Highlight: Employee attrition in companies arises from various factors. Although unavoidable, it can be controlled by employing some effective measures.
As per a survey, about one-third of the newly hired employees go on a job hunt after just six months of employment. Very few people stick with their first companies till the very end. While this seems to be quite simple, a lot of problems come with employee attrition.
Employee Attrition refers to the slow but intentional drop in staff numbers when employees retire or resign and are not replaced for a long time. Employee attrition can be of two types:
Voluntary Attrition: Voluntary attrition occurs when an employee chooses to quit the organisation. Employees may resign for official or personal reasons.
Involuntary Attrition: Involuntary attrition occurs when a corporation terminates employment from its end. This frequently occurs when firms cut roles to save money on staffing or because the position is no longer required. This is a frequent cost-cutting strategy used by businesses.
While voluntary attrition is better than involuntary attrition, it may still negatively influence surviving employees if their responsibilities increase. It can also hinder promotional chances and movement, resulting in a less happy workplace or even greater attrition than anticipated.
There can be several reasons for employee attrition. Some of them are:
- Lack of growth in work culture
- Lack of availability of skilled workers
- Unsuitable work conditions
- Retirement of Employees
- Relocation of the company
- Effect of the pandemic
How does Employee Attrition harm companies?
- Employees that leave take along years of experience with them. The loss of experience puts strain on the team and, ultimately, the entire organization.
- Companies have to incur additional costs like training programs for recruits.
- The remaining employees face added burden on their existing work schedules to compensate for the gap left behind.
- With additional pressure, the current employees may be inclined to leave and look for other firms.
- Employee attrition causes stress and disorder, which in turn leads to consumer attrition. Unproductivity at work reduces the quality and quantity of service or product, which contributes to customer churn.
The Organization describes the phenomena of companies losing out on their customer base. With increased attrition in the workplace, many customers may choose to shift to other companies as the quality of work falls.
Tips to Control Employee Attrition
To avoid such scenarios, the company should undertake preventive measures. Some of the things they can follow are:
Avoid Scrimping Whenever Possible
It is not easy for organizations to provide a generous salary to the employees every time. The company’s value might be affected negatively, or the financial department can take a direct hit. However, it is not advisable to go below the standard norms or the average compensation offered by competing organizations. The financial wellness of an employee is beneficial for both the firm and the worker. Learn about what your competitors are providing. If the variation is high, you might want to reconsider.
Hire the Right People
The first step in controlling employee attrition is to find the right candidate. While skill set and expertise are primary areas of evaluation, you should always check a person’s behavior and attitude. Be honest about your own company’s culture. It allows the candidate to determine whether or not your organization is a good fit for them.
If a candidate does not like the work atmosphere, they will be unhappy and will eventually depart. So, before hiring, make sure you have the ideal individual who is open and flexible and can fit in with the organization’s culture.
Create a Suitable Working Environment
What you provide as work benefits is very important to your employees. Top organizations provide their employees with great growth prospects, outstanding benefits for employees and their families, and enjoyable work environments.
When a company understands how to address their employees’ needs outside of the office, they profit more from their personnel. Providing flexibility in work and enhancing the workers’ work-life balance will improve the interrelationship of the employees considerably. They will start to enjoy work.
A Transparent Idea of Retirement
Employers should be aware of which staff are about to retire or resign. In reality, it is preferable to estimate the number of employees who will retire in a few years. This will allow the organization to plan and implement plans for the layoff of experienced staff.
Be careful! Inquire judiciously about your employee’s retirement plans. They may believe you are prejudiced against them because of their age.
Engage with your Employees
When you have talented personnel, you must discover ways to help them grow their skill set. Provide feedback and let them know what you think. Pay attention to what they’re saying and let them know you’re there for them. If you do not interact with them, they will become bored and complacent, believing that they are not progressing within the organization. Employee engagement is crucial for reducing attrition.
Be the boss who pushes people out of their comfort zones. Assist them in achieving their goals. Treat your employees well and keep acknowledging their hard work. You may have the most talented employees, yet they may not have the opportunity to advance professionally.
Conduct an Exit Interview
Exit interviews are the conversations succeeding resignation letters. They are conducted to determine why an employee is leaving the company. Whatever the reason, an exit interview can help you figure out how to solve the problem of high turnover or attrition rates.
This also provides you with ideas for how to improve your hiring process. Getting the correct fit for your organization is a terrific method to cut attrition and improve your company’s work atmosphere.
Employee attrition cannot be completely avoided. Sometimes things are simply beyond your control. However, understanding why and how attrition occurs and facing the challenge of overcoming attrition can assist reduce its impact on your firm.
A well-structured wellness program in place can highly impact the attrition rates. If employees are satisfied with their work environment and growth prospects, they wouldn’t feel the need to leave their jobs.
EarlySalary has collaborated with several organizations in their financial wellness programs and, with its commendable easy credit options, has helped thousands of employees stay ahead in the career game.