Final answer:
The best support for the business case for employee retention is that turnover and talent shortages can seriously impact organizational performance, leading to various direct and indirect costs. Retention is crucial for maintaining a skilled workforce and avoiding the expenses associated with constant hiring and training.
Step-by-step explanation:
The question revolves around which factor best supports the business case for employee retention. The correct answer is D. Turnover and talent shortages affect organizational performance. High turnover rates can lead to direct costs associated with recruiting and training new employees, as well as indirect costs related to lost institutional knowledge, reduced morale, and decreased productivity. It is well established that retaining employees can improve organizational performance and stability. Additionally, the adverse selection of wage cuts argument suggests that reducing wages could lead to the departure of the most qualified employees, thereby affecting the overall quality of the workforce. Companies often find it more advantageous to retain talent than to manage the consequences of high turnover.
Furthermore, instability due to a constantly changing workforce can lead to compliance issues with employment laws and excessive expenses in education and training, as the organization must continually train new employees to replace those who have left. Retention strategies may include incentives and meaningful work, particularly for millennials and Generation X employees, who value frequent rewards, praise, feedback, and find value in the purpose of their work.