01.GLOBALIZATION ASPECTS OF EMPLOYEE RETENTION AND TURNOVER MANANGEMENT IN BANKING INDUSTRY

 Introduction 

Banks are   one of the most important financial institutions. It provides a number of services to consumers around the world. Throughout the last decades a term employee turnover has been gaining a notable consideration within many   industries specially for banking industry.  Employee turnover refers to the number or percentage of workers who leave an organization and are replaced by new employees. It   has   been critically observed in almost all the areas  where  human  capital  is identified  as  the  major  source  of  production.  Namely, financial institutions, economical fields, educational spheres and many other organizations tend to have targeted level of personnel turnover and try to maintain such acceptable rate through whole operational life. Despite the fact that high fluidity of personnel can result in critical outcomes, some businesses still seem to undervalue the importance of this indication and pay little attention to the root causes. It is mainly due to a belief that success of the organization depends on many other factors rather than what rate of staff turnover it has. Nevertheless, the   very  recent  empirical  studies  have  shown  that  employee  turnover  can  seriously  affect  the organizational efficiency specially for banks.

It has been widely observed that high level of staff turnover can be the reason of economic losses of the organisation. Also, it can exert negative impact on morale of the remained workers and   devotion of   the company.  At   dismissal   of   employees the   developed communications   between colleagues  collapse,  leading  to  reduction  in  overall  performance  of  employees  and  negatively influences corporate culture. This may in turn result in decreased productivity of organisations.

 Statement of the problem 

Currently, many banks are facing unfavorable rates of employee turnover. Organisation should learn on how to   deal with the factors leading to high percentage of employee turnover during their service period failure to which they will lose their most of the customer base. Such lagging behind may be due to several factors. First of all, it is quite possible that human resources may be underestimating the true cost of such movement since they do not pay out the costs from their pockets   but   from the firm’s budget.  Secondly   and most importantly the actual causes of  personnel fluidity may be not properly studied and analyzed. Consequently, any solutions to uncovered issues do not   give   desired   results.  Moreover,   less  attention  and  little  funds  are  paid  to  the  research  and development regarding employee retention.  

Most of   scholarly   articles   have   found   numerous factors affecting   the employee turnover.  Most frequent factors   were recognized as issues such   remuneration, job stress, work environment and career growth. Apart of that others are company benefits, employee attendance   and job performances etc. In the widely cited paper (white ,1995) found that the causes of employee turnover fall under   categories: Job   dissatisfaction, errors in employee selection and poor management. (Sheelan,1995) found that the most common cause of turnover is job satisfaction.

 Banking sector is one of the most vulnerable to high employee turnover rates. Most obvious reasons for such turnover are the strong competition between the banks  and  big difference  among salary rates. Moreover, main duties and job responsibilities are very similar which again tells that if any employee leaves the job he or she can get one in other banks easily as they are well acquainted with major job tasks.  This article is critical evaluation about employee retention & turn over focusing about the how would be affected for the Banking Industry

Link between Employee Turnover and Employee Retention in Banking Industry 

The modern banking industry is a network of financial institutions licensed by the state to supply banking services. The principal services offered relate to storing, transferring, extending credit against, or managing the risks associated with holding various forms of wealth. One of the challenges in banking industry to be highlighted as high staff   turnover.

Employee Turn Over

 Turnover is the percentage of employees who leave an organization over a set period.  High turnover is an unfavorable situation that will result in increased costs in terms of recruitment, training, and development as well as benefits and compensation. When an employee leaves the organisation, the management has to incur additional expenses by recruiting new staff, designing a new salary package, and providing training course (Javed, Balouch & Hassan, 2014). Eventually, it will have a negative impact on the bank’s performance in the market in terms of profit margin. This implies a need to understand the key determinants of employee turnover intention as the main contributor to the high turnover rate In  this study, we examine the factors that affect employee turnover intention in the banking industry. The findings will help human resources managers to better align their employee retention plan   instead of focusing only on salary increment, thus improving the bank’s productivity and overall performance

Where do I find my company’s turnover and associate cost?

First, you need company data on headcount and the number of people who left the company in a given time period. The general formula is:

Employee turnover rate as a percentage = (total number of employees who left in time period / average number of employees in time period) * 100

Calculating   employee turn  over is essential  for positioning  an organization  on the right  path of growth  and organizational success (Mullins,1996).Many companies track turnover closely because it can be a huge cost to replace employees. Like customer retention, investment in employee retention has a higher return than investment in acquisition.

 

Types of Employee turnover.

Voluntary turnover is when the employee decides to end the employment relationship—it’s the employee’s choice to leave. Generally, the primary focus of retention efforts is to reduce these resignations. Retirement is technically voluntary turnover, however companies often report retirement rates separately because they are not a focus for reducing turnover.

Involuntary turnover is when the employer decides to end the employment relationship the employee did not choose to leave. This could be due to ,

• Poor performance
• Behavioral issues
• Changing business needs
• Budget cuts
• Structural reorganization/reductions in force

Healthy turnover is when ending the employment relationship is best for both the employee and employer. It could be when a project ends or there is just a poor fit.

Regrettable turnover is when an employer loses an employee important to its business.This generally includes employees identified as high performers or high potentials. It also relates to how big an impact they make when they leave, typically because they had a lot of intellectual capital, many direct reports who relied on them, or critical skills that will be difficult to replace.

Who is responsible for turnover?

Managers tend to have the biggest impact on retention and face the most immediate consequences when someone leaves their team.

That said, it is often the senior leadership team or HR who is responsible for tracking and reporting turnover. These groups may also work together on wider efforts to reduce turnover.

Given the main Reasons   highlighted in exit interviews

Given the main Reasons   highlighted in exit interviews

•  Employees have an alternative best opportunities with other institutions. Organisation is not satisfied with employee performance and makes the decision to fire him or her.

•          Lack of supervision, poor support, and role conflict.

•          Lapses in Information sharing structure.

•          The heavy workload on a single employer.

•          Extra pressure is created on staff members.

 

What is the meaning of employee retention in banks ?

Good  employees are hard to find and  its even harder to retain  those employees. That is the reason for reducing  employees turn over  is fast  becoming  the primary  concern  among companies world wide. Employee retention is   the percentage of employees who stay at an organization over a set period. It can also be measured in terms of the average or median tenure; the number of years that employees remain with an employer . Retention is also a key sign of employee sentiment and engagement.it can even be a competitive advantage for the Banks. Compare this to a company with a team with a proven history of skills, knowledge, and relationships built long term within the company. Employees remains at organisations   for a variety of reasons including meaningful  work that leverages their skills and abilities, career development  and growth opportunities including  competitive salaries  and benefits  are the others. 

Why should we pay attention to staff retention?

Retention may not always be the organization’s priority if  best people never leave for unavoidable reasons. How ever any organisation should be focus more attention to the matter already discussed through article. From the very first employee-employer interaction, likely the job application, HR department  have  an opportunity to build a culture of commitment. Every aspect of the candidate and employee experience that would be help make   organization successful.

According to Mike Poskey at ZeroRisk.com, seven (7) steps lead to increase employee retention:-  

1. It  is  necessary  to  conduct  job  analysis  audit  with  behavioral  assessment  and  cognitive  reasoning assessments with skills assessments of an employee before he / she recruit for a job. 

2. It  is  also  necessary  to  implement  job-designed  assessments  with  selection  and  recruitment  process. Techniques of structured interview should be adopted to select right person for right job. 

3. Provide  high  quality  of employee  orientation and  socialization. The  employees  that  are  hired  by  the organizations are resource for their future success.

  

4. It  is  necessary  to  implement  programs  for  their  employee  training  and  development.  Professional development should be done for employee to show the commitment of an organization.

 

5. Relationship  between  manager  and  employee  should  be  better  at  all.  That  can  hold  to  retain  an employee with organization. 

6. A competitive and equitable pay system is required to be introduced. 

7. Succession planning should be encouraged. Role of  employees should be  cleared. Organization should invest in cross-training, coaching job shadowing, mentoring, and job rotation. (Mike, 2013)

What strategies should be adhere to reduce  employee turnover in banking industry 

When we strive to improve employee retention in Banks to be considered following methods   in order to develop  organization s retention strategy

• Build a strong relationship with the team some ideas get it inspired

• Host a quarterly or monthly luncheon

• Ask your teams or departments to conduct regular satisfaction surveys

• Host trivia games with gift cards as the prize

•  Give some recognition 

•Invest in employee education-Continuing employees education will be further   advance and improve their expertise which will be improve customer experience and increase productivity .three ways you can promote continuing education within your organization:

1. Offer a clear path for growth to inspire employees to work toward their goals and solidify their future within your company.

2. Create plenty of training opportunities. Make sure you have a training program in place to give your employees the chance to work toward their goals

3. Allow people to develop mentoring relationships within the organization.

Conclusion 

In summary, many organizations are already using several of the aforementioned steps but may be lacking or may be deficient in the other steps. Each step is critical to the overall success of an overall employee retention plan. this study reveals the roles of working environment, salary, job enrichment, job stress, and job satisfaction on employee turnover intention in the banking industry. Based on the results, job satisfaction and job stress play an important role in the turnover intention of banking employees. To enhance job satisfaction, the bank should enhance the working environment, job enrichment and reduce job stress. Working environment will enhance job satisfaction and indirectly reduce the turnover intention. 

Referencing :

Bonus.ly.The ultimate employee retention guide.[online]Available at: https://bonus.ly/employee-retention-guide/what-is-employee-turnover-retention>[Accessed on 10 December 2021]

Javed, M., Balouch, R., & Hassan, F. (2014). Determinants of job satisfaction and its impact on employee performance and turnover intentions. International Journal of Learning and Development, 4(2), 120–140. [online]Available at  :https://doi.org/10.5296/ijld. v4i2.6094> [Accessed on 10 December 2021]

Rewardgateway.com. Employee retention strategies for banks.[online]Available at https://www.rewardgateway.com/blog/employee-retention-strategies-for-banks>[Accessed on 11 December 2021]

Irmi.com .Seven steps to increase employee retention.[online}Available at https://www.irmi.com/articles/expert-commentary/seven-steps-to-increase-employee-retention>[Accessed on 12 December 2021]