The Meaning Of Employee Attrition
Employee attrition means the steady decline in an organisation’s workforce due to the exit of existing employees coupled with an inability to replace them immediately.
In the digital world full of employment opportunities, employees keep switching jobs in search of better pay, benefits and work-life balance. Organisations invest a lot in employees, providing them with training and hands-on experience.
Therefore, it is essential to reduce employee attrition and retain your employees. A stable workforce of experienced employees increases an organisation’s efficiency and potential revenue.
Different Types Of Employee Attrition
Employee attrition can occur in different ways as employees have a variety of reasons to leave an organisation. While some types of attrition, like retirements, are naturally inevitable, others, such as voluntary resignations, can damage your employee resources in the long run.
1. Retirements
Retirements are a natural part of a workforce’s lifecycle. However, if many employees retire in a short period, it can cause employee attrition. So, it is crucial to track this number beforehand and make hires accordingly.
2. Voluntary attrition
Voluntary attrition refers to the loss of personnel when an employee resigns. This can be due to personal and professional reasons such as relocating, switching fields or seeking better pay.
3. Involuntary attrition
When an organisation decides to terminate the services of an employee due to misconduct or unsatisfactory performance, it can lead to involuntary attrition. Though this reduces the workforce, it also allows for replacing them with more suitable individuals.
4. Internal attrition
Sometimes, an employee initiates a switch from their current role to a role in a different department of the same organisation. This causes internal attrition. Internal attrition is often desirable as it ensures that an employee is assigned to their ideal department. However, it can be problematic if many employees are switching from one department in particular, as this can lead to an imbalance in an organisation’s operations.
5. Demographic attrition
Demographic attrition implies that employees from one particular demographic- women, ethnic minorities, older professionals etc. are leaving the organisation. In such cases, it is crucial that HR conducts an enquiry and quickly identifies and resolves the cause. This ensures the existence of an all-inclusive workplace.
All these types of attrition can reduce the workforce’s efficiency and even go on to affect the organisation’s revenue.
The Causes Of Employee Attrition
Nowadays, there are various reasons why employees might leave an organisation and add to employee attrition.
1. Lack of career progression
The job market and competitive work culture make it challenging to satisfy your more ambitious employees. A lack of visible opportunities for career progression can prompt employees to resign from your organisation and seek employment elsewhere.
2. Workplace challenges
Modern-day workplaces can become high-pressure environments. Sometimes, employees quit because of frustrating factors like toxic work culture and unresponsive leadership.
3. Poor job fit
Employees can often quit if they feel dissatisfied with their job profile. Employees’ dissatisfaction with certain aspects of their role can hamper their effectiveness. For example, a skilled coder who excels in working solo might be a bad fit for a role that requires teamwork and collaboration. You can mitigate this issue by writing better job descriptions and optimising the onboarding process.
4. Personal motivation
Employees might have to switch jobs owing to a variety of personal changes. Someone might want to move to a place with a better quality of life; new parents would like to move to an area with better schooling and so on. While such resignations are unavoidable, you can nurture valuable relationships with your employees. This way, they will always consider re-joining your organisation if the possibility arises in the future.
5. Lack of employee benefits
Employees expect basic benefits like subsidised insurance, workstation support, childcare benefits and even OTT subscription plans. Organisations should also provide adequate learning and upskilling facilities to motivate their employees. An organisation that only compensates its employees with salary will always be more vulnerable to employee attrition.
These reasons can create dissatisfaction in the workplace, potentially causing employee attrition. If unchecked, it can adversely impact workplace morale and pressurise the remaining workforce to work harder to compensate. This can cause burnout and further increase employee attrition.
Why HR Needs To Manage Employee Attrition?
Employees come and go as a part of any workforce’s natural cycle. However, a failure to adequately replace them will lead to employee attrition. Here are some reasons why it is vital for HR to manage the employee attrition rate and maintain the workforce’s efficiency.
- When an employee leaves, your organisation loses a highly experienced and valuable resource who knows the ways of your company.
- Hiring and training new employees add to the company expenses. Though Indeed can help simplify the recruiting process, it is still very resource-intensive.
- An employee’s exit places additional pressure on the remaining team members, who will have to compensate with extra work. This can lead to burnout and cause them to seek employment elsewhere.
- Due to the reduced efficiency, the organisation might suffer a loss of customers and revenue.
So, it is crucial for HR to minimise employee attrition and maintain the workforce’s strength and efficiency.
How To Reduce Employee Attrition?
Employee attrition is a severe bane to any ambitious organisation and needs to be kept in check. Here are some ways that can help to reduce employee attrition.
1. Ensure adequate compensation
Budgeting and resource management may be necessary for any organisation, but an experience and motivated workforce can provide rich dividends in the long run. Most employees switch jobs in search of greener pastures. Providing employees with competitive compensation helps to keep them satisfied. It is essential to ensure that your organisation’s compensation never falls below your competitors’.
2. Promote healthy communication
Good communication is the backbone of any successful workplace. An organisation’s efficiency depends on teamwork and healthy communication ensures employee coordination across levels. Employees can openly communicate their grievances and suggestions to HR to address their concerns. Moreover, in the event of an employee’s departure, you will be able to know the actual reason behind their decision. This feedback will help you take actionable decisions to reduce employee attrition.
3. Prioritise work-life balance
With the digitalisation of workplaces, employees should be given ample time off. Putting your employees under immense pressure may yield short-term gains but eventually lead to burnout. Providing flexible working hours and an option to work from home can help ease your employees’ burden. A healthy work-life balance will help you to retain your workforce and get the best out of your employees.
4. Hire the right personnel
Avoiding impulsive hiring is crucial to reduce employee attrition. While recruiting, you must ensure that the candidate fully understands their role and responsibilities. An employee who is a poor job fit can get dissatisfied with their profile and look to switch jobs. Implementing a clear hiring strategy can help you to recruit employees that are an excellent fit for their roles.
5. Reward hard work and achievements
You should foster an environment that rewards excellence with more than just a pat on the back. If employees do not feel that their efforts are appreciated, they may lose the motivation to go that extra mile. Worse, they might even resign. Rewarding an employee’s efforts goes a long way in keeping them satisfied. It also inspires their peers to excel and improves the workforce’s performance.
6. Train your managers
Managers act as bridges between the higher-ups and your employees. A rude manager only adds to the work pressure. Employees might resign due to this hostile work environment. Train your managers to be polite, progressive, and professional helps you to maintain workplace morale and reduce employee attrition.
7. Provide upskilling opportunities
In the internet age, employees are highly competitive. Most of the wish to avoid stagnation and may resign in search of new challenges. Training and development programs facilitate an employee’s growth and help them to improve their skillset. These upskilling opportunities ensure that employees remain satisfied with their professional and personal development.
The global job market is filled with opportunities thanks to the rising remote working trend. So, your organisation needs to retain their workforce in the face of this competition. Employment attrition can be managed by visualising each employee as an investment of resources, training and experience. This, alongside the other steps mentioned above, can ensure that your organisation can continue thriving, insulated from the adverse effects of employee attrition.
