A Thematic Analysis of the Causes of Employee Turnover in the UK Private Sector

Introduction

Employee turnover can be defined as the situation where the employees of an organization leave voluntarily or are forced to leave unwillingly, and later are replaced by newly recruited/promoted employees (Ongori, 2007). When an employee is recruited following a tough recruitment process, it costs a huge amount of money for recruitment, training, and development of that employee. So, a high percentage of employee turnover isn’t good for any organisation, and the management must find out the cause and take necessary steps to reduce the employee turnover rate. Here is a short literature review on the causes of employee turnover in the UK private sector.

Literature Review

Employee Turnover

According to Shamsuzzoha and Shumon (2007), employee turnover refers to the percentage of employees left from an organisation in a specific period, typically one year. Employee turnover can be of two types, voluntary and forced. In the case of voluntary turnover, employees leave the organisation on their own. But sometimes, the organisation itself forces employees to provide compensation to replace him/her with better and more skilled employees. However, the employee turnover rate is a good indicator of organisational culture, workplace management, and the human resource department. According to Schermerhorn and Bachrach (2023), despite having fewer financial benefits, if an organisation can provide a good working environment and flexible human resource management, the employee turnover rate will automatically be decreased. It has been found (Rosss, 2017)’s Research, employees prefer monetary benefits at the beginning of their careers. But after a few years, they prefer good leadership, good culture, a working environment, and flexible schedules to financial benefits. Hence, if an organisation faces a high percentage of employee turnover, it needs to revisit its HR policies, cultures, and workplace management. Normally, employee turnover can be calculated by dividing the number of employees who left by the number of average employees in a year, and then the rate will be multiplied by 100 (Muchinsky and Tuttle, 2020).

Private Sector

The private sector of the UK refers to the business and firms owned by private individuals. It is the exact opposite of the public sector. In almost every country, the private sector is the leading provider of employment opportunities. According to Michaels and Spector (2022), 72 million people are working in the UK private sector according to the fourth quarter of 2022’s estimation. However, employee turnover happens in the private sector. The public sector doesn’t face employee turnover that much. The percentage is too low to mention (Kreitner and Cassidy, 2012).

Causes of Employee Turnover

In the private sector of the UK, there are several potential causes of employee turnover. Low job satisfaction is one of the most prevalent causes, which might be brought on by insufficient professional growth chances, unfavourable working circumstances, or incompetent management (Mobley, et., el., 2019). Employees may also look for alternative employment alternatives if they believe their salary and perks are uncompetitive or inadequate for their needs. A lack of work-life balance, little prospects for growth, a negative business culture that conflicts with their own beliefs, or firm restructuring or downsizing are some other causes of employee turnover (Rosss, 2017). Employers may combat these factors by fostering a happy work atmosphere, providing competitive pay and benefits packages, placing a high priority on employee well-being, offering chances for professional advancement, and encouraging diversity and inclusiveness in the workplace (Jehanzeb, Rasheed, and Rasheed, 2013).

Research Questions

1. What are the causes of employee turnover in the private sector of the UK?
2. What are the impacts of employee turnover?
3. What steps can be taken by private sector management to reduce the rate of employee turnover?

Research Methodology

Research Philosophy: Interpretivism, a philosophical approach that emphasises comprehending people’s subjective experiences within the context of their social environments, is the philosophical perspective that underpins this research (Antwi and Hamza, 2015). The goal of this research is to better understand employee turnover from the viewpoint of executives working for private businesses in the UK.

Research Methodology: Inductive research methodology was employed for this study. In this method, data from the sample is collected and used to identify themes and patterns in the data. The exploratory nature of the research topic and the need for a thorough knowledge of the factors that contribute to employee turnover make the inductive technique suitable for this study.

Sample: For this research, 40 executives from various private firms in the UK will serve as the sample. To guarantee that the sample is representative of the population, the sample will be chosen using stratified random sampling. In a stratified random sample, the population will be divided into groups and participants will be chosen at random from each group.

Data Collection Method: Structured interviews with the chosen CEOs will be used to gather the majority of the study’s data. Depending on the participant’s desire, either in-person interviews or video conferences will be used for the interviews. Open-ended interview questions will be used so that participants may freely express their opinions. The interviews will be recorded on audio and then transcribed for examination.

Analytical Method: Thematic analysis will be the analytical method employed in this investigation. Finding patterns and themes in the data and classifying them are steps in thematic analysis. Reading and rereading the transcripts to find recurrent themes and patterns will be part of the analytical process. Here, certain actions will be taken.-

• Data Familiarization: Here, the answers of the participants will be read over and over again to have a detailed overview of the data (Antwi and Hamza, 2015).
• Coding: Here, data has been divided into smaller sections called codes which attribute the characteristics of data properly.
• Theme Development: The theme will bear the larger characteristics of data whereas code bears small characteristics. Normally, some codes together form a theme.
• Interpreting Data: Based on themes, data will be interpreted and findings will be identified.

Validity: The following steps will be done to assure the study’s validity: (1) Stratified random sampling is used to guarantee that the sample is representative of the population. (2) Open-ended questions are used to let participants express their opinions without restriction. (3) To avoid biases in the data, the author will collect primary data (Dul and Hak, 2007).

Ethical Considerations: The participants’ informed consent will be obtained before the interviews, their anonymity and confidentiality will be maintained, they will be informed of their right to withdraw from the study at any time, and the study will be carried out following the regulations of the British Psychological Society (BPS) and the General Data Protection Regulation (Basias and Pollalis, 2018).

Limitations: The research can have some bias due to resource limitations. For example, 40 samples can’t represent all the employees of the UK private sector properly. Apart from this, the author has limited experience in conducting research which can influence the data interpretation and findings.

Presentation and Findings

In this part, the author will present, discuss, and interpret the findings generated from the interviews of the 40 executives of the UK private sector. As mentioned previously, stratified random sampling will be used in this study, which means a small portion of participants will be approached from top private sectors of the UK. Finance and Banking, IT, construction, healthcare, and wholesale and retail are the top five sectors where the majority of the people of the UK are. It is mentionable that lower and mid-level executives will be approached for an interview.

Thematic Analysis

Theme 1: Causes of Employee Turnover

According to the answers of the participants, there have multiple causes for employee turnover. Most of the participants put ‘lack of growth opportunity in the career’ in the first place. Sometimes, employer recruits executives and doesn’t provide any growth opportunities. Hence, with time, employees feel frustrated due to not getting promotions and the increased rate of inflation.

Participant 13: “For me, this is career growth. I have joined corporate for rapid growth in my career. But see, I’m stuck in the same position for 3 years. I will certainly switch this company if any good opportunity comes out”.

Another major reason is safety and security. Though the employment laws have been updated, most of the employees are scared to be laid off anytime. Hence, a major portion is trying to switch the public sector from the private sector. Another core reason is insufficient benefits and compensation. After Covid 19, the UK is facing high inflation. But the benefits haven’t increased with the inflation rate. In addition, work-life balance is also a significant factor in switching workplaces. Long distance and inefficient leadership are the two mentionable reasons for employee turnover. For example, participant 21 said “I have joined a large company first. But after a year, I decided to go back to my town. I would like to live with my parents even if it costs me to change workplaces. Some employees from wholesale, finance and banking, and IT sector tell about work-life balance. Some employers don’t prioritize life over work, and hence, they want employees to do work even after the regular time.

Participant 26 said “I’m not a lifeless person. I love to watch movies, hang out with friends, listen to music, play cricket, and many more. But after entering into corporate, most of the time, I feel stressed. I miss my old beautiful life. Sooner or later, I will leave this organization.”

Theme 2: Impact of Employee Turnover

More or less, every organization is negatively affected due to employee turnover. For example, for recruiting, hiring, and developing through training, an organization requires some costs. If the employee leaves the organization, these costs won’t generate any benefits in future. Besides, an experienced employee who may have some confidential information will be lost. Also, after the replacement if the previous employee, the former speed of efficiency can’t be achieved instantly. The new employee must take some time to get himself adjusted to the workplace. However, if forced turnover happens, employees will lose morale and there won’t have any positive working environment or team culture. For example, participant 3 said: “We don’t have any security in the workplace. I never feel this company as my own since I may be sacked at any time.”

Theme 3: Relationship Between Employee Engagement, efficient Leadership, and employee turnover

Employee engagement describes how committed and connected individuals are to their jobs and the organisation. Employees who are engaged at work are more likely to be productive, motivated, and content with their jobs. By establishing clear objectives, communicating, giving feedback, and valuing employee contributions, good leadership is essential in fostering a positive workplace culture. On the other hand, effective leadership is essential for developing a supportive workplace that encourages participation and lowers attrition. Employees who work under leaders that are helpful, communicative, and empathic tend to be more engaged and committed to the company. On the other hand, executives who are disengaged, uncommunicative, or inattentive to employee requirements may result in workers losing interest in the organisation and leaving as a result. Most of the participants talked about employee engagement and efficient leadership. None wants to change workplace without any reason. Even if the financial benefits of a company are lower than the competitor firms, an employee will stay due to its workplace culture and leadership styles. For example-

Participant 2 said: “Most smaller firms don’t think about employee re-engagement. They can’t think about the long-term benefits. Hence, they always want to take more than their costs behind an employee. But if they think about the benefits found from this employee’s expertise, in the long run, they will certainly engage employees, and change the leadership style.”

Participant 13 said: “After the Covid pandemic, Work from home culture has become popular. Nowadays, we prefer the home office to the traditional office. But some companies don’t allow it even though such an office culture reduces its costs. Such backdated tendencies among private firms create employee disengagement, and as a result, employees leave. A good leader must identify what his/her employees want”.

Participant 37 said: “I would never work in any organization where I don’t get job satisfaction. If the employer can’t engage me in the work, it’s his failure. He should find out the cause. Otherwise, no employee stays”.

Theme 4: Steps to Reduce Employee Turnover

Companies may take specific actions to reduce staff turnover. First and foremost, they need to conduct a thorough hiring procedure for qualified candidates. To keep staff members engaged and feeling appreciated, businesses should also provide enough training and development opportunities. Thirdly, they need to provide competitive pay and benefits to keep workers. Fourthly, they should encourage work-life balance and open communication to foster a pleasant work atmosphere. To proactively address employee wants and issues, businesses should conduct stay interviews. Sixth, businesses should address difficulties right away to avoid them growing into greater ones. Last but not least, businesses should support a feedback culture to enhance employee engagement and retention. These steps may aid businesses in lowering staff turnover and the detrimental effects it has on output and morale. For example,

Participant 15 said: “To reduce employee turnover, there doesn’t have any alternative to keep employees happy. For this reason, employee engagement, effective leadership, consideration of work-life balance, sufficient benefits, and so on are equally important.

Theme 5: Different Employee Turnover Factors in Different Private Industries

Employee turnover in the UK’s private sector is influenced by a variety of things. For instance, because of the low wages, erratic work schedules, and few prospects for professional advancement, the retail and hospitality sectors see significant employee turnover rates. The competitive employment market, the need for new skills, and the possibility of increased pay, on the other hand, may have an impact on turnover in the technology sector. High levels of stress, lengthy workweeks, and a lack of opportunity for professional growth may have an impact on turnover in the healthcare business. High-stress workplaces, long hours, and the possibility of finding greater compensation elsewhere may all contribute to turnover in the banking industry. Advertising, journalism, and other creative businesses may have high staff turnover due to job instability, project-based employment, and the availability of freelancing work. Therefore, to lower employee turnover and keep its staff, each industry must assess its circumstances and apply tailored tactics. For example,

Participant 7 said: “I work in the brokerage house. I have to worry about any change in the financial market, whether it is the death of Tesco’s CEO or to acquisition of Twitter by Elon Musk. I won’t recommend anybody to come to this sector. I won’t deny that this sector pays a lot. But still, high stress is the core cause to switch this sector.”

Summary Findings

The first theme dealt with the reasons for employee churn. This subject explores the many reasons for employee churn that the investigation revealed. The most often cited cause was a lack of professional progression opportunities, which was followed by worries about safety and security, inadequate benefits and pay, work-life balance challenges, and ineffective leadership.

The effect of staff turnover was the second theme. This subject investigates the detrimental effects of staff turnover on businesses. The expense of finding, acquiring, and training new personnel is mentioned, as well as the loss of knowledgeable individuals and possible harm to team morale.

The link between effective leadership, employee engagement, and turnover was the focus of theme 3. This topic emphasises the significance of strong leadership and employee engagement in lowering staff turnover. A supportive workplace culture that promotes participation and lowers attrition may be created by effective leadership. Engaged workers who are driven and happy in their positions are less likely to quit.

The methods to reduce staff turnover were the focus of theme 4. This topic proposes particular measures businesses may take to reduce worker turnover, including rigorous recruiting procedures, chances for training and development, competitive compensation and benefits, support for a feedback culture, and promotion of work-life balance.

The conclusion drawn from topic 5. Employee turnover rates in various private sectors in the UK vary and are impacted by a variety of variables. Due to issues including poor pay, erratic work hours, and little prospects for professional progression, the retail and hospitality industries have significant employee turnover rates. In contrast, a competitive job market, the need for new skills, and the possibility of higher compensation all have an impact on the employee turnover rate in the technology industry. Employee turnover in the healthcare and banking sectors is often caused by high levels of stress, lengthy workdays, and a dearth of prospects for career advancement. Due to employment instability, project-based work, and the availability of freelance work, advertising, journalism, and other creative sectors see substantial worker turnover. Therefore, each sector must assess its particular conditions and put into place tailored methods to lower staff turnover and increase worker retention.

Conclusion and Recommendations

The results of the theme analysis make it abundantly evident that there are several reasons why employees leave their jobs in the UK private sector. The main causes include a lack of opportunity for advancement, worries about safety and security, inadequate benefits and pay, difficulties with work and family obligations, and ineffective leadership. These factors may have a detrimental effect on the business by leading to the departure of seasoned workers, rising hiring and training expenses, and a drop in employee morale.

It is clear that there is a connection between effective leadership, employee engagement, and turnover. Through clear goals, good communication, feedback, and the appreciation of employee efforts, a friendly workplace culture that promotes participation and reduces attrition may be established. Positive workplace culture can only be fostered by effective leadership, as opposed to disengaged, uncommunicative, or inattentive executives who may cause employees to lose interest in the company and eventually leave.

Businesses must carry out a careful hiring process for qualified candidates, offer sufficient training and development opportunities, pay and benefits that are competitive, promote work-life balance and open communication, conduct stay interviews, deal with issues as soon as they arise, and support a feedback culture to improve employee engagement and retention to reduce employee turnover. By taking these actions, firms may be able to reduce employee turnover and the negative consequences it has on morale and productivity.

According to the research’s results, it is advised that companies concentrate on developing a welcoming workplace culture that promotes employee engagement, effective leadership, and work-life balance. Businesses may lessen staff turnover and its detrimental effects on the company by addressing the root reasons for employee turnover. In order to build a productive workplace that encourages employee engagement and retention, businesses may also take proactive actions. These include holding stay interviews and responding to concerns as soon as they arise.

References

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Appendix

Questionnaire Set

Which elements, in your opinion, are most responsible for employee turnover in the private sector in the UK?

What impact do you believe staff turnover has on the output and financial success of UK private sector companies?

What tactics may be used, in your view, to reduce staff turnover in the UK private sector?

How crucial is employee re-engagement to the prosperity of UK private sector companies?

Would you mind sharing any personal anecdotes or tales about employee turnover in the private sector in the UK that you think best highlight the reasons of this occurrence?

What differences do you believe there are between small and big UK private sector enterprises in terms of the causes and impacts of employee turnover?

What effects do you believe the COVID-19 epidemic has had on employee turnover in the private sector in the UK, and how do you think firms may adapt?

What steps could businesses take to solve this issue? How much responsibility do employers have to avoid employee turnover?

Which UK private sector sectors have different employee turnover factors, in your opinion?

What part, in your opinion, do job satisfaction and employee engagement play in lowering turnover in the UK private sector?