Embrace your attrition rates: Three surprising reasons why parting isn’t such sweet sorrow
To thrive right now, your organisation should:
- Rethink attrition as a sign of the times;
- Seize this exciting opportunity to inject your business with new blood; and
- Equip your HR strategy to optimise your flow of talent in – and out – of a faster revolving employment door.
Discover how properly managing attrition can help boost your business in this blog.
Attrition isn’t such a dirty word after all
It’s been a long-held mantra that anything other than a low attrition rate is a sign of a badly run or failing company. This was maybe more the case back when every job was for life (not just for Christmas) and the only experience gained over decades was viewed as essential to your company’s success. But the corporate world has evolved in giant leaps, and in some sectors the employment lifecycle has changed beyond all recognition.
There has been a marked recent trend for falling retention rates, driven by:
- The pandemic: many employees re-evaluated their life choices, seeking new jobs or careers offering more flexibility or a stronger work-life balance; others just got tired of being on furlough;
- Increasingly transferable skillsets: so employees switch direction in greater numbers;
- The decline of the job for life: employees are empowered by greater choices and a stronger awareness of their value. According to a survey by Gallup, 60% of millennials are open to new job opportunities. Further, only half of millennials, strongly agreed that they planned to be working at their company one year from now. For businesses, this suggests that half of their millennial workforce doesn’t see a future with them.
Some employers are understandably nervous and discouraged by headlines proclaiming “The Big Quit”, “Talent Tsunami” and “Turnover Tidal Waves” or industry intelligence, such as Microsoft’s World Trade Index survey (of more than 30,000 people in 31 countries), reporting that 40 per cent of respondents are considering leaving their employer - this year.
Little wonder you may be reaching out to industries and professionals devoted to helping you hold on to your people. But … should you? Let’s consider instead the benefits that managed attrition might offer you and your company.
Attrition often equals opportunity
Imagine that your employees’ departure does not represent a threat to your business but actually offers you the golden opportunity to recruit more dynamic new blood. You can now attract hot new talent bringing skills, qualities and knowledge which will reinvigorate your company, imbuing it with a new flavour of innovation and adaptability and providing an exciting springboard to more effectively compete and thrive.
New hires can help you raise the performance bar for your legacy staff and open up downstream opportunities. Attrition therefore creates an environment to inspire and motivate existing employees.
Opportunity also exists within the ranks of those who leave. Be particularly sure with your high performers to part on positive terms as you never know what future doors they may open for you. They might pass business or lucrative ventures your way or they may choose to rejoin you, enriching your company with even more valuable insight, experience and know-how.
Attrition tests your HR processes – before your competition does
Ensure you examine which performers are leaving. If it is your underachievers, then grab this chance to replace ‘dead wood’ with fresh talent. And definitely wave fond farewell to employees who have nurtured a bad culture by lowering morale or productivity, or encouraging toxic behaviour.
It’s not all Easy Street though. Alarm bells should ring when it’s primarily your high performers who are leaving. Your HR function should be able to mitigate or even pre-empt this risk through robust reporting systems, (more on which you’ll find in our previous blog).
Firstly, early warning systems will help you stem any potentially ruinous mass exoduses.
Secondly, capturing the right data will help you understand the reasons behind exits. You should at the very least have a robust exit interview at the heart of your offboarding process.
Insure yourself against the damage caused by the departure of a strong performer using knowledge capture, so vital know-how and contacts don’t also vanish out the door. Make regular and effective communication and knowledge-sharing within teams and across the company a key plank of your people management strategy.
Again, our SAP SuccessFactors HR management systems can help you future-proof your knowledge capture; contact Bethan John for more details.
What’s right for the goose doesn’t always help the gander’s bottom line. In some sectors, long-accrued knowledge and experience is the most valuable commodity and the loss of highly valued individuals or teams would be a mighty commercial blow. As some of you are all too aware, some industries are currently being disproportionately impacted by attrition:
- Retail and hospitality: the pandemic decimated the ranks of those employed in this sector with staff made redundant, had roles replaced or taking their transferable skills elsewhere rather than be furloughed.
- Tech: having switched almost overnight from office-based to home working, many employees are reluctant to revert or are burnt-out.
- Manufacturing: as economies scramble to reopen and get back on track, employees realise that they are a valuable commodity and are leveraging this to better their position.
- Professional services: particularly management consultancies and tax advisories. These typically attract younger employees wanting to quickly scoop up as broad a spectrum of experience as possible and who value a cutting-edge office-based corporate culture with cool tech; travel opportunities; and a strongly defined career path - all of which were curtailed in lockdown. If their employer doesn’t deliver the wider career goals and lifestyle they covet, they will move to a firm that does.
Not sure how attrition can boost your business? We can help!
Manage attrition to attract the new blood you need for your business to thrive, replacing ‘dead wood’ employees with new recruits eager to implement new ideas and bringing the insight on how to effectively adapt or innovate. To find out more about how we will help you leverage attrition to make your business thrive, contact us right now.
However, attrition might indeed be a symptom of something rotten in the state of your company which requires swift diagnosis and intervention. If you are concerned that you don’t have the effective processes in place to identify this, discover how our SAP HCM solution, SAP SuccessFactors, will help you. With different modules addressing every aspect of the HR lifecycle, together we can transform your talent strategies! Contact Bethan John today to find out more.
Attrition means some doors might close but other more lucrative ones will open and – managed properly and with the right support – these are the doors that usher in the talent that will secure your company’s future success.