Reducing Employee Attrition
We all hope that every employee we hire works with us for a long duration and gets along with everyone in the organisation, creating a win-win situation for all. However, everyone can testify to the fact that the above scenario is not a practical reality for most hires. People quit, you hire new people and the cycle continues. People quit for many a reason, many of which are not in control of the employer but based on our experience, if employers can focus on fixing some minor work issues, it can lead to over 50% reduction in employee attrition
Attrition
Attrition is the number of people who leave your organisation over a specific time interval. Higher attrition rates lead to higher hiring requirements for an organisation. For most businesses, employee attrition is costly as new employees take time to match older employee productivity, hiring expenses, and business costs when a role is vacant. Secondly, if a key member quits, in most cases, you will see a domino effect, resulting in further people from the team quitting their jobs within a short duration. Finally, high attrition rates also impact employee morale as existing employees start contemplating moving to newer roles themselves
Attrition Type
You can classify employee attrition broadly into the following categories
Retirement
People leave once they achieve the retirement age
Voluntary Resignation
Employee tendering their resignations due to better work opportunities outside that match their long-term goals. It can also be from Employees who are not meeting expectations and tendering resignation before being told to leave, which is preferable rather than termination of employment.
Involuntary Termination
Employees who are told to leave organisations due to failure to adhere to company policies, unethical behaviour, misconduct or poor performance. This is initiated by the organisation, which can lead to better results in the long run
Business Requirements
As business models evolve, certain roles may not be needed or need a reduction in employee strength for the organisation. Ex: Covid19 is a prime example where many organisations were forced to lay off people to sustain their business. Covid19 also resulted in many organisations changing their way of working, leading to redundancies, resulting in employee layoffs
Attrition Rate
Your attrition rate is calculated as follows
(Workers who left ÷ average number of workers) x 100
Attrition rates are dependent on Industry, work location and work seasonality. Generally for non-seasonal work, it is advised to be around 10-12% and for seasonal, around 20%. These rates are based on our understanding, when working with our customers, leading to limited business impact on organisations
Why Employees Quit
Managerial Problems
Most people don’t quit their jobs but quit their managers. So it is important to notice if any specific manager has higher attrition than usual, to ensure that the situation can be curbed at the earliest.
Work Opportunity
When an employee believes that they don’t see career progression happening as per their needs, they desire to move elsewhere where they expect it provides them with better progression opportunities
Work-Life Balance
Long working hours with minimum time made available for employees to feel rejuvenated leads to higher attrition compared to peers
Pay Parity
If employees observe that their peers in alternate companies are earning higher for the same type of work, many choose to look for better-paying opportunities
Reducing Attrition
Employee Training
It is widely observed that creating multiple learning opportunities within an organisation can lead to an over 50% reduction in employee attrition. Focus to ensure training starts from Day one and it is a continuous process
Flexible Work Schedule
Covid19 has resulted in changes in work-life dynamics for workers across different levels, so a flexible work schedule is the need of the hour to ensure high productivity and low attrition
Employee Recognition
Well-designed employee recognition programs motivate employees, reducing attrition rates. Simple awards such as Employee of the Month, bonus checks and project-based awards go a long way in employee retention. To make the most of your recognition program, recognize achievements promptly and provide meaningful feedback on why a certain employee was awarded to motivate others.
We at Knighthood have been working with over 200+ organisations for over 5 years. We focus on ensuring high service levels at affordable prices. You can read more about why our customers choose to work with us.