Case study on, "Companies attrition rate"

Hi all,

I am here again, 

Today, I am going to talk on, how attrition rate should be kept low.

Various companies have various policies, and a set of people might be there to ensure keeping the attrition rate at its lowest. 

But before taking a dive into this,  let's first understand,  "What is attrition and attrition rate?".

Attrition:

Attrition means, "The process of losing someone from the mass with the natural process, such as retirement,  personal reasons, elimination,  etc.

Attrition rate: 

Attrition rate is the rate on which employees are leaving. This is the ratio of employees leaving the organization to the average number of employees. 

Formula : 

Attrition rate = (No. If employees left/Average no. Of employees)*100. 

Suppose,  A company  has on an avg 5000 employees and 100 people are leaving.

Then,

Attrition rate=(100/5000)*100

Let's simple this equation, 

Attrition rate =(100*100)/5000

=10000/5000

=2%

Means 2% is the attrition of this example. 

Now, 

Let's move to the factors which helps company to keep attrition rate low.

1) Salary hikes: 

Salary is something more close to an employees mind, and whatever may be the current salary, that is not enough and the employee thinks himself as underpaid. 

When a company give frequent salary hikes, the employees wil certainly look for the improvement areas in himself or herself,  rather than finding new jobs on anywhere.

Which in turn will stop many employees to think about the company switching. 

2) Work adhere to interest:

We often see young freshers always ask for the role of the developers, and a justification(that is actually correct) is given from manager or HR, that you may have done great piece of work during college days, but on enterprise level things are different,  So please put on some experience and then come up with request for role change.

But when same person after having an year's comes to HR or manager, he/she should have been offered what he/she demanding. To make it more valuable,  tests or assignments can be taken. Yet, things doesn't change after having that experience. 

Many employees are okay to work with less salary but in the work of his/her interest.

3) Nice atmosphere:

Some offices are green, no doubt about that, but mostly, companies now-a-days have high skyscrapers, with high quality facilities. 

But it's not necessary that everyone like to work in the same office. Scientifically it is proved that, surroundings affects a person's mind. 

So companies that have nice atmosphere could be helpful to keep employees motivated.

Above one's are some of the things that are to be done in employees favor. 

Now let's think with business perspective. 

4) Keep employee profile simple and not versatile:

The way it looks nice and mostly appreciated as a fascinating term, but a big pitfall of this versatility is that, an employee can never master himself/herself in something, and will have many skills but not good in any of them.

In marathi, there is a saying, "Ek na dhad, bharabhar chindhya", it means, not focusing on single piece and making garbage of everything. 

With above versatility,  you might get appreciated by many people,  but while going for an interview,  you may find yourself in trap, as you are versatile but don't know, which part you want to continue. 

5) Keep recruit number high:

As we have seen earlier,  the formula of attrition rate, it suggests, the more employees you are having the less attrition rate will be, as attrition rate is inversely proportional to the average number of employees. 

So more the employees, less will be the attrition rate.

6) keep long notice period:

By doing this, company not only confirms that, an employee must not get settled on his/her decision to capture and change other job.

Wait, 

Let me explain with an example,

Suppose company  XYZ is hiring and have urgent need of a manager, So needed a manager within a month, in company PQR, employee E is working and he like to apply for the XYZ company, but the notice period of PQR company is 90 days, so employee E, could not apply for the job.

Finally, these are some points, which are valuable to keep attrition rate at low for aby organization.

I hope you will find it helpful

Thanks!

-Shubh_A_M