Preventing Early Turnover of New Employees by Considering Formal and Informal Relationships

Kentaro Iwata, Jun-Ichi Asaka, Kenta Abe, Morikazu Udagawa, Junji Ochi, Minoru Matsui, Hideki Murakoshi, Hisashi Hayashi

Abstract: The early turnover rate has remained around 30% for the past 30 years, mainly because personal relationships in companies were not good. To the best of our knowledge, no previous study has considered early turnover from the viewpoint of both formal and informal relationships. The aim of this paper is to propose an organizational structure for a company that would prevent early turnover, considering both types of relationships. We built a simulation model to infer early leavers from formal and informal relationships. Based on this model, we propose a company’s organizational structure, in which the younger members of the existing workforce form a team and new employees are assigned to it. The simulation results showed that the proposed structure was more effective in reducing early turnover than the existing top-down company structure.