First of all, let’s address the prevailing line of thought that attrition is bad. Not all attrition is a bad thing. If people aren’t able to do the job, are finding the job too much or are acting as a negative and disruptive influence, then having them leave can be a good thing.
Furthermore, without a certain amount of workforce turnover, most organisations become stagnant, with no new appointments to bring in fresh ideas and to help mobilise organisational progression; you only have to look at certain old-school public sector bodies with their ‘jobs for life’ to see the stupefying results. But there comes a point when managers must recognise the level at which staff turnover becomes detrimental.
‘Bad’ attrition comes in several, often overlapping forms:
- Rapid turnover – People joining the organisation and leaving soon after, usually within twelve months. Costly since they never achieve optimum efficiency and their recruitment costs are never covered by their output
- High skills – Experienced people who consistently deliver maximum results leave. Your most valuable employees leave, having a major impact on bottom line productivity, and on cultural stability
- Volume – A large proportion of the workforce choose to leave. This is both costly in terms of repeated recruitment costs, but also undermines company cohesion, culture and processes
What causes attrition?
The simple answer is dissatisfaction. As a rule, people who are happy don’t leave. Sure, there will be exceptions, in circumstances where an employee’s partner has a career opportunity they can’t turn down, or a dependent gets sick, but by and large if the workforce it happy, they stay. Attrition, then, is caused by failing to engage the workforce and match their desires, and this means a lot more than just paying the going wage. The most common issues include:
- Challenging Work – One of the biggest causes of workplace dissatisfaction and attrition is boredom. People who see their jobs as being interesting, challenging and exciting are more likely to be content and happy.
- Career Opportunities – Employees like to see opportunities to climb the corporate ladder and to improve their careers. This is demonstrated by having new opportunities advertised internally, a proportion of new roles going to internal candidates and by having their career development discussed regularly. This is often tied to…
- Employee Development – People are often motivated by seeing opportunities for developing their skillsets, such as through structured development plans, training programmes and simple opportunities to learn new skills on the job
- Quality of People – People like to work with high quality colleagues, but also with people they like and respect. If they like the team they will more than likely want to remain with their friends. Which can tie in to…
- Culture – The goals, beliefs and values of the company, and their embodiment in the workforce. It’s more than a statement; management needs to live it, as do the staff. If someone doesn’t fit, they tend to leave, which may not be a bad thing. Culture can include elements as varied as the style of the building, décor, internet policies, work/life balance and diversity, as well as the more obvious company goals.
- Remuneration Package – Often the least important aspect, but if other elements aren’t right, it will be the straw that breaks the camel’s back. Particularly an issue for highly skilled, long standing employees for whom internal pay rises have not kept pace with the market - they can easily be poached by predatory competitors. Remember that it’s not just the salary; poor benefits, holiday allowances and so on can also be a key factor in how the package is perceived.
So what does it mean?
Together, these elements make up your organisation’s Employer Value Proposition (or EVP). that is, the benefits an employee receives in exchange for their work and professional contributions. Don’t confuse it with Employer Branding - they’re not the same. Employer Branding is simply how you are perceived externally as an employer. Although having said that, if your EVP is strong and you publicise it well, your Employer Branding will be successful as a result.
Now sadly, there is no silver bullet solution or a perfect recipe. Every organisation is different, and goals, motivations and methods will vary. And because of this, the right people for you are not necessarily the right people for your competitor, and vice versa. However, the key to tackling attrition can be surprisingly simple:
- Understand what your people want – What makes them happy? Ask them. Conduct EVP surveys. Take advantage of formal reviews. Ask people who do leave why they are leaving.
- Identify key issues – You can’t make everyone happy all of the time. What are the main things people want/like? What do most of the people want/like? What do the key workers want/like? What don’t they want or like? Develop a model of the most important and valued elements.
- Examine the company goals – What are the company goals, targets and ethos? How does this relate to the messages coming from the workforce? Are there any big discrepancies? If so, you may as a company have to accept either changing that key point, or letting people go and replacing them with workers who are more aligned.
- Accept the losses – Unless you’re already managing a structured EVP, you’re likely to find a number of people who don’t fit. You don’t need to fire them, but accept that the odds are that they are going to leave, and when they do, take advantage of the opportunity.
- Hire better – When losses do occur, don’t make the same mistakes. Be conscious of your EVP, and of the people who will fit it. Good recruitment should be 50% ‘can they do the job’, and 50% ‘do they fit the organisation’. Endeavour to find people whose personal ambitions and desires match your EVP. This means resisting the knee-jerk reaction urge to hire in haste and taking the time to evaluate who or what would be the best replacement for the organisation.
If you follow these steps, not only will you reduce attrition dramatically, but you’ll also have a happier workforce, leading to higher productivity, greater commitment and who knows - you might even enjoy working there a little more too.