HR professor

Pull the Brakes on Employee Turnover

A friend of mine recently met me at an IT seminar which was organized to discuss the current challenges in the IT industry. She seemed to be put off by a particular speech about the rising employee turnover in the IT business. I asked her what the matter was. 'You know, this is all hog wash', she said. 'Employee turnover rates are bound to increase in any high technology company. Technological changes are rapid. Obviously people don't want to stick around with you for too long as they fear obsolescence.' I argued with her that if technology is indeed changing and within the industry too, are companies not gearing up their employees for new technology? 'That's not the point', she said, 'employee turnover is a typical feature of the IT industry and is here to stay. Why bother fighting attrition; we should live with it and try to meet our recruitment needs instead.'

Now that was her point of view. She felt that it was preferred to focus on recruitment in anticipation of the attrition rates. But her viewpoint raised some important questions in my mind.
  • Was attrition truly a feature of the high tech industry that cannot be confronted?
  • How did companies deal with the knowledge drain and shortage of resources?
  • How did new employees fit in and find their place in this unstable environment?
  • How can organizations survive and compete in such a fluid environment? How can they justify such sky rocketing costs of employment?
The problem of attrition not just plagues the IT industry. Several other industries have reported in high employee turnover. Pharmaceuticals, call centers, media and communications businesses have all been suffering from growing employee turnover.

Every company strategies unique compensation and benefits plan to curb their employee turnover figures. Some companies also have employee bonds that legally prohibit employees from resigning for a specified period. Despite such measures, companies find people jumping ship and as a result the company has to be embroiled in a number of litigations.

A very interesting case was quite the joke in office circles. A senior manager in a reputed IT company was involved in bagging an important software development project. Another company was also competing for the same project. The competing firm feared that they would lose project. They decided to hook in the manager with a great employment offer. Now, the senior manager has jumped ship. Not just that, he also bagged the project for his new employer.

It is not just the loss of the employees that can be worrisome. Companies spend enormous amounts of money in training employees. All the investment gets wiped out in one stroke. Attrition shakes the very foundations of the organization structure. Often, when senior managers resign, some dedicated subordinates also walk out in a show of solidarity along with the manager. This can have a disturbing effect on the department.

Organizations waste a lot of time settling down their new employees and drafting new procedures and policies. It is not OK to simply accept attrition levels as a way of life. Attrition needs to be checked, and specific measures must be taken to pull the breaks on attrition. HR managers should probe into the root causes of attrition and find creative solutions to boost employees' interest in the company.

One of the biggest cited reasons for resigning was: 'My boss is lousy'. Very often HR people don't want to get into the messy details and hence shirk from finding out the real reasons of failure. When there is a communication problem and employees don't feel 'heard out', there is a risk of mass exodus. Look into the organization behavior to probe into the trigger factor.

It is not worth losing your employees on flimsy grounds. Human capital is the most remunerative resource of any organization in the long run. Companies should ensure that they don't treat attrition figures as inconsequential records. Attrition levels can be brought down provided the organization has the will to follow through.

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