Impact of Dysfunctional Employee Turnover
Dysfunctional employee turnover occurs when productive, professional, or strategic employees who are helpful to an organisation exist. LeDoux et al. (2019) stress that this kind of turnover transcends issues of substantive performance and breach of business continuity by extending its impact on staff motivation. For these challenges, senior leadership teams must understand both direct and indirect costs and efficiently respond to their consequences.
Direct Cost associated with Dysfunctional Employee Turnover
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Financial Costs
Dysfunctional employee turnover affects ParcelCare more financially since it tends to occur when employees should be productive. These costs comprise employee recruitment and training; the two are pretty costly, mainly due to the warehouse workers who need to meet specific requirements to be hired by the company. The costs associated with recruitment include advertising fees, interview expenses, and the costs of hiring new candidates; on the other hand, training new employees takes time and resources (Baio et al., 2024). High employee turnover leads to increased business costs, which in turn reduces the company’s profitability. Additionally, remaining employees may feel pressured to work extra hours or provide consultancy services, further straining the board’s budget.
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Dispersal of Skills and Know-how
The high turnover rate causes ParcelCare to lose valuable employee expertise. This loss hurts the warehouse’s productivity, as it removes staff with knowledge of working procedures, standards, and guidelines. The loss of such personnel means the organisation will experience poor performance standards since efficiency is reduced due to high complexity (Tamunomiebi & Mezeh, 2021). As in the case of knowledge transfer, educating new employees also hinders workflow, not to mention a test to unity within a team.
Indirect Cost associated with Dysfunctional Employee Turnover
1. Decrease in Morale and Motivation
High turnover can cause departing talented employees, which in turn disengages and decreases job satisfaction of the remaining workforce and results in more turnover. Dysfunctional turnover might lead to the development of an unstable perspective and jeopardise trust in leadership and the organisational future (Scott et al., 2021). Dysfunctional employee turnover may have a detrimental impact on employee motivation and performance. A high turnover rate results in an unstable organisational culture, and the remaining healthcare staff become less satisfied in their places of work (Van Fleet et al., 2006). This can cause burnout, stress, and an increase in turnover rates. Therefore, employees’ morale and productivity may be eroded due to the perception that their working environment is constantly shifting or that their fellow workmates frequently transition to other organisations.
2. Negative Impact on Customer Experience
In occupations where clients are the primary focus, for instance, in the services sector, hospitality, or retail, dysfunctional turnover can lead to service disruptions (Zhang & Wang, 2021). Customers may be disappointed by inconsistent or lower quality work from inexperience or too few personnel. This can hurt the company’s brand image and profitability. Therefore, dysfunctional employee turnover negatively correlates with financial performance, harms employee stability, and lowers customer satisfaction. Solving this problem involves top management implementing measures such as enhanced retention policies, organisational engagement interventions, and compensation. Addressing turnover in advance improves an organisation’s future performance and increases its employees’ well-being.
Lastly, dysfunctional employee turnover is another factor that should be managed in ParcelCare because it leads to financial losses and conveyor loss of valuable knowledge. Managing these effects will, therefore, require keen focus and special attention on the company’s part to employ string-informed retention policies that will help sustain the company’s success.
