RESIGNA-
TION
SICKNES RETIRE-
S ATTRITION MENT
DEATH
MEANING
various forms at various different places means different things. In general the term
• In military it means:
• In medical terms:
War of attrition, a limited war fought between Egypt and Israel from
1968 to1970.
• In corporate terms:
gradual, natural reduction in membership or personnel, as through
and customers.
love of god.
stress.
Attrition is one of the biggest issues that any organization faces and in fact the
centred, attrition means a situation, which an employer faces when any employee
leaves the organization due to any avoidable or unavoidable reason such as job
causes such as sickness or death. The reasons for attrition may range from
professional to personal.
beneficial for the organization. It is a very negative phenomenon and causes huge
loss to the company. The loss can be in terms of money as well as in terms of
manpower.
• The effects and impacts of attrition are also mostly negative resulting in
various types of losses for the organization like the loss in costs acquired by
employees.
ATTRITION: AN INTRODUCTION
Any new employee joining any organization usually has various dreams regarding
his/her job and the nature of the job and work atmosphere. Ideally, any employee
would expect the organization has a goodwill in the organization, get good
compensation for the service that they would offer to the organization, get ample
chance for their career growth and advancement within the organization, good
working conditions, co-operative coworkers and staff, future stability within the
organization, get ample flexible schedule so that they can attend to their family and
personal needs when necessary. In return the employee is more than happy to offer
his services with full hard work and dedication to the organization.
But then this is just the mind full of dreams and hopes of any person who is yet to
enter the organization and start with his career. This person is a person full of
enthusiasm and youthfulness to give all he can to the organization and considers all
the above said conditions to be just too minimal and minute. But dreams are
dreams. And then there is the real world when the person really enters the
organization and gets to set in the work culture that the harsh realities of the world
come in front of him and cause him to exit the organization. And there are various
More benefits.
but also all over the world. High attrition rates significantly increase the
investments that are made on the employees. Companies invest a lot of time and
money in training the employees but theses investments do not always get
converted into profits. Though the attrition rates in India is not as high as those in
the US but it is still a great challenge to keep attrition rate under control in India.
US 42%
AUSTRALIA 29%
EUROPE 24%
INDIA 18%
has the most important and perhaps the most challenging task to maintain a steady
workforce in the organization. And for this the HR manager has to make sure that
sense, is an easy job. Hence it is very important for the HR manager to find the
right kind of people for the organization who can suit and fit in well in the
organization. Not only this, also it is very important to see that the workforce
keep the motivation level of the employees high and see to it that the employees are
performing their tasks with full efficiency. Then it is also the task of the HR to see
that the employees are comfortable in their work atmosphere and have no problems
Thus it can be said that it is the HR personnel who are responsible to see that
the attrition rates of the organization are well in control. It is a tough concern
for the HR manager to see that the attrition rates are well in control.
The telecom industry is being looked upon as the next big employment-generating
bridge the ever-increasing demand and supply gap of professionals. The telecom
HR manager is not only required to fulfill this responsibility, but also find the right
kind of people who can keep pace with the unique work patterns in this industry. It
is also his duty to keep the motivation levels high, despite the monotonous work. In
India, the average attrition rate in the telecom sector is approximately 30-35
percent though it is far less than the prevalent attrition rate in the US market, which
industry.
The reasons cited by various HR Personnel for attrition in the Telecom Sector are:
1. The salary growth plan for employees is not well defined. This
the employees.
2. Long working hours and monotony of the job causes employees to leave.
women leave their job either after marriage or because of social pressures
Amongst all these reasons and all so many things happening, the HR manager is
expected to put his best foot forward and straighten all things. The HR manager
believes that for sorting out and handling this situation of attrition, the
responsibility of the manager increases of finding out “the best man” for the job
their employees, sort out their problems and try all that is possible to maintain all
the competent employees within the organization, build innovative retention and
motivational schemes.
2003 10%
2004 14%
2005 16%
16
14
12
10
Percentage 8
6
4
2
0
2003 2004 2005
Year
To study the growing rate of attrition in the coming years in Asia a study was
Hewitt’s Attrition and Retention Study Asia Pacific 2006 has given reasons for
survey said that their employee left the organization because they got offers
3. Role stagnation
The study also revealed the various strategies sought by the companies in Asia to
combat attrition.
skills.
view
A survey was conducted where the employees of various organizations were asked
Professional/
Supervisor/Te
chnical Level
39%
Others
60%
Senior/Top
Management
Level
1%
ATTRITION IN INDIA
The attrition rates in different sectors for the year ended 2007 are shown in the
following table: -
46
45 44
40 40
35 35
32
30 30
Percentage
27
25 25 25
23
20 20
17
15
10
0
IT-ITES
FMCG
Telecom
Retail
Financial
Capital Goods
Construction
Non-Voice BPO
Pharmaceuticals
Services
Aviation
Manufacturing
Sectors
From the above table it can be concluded that by the end of 2007,attrition rate in
various sectors was quite grim. And on an average the attrition rate in Indian
And rate hasn’t decreased since then. Attrition rate is on a continuous rise ever
%
change
Sr. 0-3 4-7 8-12 13+ Increase
Sector from
No years years years years in 2008
2006 to
2007
Pharma &
1 25.00% 10.00% 5.00% 2.00% -5.00% 6.00%
Chemicals
2 Manufacturing 8.58% 2.46% 2.46% 3.00% 5.00% -3.50%
Financial
3 20.00% 20.00% 20.00% 20.00%
Services
4 Hospitality 35.00% 25.00% 20.00% 7.50% 13.00% 20.00%
5 Ad & Media 40.00% 35.00% 20.00% 15.00% 17.00% 22.00%
6 BPO 40.00% 30.00% 20.00% 10.00%
No
7 Automobile 7.00% 3.00% 2.00% 2.00% 14.00%
visible
Auto
8 12.00% 15.00% 20.00% 12.00% 5.00% 6.00%
Component
9 Banking 10.00% 5.00% 2.50% 2.50% 2.00% 2.00%
10 Infrastructure 16.00% 11.00% 7.00% 11.00% 9.00% 20.00%
11 IT & Telecom 32.00% 25.00% 10.00% 5.00% 5.00% 9.00%
In this table it can be clearly seen that except for a few occasion none of the
sectors have shown a decline in attrition rates. Rather a constant and steady
The highest attrition rate has been seen in the advertisement and media industry
while the manufacturing industry has been lucky enough to show a decrease in
attrition rate of 3.5%. The telecom industry has also seen an increase of 9% from its
previous years.
IT sector is one of the most flourishing sectors in the present scenario. The number
of jobs is ever increasing and this industry always has space for every new entrant.
But interestingly the attrition rate is also ever increasing in this sector. The reason
for high attrition rate in this sector has been credited to the immense mental
pressure, unconducive work environment and lack of job security amongst the
employees.
Here is a small summary on the attrition rate of the top 4 IT giants of India i.e.
& SATYAM
Despite being IT giants and despite being one of the most flourishing industries in
India, the industry is also facing huge rates of attrition since the past few years.
Infact the workforce in this sector has been stated as one of the unstable workforce.
The biggest problem with this industry is its inability to retain back employees in
much higher rate of attrition as compared to Satyam.But during this recent Satyam
fiasco even this company has noted down a considerably high rate of attrition.
WIPRO: Wipro has the highest attrition rate in the industry. During the last
quarter of 2006-2007 the attrition rate of wipro accounted to about 16.2%. Whereas
the attrition rate of Wipro BPO on an annual basis has been around 48%.
INFOSYS: Attrition rate for infosys for the period April-June 2006 was 11.9%.
TCS: The attrition rate for TCS was 11.5 % in 2006-2007, up from 10.6% in
2005-2006.
SATYAM: Attrition rate for Satyam for the period January-March 2007 was
15.7%. It has declined to 14.9% during the last quarter of the year.
INDIA
The telecom industry is one of the most flourishing industries in India today. It is
industry over here is growing at a very rapid pace of 40-50% growth rate
annually. It is the 2nd largest telecom market in the world only after China. In
2007,India achieved the distinction of having the lowest call rates in the world and
But along with the huge employment the industry provides also comes high rates of
attrition as a big deterrent for the industry. This industry at present is facing a
very high rate of attrition of 30-40% annually. One of the most critical problems
Attrition arises generally when an employee leaves the organization due to any one
• Death of employee
• Retirement
The telecom industry is facing great challenges in finding quality human resources.
Attrition rates at an average vary between 20-40% while the top telecom companies
In this organization, the attrition rate averages to about 2.4% per month. But
in this era of recession the attrition rate has reduced a little bit to around 1.9%
per month.
The reasons for high rates of attrition is due to various factors like:
• Salary
• Work Timings
The rates of attrition also differ according to the level at which the employee is
working. In this organization, the second level employees change their organization
and job at an average of 2 to 2.5 years. While the top-level employees are relatively
more stable in this respect. They change their jobs at an average of 4-5 years.
But attrition is not the only problem creeping in this industry. Along with high
attrition rate is also comes in hand the problem of poaching which is just adding to
high attrition rates. Poaching is taking over of the employees of one organization
company is on the hunt of competent employees and if they find any employee who
Thus attrition coupled with poaching leads to the increase in the costs for the
company. India has always been one of the favourite destinations for telecom
activities. One of the reasons is the cheap labour available over here. However,
it may be quite ironical or interesting to know that the attrition rates in India and
the costs associated with it are so high that they override the benefits of lower
wage costs. It is said that it is just this low wage cost that has caused various
High rates of attrition do not cause the people to stay long enough into any
organization to learn their job completely. Thus the labour here no doubt is
cheaper but if they are not able to learn the new job then there is no use of the cheap
labour available and the investment done on them goes for a waste. Thus,
managing attrition in the telecom sector is not just good for industry but
Hence, it is an area where the HR manager has to take a lead. Understand the
causes of attrition, see the factors affecting attrition, measuring attrition and set
In the following pages are given the factors, causes, impacts and methods to
organization.
ATTRITION?
Before moving on to the causes and various factors related with attrition it is
important to know who is exactly responsible for attrition. For understanding this, a
survey was conducted amongst the entire HR department to find out who the HR
thinks is responsible for attrition. The HR personnel were given three choices and
asked to rank among the 3 choices the one, which they feel, is the most accurate
cause for attrition starting from the most obvious cause ranked at the first spot.
1. Employee
EMPLOYEE 08.03%
SUPERVISOR OR LINE MANAGER 38.15%
COMPENSATION & JOB PROFILE 53.82%
Who is Resonsible for Attrition
SUPERVISOR
38% EMPLOYEE
The results of the survey were interesting and were helpful in providing deep
insights into why attrition happens and what can be done to solve it.
own. Except in a few cases such as personal reasons, family issues, location
preference, company brand and peer relationships, employees are not self-
reason for attrition. It confirms the theory that "Employees don't leave their job
effectively and consistently. 'Satisfying employee needs' often gets lower priority in
the eyes of the manager. Further managers do not have appropriate tools to manage
provide them with tools to manage tasks related to their teams. HR should also be
able to track changes in employee performance rating, gaps between employee and
HR Managers voted unanimously that 'Compensation and Job Profile' are the
With a war for talent, disparity in the compensation packages is bound to occur and
The responsibility for compensation policy and enriching the job profile lies on the
senior management. However often this is not possible despite the best efforts made
by the managers. Every company wants to become the 'best paying employer', but
market forces, tough competition and a slow economy do not allow them to do so
When all employees work on goals that are aligned to the company objectives and
There are various causes for attrition to occur in any organization. Each employee
working in the organization has his or her different view on why do employees
generally leave organization and their preferences and wants also differ
accordingly.
organization the employee had been working in; it is seen as talent acquisition by
another organization which is in search of employees while for the person himself it
There are various reasons why people leave their current job. If these reasons are
controllable-one attempts to control. If these are not within the control of the
understand and manage attrition. There can be various reasons for people leaving
were found in the organization, which compel employees to leave the company they
Higher pay
Most of the employees leave the organization when they are not getting a
satisfactory pay for the work they do or when some other company is piping in to
pay them a much better remuneration for the same work that they are presently
doing.
Supervisors
A bad supervisor is ninety percent times the reason for the employee to leave the
appreciate his good work then probably he is not a supervisor with whom the
employees will be carry on for much time and will in all probability leave him.
Work timings
Work timings are a major cause for people to leave the job specially for females or
for people working in call centres or any other job that has no fixed work timings.
Employees will also leave the job if they feel that the company has stagnated their
career graph or if the company doesnot have much to offer to them to satisfy their
career needs.Since for them it is not just about getting into a job but rather to see
Job Security
Employees will also leave the organization if they are not sure that the organization
are in doubt that organization might at any them ask them to leave,will quit it much
Uninterseting Job
Monotonous,uninteresting job with the same thing to do everyday is also one of the
Work Environment
Often the employees are heard complaining of the unfriendly work environment in
which they are liable to work. The supervisor, co-workers, nature of job all is parts
of this work environment. When the environment crosses beyond the tolerance
Work pressure
Mostly the employees are given targets on weekly or monthly basis which they are
often are more of a headache for the employees and create emmense mental
pressure on them. Such circumstances often lead to taking away the mental peace of
the employees.Such employees are often heard complaining about sleepless nights
Employees often leave even when they are not able to deliver upto the set standards
Females form a larger part of the workforce specially in the telecom sector.But
women are the most uncertain workforce.There are various reasons because of
which females leave the work.It may be the uncertain work timings,other career
options and above them all marriage which causes them to quit and take up new job
of house wife.marriage may also cause them to shift to a new place thus casuing
them to quit.
Verbal abuse
Verbal,physical abuse and sexual harrasment are few things which are much
prevelant in the organization specially the corporate world.This fear causes many to
quit.
Transfer to other cities also causes employees to change organizations.If they find
the new place uncompatible or unadjustable they are likely to move over to a new
organization.
Last but not the least employees leave the organization owing to various personal
reasons or for pursuing higher education so that they can give their career a better
direction.
In short ,the various reasons for attrition can be grouped together under the
following heads:
The reasons for attrition have been grouped under basically three heads:
1. Individual Factors
2. Organizational factors
3. Other Factors.
FACTORSAFFECTING
FACTORS AFFECTINGATTRITION
ATTRITION
Peer pressure
Ambitions/Career Role Related
aspirations
Culture Environment
Parental/Family
No challenge Growth and
mobility
No learning career paths
Personality factors
Style of boss Pay packets
Role clarity
Role stress
Lack of independence
INDIVIDUAL FACTORS
Today each person is much aware of what he wants. It is not just about studying
somehow and getting into a job just for the sake of earning money. It is more about
building up their career and fulfilling all their aspirations and dreams. These can be
too small to fulfill their aspirations or the organization cannot offer them the career
growth, which they are aspiring for. At times other organizations provide the career
opportunity that the individual is seeking for. It is also not possible to provide each
employee the career growth that each one is seeking since each employee seeks to
rise higher in his career and it is almost impossible to give each employee the top
themselves by taking attrition as a natural phenomenon and accepting the fact that
each person here has come to earn money and make career and not to just be loyal
to their organization and that each person has the right and will move around if
given the opportunity. However, if the organization can do something to create new
situation.
People also move about if their family is at distant places. Staying away from home
causes homesickness and many cannot take up such conditions for long enough.
Hence to be with their family they may leave and move. Need for being close with
the family, spouse, children, parents etc. at different stages of one’s life to fulfill
different types of affiliation needs prompts a few people to leave their jobs and
• Personality factors:
Then there is a certain restless lot, which cannot just stick to one place. They have a
going. They always are on a lookout to explore new heights always. Such people
keep on changing their jobs very quickly. They are highly ambitious and restless.
They are highly achievement driven and want to achieve new heights in the shortest
time.
ORGANIZATIONAL FACTORS
The job related factors that cause the decision to leave include the following:
2. Lack of challenge.
4. Lack of scope for growth in terms of position, salary, status and other
factors.
5. Role clarity.
These factors may be intrinsic and job related or extrinsic and job related.
Intrinsic factors
Factors related to the characteristic of the job. It includes the work conditions
(work at odd hours, the nature of clients, the work load) and all such factors, which
cause difficulties.
Extrinsic factors
Factors like role clarity, independence and autonomy, bad boss, wrong
chemistry of the team, lack of respect shown to the individuals, etc. A large
• OTHERS
o ECONOMIC FACTORS
This deals with the aspirations in relation to salary and perks, housing, quality of
o Mobility of partner
o Fatigue
REASONS GIVEN BY EMPLOYEES
Employees themselves have cited various reasons for leaving the organization.
• The most obvious reason for employees leaving any organization is higher
pay. Most employees in telecom are approached with two or three jobs
every week, and obviously good offers are hard to resist by anyone.
are such that they are making employees leave the organization. The work
timings in telecom industry are very odd. This affects the family life of the
employee.
employees are able to go to senior levels. This means that the remaining
80% of employees look for other organization where they can get
them is also a problem. Along with that, some employees see no career
• One more reason for leaving the organization is higher education. These
because of lucrative salaries being offered. But with time, they apply for
higher education and try to move on to other organizations or sectors to
take up their household duties thus leaving behind their irregular work
hours.
the employer.
rate.
• Monotonous job. Many see this space to be a sweatshop where all that the
sheets or, worse still, work on the same lines and repeat the same work
usually do so to make a 'quick' buck. They are bound to quit because sooner
or later they will find something more attractive in terms of the job profile
or pay.
• Talent in this space is generally overlooked, which leaves the deserving few
doing work.
concentrated on hiring young, dynamic and these are looking for more than
just a job.
employees to leave the organization (in the order of most common to least) are:
• Compensation
• Personal Reasons
entirely.
2. Second part is where the employee joins another firm in the industry.
1. The primary reason for people leaving the industry is due to the cause that
2. Unfriendly working conditions, late night work shifts, high-tension jobs acts
SAME INDUSTRY
scarce resource in the market leads to wide scale poaching and head hunting
the firms. The lack of preplanned recruitment causes the firms to fulfill their
in other firms.
ANALYZING CAUSES OF ATTRITION:
MASLOWS THEORY APPROACH
The best method to understand the causes of employee attrition is through the
Maslow’s Model helps in analyzing the causes of attrition and also a better
expectations of the employees, the gap between reality and expectations and how
Abraham Maslow.It is a model which identifies the needs which act as factors of
motivation for the human behaviour. This approach basically shows that there is
certain basic human needs which if fulfilled lead to the motivation of people
and help them to perform better at work. This model has been applied over here
in reference to the employees to see what it takes to motivate the employees. Thus
organization.
According to him, the needs are present in the form of a hierarchy and are
order. Fulfillment of the basic level of need leads to the arousal of next higher level
of need. Next higher level of needs cannot arise if the lower level of needs are not
fulfilled.It is only when all the 5 levels are satisfied is the employee satisfied and
motivated to perform.
These levels have been presented in the form of a pyramid. The pyramid shows the
following 5 needs:
1. Physiological needs
These are the basic human needs or the biological needs of food, water, shelter,
sleep, and oxygen. These are the strongest needs because until all these needs are
not fulfilled the person cannot think of any other needs. Man first needs to get these
2. Safety Needs
After the physiological needs have been fulfilled comes the need for safety and
After the above two needs have been satisfied arises this need. This is the need for
involves both giving and receiving love, affection and the sense of belonging.
This involves the respect of others as well as the respect by others. Each person
wants to be respected by others and would in turn respect others. Humans have a
need for a stable, firmly based, high level of self-respect, and respect from others.
When these needs are satisfied, the person feels self-confident and valuable as a
person in the world. When these needs are frustrated, the person feels inferior,
5. Self-Actualization Needs
When all of the foregoing needs are satisfied, then and only then are the needs for
which the person was "born to do." The need that a person is himself worth of
doing various things. His thirst for creativity, problem solving, seeking personal
very easy to know what the person is restless about. It is not always clear what a
According to the Model, once the human being moves up the pyramid, the lower
level needs have been fulfilled and are of no more importance to the person. If a
person having moved up the pyramid feels an urge of any unsatisfied lower level
need, he will focus himself to the fulfillment of that lower level need but will not
Maslow's Hierarchy of Needs states that each need must be satisfied in turn, starting
with the first, which deals with the most obvious needs for survival itself. Only
when the lower order needs of physical and emotional well being are satisfied the
person is concerned with the higher order needs of influence and personal
development. Conversely, if the things that satisfy the lower order needs are swept
INDUSTRY
1. Physiological Needs
These are the biological needs. These are the most basic needs and the strongest
Any person, who takes up the first job, takes it to fulfill its bare minimum
“Physiological Need”. Each person keeps his dreams aside and takes up a career,
which will fetch him “money” so that he can fulfill his basic needs. The first
factor, which any person seeks while taking up his or her first job, is “money”.
Same is in the telecom industry. The basic need is the compensation. The person
expects this need to be updated continuously with time so that it fulfills all the
physiological needs. This need should be continuously updated with time so that it
Presently the industry is providing better salary at entry level but the industry does
Though the salary in this industry is quite high and also may look satisfying enough
for people, but people working in this industry still look forward to opportunities
the starting few years of his job; then the person starts craving for the next level of
needs.
2. Safety Needs
Once the physiological needs of the person is satisfied and the person becomes
comfortable with his work, the next need arises in him. This is the need of job
There are two aspects of security, which the people in telecom sector are mostly
concerned about. First, is the physical security of the person and his family. This
As far as physical security is concerned, the company provides the best of security
but with the industry growing rapidly there is need to maintain same standards of
security” among employees. Asurity of being with the organization and retaining
their jobs and position is very important for the people. And with the recession
going on, job security is the prime concern for the employees.
People, who believe that their job is secure enough, still have some itch. Next arises
organization, teams and to the people they work with. They want to be
appreciated for the work that they do. They want to know how their contribution is
important to the company and is helping the company to grow. They want to bond
they want to have a family like feeling. But generally people in the industry are
not satisfied. They often feel that they are not credited for the work that they
do and their seniors often do not give them enough space to grow and do not
allow their colleagues to bond with them well. Also the employees are troubled that
they do not have a proper time leaving time from the office, which in turn
disturbs their family lives. They believe organization kills most of their time and
spares no time to live their private life. The company tries to compensate for this
loss by providing fun filled atmosphere and congenial supervisors and working staff
but still a large gap has been found between expectations and reality.
appreciate the employees’ work or not. Often seniors take away the credit of the
good work from the employees. Supervisor may also encourage the person to
mingle with the colleagues. At times the supervisor is good enough to pay attention
to personal problems of the employees and try to help him out by giving him some
leniency when it is required. But at times he might even give such hard tasks to
employees so that they have sleepless nights. Like for example in this organization
itself the employees are given just 4 days off even for an occasion like the marriage
of the employee. Thus the lack of family and social life along with a friendly and
appreciating work atmosphere is one of the major concerns for the employees
4. Self-Esteem Needs
Having discovered all the love and affection, what employees next look in any
organization is the Self-Esteem needs. These involve needs for both self-esteem and
for the esteem a person gets from others. Each person always seeks high level of
respect from others as well as self-respect. Each person enjoys the respect, which
he gets from others at work place. And each person feels a natural inclination to
praise others, to appreciate their efforts, to praise their skills. And they expect the
same in return.
When these needs are satisfied the person feels self-confident and valuable.
When these needs are left unfulfilled, the person feels inferior, weak, helpless and
worthless.
every level. But at the same there are also posts and job requirements over here,
which do not require much qualification, or much qualified person. These are the
jobs, which are looked down by the society in the sense that people do not take such
posts in high esteem. For example the job of the sales person over here who is
required to do the sales. People do not appreciate such jobs so much. This attitude
has developed in general. Then how people develop a high self-esteem and get
respect from others depend a lot on themselves also as to how they themselves feel
about their jobs and how much they themselves value their jobs.
general perception of people about their own job. The industry needs to work
upon changing the image of such posts in the society and in the organization
itself since most of the times it is the people in the organization itself who look
down upon these posts and the employees in this posts. Thus the employees of the
When all of the foregoing needs are satisfied, then the need for self-actualization
gets activated. It is all about realizing our true selves and achieving it. People
who are successful in achieving it whether in work life or in normal life, are willing
to help others on or off record. They are ready to solve all the queries, ready to
listen with the same enthusiasm. They do not get irritated; do take care of the needs
of the younger ones. Such people are the greatest and the most selfless people in
any organization.
The telecom firms nowadays are trying to provide career growth path and higher
employees. These are one of the few long-term motivations provided by companies.
Though the companies have been trying to cater to the self-actualization needs of
their employees, this has been one of the major reasons for attrition. Unfulfillment
that they can be retained into the organization for longer period of time and
Attrition has various types of impacts on the organization. Attrition not necessarily
always has to be bad. It can also be good at times. Thus its impacts can be
favourable and unfavourable, direct and indirect. Both the favourable and the
POSITIVE
INDIRECT
DIRECT
IMPACTS
NEGATIVE
POSITIVE IMPACTS
Attrition is also good at times. Good attrition reduces the adverse impacts on the
HEALTHY ATTRITION
organization. There are some people who have a negative and demoralizing
influence on the work culture and team spirit. This, in the long-term, is detrimental
DESIRABLE ATTRITION
It means getting rid of the employees with whom the organization does not
wish to continue with. This can be done through resignation on part of the
BENEFITS OF ATTRITION
1. Removes the bottlenecks (in form of unproductive employees) in the
2. It makes space for the entry of new talent. This new talent can be both from
3. Entry of new talent also brings into the organization new thoughts, ideas
6. It gives a chance to gather knowledge about any new and better practices
1. If employees stay in the same organization for a long time, most of them have
pay scale, which in turn result will result in excessive manpower costs.
2. If such employees leave who have been unproductive for the organization and
have been affecting the profitability of the company, the company is surely
benefited.
3. Then there are also a few people who have a negative or detrimental impact on
4. There are also people who are not able to work up to there performance
expectations, they lack the potential for future growth or the potential to remain
a permanent part of the organization. So such people are also better getting rid
off.
them. But budget constraints sometimes do not allow them to do so. But if the
unwanted employees leave the organization, the company can use this budget in
Thus, Attrition can said to be a boon in disguise. Desirable attrition not only
motivates the people of the organization right from higher level to the lower
hierarchy but also warns each of them that there is no scope for incompetence in the
organization. Thus each employee sets to do his or her work sincerely since he
knows that any underperformance could show him the doors of the organization.
points out at the inability of the organization to recruit the right kind of
employee, groom him, train him and motivate him properly in the
correct direction.
the companies should be more employee centered to bond with the employees well
so that attrition can be understood well and effective measures can be taken to curb
it.
NEGATIVE IMPACTS
Attrition in any form is bad for the organization. The negative impacts of attrition
TANGIBLE ASPECTS
These are the aspects, which are under the control of the organization, and if
• Loss of knowledge since certain brains leave the organization and take
• Delay in execution of projects since many places fall vacant and this may
loss of production.
• Increasing cost of recruitment for hiring new employees for all the vacant
INTANGIBLE ASPECTS
These are the aspects, which are not under the control of the organization.
company badly. Attrition rate does point out at the flaws existing in the
organization it will definitely try its level best to take advantage of that
• Burden and burn out on existing employees. It increases the burden and
workload on the existing employees till the time new employees are
employee walks out he takes with him a great deal of knowledge as well
contain some of the very private and delicate issues. And if the employee
exploit the person fully and use the information gained for its own benefit.
• Existing team also gets de-motivated for sometime. On seeing any
employee moving out of organization, many of them fear being thrown out
as well thus increasing their fear and de-motivating them. Adding to this it
may also influence some more employees to walk out of the organization.
costs. Most companies are on the hunt of such employees who are on the
look out for a better job or a better remuneration. Companies try their best to
DIRECT IMPACT
INDIRECT IMPACT
1. It becomes difficult for the company to retain the present workforce.
Even if they are able to retain, up to what time period they will be able
employee.
4. It impacts the companies’ image in the market and also its ability to
Attrition has some associated benefits along with low cost of operation, knowledge
sharing amongst the firms, thus benefiting the overall industry in increasing its
myth that every time an employee walks out of the door, the organization suffers.
Some attrition is indeed desirable and necessary for organizational growth and
development.
“Typically when you walk out people, you are setting an example.
ATTRITION COSTS
The company incurs a number of costs when it hires any new employee. But this is
not just a theoretical concept but all these costs can be calculated in monetary terms
very well. The sum total of attrition cost includes various types of costs. These
• TRAINING COSTS
It includes various costs as induction program cost, lodging costs during that
period, orientation material and cost of the person who conducts orientation.
These costs are incurred as new employee is learning new job, company policies,
It includes all those costs that are incurred in terms of experience and the contacts
that were lost during the time for which the position was vacant and other such
LOSSES
During attrition cost calculation, there may be various direct and indirect costs
included.
It includes 90% of the total costs included during the entire process. The hiring cost
1. COST OF ADVERTISEMENT
etc.
2. SOURCING
These are the costs incurred while sourcing for candidates, which includes
3. SCREENING
It involves:
interviewed.
interviewee.
interviews.
5. COST OF RECRUITMENT
• Training time.
6. Payment of consultants.
3. Time that a person takes while adjusting in the office that is an indirect cost.
It includes:
1. Loss of sales
2. Loss of production
Analyzing the cost of each hire is very important for the company and it is more
important for the company to analyze the quality of the hire. A cost benefit analysis
companies’ budget.
• Which standard method is being used to analyze the cost per hire?
The Saratoga Institute includes six basic elements to calculate cost per hire:
1.Advertising
2. Agency and search firm fees
6. Relocation costs
The internal cost per hire calculation is also done on the same lines. It includes four
data elements:
The combination of both external and internal hiring costs provides a total cost
FOLLOWING:
• Regional Differences
Higher costs of Hire are seen for the pharmaceuticals, medical and manufacturing
industries. Apart from this companies located in the western parts of the world also
have higher costs of hire. This regional difference can be attributed to several
factors like:
• The costs of living are higher and hence are higher the salary demands.
Same can be said for the difference in the cost per hire in India. In India itself the
cost per hire in the metros like Mumbai, Delhi, Bangalore etc. is much higher than
that in Lucknow.
• Costs By Source
On breaking down the total hiring cost for detailed analysis it has been found that
on an average 18.4 percent of the total hiring cost are spent on advertising, 19.9
percent are paid to agencies and search firms; only 1.8 percent is kept for referral
bonuses, 2.7 percent for travel costs, 32.9 percent is paid for relocation expenses,
The breakdown for external exempt hires shows that close to 50 percent of the costs
Or
various reasons. Thus, it is understood that high percent of attrition rate anyhow is
1.
resignations
2.
Available manpower
ATTRITION CALCULATION
There are basically two methods to calculate attrition. The two methods are:
1. ANNUAL CALCULATION
2. COHORT CALCULATION
These methods compare employees who leave the organization with the total
ANNUAL CALCULATION
It indicates the broad attrition pattern from year to year. It calculates attrition by
dividing the employees who left the organization in a given year by an average of
employees working in the organization at the beginning and end of the year.
COHORT CALCULATION
It indicates the attrition over a period of time for a specific group at a specific time
group of employees hired during a specific timeframe. These hires are tracked for
selected intervals. Different timeframes are used for tracking in this method. It does
There is no one standard formula for the calculation of attrition. This can be
The types of attrition that may or may not be taken into account:
1. The employee base on which the rate has to be calculated changes every
2. The firm does not include the employees who are freshers who leave the
The types of attrition that are taken into account while calculation:
1. Fresher attrition that tells the number of employees who have left the
2. Infant mortality attrition. It tells the percentage of the people who left the
organization within one year. It helps in calculating the ease with which
3. Critical resource attrition. It tells the attrition of the key personnel of any
4. Low performance attrition. It tells the attrition of those who left the
In terms of number:
In monetary terms:
1. Calculate the cost of the person who fills in while the position is vacant.
compensation and benefits cost for each week the position is vacant, (till the
time the seat is vacant) even if there are people performing the work.
It includes the time of the person conducting the interview, the time of the
leaving.
Since the person is leaving, who will pick up the work, whose work will
The person who leaves takes away with him out of the door various
knowledge, contacts.
7. Subtract the cost of the person who is leaving for the amount of time the
position is vacant.
• RECRUITMENT COSTS
1. The cost of advertisements; agency costs; employee referral costs; internet
posting costs.
the person who conducts the orientation. And the cost of orientation
materials.
cost plus the cost of the salary of the new employee. This cost is
delivery of training.
1. After training, the employee contributes at a 25% productivity level for the
first 2 - 4 weeks. This cost is therefore 75% of the new employees full
The cost is therefore 50% of full salary during that time period.
The cost is therefore 25% of full salary during that time period.
4. The cost of mistakes the new employee makes during this elongated
indoctrination period.
• NEW HIRE COSTS
1. The cost of bringing the new person on board including the cost to put the
2. The cost of a manager's time spent developing trust and building confidence
the number of weeks the position is vacant by the average weekly revenue
per employee.
The formula used for the calculation of Turnover cost of employee is:
TACKLING ATTRITION
“ Ninety percent of the world’s woe comes from people not
strangers to ourselves.”
Just understanding attrition, its types and causes is not enough. It is more important
to understand how such a thing can be dealt with since it is one of the most critical
things in any organization now a days. Hence understanding how it can be dealt
with and then trying the methods in the organization to curb attrition is equally
Thus for dealing with attrition a proper look at how to tackle it is required so that
Before going through the methods of attrition, it is important to have a closer look
at the following:
attrition is occurring and then going through the causes to analyze why is it
happening. Any method utilized for retention should be based upon the factors
responsible for attrition in the organization. The factors may at times be very simple
like:
Once the source or the causes of attrition have been identified, managing it
becomes relatively easier. Organization can decide upon it that whether any
MENTORING
Mentoring is a term that is used to help, advise and guide employees through the
individuals assist each other with personal and career development through
emotional support.
It can be called as an offline help from one person to another that helps in making
formal program.
• The mentor and learner both should be creative enough to bring in new
changes.
• The mentor should not develop dependency in the minds of the learner.
WHO IS A MENTOR?
A mentor can be any person who acts as a guide and helps the learner understand
and guides him in the correct path. He grooms the learner in the best possible
manner. He is a person with whom the learner develops a one to one developmental
relationship and develops his own skills and capabilities. The learner often develops
deep personal bonding with the mentor. And it is in the presence of him that the
person identifies having an enabled personal growth and enhancement taking place
• Friend
• Philosopher
• Guide
CHARACTERISTICS OF MENTOR
Any person who has had positive formal or informal experiences with a
Experienced people who have a good reputation for helping others develop
their skills.
People who have the time and mental energy to devote to the relationship.
• Up-to-date knowledge
Individuals who are still willing to learn and who see the potential benefits
of a mentoring relationship.
WHO IS A LEARNER?
A learner is any person who is wanting to listen, succumb himself to another person
who will develop his skills and personality. He is a person who can lay down his
trust on another person and is committed towards the goal of enhancing his
personality.
CHARACTERISTICS OF A LEARNER
• Open and receptive to new ways of learning and trying new ideas.
• Ability to accept feedback whether positive or negative and act upon it.
EXPLORATION
NEW
UNDERSTANDING
ACTION
PLANNING
1. EXPLORATION
• Negotiate an agenda
2. NEW UNDERSTANDING
It involves:
• Establish priorities.
• Share experiences.
• Offer encouragement.
3. ACTION PLANNING
It involves:
• Celebrate progress
REDEFINING DISSOLVING
THE THE
RELATIONSHIP RELATIONSHIP
During the first three to six months, both the mentor and mentee get to
know each other, and build trust. The interaction, which occurs at this
The middle phase is typically the most rewarding time for both mentor
and mentee. The mutual trust, which has developed between the two,
can give the protégé the confidence to challenge the ideas of the mentor,
just as the mentor will challenge the protégé’s ideas.
at this stage that the mentor steps back from the formal relationship to
discuss together with the protégé how they wish to continue their
relationship.
can regard one another as equals. They continue to have some form of
THE ORGANIZATION
The HR Manager told the various other steps to curb the attrition in the
employees.
position and will remain with the company for an extended period of
time.
balance between work and family life. This helps in retaining the
employees.
will help employees find out reasons why the employees are leaving
should be made sure that employees are treated equally and fairly.
EXIT INTERVIEW
One of the best methods to find the reasons for employees’ leaving the organization
is through conducting the Exit Interviews. It helps in finding out the exact reason
for why the employees leave. Most of the companies are troubled now a days with
the question that …."Why our attrition rate is higher than other company".
Thus it is helpful in finding out the real reason why employees leave which can be
improvements.
Exit Interviews have now become a routine in the organization. These are the
Exit interviews give an inner view to the internal systems and working within the
organization that affect an employees’ career in the company. Many reforms in the
and many more improvement initiatives can be taken on the basis of the exit
feedback.
These are the cost effective means of not just collecting the data regarding the
recruitment, selection, placement and training practices but also helps in reducing
the employee attrition. These help in identifying poor practices in organization that
can be eliminated.
employees if wanting to re-join later can do so without any hesitation. These are
conducted just before the employees’ departure; hence employees can disclose their
Anyhow the employees while giving the interview may be biased and judgmental
about the company. He may also give wrong information since he is leaving. The
organization should spent equal time gaining feedback from employees throughout
their association with the organization. Besides, these interviews can sometimes
lead to character assassination and may divert from the main goal of conducting
such interviews. Thus, these interviews should be conducted professionally and as
website. This is a portal provided for the Employees’ Support System where
employees have been given various facilities like the online grievance redressal
mechanism where employees can write in their grievances online. Apart from this,
for the employees leaving the company also maintains an E-Separation Portal
which contains the employees name, code, designation, date of joining date of
resignation.
E-SEPARATION
To automate the HR processes, E-separation online system has been created for
automating the employees’ resignation process, helps an employee fill the Exit
Interview Report and complete his full and final separation from the organization
online.
It is a portal for entering the resignation request, relieving date, approval and exit
interview.
employee and thus give a better understanding of the attrition processes and
reducing it.
This model encloses the employee by 4 levels of strategies thus reducing the
This model is devised to reduce the impact of attrition by satisfying the needs of
• Ensure that adequate no. of people are there to carry on the process of
enclosed from the competitive companies by strategies at each level such that the
attrition and its impact can be reduced to the minimum. Plans differentiate on the
basis of tenure into short and long term as well as on the basis of usage into
It involves retaining the employees for a specified period of time called as the
break-even period so as to recover the cost incurred on the employee. For this the
minimum time period to recover the cost of employee should be calculated so that
After calculating the time-period measures should be taken to retain employees till
this minimum time period. For this companies adopt various measures. One such
measure is signing the bond between the employer and the employee.
It focuses on the work environment that enhances employee motivation for the job.
compensating the loss that happens to the employees in terms of losing their social
life owing to the nature of job in the organization. For this the following can be
done:
These are the steps taken by the management to minimize the impact of attrition
such that the firm does not face losses on the long-term basis. These steps include:
faster replacement.
These are the attempts by the telecom industry to reduce the attrition as a whole.
• To minimize the training costs, the industry needs to work with the
are being put in place and code of ethics is being stressed upon by
industry.
• A Common Database should be maintained by all the players of the
resources.
customers.
MANAGING ATTRITION
getting rid of unwanted employees, getting in new blood into the organization,
inflow of new ideas, new enthusiasm into the organization also developing a fear
into the minds of the people that any one can be thrown out which compels them to
work properly. But it becomes a problem when the attrition rate is abnormal.
Therefore, the HR Department has a very crucial role to play in managing attrition
and controlling it as well. Since it is the duty of the HR to bring in the right
candidate in the organization, provide him ample training, a good work atmosphere,
when attrition rate increases it is the duty of the HR personnel to study the reasons
of attrition, explain it to the management and along with it devise steps to reduce it.
The HR is the most crucial department in the telecom sector. It has a variety of
important roles to play right from recruitment of the person up to his exit from the
organization. For curbing attrition, the employee needs to start right from hiring.He
right kind of people. HR needs to identify the employees who would stick
from them.
HR has been identified as one of the key departments in the telecom industry. HR
devises different strategies to address short term challenges such as Attrition and
also long term challenges such as ensuring availability of skilled talent pool.
To deal with the attrition rate HR specialist feels that a scientific and analytical
According to the HR managers, Pay cheques are not enough to retain employees.
Other aspects like secure career, benefits, perks and communications also need to
be looked upon. One needs to focus on retention, making the work place healthier,
having education and further learning and training for the employees, treating
Companies need to go for a more diverse workforce, in terms of gender, age, race,
Going by the various surveys and exit interviews, professionals are switching jobs
either for money, career satisfaction and opportunity to work with newer
technologies. However when attrition was dealt minutely, various other reasons
have come to the forefront. It is found that lack of match between personal
concerned about the environment in the organization, his compatibility with the
Money is a higher priority amongst freshers with less than 3 years of work
experience. Professionals now look for more challenging jobs, exposure to newer
“In several cases, faced with a choice between more money and a
believe that developing higher skills will keep them ahead in job market and result
in better compensation. They start looking for a job with higher levels of
responsibility.
Thus the employee can also leave the organization for his growth both vertical as
well as horizontal.
• COMMUNICATION
company should strive to retain an employee in the same way it tries to retain a
Wipro Technologies
case of peer pressure, employee joins a well-known company. This act is a part of
brand building, which helps in attracting the right talent and retention.
Communication plays a very crucial role in retaining employees. It is said that the
organizations, which are successful in retaining employees, pass on their goals and
When any new entrant comes in organization and is in his probation period, is being
introduced to the office culture, this is the time that he should be exposed to the best
If the employees are informed about the regular happenings in the company,
employees will be confident about the future and not try to look for better options.
plan also help to manage attrition. Thus identifying the right training for the right
• CONSIDER FEEDBACK
It is important to take feedback from the employees on various issues and work
with the HR department to sort out the differences. Feedback can be got from the
employees:
management tools.
• EMPLOYEES’ ADVOCATE
One of the important reasons why employees leave companies is because of
CONCLUSION
Thus in a nutshell it can be said that Attrition whether good or bad can never be
good for any organization. It always shows the inability on part of the organization
to maintain its employees and also brings to the forefront many of the flaws of the
organization, which can prove harmful to the company and its image in the long
run. Various causes of attrition have been found out in the organization. Employees
themselves have stated various reasons for why they leave organization. These
causes have also been analyzed and a SWOT analysis on attrition has also been
conducted which explained in short the strengths and weaknesses of Attrition. Then
various methods for curbing attrition have also been devised and it was finally
found out that curbing attrition is actually not difficult and it is actually in the hands
of the HR manager who owns the maximum responsibility of managing and
curbing attrition. Thus attrition is bad and so are its consequences and managing
this evil has become more than a necessity for the organizations today.