Today’s corporate sector is highly competitive and more powerful than it was a few decades ago. Knowledge-intensive organizations in booming sectors like Information Technology (IT), Banking, Financial Services and Insurance (BFSI), Retail and Manufacturing have created more business and employment opportunities in the global arena and have found their way into the Fortune 500 list. Organizations are highly dependent on their employees to achieve sustainable competitive advantage. Following the global economic meltdown of 2008 and 2009, organizations have witnessed continuing challenges in attracting and retaining talent. Despite the layoffs and increasing unemployment rate, companies in the booming sectors have continued to search for talent (knowledge workers) to fill important roles at all organizational levels. Over the years, the average tenure of employees has come down, and with talent being in short supply, companies are always vying for them. All of these have serious consequences for the firm’s performance. In an age when the job market moves toward and away from employers and employees’ benefit, the need for analyzing voluntary turnover and retaining talent becomes imperative for most of the organizations.
However, the growth momentum across the industries is challenged with issues like employee turnover. The instances of employee turnover can be classified into voluntary and involuntary. Voluntary turnover is initiated by the employee, whereas the occurrence of involuntary turnover may be due to reasons such as long-term sickness, death, moving overseas or employer-initiated termination, where the employee has no choice in his/her termination. High attrition impacts both the individual employee and the organization at large. The employee turnover often results in high organizational costs, productivity loss and loss of high performers. It causes disruption of social and communication patterns, loss of functionally valued coworkers and decreased satisfaction among the stayers (Mobley, 1982a). Bluedorn (1982) in his approach to managing turnover strategically says, that turnover is either good or bad depending on its net consequences, either economic or behavioral; and the major problem is not the fact that people quit their jobs, it is that managers regard their quitting as a problem. Realizing that turnover is not always bad is the first step toward adopting a new strategic view. Henri Fayol’s listing of ‘stability of tenure of personnel’ as one of his fourteen principles of management assumes importance in today’s context of retaining employees. In the light of this focus, analyzing the determinants of voluntary turnover is an area of concern for managers in today’s organizations.
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