How can businesses counteract India’s ‘Great Churn’?
A 2022 workforce benchmarking study found that attrition rates of employees in India increased to an average of 14 percent between October and December 2022. However, this figure could be leaning on the conversative side when compared to other reports that put the number much, much higher – at over 20 percent.
India’s workforce attrition problem – also known as the ‘Great Churn’ – is compounded further when the same study dived into different sectors and industries, as well as executive levels. It found that the information technology sector has by far the highest attrition rate, just over 27%, almost double the average, with the pharmaceutical sector coming in second at nearly 16%.
When comparing job roles, junior management positions were found to be the biggest problem area, followed by middle management; and the same study also showed personnel with 1-2 years’ experience were the most likely to look for new opportunities, with those with 6-12 months experience next in line.
So, with attrition rates painting an area of concern, how can businesses counteract this ‘Great Churn’?
Let’s start with a real-life example to bring light to this issue - Sunrise Industries (name changed to maintain anonymity) manufactures machined and assembled parts for various industry applications. Sunrise has seen rapid growth over the last three years, doubling in size, and aims to grow three-fold over the next three years.
Sunrise recognises the importance of retaining and attracting talent to fuel its growth. However, over the last 2 years, the organisation has seen high levels of attrition in its junior and mid-level workforce. Attrition levels are in the range of 30 to 35% and 20 to 25% respectively. A significant portion of this is contributed by employees leaving within the first 12 to 18 months of joining!
As the figures above show, Sunrise is not alone in its high attrition levels. Also, add to this the portion of the workforce that has decided to be “quiet quitters” too, and the problem becomes even more grave.
India's booming economy, characterised by a rapidly growing GDP, is a double-edged sword for employers. While this growth creates exciting opportunities for businesses, it also intensifies the competition for skilled talent. With more options readily available, employees are less hesitant to jump ship if they feel undervalued or dissatisfied in their current roles.
Also read: Top talent resigns first when new hires get paid more
Attrition – Typical response
There will always be natural attrition, which can be minimised. Our focus should be placed on eliminating attrition which can be attributed to factors that can be identified and controlled.
Typical responses to reduce attrition, and improve employee engagement commonly address issues about a compelling workplace experience that fosters growth, job purpose and meaning, work-life balance, workplace culture, alignment of skills and roles, compensation, and benefits, to name just a handful of approaches.
There is also a problem in applying these more standardized approaches to employee engagement. Given the multi-generation mix of the workforce, leaders must master the art of code-switching, tailoring communication, engagement, and incentives to each generation's unique expectations. Yet, it seems that these approaches are not working, given that the attrition challenge still exists. Maybe it’s time to try a new approach.
The retention puzzle – What’s the missing piece?
Research shows that one of the primary reasons for churn beyond compensation and organisational alignment is to do with the day-to-day interface and work environment.
We have seen several cases of new joiners not “blending in” despite going through the induction and getting the required support. They eventually leave or become “quiet quitters” biding their time. This phenomenon is not restricted to new joiners only. Some team members feel unsettled when a new manager joins. In many cases an internal transfer and/or promotion leads to poor performance and/or “fit” issues despite the employee being “functionally competent” and possessing the necessary leadership and behavioural competencies. We often see natural work teams and project teams becoming dysfunctional and failing to deliver the outcomes expected.
A close look at all these cases shows that somewhere the “change” of organisation, function, team, position or a natural team mix leads to “coping behaviour” resulting in an undesired response.
What is the KAI?
Our different ways to be creative, from being flexible to thinking of new things, are part of us, not affected by how smart we are or how we grew up. The Kirton Adaption-Innovation Inventory (KAI) points out these tendencies. When our way to solve problems clashes with others', problems can happen. "Coping behaviour" means changing our way, which is often hard and takes a lot of time. Leaders can make this easier by reducing the need for change and helping people work together well. KAI has almost 50 years of research which makes it good at guessing when teams will fight and making them work together better.
Employee Journey: Factoring in one’s problem-solving style
Understanding how people solve problems is often forgotten in organisational management. Here's how KAI can help at every stage of the worker journey, reducing people leaving by making them more involved:
When new workers join, finding out their problem-solving styles helps set expectations and make it easier for them to fit in, preventing post-hire dissonance.
When people move to new roles or get promoted, the focus is usually on how well they do and if they're a good fit. But their way of thinking is often ignored. For example, moving a good problem-solver to a role needing new ideas might cause problems because their way of thinking doesn't match.
Realising how people solve problems helps companies handle people's behaviour well and stops them from getting bored and not working. Valuing different ways of thinking helps everyone work together and talk well even if they think differently.