Your last thought question deals with analyzing a management problem. Read the following situation and factors, then write what you would do to solve the problem.

Situation: You are a manager in a retail business that employees 100 employees. You have recently discovered that there has been a sharp and significant loss of staff due to employee turnover. Not only does your business run the risk of lower quality customer service but your bottom line is threatened by the increased costs of recruiting, hiring, and training new employees. You have taken on the job of analyzing the causes of the turnover and identifying possible solutions.

Factors:

1) There has been recent turnover in the middle management team. A few have taken early retirement and have been replaced by new managers.

2) Better economic conditions have resulted in a surge of new business. You are gaining new customers rapidly and they are buying more merchandise producing a higher need to restock shelves with inventory.

3) This same economic upturn has resulted in a more competitive job market.

Question: What would you do to pinpoint the most important causes of employee turnover and what would you recommend as solutions to upper management? Defend your recommendations. Remember that you have an influx of new business that might go away if you do not provide quality customer service.