Turnover Rate by Industry August 2015 (seasonally adjusted) Total 3.4 Manufactur
ID: 327246 • Letter: T
Question
Turnover Rate by Industry
August 2015 (seasonally adjusted)
Total
3.4
Manufacturing
2.2
Retail trade
4.4
Information
2.5
Accommodation and food services
5.9
Finance and Insurance
2.0
Government
1.5
source: Bureau of Labor Statistics
a)
Consider the Finance and Insurance industry. It turnover rate is below the national average.
Evaluate its turnover rate (is it too high, too low or just right and why), and give suggestions for
firms in this
industry to achieve their optimal turnover rate
b)
Consider
the Accommodation and Food Services industry. It has one of the highest turnover
rates
. Evaluate its turnover rate (is it too high, too low or just right
and why
), and give
suggestions for firms
in this industry to achieve their optimal turnover rate.
c) Comment on any other industry. Is its turnover rate what you would expect? What might be
causing the turnover rate to be higher or lower than your expectation?
Explanation / Answer
a) The turnover rate of Finance and Insurance Industry is low i.e.compared to the national average. This means that the employees stay long with firms which means the employee satisfaction is high. Also, it might be difficult for the firms to recruit skilled employees from outside.
Lower turnover rates can also be attributed to the job security in the firms. Hence, there is a chance that employees develop a carefree attitude towards work resulting in lower productivity.
Hence, the firms need to continuously monitor and evaluate the performance of the employees and assign ratings to ensure competitiveness is maintained.
b) The turnover rates in 'Accommodation and Food Services' industry are too high indicating that the employees stay for shorter durations with the firm. This leads to increase in hiring and training costs. Also, employee satisfaction might be low with the firms attributing to lack of individual development, lower salaries or benefits etc. Also, the employees are not very skilled and can be replaced easily.
To increse the turnover rate, the firms need to improve teh working conditions, increase the salary and benefits and help the employees in individual development.
c) Considering Government, the tunover rate is the least owing to the job security as well as the pay scales and benefits offered by the government.
The high and low turnover rates are attributed to a multitude of factors centered around employee satisfaction as highlighted below -
1. Salary and benefits
2. Working conditions and work culture
3. Individual development
4. Quality of work etc.
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