Make talent want to stay on
According to report, attrition rate in India has increase to 40 per cent in 2007 from 32 per cent in 2006. Amit Bapna finds out why employees are migrating to better opportunities.Updated: May 07, 2008, 23:18 IST
According to the Associated Chambers of Commerce and Industry of India (ASSOCHAM), the attrition rate in India increased to 40 per cent in 2007 from 32 per cent in 2006. Obviously, this is reasons for alarm. Corporates across industries are already facing the pinch, with attrition being voted as one of the biggest pain areas. The implications are far reaching. Under the pressure of seemingly endless deadlines, talent often gets short-changed.
It is a vicious cycle. Competition creates high pressure on performance and in the process, the art of developing talent is just not getting attention. The obvious outcome of the neglect is talent migrating to better opportunities, in the process taking away vital training and knowledge and creating vacancies that have to be filled quickly.
Says Anil Chhikara, president and co-founder, 24x7 Learning, “An organisation is viewed as a place where employees meet their aspirations of growth and development, values of trust, teamwork and transparency. If a company respects them and their skills, realises their potential and provides them with a healthy environment to learn and grow with flexible compensation, employees take that as a strong reason to stay on.”
According to Uday Ghag, head HR, AFL Ltd, “The broad reasons for attrition can be categorised as lack of independence in work or inclination to work (psychological reasons), lack of inspiration from superior and team (sociological reason) and lack of reasonable incentive in the form of compensation (economic reason). That attrition is a fact of organisation life is something the companies are ready to live with, but to keep it within manageable limits is the important task.”
One of the most important things to do to keep attrition within reasonable limits is encourage engagement or the connect the people have with different workgroups and the workplace. As R Venkattesh, executive vice president and head - human capital, DCB Bank, says, “Having a better engagement will lead to getting deeper and better insights about employees. Though lot of work is happening in many companies, a greater opportunity exists, especially in larger companies where the interaction with employees becomes more formal due to absence of listening posts in the system.”
As Chhikara points out, “Surveys by leading HR consulting firms and industry bodies have confirmed that learning and professional development opportunities are more effective retention tools than higher salaries.”
Some of the combat strategies to tackle attrition, according to Ghag, would be ensuring empowerment of employees by affording them the independence to approach their work within defined limits, leading to desired organisational output. Also, allowing employees opportunities to use their competencies across initiatives, functions and business divisions to keep them engaged and motivated with their work. And of course, the monetary mechanism that would include inculcating a performance oriented culture with a clear reward system based on achievement of smart key result areas. Also important would be devising innovative, tax efficient and relevant benefit compensation structures that address the monetary and non-monetary needs of the employees.
The system could also include some out-of-the-box, non-conventional thinking: such as redesigning jobs to reduce turnover, as in the case of UPS which managed to retain many more drivers by shifting the tedious job of loading trucks to other employees; hiring people who aren’t in high demand and placing valuable employees in locations where they won’t be constantly tempted by job offers; and teaming up with other companies to offer cross-company career paths. And some more: outsource, strengthen recruitment, standardise jobs, cross-train employees, and organise work around short-term projects.
It is very important to remember that attrition of a single employee does not have a simple implication of leaving just one seat to be filled in the workplace; it has a more complex and multi-layered impact. As Roopa Badrinath, head, human resources – Rediffusion DYR, points out, “It means a lack of continuity in client relationships which is very critical in the service industry. Replacement costs are always higher. We also need to factor the time taken for the movement of the learning curve of a new joinee as there is the initial settling down period for any new recruit. It takes time for a new recruit to embrace the vision, mission and culture of the organisation. More often than not, we tend to sweep under the carpet the impact that attrition has on the morale of the remaining employees.”
Considering that for the next 15 to 20 years India will have the youngest workforce in the world, companies will have to think of innovative practices that will appeal to the ‘here and now’ generation. Agrees Badrinath, “HR will have to be a strategic partner of the organisation and not just a passive partner. Companies will have to spend on branding themselves to make it attractive not only for fresh talent but also for incumbents. Organisations should be ready to take risks by recruiting talent from cross-verticals. Training and development initiatives should be more fun and less staid. Empower young managers with the wherewithal to manage a team.”