Attrition

HR Articles - What is ?

Attrition is defined as a gradual, natural reduction in workforce without firing of personnel, as through retirement or resignation   as a result of continuous pressure or harassment.   

Gone are the days of retiring from the first job ever held. Employees expect more from their jobs, including a healthy working environment and a sense of accomplishment. For many firms, surprise employee departures can have a significant effect on the execution of business plans and may eventually cause a parallel decline in productivity.

It is the role of the manager, that most influences an employee’s decision to stay or depart from an organization. People will leave if they don’t like their manager-even when they are well paid, receive recognition and have a chance to learn and grow. Research shows the reasons for employee departures are: Employee/manager relationship, Inability to use core skills, Not able to impact the organization’s goals, mission, Frequent reorganizations; lack of control over career, Inability to grow and develop, Employee/organization values misalignment, Lack of resources to do the job, Unclear expectations, Lack of flexibility; no work life balance, Salary / benefits, The money is not even on the list of top 5 reasons.

IT professionals are switching jobs for money, career satisfaction or the opportunity to work with newer technologies. Other reasons can be the lack of match between personal requirements and organizational culture was quite prevalent.

Calculating the Cost of Attrition

Measuring the cost of employee turnover can be a real challenge and a real eye opener. It includes both hard and soft costs, direct and indirect, as well as replacement costs. An organization might experience loss of productivity, overtime pay to those covering job duties, hiring costs, and recruiting fees.

Costs of turnover

Employee turnover adds to employers' costs in four ways:

i, Direct costs, for example of newspaper advertisements;

ii, Management time;

iii, Lower productivity both by a new employee while he or she learns how to do the job and by supervisors and experienced workers who are involved in their training;

iv, Loss of capacity while a vacancy is unfilled.

Basically, when good people leave an organization they take their training and knowledge, and often times, relationships with them.

Source: HR Concepts

Compiled and Edited by

Mr. S. Murugesan - Lecturer

Dr. P. N. Narayana Raja - Principal

Madurai Institute of Social Sciences

(Run by: DVR Foundation for HRD)

Madurai, Tamil Nadu, India