Wednesday, April 13, 2011

Attrition - What can be done to reduce it ?


What does it take to motivate and inspire people to give in their best effort at office and also make them satisfied enough to continue working ?


The usual methods like training, reward programs, nice salary (there is no limit to salary that will make people happy), career growth opportunities etc etc are being tried across all companies. Still if you look at the attrition rate it is roughly 11% for all the big companies. So in addition to these above benefits and steps something else needs to be done as well, something more fundamental in handling human mind and it's thought process.


Lets go to our local markets, local in the sense the actual old locality where most of us would have spent our childhood days. Have a look around there are sweet shops, garment shops, toy shops and others – the thing that you will find striking about these places is the faces that are on the other side of the shop, inside the shop. They would be the same guys you would have seen when you were a kid – so many other new shops catering to the same needs have come up but these people have not moved out – Why ? Job opportunity is there still why haven't they moved out ?

Is it that these people are less ambitious ? Or they lacked the smartness to figure out that if they switch job they can earn more ? Or did the owner do something different which made these people stick around ? Or did they sign any bonds ?


I would suggest take a break now, think over it and better still have a walk around the market and talk to these guys and hear what they have to say ? (I haven't talked to them either - I just love to observe and draw inference :-) – your discussions and feedback can validate what I am proposing here. One advice - do talk to the old owners as well in addition to the employees in order to get a well rounded idea.


The definition of loyalty has evolved over time – the meaning and significance of the term for a 50 year old and a 20 year old is not the same anymore. Part of the reason for this change is due to awareness and spread of knowledge and information, information which earlier was restricted to only a few. As society grows certain characteristics are idolized at certain times and with time they fade out and newer ones take their place. I am not saying loyalty in the conventional sense is passe and no one appreciates it but what I am saying is it does not hold so much a significance as it used to.


Self confidence as a trait has evolved as well. Earlier self confidence was there too but people had a imaginary ceiling and boundary to it. If you ask any of the older employees in the shops about the business side of things like how much profit does the entity make, where from are the raw materials procured, primarily who all are the customers, potential areas where we can find new customers etc – some would not even have answer to any one of the questions (even after working for 20 years) and some who do know might never try to venture out on their own. The obvious answer they would give for not trying out on their own would be that they are loyal – could be true in most cases but not all. Some would be there who deep down would have a desire to try this out but did not because they were lacking in self confidence – were not sure if they could have done something on their own leaving a nice stable job.


So spread of knowledge has increased self confidence and changed the meaning of loyalty. Now you would find people to be equally loyal but just that the moment you try to use the older methods of motivation (with the inherent assumption to fool him/her) that person would leave or start planning to leave. These days people are too sceptical of management and have an inherent sense of distrust and tend to always think that they are being exploited, so in such a panic stricken state they tend to maximize their own earnings – so who so ever pays more they tend to leave. Of course not all leave due to this – there could be other reasons as well but I will be writing about this category only.


Finally coming to the question with which we started why people leave ? The reason I see is lack of trust of the employee on the employer. If this is taken care of then people will tend to stay more.

The face of the company for an employee is the manager she reports to, the things which she reads about the top management and the brand value that the company has created for itself. If these three groups genuinely focus on building trust and follow up their claims by action as well then it ties the employee to the company in a stronger way. If I segregate these three in terms of priority they would be manager, company brand and stuff about top management in descending order. So the most important factor is the manager of the employee. If she distrusts this guy then she will not stay longer no matter what is given and the reverse is true as well.


Of course every manager has a manager of his own and as we keep going up it finally ends with the CEO, so it is easy to say that if this person is trustworthy then everyone else will follow suit. That is correct to a large extent but then sometimes this chain is broken when a wrong person enters – he will disrupt the process. Very vital is when you hire ensure that this one quality called integrity is present in the individual.


What is integrity and how does one build trust ? Will cover in my next blog.




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