ATTRITION: THE TICKING TIME BOMB IN INDUSTRY

An article that featured in the Economic Times today

Attrition is a complex, cultural and leadership challenge with no easy answers. 

In 2012, according to HR consultant Towers Watson, attrition in India was 17%, higher than the 11.2% salary rise. At this level of attrition, an organisation in 2020 will have only 22% of the employees it had in 2012. The salary rise in 2013 is expected to be 12.4%; attrition will be higher. 

Attrition is at all levels, more in junior customer-facing jobs. Attrition in the banking, financial and insurance sectors was 30%, in IT services 28%, retail and consumer goods 16%, retail store-level 30%, healthcare 10% and hi-tech 14%, according to the report. 

What is the impact of high attrition? It erodes consumer loyalty, hurting brand reputation. High attrition creates a vacuum at middle-management, which should handle execution.Attrition creates a middle management that’s tasted neither success nor failure. Weak middle management delivers faulty, corner-cutting processes. It forces senior management to work a level lower, forsaking the bigger picture. A weak middle management means poor mentorship of entry-level managers, hurting long-term leadership development. 

Why do we see high attrition? The first is economic; new industries open up when GDP grows faster than 5%. Talent in established industries is raided to staff newer industries. FMCG is the talent bank in India, funding telecom, retail, health and entertainment industries. The next reason is “hurried aspiration.” Everyone is in a hurry to be a young vice-president or a CEO, to own the latest car and television or to take that exotic holiday. This forces people to take risks with their loans, and anyone with an EMI payment greater than 25% of his takehome salary is constantly in the job market, to reduce that to below 10%. Hurried aspiration is fuelled by average headhunters who create insecurity and peer pressure by transacting CVs between managers and firms. Performance evaluation is loose and incomplete, based more on potential and less on merit. 

What do Indians value at work? The top five factors are: job security, career advancement, base pay and title, learning and development, and the reputation of the organisation. A company must grow. If it doesn’t, people leave. Learning and development is the Achilles’ heel in India. Companies do not invest much in training and developing talent: this is the first reason quoted by exiting employees. The cost of training and development is minuscule, but it is the first item cut in tough times. On-the-job learning from leaders is something young people value. Leaders in India must coach young employees; this will lead to higher engagement, better performance and lower attrition. The world will see a talent shortage by 2021. The US, Canada and Europe will see a deficit of 12 million people to fill roles. India with 2.1 million, Indonesia with 1.5 million and South Africa with one million will be the top three countries with a talent surplus by 2021. 

This is an opportunity to develop global leaders. Culturally, we need to change. We should value contracts, which we don’t do today. Our contracts are social in nature and less legal or economic. Employees will need a moral compass of right and wrong: joining competition, refusing to join a new firm at the last minute, burning bridges and so on. Companies will need to be flexible, using innovative policies for women, building alumni networks and designing customised career paths. Firms must differentiate on merit early to keep top talent. They should build a stronger middle-management pool by rewarding those who stay. Senior leaders must engage, coach and grow talent. Firms should start learn-andearn internships. Companies are good at identifying the needs, wants and desires of consumers; they should identify the needs of their employees. Finally, young managers must realise that a good career is a 20-year journey. If they do not develop strong general skills and industry competence, younger and less-costly managers will substitute them. A rolling stone career strategy is a short-term success and a long-term liability for individuals and companies. Are you worried about the long term? 

- The writer is former chief of emerging markets, Nokia

Given the crisis on hand, Organisations will have to pay attention to:

1.       What are the specific reasons for which employees are leaving?

2.       What should they do to address these reasons?

AceNgage with our yXit offering has over the past years assisted several Organisations in identifying & understanding root causes of Attrition. We now also work with Organisations on building & implementing action plans to address employee concerns.

INDIA INC SEES BENEFITS OF EMPLOYEE RETENTION

Organizations are accelerating their talent retention strategies, which experts believe would increase the stickiness of employees to their jobs for longer terms. The fact that retention is more cost effective than hiring is now being brought out strongly in research as well.

Some statistics:

Ø  The cost of replacing an employee ranges from 29% (non-management) to 46% (management) of the person's annual salary.

Ø  The new hiring cost that, on average, would be 25% of the annual salary.

Ø  Correlation between retention rate and an organization's performance in customer satisfaction, productivity and profitability is more than 35% in value terms between a low attrition company and above average retention company

Employees are also looking at a place which provides them with an opportunity to do unique things. The challenge is about creating a workplace of the future to envision the same and start putting the building blocks early, else we will be caught napping!".

Nurturing 'home-grown' talent will in the longer run create a more affiliated and willing workforce.

Courtesy : Times of India , 19^th November 2012

THE NEED TO RETAIN SEASONED PROFESSIONALS

THE NEED TO RETAIN SEASONED PROFESSIONALS

A seasoned professional in organization will necessarily have most of these characteristics -   He or she would have been a tenured employee, would have played different roles in the company across functions and business units, would consistently meet organizational and business goals, have personal rapport with many of the colleagues at different levels in the organization, have a knack of getting things done quickly within the company, fiercely protect the brand image of the company internally and externally and last but not the least create successors behind in places they vacate.

If there is one thing that is and will always be critical to an organisations success,  is the need retain seasoned professionals.  Listed below are the reasons why it becomes important to retain these employees:

   Seasoned professionals contribute significantly to organisations goals

These employees having been in the organisation for a significant period of time and normally exceed their targets on a consistent basis. When they leave it creates an impact on the team’s performance.

To compound the problem, these employees will always get replaced by fresher’s who will take a significant amount of time come up the learning curve. During this period the pressure gets transferred to the existing team members who may end up being disgruntled.

   Seasoned professionals are brand ambassadors of the organisations

These employees having worked in the organisation for several years tend to represent the organisation. New joinees look up to them and they most likely have a huge influence on the morale of the team. Positive behaviour always creates a positive work environment

    Seasoned professionals make excellent buddies & mentors

When new employee joins, it’s always good to have him/her buddied up during their first couple of months in the organisation. This would help the new employee feel more comfortable as he has continuous support. This lends itself to increased employee engagement and a reduction of early attrition. The seasoned professionals having been in the company for a few years know the wherewithal to be able to guide the new employee on a personal & professional front

 

    Seasoned professionals have excellent relationships with the Clients

Most clients tend to build relationships with employees and appreciate loyalty. When a seasoned professional leaves the clients tend to get concerned as they would be required to rebuild the trust & confidence with another employee. This process naturally takes time and during this period, there could be several anxious moments for the organisation and CSAT levels may drop.

HOW TO RETAIN SEASONED PROFESSIONALS?

   Challenge them :

Seasoned employees love to be challenged and are especially kicked about challenging assignments handed down by the very senior leaders in the company.  For them, the assignment in itself is both recognition and a reward.

   Create a learning environment

A continuous process of Learning & Development is something that all seasoned employees want. While they may be happy with their role, it’s important for them to feel that they are learning something new on an ongoing basis. They should be sent for training programs and exposed to new technologies to keep them engaged.

   Keep them engaged

Seasoned professionals need to be given continuous attention. Their managers should seek their feedback on improvement areas as their contributions can be valuable. Rewards, recognition and a pat on the back can go a long way in keeping them motivated.

Regular and frequent exchanges with the senior leaders both formal and informal, goes a long way in fuelling the continued urge to succeed in their roles

   Provide additional roles & responsibilities

Managers should consciously delegate work to the seasoned employees and ensure they are offered opportunities where they can leverage their experience to groom other employees. These employees should be given an opportunity to grow by providing them practical learning experience.

   Reward Loyalty

With attrition being one of the biggest challenges that organisations face today, it becomes extremely important that Organisations ensure that loyalty is rewarded.  Rewards can be in the form of cash, certificates, trophies & medals or special benefits such as a flexible work timings, work from home options ( on certain days of the week) etc.

Special treatment of some kind may also be a sponsored educational course, a holiday for the family, aid or support to a social cause they feel strongly about, makes their continuance in the company even more worthwhile.

The need to retain seasoned employees is very clear and simple.  Unless a random employee accidentally becomes a seasoned employee quickly, only seasoned employees can create more seasoned employees.