ATTRITION

by Vishnu Vardhan
 What’s in this?
• What attrition exactly is.
• Attrition rate at group level.
• Attrition rate at different sectors.
• Cost of attrition.
• Causes for attrition.
• Ways to reduce attrition.
• Initiatives taken by companies to reduce
attrition.
What is Attrition?
• Attrition is the rate of shrinkage in the size or a
gradual, natural reduction in membership or
personnel, as through retirement, resignation, or
death.

• It is Normal and uncontrollable reduction of a work

force because of retirement, death, sickness, and
relocation.

• The drawback to reduction by attrition is that

reductions are often unpredictable and can leave
gaps in an organization.
Employee Attrition at group level
COST OF ATTRITION
• Recruitment Costs: The cost of
advertisements, agency costs, employee
referral costs, internet posting costs.

• Training Costs: cost of orientation, cost of

departmental training, cost of time spent by
trainer

• Lost Productivity Costs: As the new employee

is learning the new job, the company policies
and practices, etc. they are not fully
productive.
• New Hire Costs: cost to put the person on the
payroll, establish computer and security
passwords and identification cards.
*cost of a manager's time spent developing
trust and building confidence in the new
employee's work.

• Lost Sales Costs: Calculate the lost revenue by

multiplying the number of weeks the position
is vacant by the average weekly revenue per
employee.
 Causes of
Employee Attrition
• External inequity of compensation: arises
when an employee realizes that some other
employee from a different organization puts
in much less efforts than he does, but receives
a much higher compensation than him.

• Work Timings: The work timings in BPO are

very odd. This affects the family life of the
employee.

• Career Growth: some employees see no

career growth in their sector, so they move on
to other companies.
• Higher Education: This is a problem with
pretty young and aspiring employees. they try
to move on in the name of higher education.

• Role stagnation: Attrition rate is higher where

the employee has to do the same work again
and again.

• Work life imbalance: rigid structural

hierarchy, exhaustive specialization of jobs,
deployment of unskilled employees and an
unfavorable work environment.
• Lack of recognition: When an employee feels
that he is not getting due recognition for his
achievement, a feeling of demotivation creeps
into him.

• Under-utilization of skills: Proper utilization of

skills has a tremendous impact on the
satisfaction of employees.

• Performance assessment : Flawed appraisal

system and biased appraisers.
WAYS TO CONTROL
ATTRITION
• Providing Something Extra: Good salary,
perks, rewards for their good performances.

• Honoring Performers: Performance based

incentives, best employee awards,

• Building Relationship:
employee – management relations,
employee – employee relations
• HR Practices: conducting the recruitment,
facilitating counseling for employees.

• Consider feed back: during the employee’s

tenure, and through exit interviews.

• Quality of work life: Occupational health care,

Suitable working time, Appropriate salary.
• Transparent work culture: accountability,
trust, communication, responsibility, pride
across the organisation.

• Office-Tiger model: it tries is to instill a sense

of pride in its employees. Make the
employees feel proud of doing the work they
do.
 INITIATIVES TAKEN
BY COMPANIES
TO REDUCE ATTRITION
• ICICI OneSource has a programme whereby
employees who have been with the company for
more than 18 months can switch to positions in
the ICICI.

• Wipro's Spectra mind has introduced medical

insurance for their employees and they also
provide 24-hour medical facilities for employees.

• Zenta Technologies which are already providing

accommodation to their senior staff are
contemplating this for lower level staff.
• E-Funds International is focusing on social and
sporting events such as organizing six-a-side
soccer games and cricket matches.

• Federal Express identifies employees with

leadership or management potential and then
assigns senior management positions.

• Intel Technology has a direct communication

programme running, the CEO maintains
accessibility with employees through blogging.
• Adobe India promotes the spirit of research
by giving moral and financial support to
employees who have business ideas.

• IBM executive MBA programmes and Web

based learning tools help in training the
employees to be better managers. Also the
company sends the senior level employees to
Wharton, Stanford and Harvard.
Any Queries?
Tons of Thanks