Blog: Pay attention to attrition

Strategic HR

Pay attention to attrition

Early attrition is a drain on resources and shows the acquisition ROI in poor light
Pay attention to attrition

The CHRO of a mid-sized people-centric organization once shared with me some alarming attrition data. It showed that the highest rate of attrition existed in employees with a tenure of less than two years. The majority of these fledglings were campus hires. They were also the brighter ones.

Departure interviews indicated compensation and better prospects as reasons for leaving. While the latter reason could’ve meant anything, the former came as a surprise. Their entry-level compensation was very competitive and their benefits package was the envy of the market! So why then…?

By tweaking the exit interview structure, new, deeper insights emerged.

What wasn’t working:

Job itself: The nature of work allocated in the initial 18 months was not fulfilling enough. Supervisors were hesitant to give the eager newbies any independent responsibilities. It was a vicious cycle.

Status in the org structure: They were at the bottom of the official pyramid in an organization that took hierarchy very seriously. And if that was not enough, lackluster designations added to the overall humiliation.

Communication: From bosses to trainers, everyone ‘talked down’ to the freshers. Communication was mostly one-way – do this, do that, come here, go there! Even the orientation program was dry and compressed into two days of information overload – and the heavy lunches caused food coma…Hardly welcoming!

Compensation: The initial pay was competitive, true, but from year two, it tabled out. Batch mates were earning more. Worse, some co-workers, doing exactly the same job, were higher paid too – ‘tenure’ was a sorry excuse! It was time to bail out!

What was working:

Training and learning opportunity: Bringing everyone up to speed was a huge challenge – both core and soft skills needed work. Degrees rarely guarantee competence. Everyone appreciated the company’s efforts on training.

The power of the brand: The brand was well known and respected. The logo on the business card evoked awe amongst family and friends.

Exposure to multiple geographies: Traveling to different parts of the country, meeting new and interesting people – customers, vendors, colleagues – was exciting and eye-opening!

Benefits: The late founder of the organization had insisted on investing in benefits instead of just cash pay. It was a sound decision! Relinquishing the benefits package was, admittedly, a difficult decision.

Basis these inputs, a strategy was developed, which included:

Campus hiring: Most B-school graduates believe they’re CEO material, from day one. Also, every organization wants to hire from the top-rated institutions. Terrific! However, the aspirations of candidate and company – and the accompanying attitudes – need to be mapped to reality. Is the role on offer, its prospects and career path, in line with candidate expectations? The answer changed the going-in strategy. As well as the target list of B-schools…

New hire orientation (NHO): From the two-day cram session, the NHO was spread out over a month. Small groups of freshers visited the various divisions of the company, seeing, conversing, questioning and understanding the businesses.

Challenge: Supervisors who requisitioned fresh head count were asked to prepare a list of projects their new hires would be expected to deliver in the first year. Projects that demanded research, analytics, interactions with customers, vendors, colleagues. Project timelines were tight and unrelenting. Successful implementation of the project(s) was fundamental to confirmation of services.

Compensation communication: A detailed face-to-face communication program detailed the Compensation and Benefits structure. Interestingly, when everything was monetized, the package looked very competitive indeed! An attractive digital employee handbook was placed on the intranet.

Designations: The company decided to introduce external designations. LOB Heads were given access to a pool of market-benchmarked titles. These were mapped to employee grades to maintain equity and sensitivity. Everyone was happy! Egos were massaged – marriage prospects got enhanced too!

A Formal Mentoring program: Senior leaders were roped in as mentors. Supervisors could nominate the brighter of their charges to this program.

The strategy succeeded because the CHRO first reached out and sought the buy-in of all the LOB Heads – with some compelling number-work. Everyone agreed and signed their acceptance! This alignment was vital. Second, the HR team across the country was rallied together and trained. Third, the PR Head was roped in to develop a friendly communication and visibility campaign.

With all the necessary ammo in hand, a slick implementation was possible. Orchestrated by HR, communicated by PR and executed by a nominated team of SPOCs. Positive results started showing up the following year itself!

By preventing tragic fledgling deaths, companies can enhance engagement and enjoy substantial financial benefits. And the incremental costs are virtually nothing. Well, except for my fee, maybe!

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Topics: Strategic HR, #Blog

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