Exploring the Relationship between Employee Turnover Rate and Customer Satisfaction Levels

Abstract

This study examined 76 banking centers to identify and analyze the relationship between employee turnover rate and customer satisfaction levels. In this correlational study, the researcher found that a moderate, significant, negative relationship existed between the variables of employee turnover and customer satisfaction score in all three years included in the study. This relationship can be interpreted to mean that as employee turnover levels increase, customer satisfaction decreases. The finding may also be interpreted to mean that as customer satisfaction decreases, employee turnover increases. Analysts continue to develop methods to measure the expense of employee turnover, and these results support the theory that employee turnover is directly correlated with customer dissatisfaction. This dissatisfaction frequently leads to a loss in customers, and therefore increases the overall cost of employee turnover. Replacing an employee costs the company a quantifiable sum of money to search for, interview, and train a new candidate. It is more difficult to measure the cost of the lost loyalty of customers who become dissatisfied after certain employees leave the company.

Keywords: Customer satisfaction, employee retention, employee turnover, turnover costs