Impact of Employee Turnover on Customer Satisfaction

Abstract

Employee turnover remains a significant challenge for businesses, particularly in service-intensive sectors such as logistics, where consistent and timely delivery has a direct impact on customer satisfaction. This thesis explores the relationship between employee turnover and customer satisfaction within a major logistics service provider in Finland, referred to as the Case Company. Quantitative data were collected through structured surveys administered to delivery employees, while qualitative insights were derived from semi-structured interviews with management personnel. The research integrates Mobley’s Employee Turnover Model and the SERVQUAL framework to analyze how turnover influences customer satisfaction through key service quality dimensions such as reliability, responsiveness, and assurance.

Findings reveal a strong correlation between high turnover rates and reduced customer satisfaction. Frequent staff changes were perceived to disrupt delivery consistency, increase service delays, and undermine customer trust. The study also identifies compensation, workload, and lack of flexibility as primary turnover drivers. Interview responses and survey data further underscore the operational challenges posed by employee attrition, especially during peak delivery periods.

The research contributes valuable insights for academics and practitioners by highlighting the need for targeted retention strategies and structured onboarding processes. Recommendations include improving compensation models, enhancing work-life balance, and leveraging customer satisfaction KPIs to monitor turnover impacts. These strategies aim to stabilize the workforce, reduce recruitment costs, and enhance service consistency, ultimately improving customer satisfaction and business performance in the delivery services sector.