Attrition: The truth behind the figures

By on May 30, 2012

Attrition is one of the most discussed issues in today’s corporate scenario. Whenever I come across any news related to attrition, the two facts that draw my immediate attention are that ‘attrition is bad’ and ‘attrition rate is on a hike and reached x%’. But somehow I always find both these facts partial and misleading. Attrition or employee turnover basically relates to the employees’ departure from the company due to resignation, retirement or death. While retirement is a planned cause of attrition, death and resignation are unplanned. However, death is unavoidable and nothing can be done; so resignation is the only cause of attrition that can be controlled.

Let’s start with finding out whether attrition is really bad?

Well, yes attrition leads to losing out employees at times when human resources are an organization’s most important asset. But what about losing the non-performers?

Zero attrition

We can always find employees who cost more than they actually contribute to the organization. Attrition is not essentially a negative phenomenon as it is usually conceived. Zero attrition is also not a good sign for an organization. Zero or very low turnover rates generally reflect two situations: either the employees possess low skills and they cannot get hired by any other organization; or the Human Resource Department of the company is ineffective in identifying poor performers. The first situation reflects a reduction in voluntary turnover, the second reduces involuntary turnover. But both these situations are undesirable.

Reporting attrition

Now let’s check the way attrition is reported to the masses. The business pages of newspapers are flooded with news on attrition but when I start reading them, what I can find is only a percentage! I wonder if a vital issue like attrition can be represented as mere percentage. There are no details about whether the employees that left the organization were performers or non-performers, key professionals or easy to replace ones, experienced or the fresh ones. There are even no details on whether they had been terminated or internally transferred, or they opted to resign. The details mentioned over there are not worth drawing any conclusion.

What would I do?

I feel the current competitive environments require a more practical approach to employee attrition. Rather than emphasizing on numbers, it must be the quality of attrition that should matter. The attrition rates should be accompanied by details like:

  1. The attrition rate of competitive firms in the industry
  2. The proportion of top performers in total attrition
  3. The kinds of jobs where attrition was the highest
  4. The ease of finding replacement in concerned job profiles which faced attrition
  5. The percentage of customers who were lost due to attrition
  6. The probability of future or followed turnovers
  7. The proportion of voluntary and involuntary turnovers out of total attrition
  8. The numbers or percentage of internal transfers realized during the period
  9. The performance of the departing employees during recent past.

I think attrition should not be an absolute measure of employees’ departure; rather it should be a comparative phenomenon. Though attrition as a threat has been researched vigorously, not much has been done in the direction of removing the myths and reporting attrition. On the basis of a little research conducted on current attrition scenario, and if you are too scared of attrition then I feel this issue needs an urgent attention. This is high time that misconceptions regarding zero turnovers must be checked and your organization starts following a qualitative attrition measurement system, rather than the quantitative one also, a in attrition reporting.


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