Attrition

  Attrition is not bad always if it happens in a controlled manner. Some attrition is alwaysdesirable and necessary for organizational growth and development. The only concern is howorganizations differentiate “good attrition” from “bad attrition”. The term “healthy attrition” or “good attrition” signifies the importance of less productive employees voluntarily leaving theorganization. This means if the ones who have left fall in the category of low performers, theattrition in considered being healthy.

Transparent Work Culture: In todayas fast paced business environments where employees are constantly striving to achieve business goals under time restrictions open minded and transparent work culture plays a vitalrole in employee retention. Companies invest very many hours and monies in training and educating employees. Thesecompanies are severely affected when employees check out, especially in the middle of some bigcompany protect or venture. Although employees most often prefer to stay with the samecompany and use their time and experience for personal growth and development, they leavemainly because of work related stress and dissatisfactions. more and more companies have now realized the importance of a healthy work culture and havea gamut of people management good practices for employees to have that ideal fresh work life. closed doors work culture can serve as a deterrent to communication and trust within employeeswhich are potential causes for work related apathy and frenzy,

A transparent work environment can serve as one of the primary triggers to facilitateaccountability, trust, communication, responsibility, pride and so on. !t is believed that in atransparent work culture employees rigorously communicate with their peers and exchange ideasand thoughts before they are finally matured in to full blown concepts. it induces responsibilityamong employees and accountability towards other peers, which gradually builds up trust and pride. more importantly, transparency in work environment discourages work politics whichoften hinders company goals as employees start to advance their personal objectives at the epense of development of the company as a single entity. Employees comprise the most vital assets of the company. in a work place where employees arenot able to use their full potential and not heard and valued, they are likely to leave because of stress and frustration. in a transparent environment while employees get a sense of achievementand belongingness from a healthy work environment, the company is benefited with a stronger,reliable work force harboring bright new ideas for its growth.

 Quality of Work : The success of any organization depends on how it attracts recruits, motivates, and retains itsworkforce. organizations need to be more fle"ible so that they develop their talented workforceand gain their commitment. Thus, organizations are required to retain employees by addressingtheir work life issues.The elements that are relevant to an individuals quality of work life include the tast, the physical work environment, social environment within the organization, administrative systemand relationship between life on and off the job.

Occupational Health care:  The safe work environment provides the basis for the personto enjoy working. The wor( should not pose a health hazard for the person. The employer and employee, aware of their risks and rights, could achieve a lot in their mutually beneficial dialogue.

Suitable Workin' time: Organizations are offering flexible work options to their employees wherein employees en3oy fle"i*timings for dedicating their efforts at work.

Appropriate salary:  The appropriate as well as attractive salary has always been animportant factor in retaining employees. Providing employees salary at par with the other counterparts of above that what competitors are paying motivates them to stick with thecompany for long.

Supporting Employees: Organizations these days want to protect their biggest and most valuable asset and they want to do this in a way that best suits their organizational culture. Retaining employees is a difficulttas. providing support to the employees acts as a mantra for retraining them. employers canalso support their employees by creating an environment of trust and inculcating theorganizational values into employees

 The management can support employees directly or indirectly. directly, they provide support interms of personal crises, managing stress and personal development. management can supportemployees, indirectly, in a number of ways as follows

Management employees turnover: : employee turnover affects the whole organization in termsof productivity. Managing the turnover, hence, becomes an important task. A proactiveapproach can be adopted to reduce attrition. Strategies should be framed in advance andimplemented when the times arrives. Turnover costs should also be taken intoconsideration while framing these strategies.

Become Employeer of choice: What makes a company an employer of choice is the benefit it offers or the compensation packages it gives away to its employees? or is itmeasured in terms of how they value their employees or in terms of customer satisfaction? Becoming an employer of choice involves following a road map which tellswhere to go as a brand.

Engage the new recruit: The newly hired employees are said to be least engaged in theorganization. keeping them engaged is an important task. The fresh talent should be utilized to maximum before they start feeling bored in the organization.

Obtimize employee engagement: An organization0s productivity is measured not interms of employee satisfaction but by employee engagement. employees are said to beengaged when they show a positive attitude toward the organization and empress acommitment to remain with the organization. employee satisfaction also comes with highengagement levels. So, organizations should aim to maximize the engagement among employees.

Coaching and Mentoring: Employees whose work performance suffers due to poor interpersonal relationships or because of lack of interpersonal skills should be provided proper coaching by their superiors. planed coaching sessions help an individual to work through issues, maximize his potential and return to peak performance.

 Feedback: Feedback acts as a channel of communication between the employee and his manager. Theamount of information employees receive about how well or how poorly they have performed iswhat we call feedback. it is a dialog between a manager and an employee which acts as a way of sharing information about the performance. it suggests where the employee performance iseffective and where performance has to improve. managers can provide either positive feedback or negative feedback to employees. This feedback helps the employee assess his performance and identify the improvement areas. 9ositive feedback communicates managerial satisfaction. positive recognition for good performance boosts up morale of employees and results in performance improvement to a higher  productivity level. it is believed that positive feedback is the only type of feedback that generates performance above the minimum acceptable level.  negative feedback obviously communicates manager's dissatisfaction. However, negative feedback sometimes make employee to put more efforts to improve his performance. out suchtimes are very rare. moreover this improvement is short term. Some managers do not provide any kind of feedback to their employees. due to no feedback, employees may assume that they are performing productively or they may feel that themanager is satisfied with their performance. Studies reveal the performance tends be same or even decreases if no feedback is provided.Thus, feedback is necessary because:

it builds trust and enhances communication between manager and employee.

It gives managers and employees a way to identify and discuss skills and strengths.

Positive feedback leads to employee retention and motivation.

It helps in identifying performance areas that need improvement and specific ways to improve them.

It acts as an opportunity to enhance performance by identifying resources for skill development.

It is an opportunity for managers and employees to assess and identify career and advancement opportunities.

It helps employees to understand the effectiveness of their performance and contributes totheir overall knowledge about the work

Managers have tendency to ignore good performances of their employees. 9rovidingno feedback may de motivate employees and may lead to employee absenteeism. input from manager's side is necessary as it help employees to improve their performance and increase productivity.

Communication between Employee and Employer: Communication is the solution to almost everything in this world. Same applies to employeeretention also. Straight from the shoulder communication is what the employees need from their employers. Employees look for organizations where communication and process are transparent. nothing is hidden and shared with the employees. Communication is also the way to win theemployees trust in the organization. Employees trust the employers who are friendly and open tothem. This trust leads to employee loyalty and finally retention. Employers also feel that theimmediate supervisors are the most authenticated and trusted source of information for them. Sothe organizations should hire managers who are active communicators.

Communication mediums

Open door policy: organizations should support open door policies so that the employeesfeel comfortable and are able to express their doubts and feeling to their employers.

Frequent meetings and Social gatherings.

Emails, Newsletters, intranet and many more.So there should be effective communication across the organization ' this communication should be two way. communication alone can lead to unimaginable heights of employee retention.

Employees Turnover 

Employees turnover has always been a sensitive issue for all organizations. Calculating employee turnover rate is not that simple as it seems to be. no common formula can be used by all the organizations. A formula had to be devised keeping in view the nature of the business anddifferent job functions. moreover, calculating attrition rate is not only about devising amathematical formula. it also has to take into account the root of the problem by going back to the hiring stage.

Employees turnover rate or Attrition rates means

Total number of resigns per month (whether voluntary or forced) divided by (Total number of employees at the beginning or the month plus total number of new joiners minus total number of resignations) multiplied by 100

If calculating in monetary terms, it includes the following:

Costs Due to a Person Leaving

1. Calculate the cost of the person(s) who fills in while the position is vacant. Calculate the cost of lost productivity at a minimum of 50% of the person’s compensation and benefits cost for each week the position is vacant, even if there are people performing the work. Calculate the lost productivity at 100% if the position is completely vacant for any period of time.

2. Calculate the cost of conducting the exit interview to include the time of the person conducting the interview, the time of the person leaving, the administrative costs of stopping payroll, benefit deductions, benefit enrollments.

3. Calculate the cost of the manager who has to understand what work remains, and how to cover that work until a replacement is found.

4. Calculate the cost of training your company has invested in this employee who is leaving.

5. Calculate the impact of departmental productivity because the person is leaving. Who will pick up the work, whose work will suffer, what departmental deadlines will not be met or delivered late.

6. Calculate the cost of lost knowledge, skills and contacts that the person who is leaving is taking with them out of your door. Use a formula 50 & of the person’s annual salary for one year of service, increasing each year of service by 10%.

7. Subtract the cost of the person who is leaving for the amount of time the position is vacant.

Recruitment costs

1. The cost of advertisements; agency costs; employee costs; Internet posting costs.

2. The cost of internal recruiter’s time to understand the position requirements, develop and implement a sourcing strategy, review candidates backgrounds, prepare for interviews, conduct interviews, prepare candidate assessments, conduct reference checks, make the employment offer and notify unsuccessful candidates. This can range from a minimum of 30 hours to over 100 hours per position.

3. Calculate the cost of the various candidate pre-employment tests to help assess candidates’ skills, abilities, aptitude, attitude, values and behaviors.

Training costs

1. Calculate the cost of orientation in terms of the new persons’ salary and the cost of the person who conducts the orientation. Also include the cost of orientation materials.

2. Calculate the cost of departmental training as the actual development and delivery cost plus the cost of the salary of the new employee. Note that the cost will be significantly higher for some positions such as sales representatives and call center agents who require 4-6 weeks or more of classroom training.

3. Calculate the cost of the person(s) who conduct the training.

4. Calculate the cost of various training materials needed including company or product manuals, computer or other technology equipment used in the delivery of training.

Lost productivity costs

As the new employee is learning the new job, the company policies and practices, etc. they are not fully productive. Use the following guidelines to calculate the cost of this lost productivity:

1. Upon completion of whatever training is provided, the employee is contributing at a 25% productivity level for the first 2-4 weeks. The cost therefore is 75% of the new employees’ full salary during that time period.

2. During weeks 5-12, the employee is contributing at a 50% productivity level. The cost is therefore 50% of full salary during that time period.

3. During weeks 13-20, the employee is contributing at a 75% productivity level. The cost is therefore 25% of full salary during that time period.

4. Calculate the cost of mistakes the new employee makes during this elongated indoctrination period.

New Hire Costs

1. Calculate the cost of bring the new person on board including the cost to put the person on the payroll, establish computer and security passwords and identification cards, telephone hookups, cost of establishing email accounts, or leasing other equipment such as cell phones, automobiles.

2. Calculate the cost of a manager’s time spent developing trust and building confidence in the new employee’s work.

Lost Sales Costs

1. Calculate the revenue per employee by dividing total company revenue by the average number of employees in a given year. Whether an employee contributes directly or indirectly to the generation of revenue, their purpose is to provide some defines set of responsibilities that are necessary to the generation of revenue. Calculate the lost revenue by multiplying the number of weeks the position is vacant by the average weekly revenue per employee.

The cost of employee’s turnover or attrition is: (Total staff * employee’s turnover rate/attrition rate %) * (annual salary * 80%)

The ‘rule of thumb’ appears to be very inaccurate indeed and, while it depends upon the category of staff, it is probably better to estimate around 80% of salary as a truer rule of thumb- and this will be on the conservative side.

What kind of strategies would be effective in producing the desired results of maximum ‘Employee Retention’ and minimum ‘Employee Turnover’? The answer is obvious. It should be the aim of each employee to keep his work force fully satisfied with no room for disgruntlement.

Retention of employees has become a primary concern in many organizations foe several reasons. As a practical matter, with lower turnover, every individual who is retained means one less person to have to recruit, selects, and trains. Also, the continuity employees who know their job, co-workers, organizational services and products and firm’s customers enhance organizational and individual performance. One survey of supervisor and workers found that losing high performance made it more difficult for organizations to reach their business goals.

Additional continuity of employees provides better “Employee image” for attracting and retaining other individuals.

WAYS TO REDUCE EMPLOYEE TURNOVER

Following are some of the ideas to reduce employee turnover:

1. Hire the best candidate.

2. Welcome new employees. Customize your induction program for new employees according to the requirements. Same induction program can not be applied to all the candidates. Make them feel welcomed.

3. Produce quality managers who can really manage employees well.

4. Provide employees with work schedules that are flexible enough to suit their needs.

5. Don’t be too demanding. You re hiring human beings who have their own life and family commitments. Respect them.

6. Provide career counseling and development.

7. Discuss your future plans regarding the candidate with the candidate. Let them know that the management is interested in retaining them and cares for them.

8. Take proper feedback from employees regarding their grievances.

9. Remember your former employees. They can be helpful to you in future. It is also a part of employee retention.

FACTS ABOUT EMPLOYEE TURNOVER

It is difficult to accept when organizations say they have zero attrition rates. Companies may have healthier turnover rates, however, there is no such thing as zero attrition. There are other such facts about turnover, about which most of us are not aware. Some of such facts have been highlighted below:

1. Turnover always happens: Companies who believe in zero attrition rates only fool themselves. This happens because employees keep on moving due to reasons like marriage or further education. Nothing can stop these employees from moving on. So, rather than achieving zero attrition companies should focus on identifying whom they want to keep so that they have healthy attrition rate.

2. Some Turnover is Desirable: Zero attrition is not desirable mainly because of two reasons. Firstly, if all employees continue to stay in the same organization, most of them will be at the top of their pay scale which will result in excessive manpower costs.

Secondly, new employees bring new ideas, approaches, abilities & attitudes which can keep the organization from becoming stagnant.

3. Turnover includes costs: Turnover always includes some costs. Consider the costs of replacing the key employee who falls in to the category of high performers. This includes the costs of recruitment advertisement, referral bonuses, selection testing, training costs, etc. Moreover, turnover results in loss of time & efforts, low productivity, loss of morale, loss of knowledge and so on.

4. High salary doesn’t work: Most managers assume that a high salary package is enough to keep employees loyal to their organization. Employees may face other problems like low job satisfaction, low engagement levels, no recognition, poor working conditions, less support from superiors and so on. Salaries are not always the solution to attrition.

Managers should try to identify the roots of the problem and then find a feasible solution.

5. The manager can reduce attrition: Managers should take primary responsibility for retaining their employees. Much of the employee’s perception of job satisfaction stems from the relationship they share with their immediate supervisor. Managers should try to support their subordinates and give proper feedback on performance. HR managers should work in collaboration to make the key employees last in their organization.

6. Reducing Turnover takes Commitment: Reducing turnover takes an investment in coaching, developing, motivating, mentoring & listening to people. There should be universal acceptance of the goal of reducing turnover along with top management commitment and dedication.