes" (Egan, Yang, & Bartlett, 2004, p. 5). Job satisfaction is associated with respectful treatment that employee receives at work (Knudsen, Johnsonn & Roman 2003; Lund, 2003). Employees who are satisfied with their job tend to be more productive and most likely to stay in their organizations (Egan et al., 2004).
Staff Turnover and Its Impacts
Employee turnover tends to have significant impact on organizational performance. When a gifted employee leaves an organization, especially a nonprofit organization, there is always a void or a disruption in continuity that can affect output capacity. Obviously, when there is a high rate of employee turnover in organizations, the void is most likely to be filled by less experienced employees who may not be able to provide the same level of productivity at a quality standard.
A preliminary study of employment trends in a small telecom company revealed that staff turnover affects a company performance. During a 3-month period, the company had a turnover of 32.5%. This was forcing the company to rely on a contractor workforce at costs averaging 35% higher than the costs for in-house staff (superbstaff.com). Gooden and Bailey say, "Some employers indicate that it costs between $2500 and $3000 to hire and lose an employee within the first 60 days of employment" (Gooden & Bailey, 2001). Parrry & Lacy (2000) noted that it costs six times more to hire new employees than to retain a current one. They indicated that 50% of loss of production comes from absences of a week or less and job stress and related problems costs organizations as much as $ 200 billion annually (Parry & Lacy, 2000).
Employee turnover in organizations and businesses is a critical issue that employers cannot neglect if such organizations or businesses want to attain their goals.
Factors of Turnover
Some staff turnover results from an employee's personal life decision, which is beyond employer control. Abbasi and Hollman (2000) identified lack of good hiring and screening practices, managerial styles, lack of employee recognition, noncompetitive wages, and a toxic work environment as the main employee turnover factors (Abbasi & Hollman, 2000). In fact, most of the studies on job satisfaction agree that people will not commit too long to something that cannot satisfy their needs (DuBrin, 1997; Egan et al., 2004). The question is what do employees want from their jobs? Employee turnover is a complex phenomenon that employers cannot address with a single strategy. For example, a worker can decide to leave a work environment that a supervisor finds challenging, because of good wages, job security, and promotion and growth with the company. For example, the physician and the social worker might be interested in autonomy in their work place, but the nurse might be looking for monetary compensation.
Employees quit organizations when their needs are not met. They stay in organizations when their needs are met. In other words, the same explanatory factors of employee turnover can be used as strategies of employee retention.