EMPLOYEE ATTRITION

Attrition:

Attrition in business can mean the reduction in staff and employees in a company through
normal means, such as retirement and resignation, the loss of customers or clients to old age or
growing out of the company's target demographic.

Turnover:

The rate at which employees leave a workforce and are replaced.

Employee Turnover vs. Attrition:

"Turnover" and "attrition" are business and human-resource terms that often are confused. There
are several types of turnover, but attrition usually can be described as a reduction in workforce.
Using these terms interchangeably or incorrectly can affect your workforce data and skew
measurements that are necessary for workforce planning.

Employee turnover and employee attrition both occur when an employee leaves the company.
Turnover, however, may result from a number of employment actions, such as discharge,
termination, resignation or job abandonment. Attrition occurs when an employee retires or when
the company eliminates his job. The major difference between the two is that when turnover
occurs, the company seeks someone to replace the employee. In cases of attrition, the employer
leaves the vacancy unfilled or eliminates that job role.

Types of Attrition:

Involuntary

Turnover or attrition can be involuntary. Involuntary turnover typically refers to an employer’s

decision to terminate the employee. Reasons for involuntary turnover include poor performance,
excessive absenteeism or violation of a workplace policy that is considered a terminable offense.
Attrition due to layoff, reduction in force or job elimination is typically involuntary because the
employment relationship ends based on the employer's circumstances, not the employee's
decision to leave. Pennsylvania State University professor education Erling Boe and colleagues
differentiate between turnover and attrition in their article "Teacher Turnover: Examining Exit
Attrition, Teaching Area Transfer, and School Migration." They indicate that, when a teacher
decides to leave the teaching profession, it is called attrition, which they consider to be a
component of turnover.

Voluntary

Voluntary termination occurs when an employee resigns to pursue another career opportunity,
relocate with a spouse or simply leave the workforce for personal reasons, such as raising a
family. In this case, the employer starts the recruitment and selection process to find a suitable
candidate to fill the vacant position. Retirement is a form of voluntary turnover; however, if the
employer decides against filling the position left vacant, it is considered attrition. Nevertheless,
in the case of retirement, the reason the job is vacant is the employee's decision to retire --
classifying it as a voluntary action.

Layoffs and Reductions in Force

A business facing closure, shutdown or a work slowdown develops a strategy for laying off
workers or reducing its workforce. This is attrition, not turnover, because the employer does not
plan to fill positions. Once the layoff or reduction in force occurs, the positions that employees
once held no longer exist.

Other Types of Attrition:

1. Good Attrition
2. Bad Attrition
3. Market Driven Attrition
4. Work load/ Stress driven Attrition
5. Process driven Attrition

Reasons for Attrition:

Attrition can be encouraged when it is part of a strategic business manoeuvre to reduce costs. It
can also manifest itself when employees voluntarily leave their jobs. This can happen for a
variety of reasons: employees may move or retire, take another job, be ill-suited to the position
they were hired to fill, or want employment that offers a more equitable work-life balance.
Others may experience a lack of the freedom or autonomy they require to perform at expected
levels. Human resources professionals inadvertently encourage attrition when they condone or
ignore maltreatment of employees by management.

1. Better Pay
2. Over expectation from the work place
3. Mismatch of job role and skills of employee
4. Lack of growth opportunities
5. Lack of appreciation and recognition
6. Uncooperative team members
7. Issues related to work timings
8. Health/Age problems
9. Stress
10. Higher studies

Job Shoppers:
A person who, no matter how good their current job/position is, spends an inordinate amount of
time trying to find a better job for more pay, less work, more interesting surroundings etc.

Effects of Attrition:

 Low Productivity
 Loss of Skilled employees
 Loss of Business Relationships
 Benefits Competitors
 Increase in work load.

Advantages:

Some business strategies use attrition as part of a restructuring plan. Rather than carrying out
traditional layoffs, some businesses choose to reduce their workforce through the more gradual
means of attrition. This is less consequential to a workforce that contains employees approaching
retirement age. When they leave the company, a replacement is not hired to fill the vacancy, and
the job position may be retired. Some business owners and managers work with their HR
professionals to create equitable positions into which remaining employees can potentially be
promoted. This creates positive employment options that did not previously exist.

Disadvantages:

When attrition occurs, the remaining duties and job responsibilities can burden employees and
managers with additional duties with no increase in pay. Even if HR staff members distribute the
extra workload throughout other departments, they may witness managers moving on to other
companies. The potential for employment promotion may no longer exist when positions are
retired due to attrition. Employee morale can suffer a situation that HR should work to remedy
before it becomes unmanageable.

Managing Employee Attrition:

1. Hire the right people:

The best way to ensure employees don’t leave you is to make sure you are hiring the right
employees to begin with. Define the role clearly—both to yourself and to the candidates. And
then be absolutely sure the candidate is a fit not only for it, but for your company culture.

2. Fire people who don’t fit:

As the old saying goes, “a stitch in time saves nine.” The same goes for cutting employees loose
when necessary. Sometimes even when you follow the advice above, you get an employee
who—no matter what you try to do—just doesn’t fit. And, no matter how effective they might be
at their actual work, an employee who is a bad fit is bad for your culture, and that creates
“culture debt.” They will do more damage than good by poisoning the well of your company.
Cut them loose.

3. Keep compensation and benefits current:

Be sure that you are paying employees the fair going wage for their work (or better) and offer
them competitive benefits, or—really—who can blame them for ditching you? This might seem
like a no brainer but you’d be surprised how few companies offer raises that keep up with an
employee’s development and actual rising worth.

4. Encourage generosity and gratitude:

Encourage pro-social behaviour in your employees. When they are given the opportunity to
connect with one another through acts of generosity and the expression of gratitude, employees
will be healthier, happier, and less likely to fly the coop. And by encouraging them to be on the
lookout for good behaviours to commend, you give people a sense of ownership of the company.

5. Recognize and reward employees:

Show your employees they are valued and appreciated by offering them real-time recognition
that celebrates their successes and their efforts. Make it specific, social and supported by tangible
reward, and you, too, will be rewarded—with their loyalty.

6. Offer flexibility:

Today’s employees crave a flexible life/work balance. That impacts retention directly. In fact, a
Boston College Centre for Work & Family study found that 76% of managers and 80% of
employees indicated that flexible work arrangements had positive effects on retention. And more
and more companies know it. That means, if you’re not offering employees flexibility around
work hours and locations, they might easily leave you for someone who will.

7. Pay attention to engagement:

This one sounds obvious, but for too many leaders interest in engagement is limited to the results
of engagement surveys. It’s not enough simply to run an engagement survey once a year. You
need save most of your energy to take action based on the results and you need to work to build a
culture of engagement in your company all year long.

8. Prioritize employee happiness:

Employee happiness is a key indicator of job satisfaction, absenteeism and alignment with
values–just for starters. Investing in the happiness of your employees will pay dividends in
engagement, productivity and yes, retention.

9. Make opportunities for development and growth:

Employees place HUGE value on opportunities for growth. In fact, a recent Cornerstone survey
drew a direct connection between lack of development opportunity and high turnover intentions.
If you aren’t developing your employees then you aren’t investing in them. And if you aren’t
investing in them, why should they stay with you?

10. Clean up performance reviews:

Our most recent Workforce Mood Tracker survey painted a frankly dismal picture of how
employees feel about performance reviews. Only 49% of them find reviews to be accurate and
only 47 % find them to be motivating. Performance reviews offer a prime opportunity for a big
win to increase trust and fortify your relationship with employees. Improve performance
management by overhauling reviews, and watch employee trust and satisfaction grow.

11. Provide an inclusive vision:

One key factor in employee engagement and happiness, according to experts, is to provide them
with a sense of purpose and meaning in their work. Offer employees a strong vision and goals for
their work and increase their sense of belonging and loyalty to your organization.

12. Demonstrate and cultivate respect:

Finally, don’t discount respect when it comes to creating a magnetic culture. In fact, in one 2012
study, respect in the workplace was revealed to be a key factor in voluntary turnover. Find ways
to cultivate and nurture respect in your workplace and it will pay off in higher retention.