How Can We Tackle a 20% Monthly Attrition Rate? Let's Discuss Solutions Together

Dear All, Please reply to the following issue. The issue is about attrition, and the attrition ratio is 20% per month. Here, I will mention individuals' opinions about their behaviors or activities.

Management: Management always believes that we need good people who should stay with us for a long time. They are willing to do anything demanded by employees as well as contract laborers. Sometimes, management makes false promises, like increasing salaries after confirmation or after six months. Increments are given selectively, not to everyone.

Foreigners: Foreigners typically focus on production and expect everyone to be versatile. They aim to introduce a foreign culture in India and pressurize Indian management to provide high salaries and benefits to their employees within the first year. Sometimes, they directly inform employees about salary reductions due to performance issues. Increments are often given selectively, and they have specific job expectations from engineers.

Staff & Contract Laborers: They feel they should receive increments similar to others and often compare themselves with colleagues. Excellent performers may not get increments, while underperformers sometimes receive significant raises due to personal connections. They believe direct communication with foreigners influences the increment decisions.

HR: HR personnel maintain confidentiality regarding salaries and company policies such as confirmations, recruitments, salary revisions, and increments. Though previously not actively involved in HR activities, there is now an interest in including HR in these processes.

The question is, how can attrition be reduced?

Thanks & Regards, Parimal

This situation arises when there are cultural differences among people, especially expatriates. For a long-term solution, you need to build a team with an open culture and transparency among team members of equal status. You may try holding an open house to facilitate this.

Analyze the root cause of attrition and discuss it with your senior management.

Regards,

You have explained the deficiencies in your system. You have to arrange the house in order. The PMS policy for appraisal and increment/promotion shall be established. I think your company is an MNC, and the expats are dominating the HR functions and day-to-day affairs of workings. Western work culture may not be suitable for the Indian environment, as per my experience with them. If you want to reduce attrition, clear HR policies should be in place.

Regards,
Pon

There are two reasons for attrition that I can see in your post only. One is culture mismanagement, which your organization has to address by appointing someone in strategic HR or involving you in handling that. How people work in different parts of the world differs from one part to another, so a middle course of action is required to be designed.

Another reason, as Pon mentioned, is the lack of clear HR policies and procedures. Regardless of whether the company is an MNC or Indian, what matters are clear-cut procedures and processes, which can make or break a company apart from other important things.

Not disclosing (not being transparent) to employees how the raise/increment is given is creating a problem. How is an employee supposed to know that another person is performing better than him/her if there are no parameters to scale? Just think about it.

Conduct exit interviews to find out the reasons why people are leaving, or conduct stay interviews where you need to identify potential employees who you think are on the verge of leaving and then talk to them to understand how they feel about the culture and company.

Hope this will be of help.

I agree with the comments of Archanaji. You must conduct a root cause analysis of attrition. Develop good employee relations so that problems are identified before employees become frustrated and leave their jobs. Employment satisfaction surveys can also help identify different constraints. Management should be informed about the major reasons for attrition. Exit interviews may also provide valuable feedback and reasons for individuals leaving their jobs.

For new employees, a minimum service bond could be implemented, and measures introduced to control attrition. In the case of junior-level employees or trainees like GET/DET/MT, some deposit/deduction from salary could be initiated, which may be refunded after completing a certain period, like 3 or 5 years.

Long-service rewards for completing 3/5/7/10/20/25 years can be introduced to motivate employees and recognize their long service and association with the company. When recruiting any person, ensure to check their stability and past service tenure to assess their loyalty and consistency in their career.

I hope all these measures will definitely help improve the attrition problem.

Regards,
P K MISHRA

Dear All, thank you for your reply. I am working in an MNC engineering company where a total of 40 people are employed, including contract labor. I am looking to design an HR policy that is linked with ISO 9001:2008 and ISO 14001 to help reduce the attrition ratio. Your guidance on this matter would be greatly appreciated.

Many thanks for your efforts.

Regards,
PM