-75%
Solution
Dysfunctional Turnover
Organisations experience dysfunctional turnover when key, high-performing individuals leave when they would have rather that they remained (Cosentino, 2022). Finding and training replacements for these departing employees is an expensive ordeal, especially because they were valuable contributors to the company. The company suffers when important, experienced employees depart willingly for avoidable reasons.
Impacts
- Direct and Indirect Costs
Dysfunctional turnover leads to both direct and indirect costs that can strain ParcelCare’s budget. Direct costs include expenses related to recruitment, such as advertising, interviewing, and hiring. Training and onboarding new employees also require time and resources, impacting the company financially. Indirect costs are often more significant and include lost productivity as new hires take time to reach the performance level of their predecessors (Plum 2024). Furthermore, high turnover can lead to overtime payments for existing staff who must cover additional duties, reducing overall efficiency and profitability. These costs can accumulate quickly, diverting funds from other critical areas like research, development, or expansion efforts.
- Impact on Team Morale and Productivity
The departure of high-performing employees can negatively affect team morale and productivity. Remaining employees may experience increased workloads and pressure to compensate for the lost expertise and knowledge. This added stress can lead to burnout, decreased job satisfaction, and further turnover, creating a cycle of dysfunction (Surji, 2013). Additionally, the loss of trusted colleagues can impact team cohesion and collaboration, reducing effectiveness in achieving goals. When employees witness frequent departures, they may question the company’s stability and their future within it, leading to disengagement and diminished performance across the organisation.
- Psychological Impact and Reputation
Dysfunctional turnover can also have a psychological impact on the workforce and damage ParcelCare’s reputation as an employer. Employees may experience anxiety and uncertainty about their job security, fostering a negative work environment, as evidenced by Ramzy et al. (2018). This atmosphere can stifle creativity and innovation, as employees may be less willing to take risks or invest in long-term projects. Furthermore, a reputation for high turnover can deter potential talent from joining the company. Negative perceptions can spread through word-of-mouth and online reviews, making it challenging to attract skilled employees. As a result, ParcelCare may struggle to build a stable, high-performing workforce, ultimately hindering its ability to compete in the market.
