Of all the metrics that we slice and dice on a regular basis, attrition has to be one of our most advanced. We have at least half a dozen attrition percentages that we calculate, my favorite being regretted and unregretted attrition. There are of course more interesting terms such as infant mortality (% of people leaving within 6 months or a year) and turnover cost (the $ impact of losing an employee), however, for the purpose of this post, let’s focus our energy on dissecting the much-loved basic – regretted attrition.
Almost every company that I know has got this wrong. A layman would assume that regretted attrition would refer to the people the organization actually regrets losing. Rarely! By definition, regretted attrition refers to those who leave the organization of their own accord. It does not include employees who have been asked to leave or those bucketed as poor performers. In purely financial terms, this definition probably makes sense. The cost of replacement of average talent is higher than the cost of retention, or is it really?
Anyone would tell you that some regretted attrition is healthy. For e.g. in one particular skill set, a churn of 15% is considered regular and is not something I would worry about or ‘regret’. In fact, I would be worried if it was lower. The team funnels at higher job levels, I do not have enough space for everyone to be promoted nor do I want to push up my manpower costs by people staying at the same level for too long. There is also abundant fresh talent available at lower costs. It makes good business sense to keep the churn at 15%. Yet for someone unfamiliar with the team dynamics and market availability, a regretted attrition of 15% might be worrisome.
Under no circumstance is regretted attrition, the way it is used today, unimportant. It gives a good view of what churn looks like. However, I am often left looking for data that tells me who my ‘regretted’ attrition really is. Unfortunately, in most organizations, this number does not exist. At this point, I’d like to point out that top talent attrition alone does not compromise of ‘really regretted attrition’ nor does infant mortality. It is a combination of multiple secret ingredients. Maybe that is the reason why it’s ignored by most organizations.
There have been attempts to demystify this data. Some organization classify them as critical talent and then eventually lose track of the factors that led to the classification. I too have dabbled in this space and hence have some ideas around it. Welcome to “Project Cheesecake” – demystifying the next big data point in your organization.
Here is how you go about it:
- Make it a part of your analytics dashboard. I know this is immensely cumbersome since we are yet to figure how to define ‘really regretted exits.’ You have the base but the numerator is still a mystery.
- Give your managers a free reign to mark exits as really regretted. If a manager regrets losing the employee, he marks it as ‘really regretted’ and adds a footnote as to why he feels that way. There are no limitations as to what the reasons should be. It could be because he was a good friend or just got the boss tea every day. Don’t judge.
- Once you have a significant number of ‘really regretted’ exits (I recommend 100+), dig into the reasons. Create a list of the top ten reasons why an employee is classified as ‘really regretted’. Was he a much-loved team player? Did he hold information that few others did?
- Once you have the list together, managers will now pick one of these reasons when marking someone as ‘really regretted’. They continue to have a box marked as ‘Others’ where they can type in a reason that doesn’t fit the defined set. Let them. Again, don’t judge.
- One year down the line, you have enough data to formulate a more concrete list of the characteristics of those who fall into the ‘really regretted’ bucket. More importantly, you now have a data point that is truly worth worrying and taking action on.
It is a simple idea and one that can go a long way in understanding talent. It also enables the design of targeted retention mechanisms. So go ahead and find who the organization truly regrets leaving. That number is more valuable than what your regretted attrition percentage tells you today.