Attrition

The latest big problem staring at India's top internet companies is attrition, especially in their senior ranks.

Flipkart, Zomato and Ola, which have been aggressively recruiting top talent with the millions of dollars they have raised, are grappling with an exodus of management-level executives.

Consumer internet companies in India "are growing so rapidly that they haven't built the fundamental concept of retaining people, especially at the top-level," said Sunit Mehra, managing partner at Hunt Partners India, an executive recruitment company.
ET Bureau | Updated: Sep 28, 2015, 05.07 PM IST


Employee attrition is a situation faced by an organisation or employer when new employees joined leaves the organisation to join other organisation when he gets offers. Generally employee attrition will be very high when there is a pressing need of employees in a particular industry due to mass retirements or expansion of organisation. Normally company faces higher attrition rate when there are more employment opportunities in the market by employers. At one point of time software industry has faced high attrition rate by employers due to large openings globally in the software industry due to the demand for software products by all industries.

Contemporary Issues




Dissatisfaction with job on rise; 80% looking for job change: Survey

By PTI | 19 Oct, 2016, 18:27 hrs IST

Dissatisfaction with job is on the rise and employees blame poor work-life balance for this state of affairs, with a whopping 80 per cent of them looking for a change, says a TimesJobs survey.

The findings of the 'Job Satisfaction 2016' survey by TimesJobs.com revealed that 60 per cent employees are not satisfied with their current job, while 80 per cent said they are looking to switch jobs.

As per the survey the level of dissatisfaction has increased year-on-year. In 2015, 78 per cent employees stated they were happy with their current job, although they were still open to other opportunities.

The report further said of the 60 per cent unsatisfied employees, 80 per cent belong to the junior level, 60 per cent are from the middle level and 40 per cent respondents are from the senior level profiles.

Among the respondents who claimed to be unsatisfied, 50 per cent count poor work-life balance, 30 per cent state meaningless work and 20 per cent say poor salary as the reason for this dissatisfaction.

Of the respondents who claimed to be satisfied, 45 per cent state their work-life balance as the major reason for their job satisfaction. 35 per cent attribute a good salary and 20 per cent say a good work profile is the reason for their contentment.

Employee attrition is one of the critical problem which is faced by an HR manager during these days. In an ideal situation an employee consider multiple comfort level while working in a office for e.g. employer's goodwill in the market, remuneration, future growth, working condition, co-workers, current role's scope in the market & most important future stability with the organization. In a survey, approximate 70% of the working population in India is not happy at all due to one of the aspect (as mentioned aforesaid) which is not fulfilled while working in a organization which caused higher attrition rate.

In broad term, attrition is a situation which employer face when employee left the organization due to job dissatisfaction, new opportunity in the market, retirement & natural cause (death/illness).

Now a days this is one of the most important question which is asked by higher authority to HR people…."Why our attrition rate is higher than other company". Earlier it wasn't important for the organization, whether their employees are committed or not, but now the time has been changed. The company cannot afford to lose its best employee to competitors. Therefore, HR team conducts EXIT interview when an employee left the job to get the information about one's decision to leave an organization. It is a paramount consideration for a HR team to think, why people are vacating their positions. Still Human Resource team face the challenge due to wrong information provided during EXIT interview.

Example:-
KINGFISHER AIRLINES  non payment of wages for a long period, almost 40% of its staff quit for other jobs between march 2012 and September 2012. Strength of staff gone down to 3766 employees from 6185 employees in between aforesaid period. Non payment of salaries was only reason for quits by Kingfisher airlines staff. Finally kingfisher airlines became king of attrition.

Common reasons experienced by HR manager are discussed here:
  • Insufficient remuneration and employee benefits paid to employee by his employer.
  • Mismatch of job profile.
  • Job stress and work-life imbalances.
  • Odd working hours/Early morning-night shifts.
  • Entering of new companies and sectors in to the market.
  • Lack of authority provided to accomplish ones task.
  • Monotony of job.
  • Lack of proper facilities provided by employer
  • Lack of proper environment.
  • Poor concern about employees by their employer.
  • Poor promotion policies or lack of promotion for long time.
The list can be endless but the reason why employees leave the organization is vary according to the nature of the business. The work should give to them the level of the employees and the nature of the responsibility he/she can handle. Therefore it's very challenging task for an HR expert to cope up with this situation and retain talent with an organization. 

High attrition, suicides in  the Indian Boarder Security Force 

Surprisingly Boarder Security Force (BSF) of the India has experienced high attrition rate for this the Indian Government have commissioned study by IIM (Indian Institute of Management) Ahmedabad to know the reasons behind. The finding of the study reveled very basic reasons for high attrition in The Indian BSF that includes core reasons like poor working condition. Long working hours in their job with postings in difficult areas such as remote locations like forest areas where there are no proper facilities which is effecting their health and sometimes threatening their life, especially in forest areas BSF personnel are much exposed to risk  by malaria due to mosquitoes bites rather than enemies bullets. IIM study also found other reasons like lack leave availability when required by BSF, most of situations leave was granted  after requirement  is over, that leads to dissatisfaction and feeling of deprive form family altogether eventually triggering unbearable stress among them, sometimes there were suicides out of extreme depression but known to outsiders. 

Adding to the existing reasons for attrition, IIM study found that delay in Promotions is also a major trigger for quits by the BSF personnel.  Normally it takes 24 years of service  to get promotion for next position whereas in the Army it takes 13 years to reach same position which is major demotivating factor and motivating factor for quits in BSF. 

These existing grievance made senior BSF officers to approach Honourable the High Court of New Delhi especially regarding delay in promotions.


Facts [+]

Attrition in India to top world charts in 2013; one in four employees to change jobs
One in four employees in the organised sector in India is set to switch jobs, the highest attrition rate globally,

In I
ndia especially in insurance sector, period between 2002 and 2008 was rapid expansion due to stepping of many member of players into this insurance sector. this has caused high inflation in employee salaries and also high attrition in insurance sector due to many number of openings offered by new entrants. In this period due to abundant openings there was an unprecedented war of talent in the insurance sector to find the right people to join their organisation especially for the key positions.

India,In the first three quarters of the financial year 2011-12, more than 3 lakh active insurance agents have quit the profession. Insurance companies such as Life Insurance Corporation of India (LIC), ICICI Prudential and HDFC Life have seen mass exodus owing to lesser incentive to agents when compare with other similar sophisticated industries.

Associated cost with high Attrition:

Talent loss:
  • It includes the cost of lost knowledge, skills and contacts that the person who is leaving is taking with them out of your door.
Recruitment cost:
  • The cost of advertisements; agency costs; employee referral costs; internet posting costs.
  • Calculate the cost of the manager who has to understand what work remains, and how to cover that work until a replacement is found.
  • cost of the various candidate pre-employment tests to help assess candidates' skills, abilities, aptitude, attitude, values and behaviors.
Training cost:
  • It includes the cost of orientation in terms of the new person's salary and the cost of the person who conducts the orientation.
  • It also consists of the training.
  • Calculate the cost of various training materials needed including company product manuals, computer or other technology equipment used in the delivery of the training.

    Reasons for high attrition at BSF & CRPF

    Facts 
    • 44000 paramilitary personnel have quit the force since 2009.
    • 36,000 of them belonged to CRPF & BSF.
    • 70% rise in CRPF & BSF attrition rate in 2011 over 2012.

    Reasons For Quits

    • Postings at difficult areas.
    • Fighting with dual enemies Maoists and malaria.
    • Long working hours leading to sleep deprivation.
    • Lack of leave availability in time they required.
    • Lack of basic healthcare.
    • Poor promotional policies and salary revisions.
Motivational cost:
  • It refers to the cost arises because of motivating the other employees to retain them in the organization in terms of increasing their salary and time.
Lost Productivity Costs:
  • As the new employee is learning the new job, the company policies and practices, etc. they are not fully productive. Use the following guidelines to calculate the cost of this lost productivity.

How To Retain Employees:

Retaining employees has always proved to be fruitful across many industries rather than to search for new & efficient talent. So to gain the fruit of this tree, different companies devise different strategies for retaining their employees. simply hiking ones salary in an endeavor to retain your valuable employee will serve no purpose as today's workforce has a lot going during his/her decision making process and its certainly not restricted to just pay.
Facts [+]

Judhajit Das, Chief of Human Resources, ICICI Prudential Life Insurance Company, explained what had transpired in insurance since it was opened up to private players over a decade ago.

He recalled that the period between 2002 and 2008 was one of rapid expansion, focused on top line growth. Multiple players had entered the field. High increments had led to wage inflation and high attrition, and rapid promotions had caused job inflation. The key proposition for people to join was that insurance was a fast-growing sector, and one would get accelerated career growth. There was an unprecedented war for talent. Circa 2006, ICICI Prudential Life was hiring about 25,000 people a year.

From a staff count of 30,000 in 2007, ICICI Prudential Life is down to 14,000 people today. And the numbers are not going up in a hurry. For Das, who has been with the company since 2000, it's been a roller coaster ride. “We did right sizing in a calibrated manner. Every six months we would look at performance and take a call on the bottom 10 per cent. It was not that we simply brought down numbers,” explains Das, in conversation with The New Manager.

Highest attrition in hospitality, aviation sectors: Survey2012:
Hospitality and aviation sectors are witnessing the highest attrition rates among employees, making retention of critical manpower resources a key challenge, says a survey.

According to a study by MyHiringClub.com, the average attrition rate in aviation and hospitality in fourth quarter of 2011-12 was 22 per cent across sector, a rate that has increased by 8 per cent from the from the year-ago period.  In comparison, attrition rates in IT and ITeS sector had fallen from 24 per cent in fourth quarter 2010-11 to 18 per cent in same period in 2011-12.

Similarly, in the auto sector, attrition rates fell to 10 per cent in January-March quarter from 11 per cent in the corresponding period in 2010-11. "At the entry and mid-management level, attrition rates in aviation and hospitality industry have doubled over the last three years. This is happening due to perceptions of being poor pay masters, delay in salaries, job insecurities and little concern for employee welfare.

  • Insurance schemes for the employees and some of there family members
  • Leased accommodation
  • Transportation facilities to & from office.
  • Personal healthcare like medical attention for self & family
  • Recognition of merits & rewards
  • Participation in decision making
  • Memberships of prominent social clubs.


Attrition levels fall due to uncertain economic environment: Study

July, 2012: Indian companies  has witnessed a sharp decline in the employee attrition levels during the months of April-June as employees are becoming cautious about changing there jobs due to uncertain economic environment.

Among the 11 industries surveyed, aviation and hospitality sectors have seen highest attrition rates among employees, while the rate is lowest among automobile and manufacturing areas. However, all these sectors have witnessed a decline in attrition compared to previous quarter.

The aviation and hospitality space saw the highest attrition rate of 16 per cent in the first quarter of 2012-13, a fall from 22 per cent in the the fourth quarter. The banking and financial services sector witnessed an attrition rate of 15 per cent against 20 per cent in the preceding quarter.

In addition, IT and ITes sector's attrition level stood at 13 per cent in the first quarter, followed by FMCG (11 per cent), real estate (10 per cent), telecom (eight per cent), automobiles and manufacturing (six per cent). Employees with experience of up to five years had the highest attrition rate of 32 per cent, while it was 27 per cent for those with 5-10 years of experience and 22 per cent in the 10-15 years' experience bracket. Interestingly, senior-level employees (experience more than 15 years) had an attrition rate of 19 per cent. The survey was conducted among over 8,500 employees and 325 employers between May and June this year.