Employee turnover impact on firm's performance

Abstract

This study investigates the impact of employee turnover on firm performance within the service-based industry, specifically focusing on companies listed on the FTSE- 350. Utilizing a quantitative, longitudinal research design, the research analyzes secondary data from financial reports to explore the relationship between employee turnover rates and key financial metrics such as profitability, liquidity, and solvency. The findings reveal a complex, non-linear relationship. The negative correlation is observed between employee turnover rate (ETR) and various performance metrics, such as return on total assets (ROA), current ratio (CR), and interest coverage (ICR). This study highlights the necessity for effective employee retention strategies and provides practical implications for managers and HR professionals aiming to optimize turnover rates for enhanced firm performance.