High employee turnover means losses.

It causes companys expenses to soar high and at times, makes people of governance difficult to manage. Several studies were made in relation to employees retention. Companies spend huge amount of money to train people and without knowing after a short time, these newly trained recruits leave the company. Thus, an issue is raised. What makes an employee stay in the company good enough that initial investment like training and supervision in the first six months contributes a positive result to the companys profitability to the satisfaction of the shareholders. Related studies show that high employment turnover rate costs a lot of money to companies. Constant churning in the workforce is a major problem today. On the book entitled Keeping Good People by Roger E. Herman, the problem on employee retention were given low cost solutions. In this new time and age, even with the advancement of technology, the workforce should still be offered with competitive remuneration and benefits package that would fit to their needs. The factors considered by applicants in choosing employers based on Collins, C.J. (2007) The interactive effects of recruitment practices and product awareness on job seekers employer knowledge and application behaviours. Journal of Applied Psychology, 92, 180-190 are job satisfaction, extrinsic rewards, constituent attachments, organizational commitment, and organizational prestige were the most frequently mentioned reasons for staying. Advancement opportunities and organizational prestige were more common reasons for staying among high performers and non-hourly workers, and extrinsic rewards was more common among low performers and hourly employees, providing support for ease/desirability of movement and psychological contract rationales. Another study by Branham, L. (2005) Planning to become an employer of choice. Journal of Organizational Excellence, 24, 57-68 shows the findings that highlight the importance of differentiating human resource management practices when the goal is to retain those employees valued most by the organization. Lockwood, N.R. (2006). Talent management: Driver for organizational success. 2006 SHRM

Research Quarterly. Alexandria, VA: Society for Human Resource Management states that retention, job performance, hourly workers, professional employees, organizational commitment, organizational justice, flexible work arrangements, organizational prestige, and location have been viewed as potentially important determinants of employees decisions to stay. Employee turnover rates have, within the last several years, become a nationwide epidemic. Employees no longer feel the sense of company loyalty that once existed. Increasing numbers of corporate mergers and acquisitions have left employees feeling detached from the companies that they serve and haunted by concerns of overall job security. As a result, workers are now making strategic career moves to ensure employment that meets their need for security. Griffeth, R.W., Steel, R.P., Allen, D.G., & Bryan, N. (2005). The development of a multidimensional measure of job market cognitions: The Employment Opportunity Index (EOI). Journal of Applied Psychology, 90, 335-349. Employees leaving the companies that they have worked unhappy or unsatisfied are craving for better employment incentives, conducive working environment and good opportunities for career growth and personal satisfaction according to Zhao, H., Wayne, S.J., Glibkowski, B.C., & Bravo, J. (2007). The impact of psychological contract breach on work-related outcomes: A meta-analysis. Personnel Psychology, 60, 647-680. In addition to elevated employee turnover rates being a frustration for employers, they can become a financial concern as well. Targeted Employee Retention: Performance Based and Job Related Differences in Reported Reasons for Staying John Hausknecht, April 200. The study believes average turnover costs to be 25 percent of an employees annual salary (2004). Other studies have proposed that the cost of replacing lost talent is even higher, as much as 70 to 200 percent of that employees annual salary (Kaye, 2000). Expanding on these thoughts, the EPF (2004) stated that for a firm with 40,000 full-time employees, the difference between a 15 percent turnover rate and a 25-percent turnover rate is over $50 million annually. The difference between a 15-percent turnover rate and a 40-

percent turnover rate is over $130 million annually (p. 2). Kay (2000) justifies such costs in advertising and recruiting expenses, orientation and training of the new employee, decreased productivity until the new employee is up to speed, and loss of customers who were loyal to the departing employee (p. 9). The costs mentioned above touch upon another area of concern: productivity. When a high rate of employee turnover exists, most of the workforce is at an entry level stage of production. A very high cost is associated with large numbers of employees who have not reached full productivity. This cycle continues with very few employees performing at maximum productivity.