Article Employee Attrition

Discussion in 'Human Resource' started by shabbir, Mar 5, 2009.

  1. shabbir

    shabbir Administrator Staff Member

    Employee stays longer with the same organization the less likely he/she is to resign. Performing employees are less likely to resign than non-performing employees.

    [heading]What is Attrition?[/heading]

    A reduction in the number of employees through retirement, resignation or death is called Attrition.Attrition is also called total turn over or wastage rate.

    [heading]Why do Employees Leave the Organization?[/heading]

    It is said that people leave their bosses,not organizations. When employees are happy with their superiors they choose to stay, if not they look for a switch.

    So now I see the following reasons to Leave the Boss

    • Higher pay
    • Work timings
    • Career growth
    • Higher education
    • Relocation to other places
    • Women leave the job after marriage to take up their house-hold duties
    • Work pressure
    • Work Environment
    • Poor performance.
    • Losing faith on merger/acquisition
    • Verbal abuse
    [heading]Attrition Rate[/heading]

    The rate of shrinkage in size or number of employees is known as Attrition rate. It is usually expressed in percentage.

    [heading]Common methodology in calculating Attrition Rate[/heading]

    The approach to this calculation might vary from organization to organization. While a few techniques are common, there are no proven theories.

    The most commonly used formulae are :

    Total Number of Resigns per month (Whether voluntary or forced) X 100
    -----------------------------------------------------------------------------------------
    (Total Number of employees at the beginning of the month + total number of new joinees - total number of resignations)

    Total Terminations in a month
    -------------------------------------------------------------------------------------
    (Total Head Count at the beginning of the month) + (Total New Hires)

    Total No.of employee left X 100
    -------------------------------------------
    Total No .Of employees present

    Number of employee separations-involuntary separations X 100
    -------------------------------------------------------------------------------------
    *Average employee count
    (*Avg. employee count = January month strength + December month strength)

    [heading] Cost of Attrition's[/heading]

    • Cost of advertising for new positions
    • the cost and time involved in interviews and background checks,
    • costs associated with search firms or placement agencies,
    • relocation costs of new employees
    • Training and orientation costs
    [heading]Consequences of Attrition [/heading]

    Attrition normally brings decreased productivity. People leave causing others to work harder.

    [heading] The Brighter Side of Attrition [/heading]

    • A poor performer is replaced by a more effective employee
    • A senior retirement allows the promotion or acquisition of welcome 'fresh blood'.
    • When business is slack it is straight forward to hold off filling recently created vacancies for some weeks.
    [heading] Diagnosing Attrition[/heading]

    Commonly Used Techniques in the Industry

    1. Surveys : They 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 and fairly brief. Questions can be open or closed, multiple choice answers, ranking of items or checklist format.
    2. 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.
  2. priyad

    priyad Super Moderator

    One more consequence of attrition I would like to add:

    The HR costs in terms of recruitment and training new employees will go up.
    Also, the training given for the employee who leaves becomes a waste for the company.
  3. priyad

    priyad Super Moderator

    And nice write-up :)
  4. shabbir

    shabbir Administrator Staff Member

    Yes totally agree on the Cost point.
  5. Smriti

    Smriti New Member

    In the turbulent recessionary times of today,attrition rate has gone down
  6. shabbir

    shabbir Administrator Staff Member

    Actually its other way round due to many Employers firing employees because attrition is normally calculated on people leaving and not on how they are leaving.
  7. aditya_s

    aditya_s Member

    good article on employee attrition
  8. keerthiga

    keerthiga New Member

    Yes i do agree tat attrition is a vital problem in every growing and big organisation
  9. jagjot

    jagjot New Member

    good article ,,, much appriciated ,,,


    JJ...
  10. ramyanagarajan

    ramyanagarajan New Member

    good article.... can give more details about attrition management....
  11. kanand1987

    kanand1987 New Member

    Thanks lot your attrition message is very useful for me...
  12. Brodon

    Brodon New Member

    Yes i do agree tat attrition is a vital problem in every growing and big organisation

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