Attrition Management Overview

A Brief Note                                                           

BPO industry is being looked upon as the next big employment generator, It is however no easy task for an HR manager to bridge the ever increasing demand - supply gap of professionals. Adding to this is the issue of maintaining consistency in performance and keeping the motivation levels high, despite the monotonous work. The toughest concern for any organisation is to keep the attrition rate in control

Employee Attrition !                                             

Employee attrition is a very big concern, Attrition rate is increasing day by day. Why an Employee leaves a company is the question asked by most of the employers. Companies even hire Private HR professionals to study the company's work and find out why an employee is dissatisfied. 

A survey has found out that there are various reasons for Employee Attrition -

• Higher Pay Package in another company
• Good working Conditions
• Opportunities for growth in new company
• Change of Place problem
• A better Boss in new company
• Brand Image of the new company

Employee attrition costs a lot to the company. There are various costs which are borne by the company at the start when the employee is under training period. Costs such as -

• Conveyance Cost
• Cost of lodging of the new employee
• Trainers cost
• Cost of venue where training will be conducted
• Materials to be supplied during training process

Attrition  Calculation                                             

Attrition in an organization refers to resignations in a particular month, quarter or year. To simplify it further, it refers to the number of employees who leave an organization. And formula for calculation for attrition % is:

Attrition % =(No. of Employees Quit) /(Avg. Employees during that time frame) %100

Inputs for computing Annualized Value is:

Monthly – Multiply the Value by 12 
Quarterly – Multiply the Value by 4 
Half Yearly – Multiply the value by 2 

Annual – Do not multiply :-)

Just to elaborate with example with respect to data shared below is:

If in a month there are 65 no. of quit cases and average no. of employee strength till date was 3012 then:
Attrition % YTD=65/3012*100=2.15% hence, monthly attrition %(YTD) for that month will be 2.15%*12=25.8%

Who is responsible & the cause of Attrition ?      

HR Heads are worried about employees leaving their organizations. Not only it is costly to lose trained employees but their replacements are not easy to come by. Hence the HR strives hard to keep attrition at the minimum. 
Attrition in the BPO industry is two fold. One part of the attrition is where the employee leaves the industry entirely. The other section of attrition is where the employee joins another firm in the industry. Both the sections have separate reasons which need to be identified.

The primary reason for people leaving the industry is due to the cause that the industry is viewed as a gap filler occupation. There seems to be a flaw in the way the industry is structured. The industry has been mainly dependent on youngsters who are taking out time to work, making money in the process also while thinking of career alternatives. Hence for this group BPO is never a long term career but only as a part time job. 
Regarding the attrition between firms, the chief cause is the unavailability of resources in the job market causing a great demand compared to the supply available. The limited resource in the market leads to poaching and head hunting amongst the competitors for the common pool. Usually new projects in the BPO industry, requires a transition stage to be implemented within a short time. The lack of preplanned recruitment leaves the firms with no option but to fulfil their immediate requirement by poaching resources working on similar projects in other firms.

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

Attrition rates are considered to be beneficial in some ways: 

• If all employees stay in the same organization for a very long time, most of them will be at the top of their pay scale which will result in excessive manpower costs.
• When certain employees leave, whose continuation of service would have negatively impacted productivity and profitability of the company, the company is benefited.
• New employees bring new ideas, approaches, abilities & attitudes which can keep the organization from becoming stagnant. 
• There are also some people in the organization who have a negative and demoralizing influence on the work culture and team spirit. This, in the long-term, is detrimental to organizational health.
• Desirable attrition also includes termination of employees with whom the organization does not want to continue a relationship. 

Recommendations and Suggestions                     

• Hiring individuals who are truly fit to succeed in the position would increase the chances of employee being satisfied with work and stay with the company for an extended period of time.
• Regular one on one interaction with the employees to understand their needs better.
• Clear identification of training needs i.e., requirements and existing skills and knowledge have to be formulated.
• The growth, objectives and vision has to be communicated by the top management on a regular basis to its employees.
• Internal training should be initiated in terms of soft skills, communication and technology.
• The roles and responsibilities have to be clearly specified and communicated.
• Career succession planning to the employees has to be formulated, identified and communicated
• Employee should feel free to provide their suggestions based on a format regularly formed that has to include objectives/measures/targets/initiatives.
• The team leader should be involved in selecting their required candidates
• The compensation package has to be increased to the market level and current trends.
• Work location facilities should be improved. 
• Exit Interview with the employees who are leaving the organization will help the organization to find out the reasons and any drawbacks within the organization.

CONCLUSION: 
Employee attrition is no longer only an HR concern. To tackle this, both the business function as well as HR needs to work hand-in-hand. While business (Support staff) would need to take ownership of their employees, the role of HR is to equip people managers to engage their teams effectively. Attrition management has always been approached reactively. It is time to be proactive. Lead indicators of attrition needs to be identified. One of the most common lead indicators are is employee dissatisfaction. Role of people managers and HR is to sense and identify possible dissatisfaction in employees and provided solution/remedies before it takes any alarming form. Resolve the satisfaction and arrest attrition is the mantra of the day. 

So factors such as training, goal awareness, career succession planning are important aspects to the employees and they prefer the organizational goals to objectives should have their interest in their continuous growth. Regular feedback and support also been involved in the attrition rate causes.

Attrition cannot be removed, but it can be reduced. If initiative is taken towards this step, as per the recommendations of this research, then the attrition rate can be lowered, so that the expenditures towards hiring and training an new joiner which exceeds the cost of retaining an employee can be drastically brought down.