Research Proposal On Impact of Employment Turnover

Research proposal on impact of employment
turnover in the Bank of Abyssinia
A. Background of the study

Bank of Abyssinia is one of the leading private bands in Ethiopia. It was established in the late
1995 and officially inaugurated and started giving service in 1996.The bank operates in more
than 43 branches all over Ethiopia with about 2000 employees.
Employees are valuable assets who should, in principle, remain in the organizations they work
in, provided that their required provisions are fulfilled. Any organization incurs a significant
expenditure on employees related to hiring, training and retaining. Employee turnover affects
companies negatively, since the organization risks losing valuable staffs. Accordingly it is
indispensable for employers to retain employees within their organizations.
The commonly observed causes of employee turnover in the banking sector are:
 Dissatisfaction of the employer with the employee due to inadequate performance,

absenteeism from work, tardiness, infringe institution rules drug/alcohol abuse and
disobedience
 Employee may quit working due to insufficient remuneration, dissatisfaction with
working conditions, job insecurity, lack of career development on the job and poor
working conditions.
Retirement, end of contract, transfer, re-joining school, resignation due to poor health,
accident, injury on the job and death are the other causes of retirement.
As businesses expand the competition among various companies become intensive; as a result
retention of skilled manpower becomes a great challenge affecting the sustainability of
businesses. The social welfare/security system, especially in the private sector is very poor in
Ethiopia. Voluntary employee turnover occurs when an employee chooses to leave the
organization, mainly due to new jobs openings. In the currently existing competitive labor
market of banking systems in the country, attractive job opportunities occur to employees. As
cost of living is swiftly increasing with each passing day, employees are seeking better
remuneration in other relevant companies.
Within six months (July to December 2013) 74 employees left the bank of Abyssinia. In the first
quarter of 2014 (January to March 2014) 22 employees gave up their jobs (quarterly reports of
the Bank). Employees turnover within nine consecutive months is alarmingly high (96
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employees). No concrete study has been carried out so far in the Bank of Abyssinia regarding
employment turnover. A standard framework to understand employee turnover process is
lacking within the Bank. Therefore there is a need to conduct a profound study to identify key
indicators for Instigating employees to leave the Bank so that feasible strategies to reduce
employee turnover would be designed. This study is intended to identify the major reasons for
employees turnover, the impact the turnover exerts on the Bank of Abyssinia and as to what
the Bank should do in order to prevent the turnover.
B. Problem statement
The high cost of losing key employees has long been recognized. However, it is important for
organizations to understand that general turnover rates in the workforce can also have a
serious impact on an organization's profitability, and even survival. There are a number of costs
incurred as a result of employee turnover.
Employment turnover, especially for mid-level and upper level managers, is not only the
challenge for the state giant financial institution, CBE. It is rather becoming the general
character of the financial sector in general and public financial institutes in particular. With the
unprecedented growth of the sector in the past two decades, particularly the expansion of
private financial institutions; experienced career bankers and insurers are moving from one
institution to another with ever increasing speed. This is particularly manifested in public
financial institutions. It has in fact become headache to the human resource managements of
the institutions.
The benefit package in other banks, particularly private banks, has been attractive. This pull
factor in addition to the low incentives at CBB contributed to the growing staff turnover at CBB.
This has created a fierce competition among the financial institutions to retain the staff they
have and appeal for experts and professionals in the sector.
Low salary and benefit packages are among the main reason for staff turnover, especially in
upward moving society like Ethiopia. Unfair treatments and unproductive relationships with
superiors and colleagues, low career growth, workload and poor working environment are also
among the prime reasons cited by employees for changing employers.
As the economy grows and the labor market offers increasing opportunities elsewhere, many
dissatisfied employees in several institutions and organizations leave in search of economic
benefits and more favorable work arrangements.
Such a trend over the last few years has resulted in an unstable labor market, especially for
middle and higher level experts, managers and IT specialists.
The paradigm of lifetime employment becomes unrealistic.
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As the economy grows and the labor market offers increasing opportunities elsewhere, many
dissatisfied employees in several institutions and organizations leave in search of economic
benefits and more favorable work arrangements.
Though the turnover rate at the bank is not at critical stage, losing experienced professional
and experts particularly at managerial level and IT specialists will have impact on the institution.
Determine job satisfaction level of employees

Identify the primary reasons causing employee turnover
Explore the human resource retention policies and procedures in the bank
Survey the satisfaction level of employees
C. Research objective
 General objectives
Employee turnover has not been exhaustively studied in the banking system of Ethiopia, and
more specifically in the Bank of Abyssinia. High employee turnover has a negative impact on a
company leading to increased costs and loss of skilled manpower. Identifying the means of
reducing employees turnover is worth studying for the benefit of organizations. The objective
of this research is therefore to investigate the core issues instigating employees for continuous
turnover, assess the impacts and propose solutions.
 Specific objectives
- To identify the prime reasons for turnover of employees in the Bank of Abyssinia
- To assess the impact of employees turnover in the Bank
- To design a strategy for employees retention (recommend tangible approach/means to
minimize/control employees turnover of the Bank)
D. Significance of the study

The outcome of the research will benefit the Bank of Abyssinia, the society which is making use
of the bank services (better and expedited services), the government for building up increased
returns (tax from the bank), the researchers (enriching the knowledge and initiation for further
detailed studies).
E. Scopes and limitations of the study

The Bank of Abyssinia operates in more than 43 branches in Ethiopia with about 2000
employees. This study will be conducted in few selected branches of the Bank located in Addis
Ababa. The outcome of the research however is expected to be useful and applicable to all
branches as well as other banks of the country.

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Research proposal on impact of employment

turnover in the Bank of Abyssinia

A. Background of the study

 Dissatisfaction of the employer with the employee due to inadequate performance,

The paradigm of lifetime employment becomes unrealistic.

Determine job satisfaction level of employees

D. Significance of the study

E. Scopes and limitations of the study

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