Exhibit 1 depicts that the overall direct expenses of turnover that result from the departure of an old PFS employee and the selection of a new one add up to $51,188. In spite of that, this figure shows only a small percentage of the overall costs that United HealthCare will have to bear. Exhibit 2 depicts that the indirect costs which result during this whole process are worth $334,632. Profits are reduced because of an increase in the Accounts Receivable, increased expenditure and charges, the investment value which is wasted, an increase in bad debts, and other similar expenses.
Therefore, United HealthCare has to bear an overall cost of $385,820 ($51,188 in direct expenses plus $334,632 in indirect costs) due to PFS employee turnover. This paper will cover the causes of high employee turnover rates and appropriate methods to curb down this rate. It will also briefly discuss some of the consequences of a high turnover rate. However, this paper does not include the internal programs of United Healthcare or any other specific organization.
The research conducted for this paper discusses general organizations with a focus on the healthcare industry although the problems and solutions discussed inside this paper are true for
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Section 5. Importance and Significance of Project Increasing retention and decreasing the employee turnover rate is an important matter especially in the healthcare industry. The healthcare sector is currently suffering from low tuition reimbursements, issues of medical needs with respect to recognition of diseases and their cure, and an overall decrease in the respect that the healthcare employees once received. These are just a few factors which may influence the healthcare employees to quit their jobs.
The very first move that should be taken to decrease the high turnover rate is the recognition of causes which compel an employee to leave his job. There are innumerous reasons why an employee may quit his job. Some of these factors are not affected by employers’ decisions and employers are unable to resolve such issues. Examples of such factors may include family relocation, a modification in one’s career, etc. On the other hand, there are factors which can be prevented by a successful employer. Such steps may include tuition reimbursements, fringe benefits, etc.
A productive employer may take such steps to increase the retention rate of any organization, which would definitely lead to the successful achievement of organizational goals. From the perspective of healthcare employees, money is as important for them as it is for employees in other industries. It can be stated without any doubt that healthcare employees should be given good salaries that must match the current market trends in other industries. Otherwise, the turnover rate in the healthcare industry will keep on increasing.
Regardless of the ethical issues involved, healthcare employees do not work just for the betterment of the society nor do they work just to take care of the elderly. Their main incentives are money and better career opportunities. Of course, paying the highest salary is not what is required but the fact of the matter is that the necessities of healthcare employees should not be neglected. A survey of the overall healthcare industry and other industries may prove to be beneficial for healthcare employers when it comes to determining the pay scale of healthcare employees.
An employer must ensure that whatever he is offering to his employees is reasonable unless there is insignificant competition in a particular locality. Fringe benefits can make a big difference in the global world of business. A good package of fringe benefits may even counterbalance a low salary. Such incentives may prove to be extremely helpful for the retention of valuable employees. There are numerous other matters besides wages, which lead to employee satisfaction.
An average employee wants to feel the difference he is making to the organization’s achievements. They want to be praised for the work that they have done and they need proper feedback. In many cases, good employees also value a negative feedback which is extremely beneficial for their learning process. Normally, employees gain a lot from negative feedback and constant negative feedback prevents them from committing the same mistakes again unless such a feedback is given in an annoying manner.