Psycho Bite Size – Attrition
Roger Philby | 02 Jul 08
Attrition is a measure ofpeople leaving an organisation. This can be through various natural processes,such as retirement but can also be caused by the premature leaving of employeesas they are not fully engaged with their role, the company or both.
The CIPD reported overallemployee turnover at 18% in the UK, with higher rates just over 22% in the private sector. However, different businesses are doing quite differently.
This month’s psychobitesize will look at the real issues with attrition and psychological modelsused to try and explain it.
Attrition– what’s the cause for concern?
Attrition is increasinglybecoming an issue for employers. In short, attrition costs businesses money.Not only that but high attrition of employees causes concern and worry,creating a sense of insecurity and low morale.
Investigating the cost ofattrition, research shows that $200 billion is spent in the US businesses alone replacing employees that have moved on. The money required to re-source,re-recruit and re-train lost individuals, as well as wasted management time andlack of efficiency while they’re learning, is estimated at around 14 x theirbasic salary. Not cheap.
Companies who can have animpact on their attrition figures, even by the smallest amount, are essentially saving themselves a great deal. When the bank of Scotland reduced theirattrition figures by just 1%, they saved around £30m.
What are the causes?
A number of studies havedetermined key factors in determining whether an employee will leave or not.Some of the most important are detailed below.
Winsborough, Morris and Hughes
Researched the attritionrates at a large military organisation in New Zealand. Their research showed that an intention to quit was not the best predictor ofwhether an individual would in fact leave. They found that satisfaction with work and the feeling of connection tothe organisation were being diminished as a result ofpoor management and a lack of respect. Six key factorswere identified as fundamental:
- Belonging
- Work-life balance
- Respectful work environment
- Involved management
- Job satisfaction
- Anomie (anxiety or isolation resulting from a lack of social control)
Schneider’s Model
Schneider and his colleagues created an attraction, selection and attrition model from theirwork. This model is now used as a basis for understanding how individual features in an environment may contribute to people leaving.
David Lee
Lee found that regardlessof age and profession, there were 6 key, hard-wired needs that individuals need to have fulfilled. The more they have, the less likely they are to leave.
- Meaning and purpose
- Community and connection
- Learn and grow
- Sense of control and autonomy
- Mastery and self-efficacy
What all of the researchdemonstrates is that the reasons for leaving any company are notstraightforward and are rarely based on one thing alone.
What can be done about it?
A lot of work has beendone on the possible solutions to attrition issues. The key to these is that they need to be tailored to the company as not every business has the samepeople issues.
Below are some of the most commonly used tactics employed by companies to keep their staff from walking out the door:
- Tighten up hiring so you hire the right person inthe first place!
- Competitive salaries, benefits and holidays
- Create chances for individuals to contribute
- Create social or sports clubs and initiatives toget employees talking and belonging
Employee engagement is thekey for many companies. Global employee research consultancy ISR noted some key findings from their work on employee engagement.
- 50% of UK employeesthink their business doesn’t do enough to engage them
- 26% of UK employeesfeel they don’t have the opportunity for personal development
- Higher employee engagement = 19.2% increase in operating income
- Lower employee engagement = 32.7% decrease
