The Laws of Attrition: A Best Practice on Retention
"Employee Engagement" is to "Attrition" as "Root Cause" is to "Symptom." More often than not, HR teams try to control attrition but ignore the root causes. Temporary fixes result such as knee-jerk promotions, salary hikes and counter offers leading to a lesser number of satisfied employees at higher costs. The HR teams continue to stick bandages on the wound instead of fixing the root cause of the hemorrhage.
This article suggests one of the approaches towards predicting and controlling attrition and is typically applicable to most services companies.
Predicting Windfall Attrition
Before we get into the best practices, there is a theory I created along with my team on how to engage employees in a services set-up. Services organizations, specifically the offshoring ones in destinations like India, have people working together as a team on a common project, at a common place, reporting to a common manager and having a common customer. Typically the services, support and process types of work are carried out in offshore centers.
Sometime back, we realized that while there is some trending to attrition based on the bonus cycles, increment cycles, promotion cycles etc., there are some crucial peaks which are inexplicable. There have been instances where a team of people working on a common project was suddenly wiped out or had double/triple the attrition as compared to the rest of the organization. This is a type of attrition which cannot be attributed to common causes.
We analyzed various sub teams and spoke to a lot of people who moved away from those teams. We then realized that there are two factors which caused this windfall attrition. Each member of the team can be categorized into a 2X2 matrix across these two key factors as shown in the figure below. These factors, as we defined them, are "Influence on the team" and "Visibility in the team." Each quadrant of this matrix has a unique characteristic, as mentioned below.
The Team Influence and Visibility Matrix
Quadrant 1 : This is where those highly visible players who also have a great influence on the team are placed. More often than not, this quadrant contains the best performers from the team. These are the opinion-makers in the team who are visible to the management and the team as well and are respected for their performance. These people are the ones who cause what I call "windfall attrition" when they leave, since people follow them. The issue here is not about retaining these people, since two-thirds of the people in this quadrant are the best performers around whom most of the retention tactics/policies revolve. Where the organizations miss out is the remaining third of this quadrant, who are typically the high value employees that might be overlooked in the bargain.
Quadrant 2: This is where most of the "Architect", "Domain Expert" type of people figure. They have little visibility to the organization’s superiors, but a great influence on the team due to their expertise in their work. These are also the mentors and go-to people for the rest of the players on the team. These pose the second biggest threat of windfall attrition if they leave since they will have a high influence on a certain group of people within the team. They are also the ones who fly below the radar on most rewards and recognitions, and thus miss out most of the time. These are the silent players who come and go silently, but have people follow them when they go.
Quadrant 3: This is an interesting set of people who are most visible to the superiors and management, due to the fact that they are clever operators. Sometimes they have a proximity to the customer and thus become important to the superiors. These also are the folks who have the least influence on the team, since the team knows they are people with low potential. In fact, this is a dichotomy where the team might not want these individuals, but the superiors would do anything to keep them on. This is exactly where the Rewards and Recognition process has a beta error of rewarding non-deserving employees. They are also the ones whose attrition will cause some pain, since there will be customer escalations or the team leader might feel things coming down and get the HR team to go all out to retain them. The reality is that if they go, there will be the least long-term damage might even result in maintaining better team harmon.
Quadrant 4: Simply put, doesn’t matter!
How do we use this practice?
Most of the HR efforts go into identifying the people based on potential and performance and devise policies accordingly. In effect, what it does is control symptoms and some beta errors still pass through. What these additional parameters do is identify some of the factors in influence and visibility, which assess the real health of the team and predict the windfall attrition. In following this approach, the issue becomes knowing the teams and sub teams very well. This requires high quality ground intelligence, which, with the increasing span of HR teams and very little focus on managerial effectiveness initiatives, can be a huge challenge. But this is one investment which for sure pays in the long term.
One of the examples where we deployed this was to nominate "HR catalysts," who are the conscious keepers of the team’s health and are extended resources for HR teams. These catalysts are a part of the team and also work closely with HR to be their eyes and ears. More often than not, a HR catalyst type of model requires informality in the way the model is deployed. Processizing this can result in false information, and the HR teams need to be very careful about how they engage the catalysts.
This concept this works best in specific geographies like India and China, to an extent, where the significance of team is very important due to the way the off-shoring model is structured. This concept needs to be tweaked for other geographies, where employees might be more used to working and contributing as individuals than as teams and where coming to work at a common place, for a common customer might not be meaningful.
In conclusion, an in-depth understanding of the workforce is necessary in order to assess control the causes of attrition. Retention efforts will then be focused on those employees who are a value-added asset to the organization.