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Posts Tagged ‘Employee retention’

The Impact of the COVID-19 Pandemic on Employee Turnover Rate


The COVID-19 pandemic led to business closures and financial losses. As a result, the number of people quitting their jobs or getting laid off has increased. According to the International Labor Organization’s ILO Monitor: COVID-19 and the world of work, “…there were unprecedented global employment losses in 2020 of 114 million jobs relative to 2019.” 

For organizations monitoring this labor issue, it would reflect the % Employee turnover rate, a key performance indicator (KPI) that refers to the rate at which employees leave an organization in a given period. Consequently, % Employee Turnover Rate increased due to the effects of the pandemic. The increase was sustained by Involuntary Employee Turnover, which occurs when employees are terminated from their positions.

The economy-wide closures further disrupted the employment structure for all but essential workers. This caused an increase in the disparities between industries and social classes, with the turnover being greater among women, youth, and minorities. Moreover, the impact of the pandemic on the work system has a significant variation between regions.

The most affected were the low-wage industries requiring high human interaction, such as transportation, hospitality, food service, construction, retail, and creative industries. The State of Working America report revealed that between February 2020 and February 2021, the U.S. hospitality industry registered the highest employment loss in the nation. It is the hardest-hit sector due to a large period of restricted international mobility, losing nearly 3.5 million jobs or 20.4% by the beginning of 2021.

Changing jobs or moving to another employer seemed difficult during the pandemic. However, even if movement restrictions are subsiding and life seems to get back to normal, the employee turnover remains on an ascending trend. 

Nonetheless, the job market is confronted with another challenge, and this time, it is generated by the Voluntary Employee Turnover. This type of turnover happens when an employee leaves a job mainly because they found a new job. However, the turnover can also result from promotion within the company or retirement. 

Employee Turnover in the Hospitality Industry

In the hospitality industry, a bounce-back was expected as restrictions began to be lifted, but a shortage of employees countered the previsions. According to the U.S. Department of Labor, the number of employees from the sector who quit their jobs is on an ascending trend. In March 2020, 534.000 employees quit their job in the hospitality industry. The number raised to 703.000 in March 2021, while the preliminary data for March 2022 show that 889.000 employees from the sector quit.

The situation does not seem to improve as the results of the University of Central Florida study on the state of industry employment reveal that former hospitality employees are reluctant to return to work due to the pandemic and are seeking professional opportunities in different industries.

Going through the experience of a global pandemic has shifted people’s perspective of what work should be like. Although the reasons for leaving a job are subjective to each person, the most common changes seem to be oriented towards flexibility and well-being. 

Even if employee turnover is seen as a result of poor business performance in an economy affected by restrictions or a change in priorities among employees, the effect of the pandemic is beyond doubt. It would continue to change the global work system and employee turnover. The change is characterized by the implementation of permanent remote or hybrid work policies, making job opportunities from around the world available, changing the jobs of essential workers, and even the phasing out of certain jobs due to automation.

Therefore, now organizations have to focus on employee retention. Together with employees, companies have to find ways to adapt to the new normal, reach a mutual understanding, and find a balance between employee expectations and business performance.

To overcome the impact of the pandemic on the % Employee Turnover Rate, organizations in the hospitality sector and even in other industries, especially in low-wage ones, could improve their compensation for employees. Meanwhile, employers could also go beyond the financial perspective and develop non-financial incentives by creating healthy and safe working environments, incorporating flexible working schedules and work-from-home options, and supporting employees as they pursue work-life balance. 

To ensure employee retention, organizations must improve their communication with employees to better understand their needs, keep them motivated and engaged, create the right growth opportunities, and offer them deserved recognition.

The KPI Institute’s Professional and Practitioner training courses in Employee Performance Management are designed to help professionals in designing, implementing, and monitoring performance systems that are matched with the company’s strategic goals.

Invite your colleagues and join the Certified Employee Performance Management Live Online course on 18-22 July, 2022 to strengthen knowledge and skills in managing individual and team performance. For more information, visit our website.

Employee Turnover and Retention: The Impact of Various Talent Management Practices


The Great Resignation was among the top headlines in 2021. It highlighted the significance of employee retention. Even though most businesses are aware that the expense of replacing employees is substantial, management is still not putting enough emphasis on retaining their personnel. The possibility is that the failure occurred due to a lack of serious effort or an inability to implement retention effectively. In any case, knowing the interrelationship between turnover, talent management, and retention is critical for HR decision-makers. 

The Global Business and Organizational Excellence journal published their research done in 2021 to investigate talent management practices as a strategic technique for employee retention, to control employee turnover intentions, and to analyze how talent management practices affect employee retention and turnover intentions. This article will go over each of the sub-objectives, hypotheses, and associated outcomes, and then draw conclusions.

Before diving into the study, it may be worth taking into account the employed research method. The proposed hypotheses are tested using a quantitative method-multiple linear regression. The samples used are 236 responses from Indian IT companies. 

The following  are the four sub-objectives that influenced the research on retention intentions:

  1. Recruitment and selection

    The first hypothesis is framed in terms of the impact of recruitment and selection on employee retention: “The higher the degree of satisfaction with the recruitment and selection process, the higher the rate of employee retention.” The result shows that it has a positive effect on employee retention intentions, but was not statistically significant. This means that the recruitment and selection process can affect employee retention intentions, but is not as significant as other practices discussed later.

  2. Performance and career management

    The second hypothesis states that “Employee performance and career management positively affect turnover and retention intentions.” This means that employees who have opportunities for development and career progression are more likely to stay in the company for a longer period of time and feel happier and more loyal to their employers.

  3. Teamwork and management support

    The research’s third hypothesis is that “Teamwork and management support positively affect employee retention intentions.” This proposition is also statistically supported by the result, meaning that teamwork and management support increases employee retention intentions. The result showed that teamwork and management support increases an employee’s retention intentions. Employees that work as a team form bonds and trust with one another, which can help in employee retention.

  4. Salary and compensation

    Last but not least, the fourth hypothesis of the research is that “There is a significant positive association between salary and compensation and employee turnover and retention intentions.” The test revealed that the positive relationship between compensation and retention intentions was approved and statistically significant. Moreover, salary and compensation emerged as the most important factors for employee retention, which is also in line with other research.

In summary, the result of the research highlights the importance of talent management practices on talent retention. The talent retention process starts from recruitment, then the company’s performance management system and team support would provide a comfortable environment for employees to grow and progress their careers. Salary and other forms of compensation are important to attract and retain talent, as salary is one of the primary motives for employment.

These talent management practices each contribute in their own way, but when executed collectively, you may not need to find new talents as frequently as you usually do.

The Great Resignation and the Requirement of a Data-driven Approach from HR


Image Source: Nick Staal | Unsplash

During the past few months, there have been rampant talks regarding the Great Resignation spree, especially in the US and many European countries. Several theories have been put forward on why this phenomenon is happening, such as people wanting their own way of thinking, having freedom from a salaried culture, searching avenues to serve the community based on one’s own value system, and enjoying life leisurely without being shackled. Initial reports in media viewed pay and compensation as an important issue for this turnover, however, it was analyzed later on that pay-related issues was not figuring even on the top ten important reasons for this movement.

Factors contributing employees to leave

If it is not the pay and compensation, then what exactly is driving this phenomenon? According to a study done by MIT, the top five reasons why people resign from their jobs are as follows:

  • Culture: Employees are more comfortable in organizations where diversity, equity, and inclusion are being promoted. Reversely, employees felt an aversion towards experiences of disrespect and unethical behavior within the company.
  • Perceived job threats: Due to the prolonged situation brought by the pandemic, the financial position of an organization may be in the red. As such, employees feel that they could get laid off from their job; as a precautionary measure, they start searching for new jobs.
  • Too much focus on the idea of “innovation”: Currently, there is a focus on innovation and digital acceleration such as Machine Learning and Artificial Intelligence. While employees in an organization talk positively about innovation, they also realize that it is hard to innovate which eventually causes burnout. 
  • Performance recognition: During the pandemic, most employees started working from home. Under this environment, it is difficult to distinguish high-performing employees from the rest, ultimately leading to common minimum recognition and rewards instead of logically differentiated ones. 
  • Response to COVID-19:The response and tackling of the COVID-19 situation by an organization is greatly linked to the confidence and loyalty of their employees.

What approaches can be adopted

Organizations, particularly Human Resources (HR), must take a data-driven approach to tackle this issue, first by determining not just the quantum of people quitting but by finding who exactly has more turnover risk to the company. Of course, approaches will vary from organization to organization, however, there are a few basic steps involved. 

First, by quantifying the problem wherein the attrition rate is calculated, it should be analyzed at a granular level. This analysis should show information such as the category of people leaving in terms of function, age, gender, position, experience, or the number of years in the organization. One can use analysis to identify how much of turnover is coming from voluntary resignations and involuntary resignations. 

As a next step, the impact of attrition on the key business matrix can be evaluated, including the cost of resignations. This analysis will help in identifying the root cause of the problem and segment of people to be focused on for retention strategy. There could be some obvious reasons such as compensation, promotions, pay increases, rewards, recognition, and training opportunities. 

However, to identify softer issues such as trends and blind spots, it needs detailed employees’ feedback and one-to-one interaction. Here, a data-based HR approach is important since it can capture an employee’s mindset and convert it into meaningful analysis. After this step, companies can create highly customized programs for segments of people and identify specific factors to be corrected. The idea is to take care of factors that highly correlate to the attrition rate. 


Data-driven strategy for addressing high retention rates is difficult and resource-consuming. On top of that, doing it right is a real challenge since poorly done analysis may lead to wrong corrective actions. Nevertheless, it is worth following a data-driven strategy, especially when you want to implement a targeted retention policy. As a result, organizations can attract talent, reduce talent acquisition costs, and can develop an engaged and motivated workforce contributing from the bottom to the top line.


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