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Jyothi Singh
Hi, Can some one help me out, as to how we can calculate the attrition rate. Please quote with example. Also let me know how to over come the attrition level in the present scenario. Thanks, Jyothi
From India, Bangalore
Col
Hi,
In the articles section I have posted several articles on reducing employee turnover that may be of use to you.
There are several different definitions for turnover.
Which one do you want?
Attrition is typically number of departures in one year divided by total workforce. It is a very raw figure and of limited value as you include retirements and dismissals as well as voluntary departures.
My website has more on employee retention.
Col

From United Kingdom, London
Col
In order to limit the number of departures you need to know why people are leaving.
This is commonly known as diagnosing the causes of turnover.
Then you have to put in place measures that solve the problems.
In addition, it is sensible to improve your employee value proposition.
For more on this see www.colbrown.co.uk/Employee_Value_Proposition
Col

From United Kingdom, London
Col
Here is an article on diagnosing the causes of turnover.

Diagnosing The Causes Of Employee Turnover

Diagnosing the key drivers of turnover is crucial if you are to reduce employee turnover. An incorrect diagnosis and your intervention is highly unlikely to succeed.

Having analysed the available data on retention and turnover, you should have a good idea on those specific groups you wish to investigate, to see if you can establish the key drivers of turnover, and put in place appropriate solutions.

There are several different approaches to information gathering. It is usually best to use a combination, providing both qualitative and quantitative data.

Personally I would recommend, depending upon the precise circumstances:

conducting a small number of interviews

followed by two or more focus groups

then a questionnaire to a wider audience

and perhaps a survey if appropriate

Interviews

A good way of discovering relevant information is through one to one interviews. For an interview to be effective it should be conducted by a neutral third party.

There are advantages and disadvantages with this method of information gathering. Its major drawback is that it can be very time consuming and hence expensive. The other disadvantage is the lack of anonymity.

The main advantage is the ability to provide much greater detail than you would get from a quantitative approach such as a survey or questionnaire.

The key to interviewing is in being able to ask well targeted questions. Remember you don't want to know why employees in general leave, you want to know the main reasons why employees in this specific group leave.

Interviews can be structured or unstructured. In the initial stages it is wise to adopt an unstructured format so you can ask additional questions for more detailed information. Keep probing for extra clarity until you feel you have reached the source of the problem.

Interviewers need to have well developed listening skills to take on board relevant information, otherwise conducting interviews will be largely pointless.

Key points

prepare questions

dig deep for the real truth

listening is vital

do a test run of your interview

Focus Groups

Using a focus group can be an appropriate way of discovering some of the key drivers of turnover.

It is a good way to acquire qualitative information, rather the quantitative data that a survey produces. Focus groups are inexpensive when compared to say interviews and take less time to prepare.

A focus group provides an opportunity for a small number of people to discuss issues relating to employee turnover and retention. An added benefit of focus groups is that they can be used to generate new ideas, discussing possible solutions as well as diagnosing causes.

For larger companies you will need to conduct a series of focus groups in order to get a reasonable sample.

Key points

Requires a facilitator to pose the questions

Restrict size of each group to between 6 - 10

Ensure focus group is representative of targeted group

Plan broad topics though leave room to explore ideas

Explain the reason for the focus group

Avoid letting one person dominate

Ask why colleagues left

Ask why colleagues stay

Ask why colleagues would leave

Ask what would keep them from leaving

Nominal Group Technique

One particular type of focus group process is the nominal group technique. This is especially useful in determining the key drivers of employee turnover.

Key points

Group size 8 -10

Representative sample

Focus on why others would leave, not why they would leave

Create trust

Integrate the data from a series of groups

Procedure

Explain the ground rules

Each member of the group is asked to write down reasons why colleagues have left

The facilitator goes round the group asking each person in turn for their first reason

The facilitator uses a flip chart to document the reasons

They then repeat for each person's second reason and so on

These lists are then clearly displayed for everyone to see

Group members are then asked to choose the most important reasons after careful consideration of all those listed

They rank these in order of importance

Scores calculated by awarding a set number of points for no1, no2 etc, then totally the number of points for each reason.

Questionnaires

Questionnaires are commonly used as part of the information gathering process. They are a reasonable way of obtaining relevant information, though response rates are often disappointing.

Questionnaires need to be designed carefully to be effective.

They should be:

easy to use

anonymous

fairly brief

Questions can be open or closed, multiple choice answers, ranking of items or checklist format.

Steps:

1. Determine the information needed

2. Choose the type of questions

3. Create the precise questions

4. Check readability

5. Design for analysis

6. Test

7. Adjust if necessary

8. Prepare data summary

9. Distribute

To improve response rates you should ensure confidentiality, provide advance warning, explain the purpose of the questionnaire and explain who will see the data.

Attitude Surveys

The use of surveys to measure employee engagement or commitment is gaining in popularity.

The research suggests commitment is a reasonable predictor of turnover if considered across a large enough group. Unfortunately surveys are not always reliable and response rates are sometimes disappointing.

One difficulty with attitude surveys is knowing which areas to focus upon. It is usually sensible to conduct some form of qualitative information gathering beforehand, in order to get an idea of which issues you should be asking about.

Surveys tend to ask the importantance of each issue, in addition to rating how the company is performing on that issue.

Retention surveys will usually ask about some of the following:

1. Resources to do the job

2. Career development

3. Relationship with manager

4. Meaningful work

5. Work-life balance

6. Learning new skills

7. Appreciation

8. Recognition

9. Relationship with colleagues

10. Company's values

11. Leadership

12. Salary

13. Benefits

14. Job security

15. Stress

16. Team working

17. Communication

18. Giving back to the community

19. Delegation

20. Everyday experience

Exit Interviews

Exit interviews are used by the majority of companies. They tend to be conducted just before an employee leaves, though some firms wait until after the departure.

Exit interviews will normally to be done in the form of a questionnaire, though one to one interviews are also used. Recent years have seen the appearance of internet based exit interview questionnaires.

Research shows exit interviews to be unreliable

Unfortunately, research shows exit interviews to be unreliable, as departing employees opt to give socially acceptable reasons rather than genuine ones.

It is rarely in the employee's best interests to give any negative reason for leaving at this stage. The need for references is often paramount, and not worth putting at risk, by giving the real reasons.

In addition, departing employees may be unwilling to devote much time to completing detailed questionnaires, resulting in incomplete answers.

The end result will often be a large number of departures apparently due to an offer they simply could not refuse, or in the wider context, career advancement.

To improve the reliability of exit interviews, it is best if they are anonymous. An unfortunate side effect of anonymity is that response rates drop.

If you are to conduct one to one interviews, it is far better to get a neutral third party to conduct them, or if that is not practical, to use HR or a trusted figure, than to let their manager or supervisor take responsibility.

Designing exit interviews

ensure confidentiality

anonymous if possible

provide a small incentive

focus on improving conditions for colleagues

Some firms opt to conduct exit interviews six months after departure. This way they have a better chance of determining the destination. This information is more difficult to obtain but may be more reliable as the references factor is less significant.

In all honesty, exit interview data needs to be treated with a large degree of scepticism. It is certainly unwise to make exit interviews your only source of information.

Summary

Exit interviews in general are unreliable

Treat with extreme caution

Involve a neutral third party for better reliability

Make sure to use other sources of information in addition

Creative Thinking

Sometimes the use of creative thinking techniques can help uncover the key drivers of turnover.

The following techniques are worthy of consideration if your information gathering has proved to be unhelpful:

Force field analysis

Mindmapping

Brainstorming

Cause and effect diagram

Conclusion

Currently most firms rely on exit interviews as their main source of information for diagnosing the causes of staff turnover. Unfortunately, research to date has shown exit interviews to be unreliable.

A far better approach is to conduct a small number of focus groups and interviews to obtain qualitative information, and then to use this information as the starting point for a wider questionnaire or employee attitude survey.

References:

CIPD Recruitment and Retention Survey 2004

Managing Employee Retention - Phillips & Connell

Retaining Valued Employees - Griffeth & Hom

Competing For Talent - Nancy Ahlrichs

Keeping The People - Leigh Branham

© Colin Brown 2004

From United Kingdom, London
slnrsimha
Hi Friends,
I have "few" doubts regarding attrition, will be very much happy if my queries are answered.
1. Does Attrition includes retitement, VRS, dismisal & resignation?
2. What will be the ideal attrition rate for a print media?
3. Can more attrition be attributed to more dynamicity of the organization & less attrition=rigidity?
4. Won't legal contract stop good talent from joining the organization?
5. Is money a major contributor of attrition?
6. Which are the important factors to be concentrated to reduce attrition?
7. Does less attrition reflects the success of the org. & HR?
Regards
Narasimman
HR

From India, Madras
Jyothi Singh
Hi,
Kindly let me know how to handle the employee grievance.
For Instance if the employee feels that he is having some kind of problem with his colleagues and his senior officials. What step to be taken to overcome or how to tackle the situation.
Thanks & Regards,
Jyothi

From India, Bangalore
Col
1. You should calculate regretted avoidable turnover. Attrition is practically meaningless.
2. A figure of around 5% is optimal. (few firms achieve this)
3 What do you mean by attrition. If you fire half your workforce, that is a rather different situation to if half your workforce leaves on its own account.
4. Don't understand your point. What do you write in the contract?
5 . It depends. Are you paying market rate salaries? If you pay uncompetitive wages you would expect to lose large numbers of workers.
If your salaries are upper quartile then money is less likely to be a factor.
6. Ask your employees. I am a retention specialist (possibly one of the top 50 in the world) and I wouldn't dream of telling you what your employees value. Only they know. So ask them. Anyone who tells you x is important, or y is important, does not understand retention and turnover. Of course I could tell the top 10 for employees in general but that will be of little use to you.
7. Yes
Col

From United Kingdom, London
Vivekinhrd
Dear All,

Defining attrition: "Actual number of employees left through resignation(Whether voluntary or forced), or some other reason(Retirement/death/VRS etc)'.

It depends upon organization to which factor they would like to consider as attrition for their company.

To calculate Attrtion we can use the formula:-

Number of Employee Left

-------------------------------------------------------------------*100

Number of Emplyoyee+New joined-No. of Employee Left.

How to Prevent Employee Turnover :-

1. No doubt Exit interview is one of the sources to get the reason for change and which help us to amend existing policy or to introduce new policy.

2.While most organizations want to blame turnover on wages and benefits, they actually do not play a big role in why people leave their jobs. The overwhelming majority of people who leave any company leave because of the way they are treated every day.

First, lack of appreciation is itself a negative. There are many managers who are very nice people, but who manage almost exclusively by negative reinforcement--not because of what they do but because of what they don't do. If you can't identify times when you have overtly told individuals that you appreciate their contributions, then you can count on the fact that they think you don't.

Second, when you give out positives--whether it is a pat on the back or a raise in pay--if you give them equally to all performers, then you end up punishing the best performers. Most employees think that it's not fair that they work hard every day, while others do just enough to get by--yet the consequences, pay, benefits, perks and praise are the same. " Treat people on the basis of merit, not seniority or position.

The third reason that employees feel negative about the workplace is that even though managers think they are creating a positive environment, they frequently fail to deal effectively and efficiently with problem performers. When poor performance is tolerated, other employees don't understand it. When they try to figure out why, they often conclude that there is favoritism for some unknown reason or that the supervisor or manager is weak. Both reasons are problems for the organization.

3.Career Development and Career Counseling

Career development is a process by which organization, the supervisor, help employees in developing their career goals and implementing their career plans.

Career Counseling is the methods by which you explain the career development process and help the employee identify career goals and career plans. Career development begins with and success depends on effective career counseling.   Career counseling focuses on the employee’s career goals and the preparation of career plans consistent with organization future staffing needs.

4. Training and Development.

5. Organization culture.

6. Reward and recognition.

7. Grievance & issue handling.

8. Employee care by creating - fun at work/outings/Team building exercise.

9. Improving Recruitment process -- Taking right people.

Thanks

Vivek


Vivekinhrd
Hi

Defining attrition: "Actual number of employees left through resignation(Whether voluntary or forced), or some other reason(Retirement/death/VRS etc)'.

It depends upon organization to which factor they would like to consider as attrition for their company.

To calculate Attrtion we can use the formula:-

Number of Employee Left

----------------------------------------------------------------- --*100

Number of Emplyoyee+New joined-No. of Employee Left.

How to Prevent Employee Turnover :-

1. No doubt Exit interview is one of the sources to get the reason for change and which help us to amend existing policy or to introduce new policy.

2.While most organizations want to blame turnover on wages and benefits, they actually do not play a big role in why people leave their jobs. The overwhelming majority of people who leave any company leave because of the way they are treated every day.

First, lack of appreciation is itself a negative. There are many managers who are very nice people, but who manage almost exclusively by negative reinforcement--not because of what they do but because of what they don't do. If you can't identify times when you have overtly told individuals that you appreciate their contributions, then you can count on the fact that they think you don't.

Second, when you give out positives--whether it is a pat on the back or a raise in pay--if you give them equally to all performers, then you end up punishing the best performers. Most employees think that it's not fair that they work hard every day, while others do just enough to get by--yet the consequences, pay, benefits, perks and praise are the same. " Treat people on the basis of merit, not seniority or position.

The third reason that employees feel negative about the workplace is that even though managers think they are creating a positive environment, they frequently fail to deal effectively and efficiently with problem performers. When poor performance is tolerated, other employees don't understand it. When they try to figure out why, they often conclude that there is favoritism for some unknown reason or that the supervisor or manager is weak. Both reasons are problems for the organization.

3.Career Development and Career Counseling

Career development is a process by which organization, the supervisor, help employees in developing their career goals and implementing their career plans.

Career Counseling is the methods by which you explain the career development process and help the employee identify career goals and career plans. Career development begins with and success depends on effective career counseling. Career counseling focuses on the employee’s career goals and the preparation of career plans consistent with organization future staffing needs.

4. Training and Development.

5. Organization culture.

6. Reward and recognition.

7. Grievance & issue handling.

8. Employee care by creating - fun at work/outings/Team building exercise.

9. Improving Recruitment process -- Taking right people.

Thanks

Vivek


happy
Hi Col,
Read your article. It was very informative. I am doing an employee attrition project in an agrochemical company in India. Do you have any benchmarks as to :
1. All India attrition rate
2. Attrition rate for Manufacturing firms in India
3. Attrition rate for chemical/agrochemical industry in India (this includes pesticide, fertilizer and seeds)
4. Attrition data for sales and marketing people - all india
5. Future trends in attrition


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