IS ATTRITION AND RETENTION BOGGING YOU?
Employee attrition is a costly dilemma for all organizations . In today's taxing business climate, managing company's competent and skilled human capital is vital for success. Is your approach to recruiting and retention aligned with your company's strategic goals? This article explores the prime factors for employee attrition and some retention strategies and processes that will help drive long-term tangible business benefits.
Companies usually turn to increasing the compensation for employees to retain them. This however is no longer helpful in solving the problem as the skilled work force has many opportunities which masses of them give predilection to. Employee attrition costs 12 to 18 months' salary for each leaving manager or professional, and 4 to 6 months' pay for each leaving Management or even hourly employee. According to a study by Ipsos–Reid , 30% of employees plan to change jobs in the next two years. Most leaving employees seek opportunities that allow them to use and develop their skills. Leaving employees want more meaning in their work meaning challenging the challenges. They often indicate that they want to use their qualities and skills in challenging teamwork led by capable leaders.
Managerial staff cite "career growth" and "leadership" as the major factors that influence attrition and retention, together with "opportunities for management" "ability of top management" "use of skills and abilities" and "work / family balance" Professional employees cite concerns about "supervisory coaching and counseling," "company direction" and "interesting work" Clerical employees voice concerns such as "type of work," "use of skills and abilities" and "opportunity to learn" Hourly employees notice whether they are treated with respect, their "management ability" and "interesting work"
Employee attrition rate can be never being entirely eradicated. It can only be influenced to keep it in control. The business model on which a subsidiary operation runs is significant in achieving this. Outsourcing higher end responsibilities that offers challenging tasks to the employees goes a long way in helping.
CASE STUDY: A Major Auto Component Manufacturer
The Exit Interviews for key performers of the organization were Analysed through language processing tools. The results were:
• Overall, job dissatisfaction levels are high at all facilities, in all job classifications and among both new and lateral recruits.
• Employees between 2 to 5 years of service and more than 10 years of service have higher dissatisfaction levels than those with less than 2 years of service.
• Pay, work schedule, mandatory overtime, designation levels, opportunities for advancement, and benefits were most frequently cited as issues the key performer's wanted to change about their jobs.
• When asked what incentives motivated them, pay and benefits was not frequently cited but majority of the respondents said that the liking for their work and the interest.
• Respondents also frequently cited communication as a significant factor. Many key employees expressed a desire for more two-way flow of information and a voice in decision-making.
• They wanted a forum for sharing their ideas for system improvement. Some expressed the perception that inmates have a voice in the system but the staff does not, and expressed a desire to see administrative staff make a visit the facilities during second and third shifts.
• Perceived lack of recognition was also cited as a contributor to low job satisfaction. Some respondents described a climate where bad performance was recognized but good performance was not. Several employees expressed a sense that their work is not valued, nor is it considered a skilled role. Other workplace climate issues that were often cited as contributing to poor performance were lack of teamwork, back biting and favoritism. The phrase “good old boy system” came up in several narrative responses.
• Though job dissatisfaction seems to be the norm, there was considerable variability among facilities in terms of the issues that were cited as contributing to job dissatisfaction, especially compensation.
If you are a boss, the following statistics should give you nightmares! However, here is a list of the most common `personality wrongs' that many managers commit that have to be corrected for the managers to succeed.
Source: Article on “Employees leave boss's not their jobs” published in “The Hindu”
Boss's always right
Most frequently the senior managers deem themselves too great to consign mistakes, simply because now they have a designation that deceives them into believing that they are perfect and incapable of any faux pas. Such notions can be dangerous and prove an obstacle to learning and improving.
Me and Only Me
The most common mistake a senior manager makes is to think of himself, and not involving his subordinates when taking decisions. Authoritarian leadership is not appreciated in today's corporate world. Most of the present day employees can and do think for themselves and do not appreciate any dictatorial control.
Forever and for always
Senior managers must not take their leadership for granted. Many senior managers believe, `Once a leader, forever a leader' . They forget that the title is only temporary and that true power does not lie with them but with the employees.
Black-and-white pictures
If a senior manager sees the world and all the situations in it clearly demarcated as black or white, it will be difficult to be subjective. He should know that there are lots of gray shades too and judging everyone by one's individual standards is surely not the best thing to do. Every person has distinct individual characteristics.
All-knowing
This epithet is for the Power above us all, though some senior managers would love to use it for themselves! Considering one above any fallacy is indeed the biggest fallacy in itself Good senior managers understand that they are people of average knowledge and intelligence. They know there is still a lot to learn. They hire the best people to acquire this knowledge. Such leaders succeed and the organization of such leaders succeeds, too.
Sorry, no sorry!
Accepting one's mistakes and apologizing for it, is a sign of healthy self-worth. Unfortunately, some senior managers get embarrassed about their mistakes and do not acknowledge it, in an attempt to cover it. But remember that acknowledging a mistake is the first step to finding its solution and makes one appear humane too. Similarly, taking criticism positively is also an endearing quality in a senior manager. Making changes, as suggested by employees, increases the trust they establish in you.
Permanency
Leaders who are unreceptive to change will find it difficult to survive in this dynamic world. Senior managers must be open to taking risks and judge the pros and cons of every opportunity that comes their way. Old habits die hard and one's `character' mistakes are the most difficult to correct Nevertheless, a true desire to change and a little determination will make you the perfect senior manager.
Recruiting and Retention for the Workforce
The need to increase recruiting and retention effectiveness is a flaming issue worldwide. The business benefits of these approaches are reaching into the developing world—an encouraging sign that the learning's of human capital management can help raise global workforce standards.
Compensation
The Issue: While just 31 percent of respondents indicated making more money was their primary reason for job hunting, it's evident that paying proactive competitive salaries is MUST.
What We Can Do:
Use of Industry Surveys and other data tools to stay informed on wage trends.
To benefit both company and employees, tie increased one time performance pay to meeting specific goals aligned with business objectives.
Collect data from exit interviews to document trends from your departing employees, and then use this data to make a business case for increasing salaries across the board.
Conduct ESS to find out what perks, benefits and forms of compensation other than money will help keep them motivated.
Let employees decide their own compensation package / reimbursements once the quantum is fixed.
Management and Retention
Improve managers' leadership, communication and interpersonal skills through coaching, training and feedback. Rate these key skills in their evaluations, and tie compensation to performance.
Create a safe environment and process for employees to bring up concerns with their managers. Address problems quickly.
Communication:
Provide clear vision, brawny and consistent communication, teamwork and respect for workers' efforts.
Share the company vision/mission clearly and regularly.
Collaborate, communicate and listen. Contented employees achieve amazing things.
Organization Culture:
Culture is reflective of senior leadership. Being dissatisfied with senior leaders is one of the seven reasons people leave jobs. For IT people, it may be a culture that doesn't communicate. If the culture doesn't care for people, you have to go after what they do care about, which is the bottom line.
To the extent that an organization over time develops uniquely shared norms we can distinguish organizations by its culture. The people in the organization create organizational culture. He models this process as a cycle of Attraction- Selection-Attrition (ASA)
Attraction : People seek a “fit” with their own personality in their choice of career and employer.
Selection : Organizations recruit and select people that are compatible – they “fit” in.
Attrition : When incompatible people join a company, they tend to leave seeking a “fit” with another organization. This leaves the organization with more homogenous group.
This tendency towards homogeneity reinforces common shared norms of behavior or culture.
Challenge the challenges
Mentoring
The Mentor plays a very vital role of handholding in the initial stages of an enterprise. He is the guardian angel to whom an entrepreneur can turn when in distress. The Mentor provides business guidance and shares his experience and skills with the entrepreneur. The Mentor and the Mentee have to mutually agree on the time the Mentor will spend with the Mentee. This can vary from several hours a week to several days in a month. The Mentor may have one or more Mentees in a cluster of industries depending on the nature of support needed. Mentor-Mentee relationship is generally a long-term association.
Ownership culture: Pride in the company
Developing an efficient ownership culture is so vital for any organization. It could be a utopian vision of an organization where employees work with the passion of an entrepreneur, where they feel that they own the organisation, are self-motivated and have a great sense of pride in belonging to the company. Developing such a culture at the workplace is a tough task for an employer and for HR team, but it is the only way to ensure employee loyalty, and bridge the gap between employer and employee. If nurtured, this feeling not only optimizes productivity and excellence beyond expectations, but also helps in combating attrition. While most organisations do make assiduous efforts to inculcate a feeling among employees, the task is made more difficult due to the highly fluid situation of the recruitment market and the constantly changing loyalties.
Interestingly, the ratio of ownership differs from person to person at different positions within the organisation. While it is the top management, which should forefront the effort by clearly communicating the organizational vision and the responsibility of each individual, it is the immediate boss who is directly responsible for grooming the sense of ownership among his or her team members. The need to create this culture is essential for every company. It also reduces problems of employee alienation and attrition. Employees are more attached to an organisation, which helps in better organizational management. Work performance improves and growth in job satisfaction is seen at all levels. Furthermore, employees are more open to put forth their ideas and talents. A strong organizational culture enforces the fundamental law of entrepreneurs that ‘what is good for the business is good for me.
Put practices to be “Employer of Choice”
The change initiatives to craft your organization into a Preferred Employer instigate with administrator deeds and actions. It is significant for managers to exhibit the exact attitudes and behaviors to construct elevated levels of employee engagements. So called Employer of Choice upshot from an ambiance of conviction, where the attitudes and actions of management hold up employee self-sufficiency and cooperation. In a workplace with high level of trust, there is transparency and team zeal, the employees are prolific, the processes are more pioneering, customers are more contented – and the conclusion is more returns on investment.
Robust Performance Management System
Broadly speaking, a dynamic P erformance M anagement S ystem is to ensure the following:
• Assess employee's performance against the focus area's set in their performance agreement for the appraisal year and improves their proficiency.
• Provide an opportunity to the employees to express their views or to seek further clarification on their performance.
• Identify potential of employees and to develop them for future roles.
• Train the people to develop their skills, knowledge and experience to perform their jobs well.
• Reward them appropriately.
• Generate data for career planning and succession planning.
ABOUT THE AUTHORS
Mr. Hari Nair is a young Post Graduate in Public, Personnel Management & Industrial Relations from Osmania University, did his Graduation in Commerce and has a Degree in Education Psychology & a Diploma in Journalism. His Career Matrix commenced at the age of Nineteen as Officer Administration and he has a rich and varied experience of 17 years. Had worked in Training & Establishment division of Ministry of Defence, Chittorgarh; as Functional Head HR for Minda Huf Limited, NOIDA; Federal Mogul Sintered Products Limited, Bhiwadi; Indo Rama Textiles Limited, Pithampur & L&T Group of Companies, Pithampur. Currently he is at the helm of affairs at Sona Koyo Steering Systems Ltd, Gurgaon as its General Manager – Human Resources. He is a Friend, Mentor, Counselor and a Consultant for many Organizations and is a Life Member of NHRD, ISTD, ISABS, DMA, AIMA, IOD, NIPM and NCR Chamber Of Commerce & Industry. He can be reached by e-mail –
or 
and on his Mobile No. +91-98-102-89047
Mr. Abhishek Gavane is a fresh MBA graduate with Bachelor's degree in Mechanical Engineering. He has been privileged as University Topper at Government Engineering College, Rewa (MP). Moreover he has attained 3rd rank in GGSIP University, New Delhi in the function of Human Resource Management. Presently working at executive level in Sona Koyo Steering Systems Ltd, Gurgaon he has acquired affluent experience across functions akin OD Interventions, Training & Development and Recruitments. He can be reached by e-mail
or on his
Mobile No. +91-98-913-65444
From India, Bahadurgarh
47Employee attrition is a costly dilemma for all organizations . In today's taxing business climate, managing company's competent and skilled human capital is vital for success. Is your approach to recruiting and retention aligned with your company's strategic goals? This article explores the prime factors for employee attrition and some retention strategies and processes that will help drive long-term tangible business benefits.
Companies usually turn to increasing the compensation for employees to retain them. This however is no longer helpful in solving the problem as the skilled work force has many opportunities which masses of them give predilection to. Employee attrition costs 12 to 18 months' salary for each leaving manager or professional, and 4 to 6 months' pay for each leaving Management or even hourly employee. According to a study by Ipsos–Reid , 30% of employees plan to change jobs in the next two years. Most leaving employees seek opportunities that allow them to use and develop their skills. Leaving employees want more meaning in their work meaning challenging the challenges. They often indicate that they want to use their qualities and skills in challenging teamwork led by capable leaders.
Managerial staff cite "career growth" and "leadership" as the major factors that influence attrition and retention, together with "opportunities for management" "ability of top management" "use of skills and abilities" and "work / family balance" Professional employees cite concerns about "supervisory coaching and counseling," "company direction" and "interesting work" Clerical employees voice concerns such as "type of work," "use of skills and abilities" and "opportunity to learn" Hourly employees notice whether they are treated with respect, their "management ability" and "interesting work"
Employee attrition rate can be never being entirely eradicated. It can only be influenced to keep it in control. The business model on which a subsidiary operation runs is significant in achieving this. Outsourcing higher end responsibilities that offers challenging tasks to the employees goes a long way in helping.
CASE STUDY: A Major Auto Component Manufacturer
The Exit Interviews for key performers of the organization were Analysed through language processing tools. The results were:
• Overall, job dissatisfaction levels are high at all facilities, in all job classifications and among both new and lateral recruits.
• Employees between 2 to 5 years of service and more than 10 years of service have higher dissatisfaction levels than those with less than 2 years of service.
• Pay, work schedule, mandatory overtime, designation levels, opportunities for advancement, and benefits were most frequently cited as issues the key performer's wanted to change about their jobs.
• When asked what incentives motivated them, pay and benefits was not frequently cited but majority of the respondents said that the liking for their work and the interest.
• Respondents also frequently cited communication as a significant factor. Many key employees expressed a desire for more two-way flow of information and a voice in decision-making.
• They wanted a forum for sharing their ideas for system improvement. Some expressed the perception that inmates have a voice in the system but the staff does not, and expressed a desire to see administrative staff make a visit the facilities during second and third shifts.
• Perceived lack of recognition was also cited as a contributor to low job satisfaction. Some respondents described a climate where bad performance was recognized but good performance was not. Several employees expressed a sense that their work is not valued, nor is it considered a skilled role. Other workplace climate issues that were often cited as contributing to poor performance were lack of teamwork, back biting and favoritism. The phrase “good old boy system” came up in several narrative responses.
• Though job dissatisfaction seems to be the norm, there was considerable variability among facilities in terms of the issues that were cited as contributing to job dissatisfaction, especially compensation.
If you are a boss, the following statistics should give you nightmares! However, here is a list of the most common `personality wrongs' that many managers commit that have to be corrected for the managers to succeed.
Source: Article on “Employees leave boss's not their jobs” published in “The Hindu”
Boss's always right
Most frequently the senior managers deem themselves too great to consign mistakes, simply because now they have a designation that deceives them into believing that they are perfect and incapable of any faux pas. Such notions can be dangerous and prove an obstacle to learning and improving.
Me and Only Me
The most common mistake a senior manager makes is to think of himself, and not involving his subordinates when taking decisions. Authoritarian leadership is not appreciated in today's corporate world. Most of the present day employees can and do think for themselves and do not appreciate any dictatorial control.
Forever and for always
Senior managers must not take their leadership for granted. Many senior managers believe, `Once a leader, forever a leader' . They forget that the title is only temporary and that true power does not lie with them but with the employees.
Black-and-white pictures
If a senior manager sees the world and all the situations in it clearly demarcated as black or white, it will be difficult to be subjective. He should know that there are lots of gray shades too and judging everyone by one's individual standards is surely not the best thing to do. Every person has distinct individual characteristics.
All-knowing
This epithet is for the Power above us all, though some senior managers would love to use it for themselves! Considering one above any fallacy is indeed the biggest fallacy in itself Good senior managers understand that they are people of average knowledge and intelligence. They know there is still a lot to learn. They hire the best people to acquire this knowledge. Such leaders succeed and the organization of such leaders succeeds, too.
Sorry, no sorry!
Accepting one's mistakes and apologizing for it, is a sign of healthy self-worth. Unfortunately, some senior managers get embarrassed about their mistakes and do not acknowledge it, in an attempt to cover it. But remember that acknowledging a mistake is the first step to finding its solution and makes one appear humane too. Similarly, taking criticism positively is also an endearing quality in a senior manager. Making changes, as suggested by employees, increases the trust they establish in you.
Permanency
Leaders who are unreceptive to change will find it difficult to survive in this dynamic world. Senior managers must be open to taking risks and judge the pros and cons of every opportunity that comes their way. Old habits die hard and one's `character' mistakes are the most difficult to correct Nevertheless, a true desire to change and a little determination will make you the perfect senior manager.
Recruiting and Retention for the Workforce
The need to increase recruiting and retention effectiveness is a flaming issue worldwide. The business benefits of these approaches are reaching into the developing world—an encouraging sign that the learning's of human capital management can help raise global workforce standards.
Compensation
The Issue: While just 31 percent of respondents indicated making more money was their primary reason for job hunting, it's evident that paying proactive competitive salaries is MUST.
What We Can Do:
Use of Industry Surveys and other data tools to stay informed on wage trends.
To benefit both company and employees, tie increased one time performance pay to meeting specific goals aligned with business objectives.
Collect data from exit interviews to document trends from your departing employees, and then use this data to make a business case for increasing salaries across the board.
Conduct ESS to find out what perks, benefits and forms of compensation other than money will help keep them motivated.
Let employees decide their own compensation package / reimbursements once the quantum is fixed.
Management and Retention
Improve managers' leadership, communication and interpersonal skills through coaching, training and feedback. Rate these key skills in their evaluations, and tie compensation to performance.
Create a safe environment and process for employees to bring up concerns with their managers. Address problems quickly.
Communication:
Provide clear vision, brawny and consistent communication, teamwork and respect for workers' efforts.
Share the company vision/mission clearly and regularly.
Collaborate, communicate and listen. Contented employees achieve amazing things.
Organization Culture:
Culture is reflective of senior leadership. Being dissatisfied with senior leaders is one of the seven reasons people leave jobs. For IT people, it may be a culture that doesn't communicate. If the culture doesn't care for people, you have to go after what they do care about, which is the bottom line.
To the extent that an organization over time develops uniquely shared norms we can distinguish organizations by its culture. The people in the organization create organizational culture. He models this process as a cycle of Attraction- Selection-Attrition (ASA)
Attraction : People seek a “fit” with their own personality in their choice of career and employer.
Selection : Organizations recruit and select people that are compatible – they “fit” in.
Attrition : When incompatible people join a company, they tend to leave seeking a “fit” with another organization. This leaves the organization with more homogenous group.
This tendency towards homogeneity reinforces common shared norms of behavior or culture.
Challenge the challenges
Mentoring
The Mentor plays a very vital role of handholding in the initial stages of an enterprise. He is the guardian angel to whom an entrepreneur can turn when in distress. The Mentor provides business guidance and shares his experience and skills with the entrepreneur. The Mentor and the Mentee have to mutually agree on the time the Mentor will spend with the Mentee. This can vary from several hours a week to several days in a month. The Mentor may have one or more Mentees in a cluster of industries depending on the nature of support needed. Mentor-Mentee relationship is generally a long-term association.
Ownership culture: Pride in the company
Developing an efficient ownership culture is so vital for any organization. It could be a utopian vision of an organization where employees work with the passion of an entrepreneur, where they feel that they own the organisation, are self-motivated and have a great sense of pride in belonging to the company. Developing such a culture at the workplace is a tough task for an employer and for HR team, but it is the only way to ensure employee loyalty, and bridge the gap between employer and employee. If nurtured, this feeling not only optimizes productivity and excellence beyond expectations, but also helps in combating attrition. While most organisations do make assiduous efforts to inculcate a feeling among employees, the task is made more difficult due to the highly fluid situation of the recruitment market and the constantly changing loyalties.
Interestingly, the ratio of ownership differs from person to person at different positions within the organisation. While it is the top management, which should forefront the effort by clearly communicating the organizational vision and the responsibility of each individual, it is the immediate boss who is directly responsible for grooming the sense of ownership among his or her team members. The need to create this culture is essential for every company. It also reduces problems of employee alienation and attrition. Employees are more attached to an organisation, which helps in better organizational management. Work performance improves and growth in job satisfaction is seen at all levels. Furthermore, employees are more open to put forth their ideas and talents. A strong organizational culture enforces the fundamental law of entrepreneurs that ‘what is good for the business is good for me.
Put practices to be “Employer of Choice”
The change initiatives to craft your organization into a Preferred Employer instigate with administrator deeds and actions. It is significant for managers to exhibit the exact attitudes and behaviors to construct elevated levels of employee engagements. So called Employer of Choice upshot from an ambiance of conviction, where the attitudes and actions of management hold up employee self-sufficiency and cooperation. In a workplace with high level of trust, there is transparency and team zeal, the employees are prolific, the processes are more pioneering, customers are more contented – and the conclusion is more returns on investment.
Robust Performance Management System
Broadly speaking, a dynamic P erformance M anagement S ystem is to ensure the following:
• Assess employee's performance against the focus area's set in their performance agreement for the appraisal year and improves their proficiency.
• Provide an opportunity to the employees to express their views or to seek further clarification on their performance.
• Identify potential of employees and to develop them for future roles.
• Train the people to develop their skills, knowledge and experience to perform their jobs well.
• Reward them appropriately.
• Generate data for career planning and succession planning.
ABOUT THE AUTHORS
Mr. Hari Nair is a young Post Graduate in Public, Personnel Management & Industrial Relations from Osmania University, did his Graduation in Commerce and has a Degree in Education Psychology & a Diploma in Journalism. His Career Matrix commenced at the age of Nineteen as Officer Administration and he has a rich and varied experience of 17 years. Had worked in Training & Establishment division of Ministry of Defence, Chittorgarh; as Functional Head HR for Minda Huf Limited, NOIDA; Federal Mogul Sintered Products Limited, Bhiwadi; Indo Rama Textiles Limited, Pithampur & L&T Group of Companies, Pithampur. Currently he is at the helm of affairs at Sona Koyo Steering Systems Ltd, Gurgaon as its General Manager – Human Resources. He is a Friend, Mentor, Counselor and a Consultant for many Organizations and is a Life Member of NHRD, ISTD, ISABS, DMA, AIMA, IOD, NIPM and NCR Chamber Of Commerce & Industry. He can be reached by e-mail –
Mr. Abhishek Gavane is a fresh MBA graduate with Bachelor's degree in Mechanical Engineering. He has been privileged as University Topper at Government Engineering College, Rewa (MP). Moreover he has attained 3rd rank in GGSIP University, New Delhi in the function of Human Resource Management. Presently working at executive level in Sona Koyo Steering Systems Ltd, Gurgaon he has acquired affluent experience across functions akin OD Interventions, Training & Development and Recruitments. He can be reached by e-mail
Mobile No. +91-98-913-65444
From India, Bahadurgarh
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Attrition Control and Retention Strategies for Changing times.ppt
Attrition-rate. xls
Retention quest.doc