Introduction
Human resource capital plays an integral role in an organization. According to Shaikh (2007), employees are the greatest asset that an organization uses to effect changes in an organization. A motivated workforce plays a critical role in enhancing the competitiveness of a business or organization (Ntshangase & Parumasur, 2013). As a result, employers invest many resources in the recruitment and development of the employees. However, labor turnover presents one of the greatest challenges for human resource managers. Graddick (2008) noted that it deprives organizations of their resources. The following is a case analysis of Fulchester University that has had high labor turnover.
Understanding the Situation
The critical issues facing Fulchester University include high labor turnover in the information technology department. The contributing factors to the high labor turnover include lack of clear talent management schemes and recruitment policies to enhance employees’ experience in the University. The IT department plays a critical role in the service provision. For instance, the IT department helps students and staff members to use the computer laboratories, the drop in suites, and research and teaching.
The labor turnover has been a major concern for Peter Norris, the human resource manager at the IT department. The lack of competent and motivated staff affects the service delivery to the 30,000 students and the other IT users in the university.
Diagnosing the Problem Areas
SWOT Analysis
A SWOT analysis is a critical part of strategic planning. It helps in providing a holistic view of the present situation and the future situation. SWOT analysis provides the framework for identifying factors that affect business operations (Chermack & Kasshanna, 2007). The identification of such factors provides the basis for drawing business strategies. Despite its all-around approach, the information that is gathered through the SWOT analysis may be oversimplified and may end up overlooking important aspects of an organization. In addition, SWOT analysis focuses on the internal operation of the business and fails to provide an in-depth analysis of the macro factors that affect business operations.
The tool is applied to analyze operations in an organization and in the identification of the areas of strengths where an organization can leverage on. SWOT analysis has four subcategories that include strengths, weaknesses, opportunities, and threats. According to Chermack and Kasshanna (2007), the SWOT analysis helps in determining the key areas in an organization that needs improvements. For instance, through SWOT analysis, a business is in a position to determine how to neutralize weaknesses by initiating better strategies to exploit the opportunities and minimize threats (Lynch, 2009).
Strengths
Strengths are the strongholds of a business. The university already has a functional IT department. Besides, the IT department has an organizational structure that facilitates efficient access to IT services in the five sites. The organization structure of the IT includes the manager based at the central administration block. A team of IT experts supports the manager. Each team has a team leader who reports to the manager.
Weaknesses
Weaknesses are the internal factors that derail an organization’s ability to achieve its goals. Examples of the weakness include staff resistance to changes and organizational structure that does not support the core objectives of the business (Fenwick, 2011). In the Fulchester University, the major weakness is that there are no programs to cater for the employees’ welfare. For example, the university lacks job enrichment schemes. Also, the highly hierarchical IT department organizational structure presents a challenge; it hinders direct communication between the manager and the employees at the service sites. Guest et al. (2003) stated that the lack of effective communication between the employees and top leadership creates gaps and lowers the motivation of workers. Furthermore, Fulchester University lacks clear guidelines on recruitment, retention and the remuneration packages for the employees.
Opportunities
According to Hendry (2000), opportunities are the factors that provide the window for expansion for a business. The factors allow the growth of a business. The opportunities in Fulchester University include a training program for the induction of new and continuing employees. The training can be applied to create a sense of belonging among employees to the University.
Threats
In any business environment, there are competitors and government policies that affect the operations of the business (Alexander, 2008). Fulchester University faces a unique challenge of high attrition in which the trained and developed IT officers leave for private universities that offer better pay. The salaries in the University are set at the national level; therefore, the HR does not have control over the remuneration of the employees. There are also limited funds to place adverts for recruitment during the prime time news, which threatens the capability of pulling skilled IT experts for the hiring.
STEEPLE Analysis
STEEPLE analysis provides a framework that enables an organization to identify and exploit opportunities (Caddle, Paul & Turner, 2009). The STEEPLE analysis is used to strategically design operations that are aimed at increasing competitiveness. The main weakness of STEEPLE is that data used for the analysis of the macro factors is based on assumptions; thus, decisions made based on the data may not respond to the true situation on the ground. Despite the weakness, STEEPLE analysis provides an in-depth picture of the external factors that affect the operation of the business (Caddle et al., 2009). In the contemporary world, an organization has to remain competitive. Therefore, STEEPLE analysis provides a good framework for examining the environment in which the business operates and the factors that may be causing the high labor turnover.
Social
The social aspect entails the analysis of the socio-cultural changes that affect an organization. Clear information on the social environment helps in the identification of faults and the possible strategies that can be put in place to address the issues. The social environment includes lifestyle changes, age structure, and population growth. The social factors affect the preference for a job. For instance, fresh university graduates comprise a dynamic group, which requires a vibrant workforce where they are allowed to actively participate in driving change. The University does not have a talent management program, which may be the discouraging factor for the young graduates who need jobs that enhance their capabilities.
Technological
Advancements in technology have become the hallmark of modern society. The changes in technology necessitate operations by people with IT expertise. As are a result, IT experts also need to work in environments that match the changing technological environment. An Information Technology department that allows innovation attracts more talent. The presence of organizations that provide an innovation platform for employees acts as a pull factor for young and talented employees; hence, the movement from rigid organizations.
Economic
The economic environment keeps on changing. The changes affect the GDP, inflation and interest rates. Consequently, the economic changes influence the salary requirement for employees. For instance, a rise in inflation increases the cost of goods and hence employees will require corresponding remuneration to cushion them against the high costs of living. A rigid pay system lowers the morale of employees and hence the high labor turnover.
Environment
The environment in which a business operates is very crucial. A business can have a positive or negative impact on the environment. In the modern society, issues that deal with sustainable living play a critical role in enhancing the environment. Corporate social responsibility (CSR) aimed at improving the environment is important for organizations. According to Tamm, Eamets, and Motsmees (2008), organizations with CSR activities that target the environment have motivated employees.
Political
The political factors related to the government policies that affect business operations. The government policies influence the economic, social and legal issues. For instance, the policy and the salary regulations by the government hinder Fulchester University from implementing competitive pay packages.
Legal
Businesses do not operate in a void; some laws regulate the operations of organizations. For instance, the University has to abide by rules set at the national level that concern the remuneration.
Ethical
Ethical factors refer to social values that govern the behavior adopted in an organization. The ethical factors determine what is wrong and what is right. They influence relationships in an organization. Ethical factors influence the social responsibility cherished in a business (Caddle et al., 2009). Companies with good ethical and social responsibilities have the possibility of attracting and retaining employees.
Generating Alternative Solutions
Khan and Mufti (2012) noted that high employee turnover hurts the company’s resources. According to Irshad and Afridi (2007), high labor turnover costs businesses twice the salary amount for an employee. The cost is normally incurred in the recruitment and training of the replacements (Ho, Lee & Wu, 2009). Therefore, there is a need for strategies to curb the high labor turnover. Measures to reduce labor turnover should be prioritized. Therefore, revolutionary change in human resource management will be suitable for the University. Revolutionary change occurs very fast and hence will help in cost saving.
To provide long-term solutions, the changes should be continual. Gberevbie (2008) noted that continual changes develop an organizational culture and cultivates a positive trend in an organization, unlike the episodic changes that provide short-term solutions. Therefore, the alternative solution is the implementation of performance management systems and performance measures. The program should also entail a job design that meets the current market requirements. The design should integrate the motivational measures that satisfy the needs of the employees and should be aligned to the University strategic goals.
According to Beheshti (2010), effective performance management and measures of the employees is paramount in the execution of institutional strategy. The performance measure is concerned with ascertaining the value created by individual employees for the customers and stakeholders (Fenwick, 2011).
Besides, the university should lobby for policy changes at the national level in order to get the autonomy to implement competitive salary packages. The policy changes may take a lot of time to effect; therefore, the University should put in place an internal reward system for employees and design a program to ensure that talent is maintained.
Predicting Outcomes
The staff attitudes, human resource management, organizational culture, and the work environment are correlates; they predict effectiveness (Elias & Scarborough, 2004). The effectiveness of the services is normally determined by behavioral and attitude changes. Increased productivity and reduction in absenteeism are indicators of positive changes. Essentially, Bititci et al. (2008) argued that a performance management system should be designed in a manner that enhances the management and coordination of the individual employees. The system should incorporate the various programs for training and capability enhancement of the employees. For instance, it should have a well laid out strategy that guarantees that the employees are aware of the management system.
Evaluating Alternatives
According to Shaikh (2007), retaining talent is a top priority for businesses. Alaxender (2008) noted that in the field of IT, talent plays a critical in ensuring increased productivity. With the increased competition in the world of IT, organizations that do not put in place strategies to acquire and manage the best talent end up paying a great price (Crosby, n.d). The case of Fulchester points to the lack of clear policies and legislation on the management of the employees. Also, the organizational structure does not provide a good environment for employees’ growth and capability building. Therefore, performance management systems should be put in place and performance measures enacted to strengthen organizational strategic goals.
Rounding out Analysis
Motivation of the employees is core to achieving a productive and motivated workforce. Employee satisfaction can be achieved by putting in place a performance management system that is aimed at improving the relationships between employees and the managers. Fulchester University main issues were influenced by both the internal and external factors. The internal factors included a lack of operational strategies and motivation programs for the employees while the external factors included government legislation and competition. Therefore, the human resource management should establish performance management that upholds the needs of the employees. An effective performance and operational performance will motivate employees and reduce the high labor turn over.
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