Factors affecting the retention of employees in auditing firms

The twenty first century has identified knowledge, as opposed to labour, raw materials or capital, as the key resource required by firms. This has created a shift of ownership in relationships between employees and employers since employees own the tools of production through the knowledge they hold (Kinnear & Sutherland, 2000). The employment relationship is undergoing fundamental changes due to international competition, de-regularisation and globalisation which have major implications for attraction, motivation and retention of talented employees (De Vos & Meganck, 2009). Organisations face great challenges and intense competition with almost all strategies being easily replicable by competitors. This has led organisations to begin realising that people are in fact the only real differentiator that can gain the organisation competitive advantage (Munsamy & Bosch Venter, 2009). Turnover of employees costs South Africa millions of rands per annum through decreased productivity, increased accidents and quality problems. Specifically, loss of knowledge workers are identified through costs of hiring and training new employees, loss of institutional knowledge, lower office morale, loss of talent and customer dissatisfaction. It is therefore essential to understand the reasons why employees leave organisations in order to discover how to retain them (Mendes & Stander, 2011; Gaylard, Sutherland & Viedge, 2005). Employee turnover can have several negative consequences. It can be difficult to replace the departed employees and the cost of replacing employees can be exhaustive. Remaining employees can be left feeling demoralised from the loss of valued co-workers and work patterns can be disrupted until replacements are found (Newstrom and Davis, 1997). Bilal, Zia-ur-Rehman, and Raza, (2010) add to this list of negative consequences of turnover as turnover can increase recruitment and training costs, loss of productivity as projects lose continuity, interruption of key activities, increase in mistakes made, or even hiring the wrong person for the position