Employee Attrition

Employee attrition and candidates absconding are significant business concerns in today’s knowledge- driven marketplace, where employees are the most important human capital assets.

Learn about:- 1. Introduction to Employee Attrition 2. Types of Employee Attrition 3. Recommendations.

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Employee Attrition: Introduction, Types and Recommendations

Employee Attrition – Introduction

Employee attrition and candidates absconding are significant business concerns in today’s knowledge- driven marketplace, where employees are the most important human capital assets.

The World Future Society predicted that the greatest test of durability for companies in the next five years would be the ability to attract and retain top performers. For example- in some industries there is a phenomenon of ‘merry-go-round employees where employees jump ship within the industry and companies are recycling employees. In the finance industry, it is a common phenomena for the top-level employees to ‘job-hop’.

In simple terms, attrition refers to phenomenon wherein, an employee leaves the organization.

Attrition has the following impacts on the organization:

i. Indicating a failure in the companies ability to set effective HR polices.

ii. A chronic cycle of decrease in productivity due to insufficient employees causing other existing employees to work harder resulting in work – life imbalance which leads to further attrition.

iii. The cost of replacing staff is enormous.

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Employee Attrition – Types

i. Fresher attrition- The number of fresher who left the organization within one year, using the company as a springboard or a launch pad.

ii. Infant mortality- Is the percentage of people who left the organization within one year.

iii. Critical resource attrition- Attrition in terms of key personnel like senior executives leaving the organization.

iv. Low performance attrition- Attrition of those who left the organization due to poor performance.

Attrition is a complex issue and has several dimensions. At the face of it, it seems as a simple case of role mismatch. Often, in an interview a candidate is found to be suitable for a particular position but later appears to be a wrong selection. Perhaps the most hidden dimension of this mismatch is the ‘Halo Effect’ (Dey).

It refers to the transfer of goodwill or positive feelings about one characteristic (e.g., individuals pleasing appearance) to another possibly unrelated characteristic (e.g., Performance). This may be created by both the employees as well as employer during the process of recruitment and selection.

As the war for talent heats up in the Indian market, many organizations tend to think that it takes complicated performance evaluation systems and steep salary hikes to motivate and retain their employees in the system. These do help, but only to a certain extent.

An employee would stay productive only if he is made aware of how important he/she is to the system. Mary Kay Ash, a US businesswoman built a multi-billion dollar cosmetics empire from a mere $5,000 initial investment, based on a simple rule of encouraging managers to treat staff, customers, suppliers and everyone with the same care, consideration, and concern they would like to receive themselves.

As organizations lament the challenges that they have to constantly encounter as a consequence of employee turnover, all attrition may not detrimental for an organization. Some attrition is desirable and necessary for organizational growth and development.

The Media and Entertainment sector is one of the most rapidly growing sectors of the Indian economy due to the increasing number of television viewers, robust growth in advertisements and subscription revenues.

The Indian Media and Entertainment Industry (M&E) stood at US $ 12.9 billion in 2009, registering a 1.4% growth over the previous year; according to a joint report by KPMG and an Industry Chamber. Over the next 5 years, the industry is projected to grow at a Compound Annual Growth Rate (CAGR) of 13% to reach the US $ 24.01 billion by 2014 as stated by the report.

According to figures released by an Industry chamber in March 2010, the Broadcast and Television Sector comprised over 43% of the overall M&E Industry Sector wherein the total size of the television sector accounted for US $ 5.7 billion.

Thereby, increasing the demand for talented and trained personnel in the media industry. However, the attrition rate in the media and entertainment sector has witnessed an increase in people leaving the organizations and the sector itself.

A report by research firm Media Partners Asia (MPA) stated that India is poised to become the world’s largest Direct-to-Home (DTH) satellite pay TV market, with 36.1 million subscribers by 2012 overtaking the US.

The challenge for any organization is how it reacts and treats its employees. Research proves that Salary is not one of the biggest components for employee retention.

Money is an important factor, but there are many other reasons for an employee’s decision to leave. In fact, in a country like India with a comparably low cost of living, satisfaction with the salary tends to be reached more quickly. Employees look beyond the money factor and new aspects become crucial.

Therefore, is it imperative for organizations to understand what attracts and retains a potential candidate and predict attrition early in the recruitment process so as to curtail significant loss of) productivity and revenue.

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Employee Attrition – Suggestions

Esteem and acknowledgement needs are highly important in a hierarchical society as India. A higher position means status and respect. This explains the concern for individual development and career advancement. Every employee is keen to know his or her career opportunities and path in the company. These internal motivators become crucial elements of the retention policy.

Thus, a career development program could be one of the solutions for an effective motivation policy. The key motivator for professionals is that their learning curve and the challenges given to them should not come to a standstill also aspects such as new projects, cross functional exposure, enhanced learning, training, involvement must be incorporated.

The following recommendations were arrived at, after discussions with key HR personnel and Head of Department.

These are to be designed as per the needs and requirements of the organization:

1. Recognition:

Recognition refers to a presence of systems and practices that real firm an employee’s value to the organization. The occasional “good job” is inadequate to satisfy an employees’ sense of value. It involves problem-solving and decision-making procedures which add to their sense of value and worth within the organization. Employees feel recognized only when their supervisor or manager talks to them about their work during productive discussions that convey mutual respect.

Asking employees for their opinions, asking them to help solve problems or implement improvement and providing them with opportunities to discuss important decisions is an aid to minimize the social distinction of the management hierarchy.

Recognition must enable a sense of individualism wherein the organization is flexible, supportive, and responsive to an individual’s special circumstances. For organizations to attract and to retain the best employees it is essential to develop honest relationships with them.

The need for recognition in the early stage of employment differs from the one in the later stage of employment. During the introductory phase of the employment, the need for recognition in simple terms refers to a mere want of ‘attention’.

The new employee must be integrated into the organization and the focus should be to enable him to form healthy relationships and encourage networking within the organization.

The Mentor and Buddy System:

In such a practice, a senior as well as a coworker is assigned to the new employee. The senior assigned acts as a mentor and the coworker takes on the role of a ‘buddy’. The mentor brings in clarity with respect to the exact nature of the job and responsibilities to be carried out.

The buddy helps the employee to adjust to the new work settings and environment, making the process of socialization easier. Nominated peer/buddy can provide informal support and accelerate assimilation into the team/department by offering advice and information as needed.

Recognition in the later stages of employment involves acknowledgment and appreciation of work. An employee will feel recognized if he/she is considered capable enough to carry out the assigned duties, when opinions and suggestions are welcomed, as a result of which the employee experiences a greater sense of involvement and worth.

Employee of the Month/Spot Rewards:

In such a system, exceptional performance of an employee is recognized and the employee is selected for the title of ‘Employee of the Month’. Such a practice will enable an employee to feel a sense of achievement, appreciation and pride on a monthly basis. The employee can be rewarded with certain perks (meal vouchers/special discounts, via traditional pay roll systems) and his/her special space on the intra net.

Motivation is the key to performance improvement. Performance is a combination of ability and motivation. It is important to understand that each employee is not motivated by same needs.

At various points in their lives and careers, various employees will be motivated by completely different needs. It is imperative to recognize each employee’s needs and proceed accordingly.

Motivation includes the following aspects:

i. Equal and fair treatment to all.

ii. Positive reinforcement

iii. Satisfying employee needs

iv. Setting up work related goals.

Quarterly Review:

An effective Career Development Programme must be initiated. Conducting a review every 3 months will help the employee as well the manager to gain insight into his progress at work as well as to decide the future course of action thereby enhancing motivational levels. It is important that the concerned HR personnel is also present during the review.

This review should be an informal candid discussion wherein the employee can freely express his thoughts. Future goals and objectives should be set for the employee providing challenge, clarity and definition of job responsibilities.

2. Training:

Analysis of the data reveals a strong need for Training. Training helps in optimizing the utilization of human resource that further aids the employee to achieve organizational as well as individual goals. It helps the employees in attaining personal growth along with development of technical and behavioral skills in an organization.

It helps in increasing job specific knowledge and skills of employees, enabling them to expand the horizons of human intellect and an overall personality of the employees. Training should be participative and encourage exchange of views, ideas and experiences. Such participation helps to foster the idea of employee involvement.

It is important, to provide both employees as well as managers with training in the skills and techniques required for communication and consultation.

Managers have an important role to play in communicating and consulting and training can enable them to:

i. Become more aware of the importance of good communication practice

ii. Better understanding of their roles and responsibilities as communicators

iii. Support those who are less outspoken and improve their ability to communicate.

It is also necessary to evaluate periodically the effectiveness of any training undertaken. The employee’s Line Manager has the primary responsibility to identify the needs of the inductee and assess their learning styles as well as ensuring that the training programme is followed through.

Training Needs Survey:

It is imperative for organizations to identify the training needs of the employees. A survey maybe conducted by the organization half yearly or annually so as to identify the training needs of the employees. Thus, effective training programmes can be implemented based on the training needs requirements.

E-Training:

It is a computer and network enabled transfer of skills and knowledge. E-learning applications and processes include Web-based learning, computer-based learning, virtual classrooms and digital collaboration. Content is delivered via the Internet, intranet/extranet, audio or video tape, satellite TV and CD-ROM.

i. Convenience and flexibility to learners.

ii. e-Learning is self-paced and the learning sessions are available 24 x 7.

iii. Learners are not bound to a specific day/time to physically attend classes. They can also pause learning sessions at their convenience.

iv. High technology is not necessary for all online courses. Basic internet access, audio, and video capabilities are common requirements.

v. Individuals can begin their courses while at work and finish those at an alternate internet equipped location.

3. Induction:

Induction refers to the process for introducing a new employee to their work environment. The purpose of induction is to ensure the effective integration of staff into the organization. New employees also need to understand the organization’s goals, values and philosophy; personnel practices, ethics, integrity, corporate social responsibility and the job they are required to do.

1. Provides motivation and confidence to new employees.

2. Helps the new employees to assimilate the workplace culture.

3. Improves work quality and productivity.

4. Reduce incidences of early leaving.

5. As induction involves other staff other than the inductee, the process can also be useful in developing the skills of existing staff.

All the information at one single induction session can be quite overwhelming for the new employee.

Therefore the entire induction programme can be carried out in 3 stages:

1. Primary Induction- Must Address the immediate needs of the employee.

i. Proving a pre-employment pack/letter will enable the employee to predict exactly what will happen on their first day and overcome apprehension.

ii. Have everything set out on paper – example names of the people the inductee is to meet, chalk out a timetable of the first day.

iii. Nominate a key person who is responsible for each task that the inductee will have to do and make sure they are prepared and trained to do it.

2. Main Induction- Once the primary induction is completed, the employee will need to be inducted into the culture and systems of the organization.

Information regarding:

1. Work environment

2. The organization

A structured view of the organization, statements and business plans and explaining the objectives of the organization, business plan, communication and involvement of various systems. An understanding of the roles and culture within the organization.

Emphasis on Job instruction – setting targets, explaining performance measurement techniques. This involves ensuring that the inductee receives the relevant training to actually carry out the work.

Evaluation of the Induction Process:

Post Induction Feedback Form: The new employee can be provided with a checklist to evaluate the effectiveness of the induction programme.

4. The Exit Interview Analysis:

An exit interview is an interview of a departing employee. They are generally conducted by a human resources staff member, so that the employee is more inclined to be candid.

The purpose of an exit interview is to gather an employees’ feedback on the work experience in order to improve working conditions and retain employees.

The results and analysis of exit interviews provide relevant and useful data for training needs analysis and training planning processes. Sometimes an exit interview provides the chance to retain a valuable employee who would otherwise have left the organization.

The exit interview can be dealt with in 2 stages:

1. Exit Interview Form- The employee is requested to fill in the exit Interview form.

2. Interview- A 10-15 minute informal talk with the employee.

The existing exit interview form:

i. More objective, wherein the exit has to tick/choose his preferred rating/response.

ii. Use of forced choice format (Yes/No) – helps in quantifying data.

iii. Eliminate ambiguity of certain items.

iv. Must not be repetitive.

v. Use of simple language.

vi. A one page brief exit interview form.

The Exit Interview:

The Exit Interview must come across as an Informal chat, enabling the employee to share experiences/thoughts in an uninhibited manner. In reality, the interview will be structured by HR personnel, facilitating a better understanding of the reasons for resignation. The interviewer must make a note of the responses after the completion of the interview.

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