Employer Retention Strategies to Reduce Attrition Rates
Michael Jordan, my favorite Basket ball player & idol said, “Talent wins games, but teamwork & intelligence win championships.” this is so true in today’s modern world. Talent, Teamwork & Intelligence together is such a powerful combination. In today’s world retention of this talent has become crucial and talent at the same time is not easily available. In Today’s blog lets discuss about ATTRITION and how can organizations adopt strategies that would help retain & also attract new talent.
Before we start off, we need to know what Attrition is, Attrition Rate & how to calculate attrition in an organization. The unpredictable & uncontrollable, but normal, reduction of work force due to resignations, retirement, sickness, or death leads to “Attrition” in organizations. Before we get into the calculations, let’s talk about the definition of attrition rate. In a general sense, attrition rate is the number of people who move out of a group over time.
Generally, Attrition Rate is a measure of employee turnover, and it helps you to understand how well you’re retaining talent in your organization. A high attrition rate means that your employees are leaving frequently, while a low rate indicates that you’re keeping your employees for longer periods of time.
So how do we calculate attrition rate in an organization?
Calculating attrition rate at its most basic level is very easy: just divide the number of people who left your organization by the average number of employees over a very specific time period.
Let’s say you started the year with 25 employees and ended the year with 45. And over the course of the year, 10 employees left. Here’s how we’d calculate the attrition rate for this situation:
Annual attrition rate = 10 / ((25+45) / 2)
= 10 / 35
There are a lot of factors & situations that cause attrition in organizations. So, what strategies do we adopt that is going to reduce the attrition rates?
- Financial Considerations – Many a times the salary is a major issue when it comes to attrition. The expectations of employees are increasing day by day. One of the major reasons is high demand of employees in other organizations. Many people leave the organization because they have been offered a higher salary & in the current competitive scenario, it is easy for employees to find positions that leverage their experience & have better pay structures.
- Stress & Workload – Employees that are highly stressed are more likely to quit their jobs. 45% of the candidates that we surveyed state that their job was too demanding and stressful, and they had excess workload. Helping employees manage their workload by giving them the resources to do so is a great way to reduce attrition rate.
- Lack of Appreciation – who doesn’t want to be appreciated? companies who don’t have a proper structure, incentives, rewards & recognition programs etc face the brunt of employees leaving the organization unappreciated.
- Company work Culture – Your culture defines who you are & your work culture defines how the organization is run. Your work culture would create a “glass ceiling effect” which would lead to large attrition. Company now are diverse in nature and are inclusive and bring a lot of sense of belonging as part of their work culture.
- Slow career growth internally / laterally; companies who don’t have goal setting, KPI, KRA, career path for their employees will not be able to retain their employees. A clear career pathway is a must in any organization. Employees with niche skills & Highly relevant experience are a precious commodity in today’s fast-growing market. Lack of Internal jobs rotation would create these issues.
- Work environment – places which are hazardous to workers, unsafe for women, dealing with toxic materials or unprofessional behavior in the work environment, lack of trust and having a biased system, lack of opportunity to address employee grievances, accessibility of the senior management team would lead to high attrition.
There are a lot of other factors such as lack of job rotation, monotony of work, Workload, Irate Customers, Travel time, Insufficient Breaks, Health factors and many such more which can cause attrition.
Let’s see now as to how we can reduce Attrition.
A few methods that can be easily be adopted by organizations are as such:
- Improve your hiring process continuously & Hire only the right fit candidates.
Your hiring process should be well defined, it should include a few rounds which would test the prospective job seekers Intellectual ability (IQ – intelligence quotient), EQ Emotional Quotient, Social Quotient & psychological stability. A stress test can also help judge the ability to handle work pressure. 30% of Attrition can be reduced if the right fit candidates are hired.
- A well-structured Orientation / On-boarding Process – first impression Is the last impression. The day of joining for the new employee should be well planned, structured & highly informative in nature. The person should feel delighted on the first day of the job. The induction process should consist of things like the company vision, mission, goals, values etc… it should also consist of Employee handbook and mentor or joining buddy to help the new joinee. Such activities make the new joinee feel a sense of belonging and would not encourage him / her to look for another job elsewhere.
- Take Feedback, Suggestions & Opinions time to time – a very good practice by many employee-friendly organizations is that the company values the employee’s opinion and always keep an eye and ear out so see and hear what their staff is saying. Feedback from employees about their manager & the management, suggestions for improvement as an organization & opinions about a few policies. Giving a platform or mechanism to voice their opinions matter.
- On time appraisal – A lot of organizations fail to do appraisals on time. Performance management needs to be done on a regular basis either monthly, quarterly or half yearly. Based on our survey with job seekers we go to know that 40% employees state that their appraisal was not don’t on time which led to a bad employee experience. Timely appraisal keeps a check on quality, time and effectiveness of the job which in turns helps reduce attrition.
- Appreciation, Rewards & Recognition play a key role in reduction of attrition. An employee who is appreciated or has been a “pat on the back” will always be motivated to work and excel at his / her job. Performance management with Rewards and recognition to deserving employees will boost their morale and not make think of venturing out and apply to other jobs in the market.
- Fun Activities & Work Life – Balance is important. As the saying goes… all work & no play makes jack a dull boy. Fun activities are crucial to boost the moral of the employee. Yoga sessions, dance sessions, dress up competitions, rainbow week, birthday celebrations, work anniversary celebrations, the list is endless … these activities will reduce the levels of attrition.
- Growth Plan & Career progression of employees is crucial. everyone looks for a yearly hike, but those hikes should come with a review of existing responsibilities, goals & targets to be achieved and additional responsibilities to be taken up. A clear career graph with mentorship is a must. Employees like to stay in organizations which tends to care for them and their well being.
- Clear & transparent communication with updated company policies: The company should have set forth a few strong rules & regulations with employee friendly policies. Policies related to code of conduct, behavior, rules of engagement, HR policy, Leave & attendance, NDA’s, etc… companies need to have two-way communication from top to down & vice versa. The management should have open door policies where the employees can he heard out & their grievance; issues can be noted by the senior management.
- Training & Development – It’s true that all are not born equal but if treated equally, with respect and are trained, given the right set of tools, nurtured and mentored then nothing can stop them. Identifying a need for training, providing adequate resources to accomplish the tasks assigned, create a development graph which would help retain them in the long run.
- Exit interview process with feedback & suggestions: An employee leaves an organization for a reason but to get to know the justified reason an exit process is necessary. The Exit interview should be conducted and also along with it a survey to check on the journey of the employee from the first day to last day with suggestions on improvements, feedback on existing processes, manager & management & Work environment is a must.
In a way 0% Attrition is not completely possible, Sometimes, it is just outside your control. And us being humans we all have our individual traits, likes, dislikes, wants, wishes & desires. However, knowing why & how it happens; meeting the challenge of overcoming attrition can help minimize its effect on your business after all we’re only human!