Is Employee Turnover Necessary for Growth, or Does It Harm Companies? What Do You Think?

Hi,

Is attrition really needed for a company to grow/improve, or is it detrimental? Please suggest.

Regards,
Srinivasan K

Hi,

I feel that some amount of attrition is good as it allows new people to enter and accept challenges, reducing stagnancy. However, excessive and continuous attrition is detrimental to any organization.

Thoughts/suggestions are invited.

Regards,
Bhavna
www.vinove.com

I go with Bhavna. Attrition is necessary to a certain extent, giving opportunities for the new ones and new challenges. Continuous attrition is definitely bad, affecting the organization's growth.

I believe that every human mind needs a change in the routine job. When they are unable to get the required change, the problem of hopping arises in the organization.

As far as attrition is concerned, I think that it causes harm to the organization in a broader sense. The market goodwill is hampered, other than other related losses. In my belief, the immediate boss plays a vital role and has the power to cope up with attrition.

Hi,

Attrition is important. An organization will have different kinds of employees:

1) Bottom performers who don't add value to the organization. They are always trying to break even.
2) People who are high on absenteeism.
3) People who have a casual attitude.

Hence, it's good that such employees leave. Moreover, when people leave, fresher talent is brought into the system. However, an excess of attrition is always a deterrent for a company's profit since then the ROI on employees is less and even negative in some cases.

Regards,
DK

Hi,

Turnover/attrition is not bad, but it becomes a significant issue if it occurs regularly, leading to increased expenses on induction/training costs, additional infrastructure/planning expenses, etc. Remember, excess of everything is not good.

Thank you,
Tarun

Hi Attrition!!

A pinch of salt is good for the dish. Too much will affect the whole system! It depends on which end you are.

For the Employers: it is a must to remove Non-performers, address regular absenteeism, and address issues of not following the code of conduct.

For the Employees: new opportunities for education, marriage, organizational culture adaptability, etc.

Sandeep Sable

Hello Srinivasan,

Is attrition really needed for a company to grow/improve, or is it detrimental? Please suggest.

If good employees are leaving, it is bad.
If bad employees are leaving, it is good.
If good employees are replacing the bad employees who left, it is good.
If bad employees are replacing the good employees who left, it is bad.

Bob

Hi,

Is attrition really needed for a company to grow and improve, or does it have negative consequences? Please suggest.

Regards,
Srinivasan K

Zero percent attrition is bad; the same is true if the attrition rate is more than 20%. If you have an interest in economics, it is similar to the inflation rate. If the inflation rate is low or high, both scenarios are unfavorable.

Hi!

Attrition is good if it results in an efficient employee. However, on a regular basis, it is detrimental as it affects the organization's growth. It reflects that the organization is not serious about development and is not taking care of its employees.

Swati

Attrition is neither good nor bad. It is just a phenomenon, at least making HR people think that there is one more challenging thing. And we, as HR people, combat attrition by recruiting further. The exit interviews become a formality, and recruiting a person for that position becomes our priority. The issue is to combat attrition with OD initiatives. The discussion of good and bad can be put on hold for a while. Can anyone list some initiatives that will really help us as HR people to fight against attrition? Or we, as HR executives of one organization, continue to cause attrition in another organization. This also brings up the issue of talent poaching. :roll: Too much to talk about...

"My apologies if this post poses any offense to anyone."

Hello Saurabh229:

The issue is to combat attrition with OD initiatives. Why wait until people are hired to combat attrition? It is far more expensive and time-consuming to use OD initiatives to reduce attrition than it is to hire people who will become successful employees without OD initiatives.

The discussion of good and bad can be put on hold for a while. But it has to be addressed before the job offer is made if we really want to reduce attrition.

Can anyone list some initiatives which will really help us as HR people to fight against attrition? Or we as HR executives of one organization continue to cause attrition in another organization.

When managers hire for talent, attrition declines and new hire productivity goes up.
Bob Gately
bobgately@verizon.net

Dear Bob,

Thank you for a very nice answer. You know, that very day, my senior and I were thinking of developing a methodology that can be used during the recruitment process. The key was to recruit the right candidate. We were trying to build a competency framework and may need to use some psychological tests.

Please advise on these lines or correct me if we are heading in the wrong direction.

Regards,
Saurabh

Hello Saurabh:

Thanks a very nice answer.

You're welcome and thanks for sharing that with me; I appreciate it.

You know that very day, my senior and I were thinking of developing a methodology that can be used during recruiting.

Great, more managers ought to do the same thing.

The key was to recruit the right candidate.

Good, that is the secret - the right candidate, not the best candidate.

We were trying to build a competency framework and may take the help of some psychological tests.

Competency is only part of the job success puzzle, and most employers have that piece. Over-reliance on competence sets the stage for job failure by competent future new hires.

Please advise on these lines, or correct me if we are going wrong in that direction.

Send me an email with your email address, and I'll send you the "Testing and Assessment: an Employer's Guide to Good Practices", Employment and Training Administration U.S. Department of Labor, 1999. It is a good resource for the end user.

Bob Gately
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Dear Bob,

I did not understand that "how over dependence on competence can lead to job failure." From what I have read so far, competencies provide a very strong base for rating a person. It has been helpful for the entire PMS process.

Talking about competency, we are also in the process of developing a competency framework for our managers going for foreign assignments (expats). Can you provide some more insights on developing the entire process (right from selection to repatriation)?

Well, my email address is saurabh.scmhrd@gmail.com.

Thanks and regards,
Saurabh

Hello Saurabh:

I did not understand that "how over dependence of competence can lead to job failure".

I'll try to explain, see below.

With what I have read so far, competencies provide a very strong base for rating a person. It has been helpful for the entire PMS process.

New hires need to be competent or they need to be trained, coached, managed, and mentored until they become competent, but they need to have a talent for the job in any case.

Talking about competency, we are also in a process of developing a competency framework for our managers going for foreign assignments (expats).

Competency is required for job success, but does it predict job success? If it did, most employers would have nothing but successful employees since they hire for competence.

Can you provide some more insights on developing the entire process (right from selection to repatriation)?

Hiring for talent is the key to hiring successful employees. If we want to be sure that all our new hires and employees become long-term successful employees, we need to make sure that all employees are competent and have a talent for their jobs.

For employees to find job success:
- Talent is necessary, but not sufficient.
- Skills are necessary, but not sufficient.
- Training is necessary, but not sufficient.
- Orientation is necessary, but not sufficient.
- Knowledge is necessary, but not sufficient.
- Competency is necessary, but not sufficient.
- Qualifications are necessary, but not sufficient.
- Effective management is necessary, but not sufficient.
- Successful interviews are necessary, but not sufficient.

Talent is the only necessary condition for job success that employers cannot provide their employees, and schools cannot provide their students. Employers must hire talent. Most employers don't measure talent, so they can't hire for talent even if they hire the best and the brightest.

Competence and talent are necessary but not the same. The following ties competence and talent together in a short guide for selecting the right people for a position. Talent and competence are necessary but they are two different things. Selecting for competence and talent avoids many performance problems. There are two conditions when competent people should not be hired or selected for a position. Each position has its own talent requirement.

Job applicants can have:
- Excellent Talent ... greater than 85% job suitability
- Adequate Talent ... 85% to 70% job suitability
- Inadequate Talent ... less than 70% job suitability

Job applicants can also be:
- Highly Competent
- Competent
- Not Competent

The following is the order in which applicants and/or employees should be selected for positions:
- 1A = Excellent Talent and Highly Competent
- 1B = Excellent Talent and Competent
- 2A = Adequate Talent and Highly Competent
- 2B = Adequate Talent and Competent

The following should be selected if they can become competent:
- 1C = Excellent Talent and Not Competent
- 2C = Adequate Talent and Not Competent

The following should not be selected:
- 3A = Inadequate Talent and Highly Competent
- 3B = Inadequate Talent and Competent
- 3C = Inadequate Talent and Not Competent

Talent must be hired since it cannot be imparted or acquired after the hire.

Bob Gately
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Hi,

I agree with Bhavana. Attrition is required to a certain extent to introduce new blood into the organization, a change that is necessary for new initiatives.

Healthy attrition is always good, but anything in excess is bad. Attrition can occur for many reasons. Some reasons are beneficial for the organization, such as the attrition of below-average performers. However, problems arise when high-performing individuals decide to leave, especially when there is no succession planning in place.

Dear all,

In my view, a high attrition rate is very detrimental. An attrition rate below 15% is considered acceptable, while anything higher than that can be harmful to the company. By bringing in new employees, the organization can benefit from fresh ideas and innovations, thereby enabling organizational growth.

Regards,
S.N. Rahaman
BASIX

Hi,

I believe it is beneficial for any organization to maintain a "healthy attrition" percentage. Successful companies often implement a policy of forced attrition, where they request the bottom 5% or 10% of underperforming employees to leave the company. Some reputable companies adopt this policy to differentiate performers, bring in fresh perspectives, and signal to employees that the company values high performers.

However, I do concur that involuntary resignations leading to attrition should be kept to a minimum for an organization to thrive.

SM

Hello SM:

I think it is better for any organization to have a "healthy attrition" percentage.

Well-managed employers must lose some of their best employees because the best employees need a chance to advance in their careers, and most such employers do not have enough positions available for all their good employees.

Successful companies have the policy of forced attrition, i.e., they ask the bottom 5% or 10% of the employees who are not performing to leave the company.

Why are these employees not performing?

I know of some great companies who adapt this policy to differentiate performers, infuse fresh blood with a different perspective, and also communicate to the employees that the company takes care of the performers.

It seems to me when employers fire the bottom 5 to 10% per year, they are admitting that they do not know how to screen out bad hires.

But I do agree that involuntary resignations (attritions) have to be very minimal for any organization to succeed.

I agree, and the secret to reducing attrition is improving the selection process.

Bob Gately

email: bobgately@verizon.net