How to Reduce Employee Attrition
Employee attrition weakens an organization. When employees leave an organization high and dry without giving leadership the time to replace them, it hurts the morale of other employees, and the brand image with customers.
“Attrition impacts the efficiency and productivity of an organization.”
Different Types of Attrition
Attrition in an organization can be of different types and have varied impact on the people left behind.
Voluntary Resignation — This is when employees leave on their own. There are several reasons why employees might choose to do this including — limited growth opportunity, lack of appreciation, mismatch of job role, better pay in a different organization, work-related stress that can become long-term frustration, or even the source of illness.
It is factors like these mentioned above that contribute to voluntary attrition. A study conducted in the recent past says 49% of millennials never think that they are going to last in one organization or company for more than two years at a time.
Involuntary Attrition — This is the attrition when employees are removed from their posts or positions due to a lack of performance or poor ethical conduct in the workspace. This attrition can aid or harm the company depending on how the decisions regarding the termination of employees are made.
Retirement — Retirement of key employees can be a huge blow to the everyday functioning of the company if they haven’t prepared for it well. It might not be very easy to fill the shoes of an experienced employee without enough notice.
Internal attrition — This occurs when an employee leaves key posts in one department to join more important positions in other departments. In this case, the company or corporation might benefit, but the department that is left behind might be harmed through gradual attrition.
Ways to Minimize Attrition
There are some proven steps that organizations can take to reduce their losses through employee attrition. Here are some to consider.
Do Not Skimp on Compensation
Most organizations cannot afford to pay every employee a hefty paycheck every month, however maintaining industry parity is necessary. Studies have suggested that voluntary resignation from jobs occurs when the compensation offered to employees is even 10% lower than the industry or company average for that position.
While it is important to make tough decisions about employee salary, it is also crucial for companies to keep the bar up. If employees must ask to be brought up to parity with the market in compensation, the organization practicing this will suffer higher attrition.
Conversely organizations that proactively bring employees’ salaries at parity with the market, have lower attrition.
“It’s a smart choice to be proactive in compensating employees at least on parity if not better than market trends.”
Match People to the Right Roles
I’ve personally seen this happen to very good sales leaders who get courted for a leadership role, only to end up in some fancy individual contributor role. Nothing wrong with individual contributor roles, but the person who was being courted for a business unit head capacity feels robbed, and that’s the beginning of the end of that relationship.
It’s important to be totally honest with what you are hiring for, just as it is important to let employees be transparent about their preferred roles.
The best leaders don’t just hire to fill roles, they hire to enhance the value the organization creates. Matching up people to the right roles is a learned leadership skill, yet an important one to reduce attrition, and maintain a competitive advantage in the market.
Reward Employees Often
Your employees need to understand that you, as an organization, appreciate their work and that their efforts are not going unnoticed. Hence, you need to make sure that their big successes or their proactivity in the workplace get rewarded often.
This keeps morale high in the workplace and motivates your people to do more than expected.
“Creating an atmosphere of acknowledgment and trust is crucial to lowering attrition.”
Working in an organization for a long time might often become mundane, repetitive, and bland for most people. Here, productivity rates begin to fall, and the company’s efficiency decreases.
The leadership’s responsibility is to keep employees engaged in everyday tasks by making the workplace a warm and hospitable environment.
Employees crave a flexible work/life. If you’re not offering employees flexibility around work hours and locations, they might easily leave you for someone who will.
With the improving economy and the coming talent shortage, attrition promises only to get worse. The 5 days’ work week is antiquated, why not change it up. Experiment with a four-day workweek. There are some real measurable benefits to doing so to both the organization and the people.
Encouraging prosocial behavior with your employees, can create a culture of generosity and gratitude. Connecting through acts of giving and expression of gratitude, employees will be healthier, happier, and less likely to leave.
“Encouraging to lookout for good behaviors to commend gives employees a sense of ownership of the company.”
Even if your business is otherwise successful, employee attrition can cut into your profits and even cause you to lose customers. Developing a plan to reduce attrition is the only way to get ahead of it.
“Employees are the building blocks of an organization and ensure the success of a business, so it’s important to keep them happy.”
Create an environment where everyone feels proud to work for your company. Employees should feel safe, valued, and included. They shouldn’t be afraid to be themselves in the workplace or forced to be someone they are not.
“Creating an outstanding company culture will ensure lower attrition.”
Finally, have more fun. When people are paid competitively, do work that aligns with their personal aspirations, get rewarded often, feel like they are doing something good in the world through social impact, practice gratitude and have fun…. they don’t have time to think about leaving. Why would they?