Attrition in the workplace is usually defined as loss of employees through employee-initiated actions such as resignation or retirement. It’s not precisely the same as “turnover,” because turnover implies that new employees will take the place of those who quit. Attrition becomes an issue when the vacated positions are not filled even though the employer desires to fill them. As economies improve and applicants have more job options, many companies are finding that attrition is posing a serious threat to their operations. It can also cause a black mark on their reputations: word spreads fast, and gaining a reputation as one of the worst places to work is not something that most business owners want on their list of accomplishments.
Each industry has its own standards for acceptable attrition rates, and acceptable or normal rates can also vary by region or season. They can differ between unskilled and skilled positions as well; generally speaking, unskilled positions have a higher turnover and attrition rate, and most employers accept this as part of the cost of doing business. But sometimes attrition goes way beyond the bounds of “normal,” and there’s almost always a reason.
What you can do
If attrition is a problem for your firm, is there anything that you as a manager or business owner can do? While certain circumstances might be beyond your control, the good news is that you can take steps to stop attrition or prevent it in the first place.
1. Whenever an employee quits (or is let go), don’t forget the exit interview. Many firms do this as a matter of course, even though employees don’t have to agree to them and can decline for any reason. If an employee does agree to an exit interview, you can use it to gain insight into why the employee is leaving, which can lead to ideas on what you might do to improve your workplace. (The exit interview can also save you from a possible lawsuits filed by a disgruntled ex-employee) Be sure to ask the employee detailed questions about why he or she quit. Be respectful and not confrontational, and listen with an open mind.
2. Strive to make your workplace safe, pleasant and employee-friendly. Even if you are in compliance with all local and national safety regulations, your work environment could still be unpleasant for employees. Make a serious effort to look at things from their perspective; make sure all the work areas are clean, well-lit, and adequately heated or cooled, and that the workplace has all of the proper amenities (clean and convenient restrooms, break rooms, etc.). Also take steps to ensure that the psychological and emotional “environment” is sound and healthy – that there’s no sexism, racism, or bullying among employees or between management and employees.
3. Keep the lines of communication open, and make employees feel like they’re part of the team. As is the case with relationships, communication is the key to a healthy workplace. You need to communicate honestly with your employees. Communication allows you to let them know how they’re doing and how the company is doing. It allows you to help them with problems and acknowledge their accomplishments. It also gives them the chance to let you know how you’re doing and how the company can be improved. Effective communication helps your employees feel as if they’re important members of your team.
4. Make sure it’s not a management problem. Sometimes one incompetent or bullying manager can wreck a whole division or an entire organization. Contemporary schools of management emphasize teamwork and making employees feel valued; unfortunately there are still many managers who hold to some of the old-school, despotic managerial styles. If your firm has despots and bullies on its management team, and you’re in charge, either re-train them or give them their walking papers. If you’re one of those incompetents or bullies, take some refresher courses in management.
When attrition can be a benefit
Most companies view any type of employee attrition as having a monetary cost because of the expense of finding, hiring and training new employees. In certain circumstances, however, attrition can have a beneficial effect, even if unintended; some companies rely on it to control labor costs in order to remain profitable, without having to issue mass layoffs or firings. Some cost-conscious employers are able to supplement the effects of attrition with a hiring freeze.
Generally speaking, though, attrition is problematic for most companies. And as a manager or business owner, one of your priorities, next to serving your customers, should be providing your employees – your most important assets – with a safe, supportive work environment. Building a reputation as one of your area’s or industry’s best rather than worst places to work can only help your bottom line.
This is a guest post by Sarah Brooks from free people search. She is a Houston based freelance writer and blogger. Questions and comments can be sent to brooks.sarah23 @ gmail.com.