Jan 23, 2019
Is the high employee attrition hurting your business?
Vulpith Blog AdminAdmin
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There are many reasons why your employees leave your company such as being overburdened, underpaid, underappreciated, hostile work environment, toxic bosses, lack of career development opportunities and more. 

In a highly competitive talent marketplace, employee attrition bears heavy costs for any organization. 

After all, it costs a lot to hire an employee - salary, benefits, recruiting, onboarding and training costs. There are also costs that are impossible to quantify but fatal to your bottom line - low employee morale, lost clients, and low productivity while the position is vacant and till the new employee settles fully into the role. A new employee needs time to ramp up the learning curve, and it can take up to a year for a new employee to be fully productive.  

 
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Now, what will happen if the new employee decides to leave the company after a year? It starts all over again. 

The cost of replacing an employee can range from a minimum of 50% to over 200% of the position’s annual pay according to the Society for Human Resource Management (SHRM). 

High employee turnover can prove to be fatal to any business since recruitment, onboarding and training costs are extremely expensive. Employee attrition kills your bottom-line.  

 
Employee Attrition - An inevitable fact of modern career path
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Gone are the days when an employee served a company for decades, and the height of professional achievement was the corner office room designated to those at the top of the corporate hierarchy. It made practical sense as companies also made longer-term commitments to their employees with job security, health benefits, and pensions. 

Today, employees have to switch across functions, jobs and even industries to advance their careers. Companies, on the other hand, are looking for ways to compensate the employee with a lesser burden and do not promise any job security. Also, millennials and Gen Z are more inclined towards meaningful work, schedule flexibility and drawing their non-linear career paths forcing companies to adapt to their expectations. 

Thus, increasing employee attrition is the inevitable fact of the modern career path. 

Companies have also realized that charting long-term employee retention is increasingly becoming an impossible task due to the above reasons. 

 
Embrace and leverage employee attrition 
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While employee turnover is painful and even lethal for small companies who are competing with larger businesses for talent, it is true that smart companies don’t fight attrition. 

Successful companies don’t fight but accept, adapt and leverage employee attrition, turning it into a golden business opportunity. 

As employee tenures decrease, strategic companies embrace attrition as an opportunity. They view employees as smart contributors from the start and value scarcity of both talent and time. This scarcity, when harnessed correctly, drives abundant business results. Both the employee and employer realize the scarcity of time and treat their work and its goals with greater urgency. 

“Retention is an overrated strategy that jeopardizes a company’s success, longevity and competitive advantage in the workforce.” - Human Capital Institute (HCI).

Deloitte recently identified seven key disruptors are driving change and opportunity in the future of work. Two major disruptors include the changing nature of a career and the rise of contingent workers. 

Companies have to chart strategies that embrace the future of work to stay on top of the competition. 

Like, you can adopt the Pareto's Principle or 80:20 rule in your organization by outsourcing 80% of the non-core tasks, with the in-house team focusing on the rest 20% core activities.  

 
Conclusion
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Instead of striving to hold on to employees, companies should focus on new strategies and employment models that embrace the future of work. 

Cultivating a diverse employee workforce to access critical skills can help your business achieve its goals irrespective of whether employees are leaving your organization or not. You can seek out for these vital skills and leverage the scarcity of time and talent as your competitive advantage. 

Do you require assistance in workforce planning and effective optimization of your resources? Our talented experts are just a call away *9014912456* 


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Category : The Way We Work
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