Introduction
Among an organization’s most important assets is its human capital, which can significantly support its success strategy and ensure that the business’s mission and vision are sustained. Nowadays, in the face of changes brought on by the global pandemic and crises, more people have become conscious of their career preferences, prioritizing their well-being and seeking jobs that could offer satisfaction. Nevertheless, many companies, even large and well-known ones, often fail to retain their employees, facing high turnover rates.
Among such companies is Google, a highly competitive technological business specializing in unique services such as online search engines, cloud products, electronic devices, advertising, and artificial intelligence. Nevertheless, with its revenues and expenses, the staff at Google continues to raise its concerns. In the last several years, especially in 2022, the firm has faced significant employee turnover due to dissatisfaction with compensation and diversity. Thus, the issue of employee turnover involves many financial risks and is connected to reputation, so it is crucial to focus on employee retention strategies that will improve employee satisfaction and loyalty.
The Issue of Employee Turnover
Before analyzing Google’s issue, it is crucial to give an overview of the employee turnover issue in general. The company staff members’ resignation can be referred to as employee turnover. It has been highlighted as one of the reasons why American worker efficiency levels could not keep up with those of overseas counterparts.
It additionally serves as one of the main factors affecting the labor supply. The labor supply of a company decreases as workers leave, even if all else remains the same. The organization will incur direct and indirect costs (Snell, S., & Morris, 2022).
Therefore, it is acknowledged that employee turnover is mainly seen as a negative occurrence. There are many reasons underlying the employee’s decision to resign. For example, factors that can contribute immensely to such a decision are a work environment that does not meet their expectations or their desire to find a more fulfilling alternative, unfair treatment, poor compensation, stress, and others (Ekhsan, 2019).
However, while such issues can be easily managed, it isn’t easy to find the appropriate balance to benefit both the company and staff members. Usually, managers must ensure enough stress and motivation to ensure that employees are neither too relaxed nor too overwhelmed (Berman et al., 2019). Otherwise, there can be an issue with productivity, and in another scenario, there might be a high turnover rate.
Causes Behind Employee Turnover at Google
When reviewing Google’s turnover rate in detail, it is evident that much employee dissatisfaction stems from diversity and compensation issues. First, it is noteworthy that there is high inequality between racial minorities in the company. To measure the attrition rate, Google uses a turnover index with a benchmark of 100. For Black+ employees, the turnover in 2021 was 121, compared to 112 in 2020 (Dave, 2021).
Similarly, attrition among employees of Latinx+ grew from 97 to 105 in the same year. In contrast, for White+, attrition decreased across both genders, falling to 112 from 117 (Dave, 2021). As a result, despite businesses competing to boost diversity, certain individuals from underrepresented backgrounds claim they still lack a sense of inclusion and acceptance in the IT sector. In this case, Google’s turnover rate is seen as higher in minority groups.
The reason why employees decide to resign from Google is not only a lack of feeling of belonging but also perceived inequality. According to the company’s annual employee polls, a rising proportion of staff members at Google are skeptical that their compensation packages are fair or comparable with the salaries they might receive in a similar function elsewhere. Only 46% of survey participants believed their overall remuneration is reasonable compared to other organizations offering comparable employment, a 12-point decrease from a year ago (Elias, 2022).
Meanwhile, a slightly greater percentage, 56%, report that their salary is fair and equitable, a decrease of eight points from the previous year. Moreover, 64% of workers, down three percentage points, felt their salary reflects their performance (Elias, 2022). As a result, Google employees lack a sense of belonging and feel discouraged due to inequitable pay. Due to this, issues concerning recruitment and retention of talent arise.
Alternative Points of View
Benefits of High Turnover
High employee turnover is debated, with some believing that it has certain benefits driving a company’s growth and others arguing that it only causes stagnation and additional expenses. When discussing benefits, the first one is that job switching and significant employee turnover may benefit businesses and employees in terms of new opportunities.
Fresh Perspectives
The immense labor flexibility in the United States labor market is a benefit of high turnover (Solmon, 2019). Job hunting may increase the compatibility between employee qualifications and corporate needs, boosting employee productivity. Additionally, with high turnover, there will be a possibility for companies to find people who will bring more diversity to reinforce the culture. Since they come from different backgrounds and have various qualifications and skills, new employees can bring new views, fresh insights, and innovative ideas (Solmon, 2019). HR managers ought to support an environment where workers experience a sense of diversity and inclusion, which is especially applicable to Google.
Competition and Productivity
Another advantage of high turnover is that there are more opportunities to grow. Companies with stagnant employment eventually succumb to a position where they are no longer competitive and lack an edge. Workers will lack the ability to compete successfully against more unpredictable, growing businesses in a company where a sizable percentage of staff members are promoted to a level above their capabilities (Solmon, 2019). Therefore, employees who are content with their current position, least inclined to take risks, or unable to learn from their errors should be encouraged to go since this will energize the team and offer the company an advantage.
Disadvantages of High Turnover
Brand Reputation
Nevertheless, while the reviewed benefits are encouraging, more shortcomings have been identified. First, staff turnover significantly affects the business in terms of brand image. Employee behavior, values, and opinions influence not only output but also overall efficacy and productivity, and employees place a high value on the nature of work and teamwork (Al-Suraihi et al., 2021). If it is widely acknowledged that a specific company experiences issues with retaining talent, competent workers will hesitate to apply for positions there.
Financial Performance
Additionally, high turnover can significantly influence a company’s financial results. From a business perspective, staff turnover is costly because of the expense of hiring new personnel (Al-Suraihi et al., 2021). On the one hand, the company will have to spend more on HR services and negotiate employee salaries. On the other hand, businesses will be expected to maintain and reinforce the level of competency and talent, increasing investments in employee training.
However, these are not the only steps since even after recruiting and training employees, it will be essential to retain them, which requires funds allocated for benefits (Al-Suraihi et al., 2021). Overall, it becomes evident that from a financial point of view, high turnover is a significant issue that entails more expenditures that could have been allocated to research and development or other areas.
Operational Inefficiency
Finally, high turnover is a significant shortcoming for many businesses since they might experience inefficiency. Employee turnover may harm operational expenses and the retention of skills required to keep up corporate operations and a competitive edge (Al-Suraihi et al., 2021). Staff members who were once aware of the business intricacies and had the required skills to ensure that operations were effective are no longer present, which might extend the time needed for certain activities. A lack of competent and qualified employees may result in a management issue that lowers output, profits, and the standard of goods and services (Al-Suraihi et al., 2021). Consequently, high attrition rates can impact workplace relationships, motivation, and safety from the perspective of the employees.
Personal Point of View
As an HR professional, I strongly believe that employee retention should be a priority for companies, especially in the case of Google, which has a disruptive model focusing on innovations in its operations and output. Considering the disadvantages of a high turnover rate, there can be significant challenges to the bottom line and brand image.
This is why retention approaches are required for organic growth and employee loyalty. Instead of dealing with increased recruitment and training costs, reduced productivity, and loss of institutional knowledge, companies should focus on employee retention strategies that promote employee satisfaction, engagement, and growth.
Employee Recognition
The first way in which companies, especially Google, can enhance employee satisfaction is through a robust employee recognition program. Such a program should aim to reward employees for their performance. As seen in Google’s case, most employees did not feel valued, and a decreasing number of people believe that their compensation meets their performance and input. Therefore, it is crucial to ensure that staff members are fairly compensated for their work and receive monetary and non-monetary benefits that would reflect the company’s recognition of each individual’s efforts.
Employee Satisfaction Assessment
Moreover, it is crucial to show business engagement by constantly evaluating employee satisfaction. Although Google conducts annual surveys to determine staff members’ perceptions, it is crucial to make evaluations more regular. Moreover, surveys must be aimed at evaluating employees’ perceptions and requesting feedback on what should be improved. Here, to see positive results, Google should respond to employee concerns.
For example, the corporation can focus not on requesting fair compensation but other options that could improve employees’ working experience. Among such options can be flexible work arrangements, such as work-from-home options or flexible working hours, to facilitate work-life balance.
Overall, companies should not undermine the power of employee satisfaction and pay close attention to employee turnover. By being conscious of staff preferences and experiences, any company can increase employee satisfaction, loyalty, and retention. Consequently, a business can reach its goals due to dedicated staff and their skills and qualifications. Moreover, more professionals will be eager to join the company due to its strong brand image and reputation.
Conclusion
Hence, focusing on employee retention techniques that will increase employee satisfaction and loyalty is essential since employee turnover entails different risks, including financial and reputational problems. A detailed analysis of Google’s turnover rate shows that many employee complaints about diversity and pay are widespread. High staff turnover is a contentious issue. While some think it may help a firm thrive, others claim it merely leads to stagnation and increased expenses.
As a human resources specialist, I firmly believe that firms should prioritize retaining their best employees, especially Google, which has a disruptive business model that emphasizes improving processes and output. Companies should concentrate on staff retention tactics that encourage employee happiness, engagement, and growth rather than dealing with rising recruiting and training expenses, decreased productivity, and loss of institutional knowledge. The first approach for businesses, particularly Google, to improve employee happiness is to implement a strong employee appreciation program. Additionally, it is essential to demonstrate corporate involvement through ongoing employee satisfaction surveys.
References
Al-Suraihi, W. A., Samikon, S. A., & Ibrahim, I. (2021). Employee turnover causes, importance, and retention strategies. European Journal of Business and Management Research (EJBMR), 3(6), 1-10. Web.
Berman, E. M., Bowman, J. S., West, J. P., & Van Wart, M. (2019). Human resource management in public service: Paradoxes, process, and problem (6th ed.). Sage Publications.
Dave, P. (2021). Google reports soaring attrition among Black women. Reuters. Web.
Elias, J. (2022). Google employees are becoming unhappy with pay, promotions, and execution, survey results show. CNBC. Web.
Ekhsan, M. (2019). The influence job satisfaction and organizational commitment on employee turnover intention. Journal of Business, Management, & Accounting, 1(1), 48-55. Web.
Snell, S., & Morris, S. (2022). Managing human resources. Cengage Learning.
Solmon, L. C. (2019). Labor markets, employment policy, and job creation. Taylor & Francis.