A Study on the Impact of Recruitment Methods on Employee Turnover (Reference to Banking Sector in Sri Lanka)

Abstract

The Bank is a service organization. A service organization’s success depends on their human resource. The employees become a resource once they become skilled. They become skilled due to a number of reasons; experience is one of the main reasons. If an organization is having high turnover means, the accumulation of human capital to the organization is constrained. High rate of employee turnover leads to lower labour productivity and it results in the delay of attaining organizational goals. Experienced employees are well aware of the company's policies, goals and they know how to accomplish given objectives in the organization effectively and efficiently. In contrast, the fresh recruits frequently require more time to learn the things around them. Therefore the organizations with high labour turnover tend to have more inexperienced workers. This results in low labour productivity and it becomes a magnet to other negative forces also. Therefore, this study aims to examine the impact of recruitment methods (internal recruitment method or external recruitment method) on employee turnover in the banking industry in Sri Lanka. The data was collected through a semi-structured questionnaire. Sample size was 280 employees in the capacity of mangers, assistant managers, banking assistants and trainee banking assistants. The data was analysed by using the linear regression model with the aid of SPSS (version 21). Finally the study concludes that those who were recruited based on external recruitment methods have a higher chance of turnover than those who were recruited internally.