Blog: The attrition advantage: Use – don’t shoot – the messenger

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The attrition advantage: Use – don’t shoot – the messenger

Voluntary attrition is not just valuable as an indicator that the organizations health is stressed but it can yield substantive benefits too
The attrition advantage: Use – don’t shoot – the messenger

It’s been a long time since I heard this fable by Aesop (when people didn’t think it was a misspelt Employee Stock Option Plan), so I may have a few details wrong. There was a stag called Techmajor who stood admiring himself in the pool of public perception. He was the proudest of his antlers, one of which he named 'foreign' and the other he named 'postings'. But he was ashamed of his four legs which he derisively called Vo, La, Tree and Shun. He went to Dr. Comp, an orthopedic surgeon, and paid lots of money to get his legs cut shorter. One day a lion called Business Downturn (no more names, I promise) started chasing Techmajor. He ran as fast as his now shortened legs could carry him. Unfortunately, his antlers got caught in a trump tree (well, just one more) and he became lion protein.

The point is not to glorify voluntary attrition and never seek to curb it. But if it is simply suppressed before mature people managing processes are in place, artificially lowered attrition can make the organization’s health worse instead of better. As we shall see, during this phase of immature people systems, letting attrition continue may not be such a bad idea after all.

Attrition is the symptom – not the disease

A harried business leader in a start-up asks the CHRO to do something about the very high levels of attrition. So far so good. A sound CHRO will already have worked out an HR strategy which plans on putting a series of foundational and then increasingly sophisticated people processes and practices into place. If she has carried the CEO and Business Partners with her in formulating the strategy, it should be possible to explain at what stage these processes will have enough traction to retain and engage an increasing proportion of high performers. These will take time. When the CEO demands immediate solutions, some CHROs are only too eager to present quick-fixes. A classic one being a demand for higher staff compensation. Not only does this put the ball neatly back in the CEO’s court but the enhancement will ultimately raise CHRO’s pay-boat as well! Even if such fixes work temporarily, they have not tackled the root causes of attrition. It is like treating typhoid with Aspirin.

In fact, voluntary attrition is not just valuable as an indicator that the organization’s health is stressed. Given below are some examples of the more substantive benefits it can yield as well.

Restructuring with minimum distress and cost

Organizations at the stage of evolution where their people practices do not provide adequate adhesion for talent are also likely to have fluctuating workforce requirements or lack the predictive ability to avoid downsizings and layoffs. In such situations, attrition provides the least expensive means of bringing down the headcount and, the higher the attrition, the quicker the process. 

Clearly this does require an investment in training some people before deploying them to new roles but this is generally more economical than redundancy payouts and invariably less damaging to morale. It may be objected that such deployments don’t always place people with the right aptitude for the roles they are to occupy. In reality, I have found people frequently discovering the right aptitudes in themselves when the alternative is redundancy.

Stopping second-best suppuration

Organizations that operate a meritocratic culture need to be prepared for the fallout when their top talent competes strenuously for positions of leadership.

Sound selection programs don’t stop only at identifying the best but go on to counsel and place the 'just missers' into other challenging roles.

Organizations that have not yet developed such comprehensive selection solutions risk repeated disruption because it is the almost-as-good contender who can spread the worst disaffection and cynicism.

As Exeter points out (in Shakespeare’s Henry VI):

"When Envy breeds unkind division: There comes the ruin, there begins confusion."

Far better, in such situations, for the ones who don’t make the cut to find careers elsewhere than that golden handcuffs and other attrition alleviators shackle them to the enterprise while they are still smarting from their loss.

Market-managing careers

Even long-established, people-friendly enterprises are hard pressed to establish robust talent management processes, where the organization’s future needs for leaders is met while individuals can make career choices that best permit them to develop their potential. The plight of start-ups (and of other corporates that have not bothered to develop people processes much beyond recruitment and on-boarding) can well be imagined. In such situations, individuals can face frustration, stagnation and dissatisfaction even though the organization may be growing. Till these processes are satisfactorily implemented, it is preferable that discontented employees take their aspirations to other organizations which are better equipped to fulfill them. In some cases, the same employees may come back with varied exposures, wanderlust satisfied and a true appreciation of what the organization they initially left has to offer.

There is a secondary benefit of departures in organizations where business growth has slowed (or where productivity gains are sufficient to mop it up). Opportunities for progression are created at the next lower level which may otherwise not arise for long periods, especially when the workforce is homogeneously aged.

Preventing disaffection from coagulating

The above is only one instance of attrition taking festering disaffection out of the system before it can do much harm. In the absence of well-developed people processes, this is perhaps the most valuable service attrition provides. There is some similarity to an amputation saving a gangrenous limb from infecting the rest of the body except that here (in the case of voluntary attrition) the disaffected part excises itself. It is important, of course, to ensure that the best performers are still retained and only others take the exit option. This much is expected from HR even before more sustainable attrition reduction processes are in place.

One of the ways in which untreated unhappiness reveals itself is through unionization in employee categories that were so far immune from it. What is happening today in the tech space will immediately come to mind. While unionization in this sector owes its origin to far more egregious people management errors, most of these majors are still actively trying to buy retention, which actually aggravates the problems the current downturn in their business is causing.

Sequence is the key

It is worth reiterating that the argument we have been pursuing applies only to voluntary attrition. Forced attrition (or the sudden discovery of the precipice at the end of the bell curve) in fact adds to disgruntlement instead of relieving the pent up pressure. 

It is equally important to note that this is not a call to give up the battle for retention. It’s just that the battle must be fought with sustainable strategies which make a long-term difference to the attractiveness of the organization. In the meantime, attrition is preferable to bolting down unhappy people to stay through short-term (usually monetary) fixes. 

People of my generation will remember the Simon and Garfunkel favorite, 'Sounds of Silence'. I hope they will forgive me for tweaking its opening lyrics:

Hello attrition, my old friend,

I've come to visit you again.

Because when the vision starts sleeping

And people processes are only slowly creeping,

It's not so bad if you still remain

To relieve the strain,

And restore a sense of balance.

Topics: Strategic HR, Talent Management

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