Impact of Employee Turnover in Banking Sector

                  👀 To conclude, the problem of employee turnover can rarely be explained by a single factor, but rather by several factors which interact with each other. The converging factors are job stress, pay perceptions, low career development, bad leadership, value misfit, work life imbalance, perceived unfairness and attractive external opportunity depending on the individual. The most important aspect to HR professionals, particularly in the banking sector is to know which of these drivers is most eminent in their context and segment of employees. It is only then that retention strategies of substance can be developed. 👀 It is not only that valuable employees should be retained not to cause a manager the pain of losing them or not to humiliate the pride of the managers. It is a tactical performance driver which impacts costs, customer loyalty, quality of operations, risk, knowledge, culture, succession and innovation. 👀  I...

    Once learning what employee turnover is, why it occurs and how it harms the performance, the important question is what exactly can HR do about it? Retention is not a series of arbitrary practices commonly known as HR activities, but a strategic evidence-based system of practices that are aimed at retaining the right people at the right reason. The studies have found that properly designed HR practices may greatly decrease turnover intentions and enhance actual retention particularly when combined as opposed to being separated (Allen et al., 2010; Hom et al., 2017). In banking where human capital and customer confidence are the most vital resources, retention strategies have been found to be especially important. In this blog, the main HR strategies are described, which is connected to theory and empirical evidence.   5.1 Begin with Diagnosis: With Data Not Guesswork. HR should know who is exiting, whence and the reasons before initiating efforts. According ...

                                   Theoretically, an outflow and inflow of people in an organization can resemble a common cycle. As a matter of fact, high turnover will nearly invariably leave a performance scar behind, in particular in knowledge- and service-intensive industries like banking. Scholarly studies in a number of decades indicate an overall negative correlation between turnover and organizational performance, whereas banking-based studies present an extremely tangible impact on customers, efficiency and competitiveness (Park and Shaw, 2013; Asamoah, 2013). This blog considers the issue of turnover as a threat to performance, especially in the case of banks. 4.1 What the Evidence Says: Turnover and Performance Are Enemies most of the time. Huge meta-analyses provide a big picture message. Park and Shaw (2013) analyzed more than 300 correlations and discovered that the overall t...

  The flip side of the coin is equally however important: what will become of good employees who remain. Retention is considered not a soft, nice-to-have goal at master level, but rather a key element of organizational performance. Evidence continues to point to the fact that an organization may be more productive and better service delivery due to efficient retention practices (Allen et al., 2010; Hausknecht, 2017). The benefits of keeping good employees are especially high in people-intensive industries such as banking, where the product is mostly knowledge that an individual brings to the company. This blog describes such benefits in a number of major headings.     3.1 Reduced Costs and High Return on Investment on HR Investment.   It is a well-known fact that turnover costs a lot. Direct financial costs of recruitment, selection, medical check-ups, training and induction are involved. Besides that, there are indirect costs; lost productivity during posi...