The Challenges of Managing Attrition in Contemporary Organizations

The Reasons for Attrition

In recent months, there has been a spate of news items about how attrition is taking its toll on many organizations in Asia and especially in the IT sector in India. Whereas in the west, because of the recession and the gloomy economic conditions, attrition is no longer an issue and instead, layoffs are the order of the day, in relatively better performing Asian countries, attrition has come back to haunt the companies. There are many reasons for attrition and usually research has shown that the most cited reason is that the employee is unable to get on with his or her manager. The adage that employees leave managers rather than organizations is a favorite catchphrase among management experts and organizational behavior theorists. Having said that, it must be remembered that attrition is also because of other factors like employees being unhappy with their salary or the raise that they get after the appraisal period. Further, attrition can also be because employees perceive that the current organization is not doing well and hence, they are on the lookout for better performing peers and competitors. Apart from this, attrition is also because employees find jobs in other companies that are more fulfilling and match their skill sets and profiles.

The Red Lists and Risk Management

After analyzing the reasons for attrition, it is time to look at how companies and the HR managers can manage attrition. In many organizations, managers are asked to identify potential cases of attrition before the employee actually puts in his or her papers. For instance, many multinationals have the practice of asking their managers to prepare lists of potential employees who are likely to quit. This “red list” is then sent to the managers’ supervisor and the HR manager so that when the employee actually quits or even does not quit, the organization is prepared for the quitting event or counseling the employee against quitting. The latter scenario happens when the employee is deemed valuable to the organization and the manager identifies such attrition as being a loss to the company. Further, attrition is also managed by the HR department organizing periodic one-one sessions with the middle management and the managers having the same one-one session with their employees. The rationale for such sessions is that the employees would vent their frustrations or lack of comfort with the manager or with the organization and hence, ways and means can be found to address the employees’ concerns.

Some Real World Case Studies

Attrition has become a challenge for companies like the Indian IT major, Infosys that has seen unprecedented attrition among its employees in recent months. The situation has deteriorated to the extent that the company is having to address investor and analyst queries about this issue and has had to come up with a plan to tackle the same. The point here is that attrition in well-known companies affects their brand value and their brand image and considering the fact that companies like Microsoft and Unilever as well as P&G are respected globally for their HR practices, attrition in these companies dents the carefully crafted image of being people friendly. This is the reason why the blue chip companies take attrition seriously and to the point where Steve Balmer (the former head of Microsoft) is reported to have gone through all the exit interview forms of the employees.

Concluding Thoughts

Finally, attrition is also economically damaging to the organizations as the replacement employees have to be hired at a cost and trained again at a cost. Further, losing employees who are well versed with the organizational culture can mean a loss of valuable resources that lead to a situation where the organization stands to miss the potential value adding activities of the employees. It is for this reason that HR managers and organizations take attrition seriously and consider ways and means to curb the same.