Employee Attrition

Title of Paper “Impact of Employee Attrition on People Management in Organisations” Author Name Santhosh Kumar Abstract When people do jobs that just don't suit their liking, they start feeling irritated and it results in low productivity, dissatisfaction, low morale, absenteeism and other negative behaviors till the employee is shown the door. It is therefore necessary for the organization to avoid this before hand. The other expression for avoiding this type of behavior in organization is through effective people management.Talent management implies recognizing a person's inherent skills, traits, personality and offering him a matching job. If any other position is given it will cause discomfort, resulting in lack of talent pool, low productivity, inferior quality, dissatisfied customers and may even lead to shut down. A wrong fit will result in further hiring, re-training and other wasteful activities. This ultimately affects the society and the economy. The objectives of the study was to find out Impact of Employee Attrition on People Management, Reasons for employee attrition, layoffs, mismatch between demand and supply and finally to develop ideas to manage talent with reference to financial Services in India. The paper highlights the topic in review of literature and analyzing the same. How can organizations retain talent, steps they can take and try to avoid attrition. The paper is compiled by collecting secondary data. It is the job of the Management, particularly the HR Department, to place candidates with prudence and caution. No matter how inspiring the Leaders are, they are effective only when they work as a team. A team's output is healthy only if the members are in sync. To achieve such harmony, the key ingredient is "putting the right people in the right jobs". Key Words: Talent Management, Employee Attrition, Layoff, Re-Training, Productivity Title: “Impact of Employee Attrition on People Management in Organisations” Introduction In an organization nothing is more crucial than fitting the right employee in the right position. Every person has a unique talent that suits a particular job profile. Yet there are some people who end up being in the area of work they should not belong to. Is it because there is shortage in demand for their talent or because they are lured by company compensation and benefits? Take the second scenario, in current climate of change, its really critical to hold onto key people especially with tough competition around and greater opportunities from larger companies. Do HR personnel fail to recognize these opportunities and talent with them? Do they fail to motivate them or does the organization culture does not allow them to grow? In view of this the need of hour for every company is to recognize talent within their organization and create different strategies to retain the best. In brief, they should learn the art of Talent Management. This will help them in growing in their operations and building a sustainable economy. Review of Literature A study by IBM (NYSE: IBM) and the Human Capital Institute (HCI) shows that while 84 percent of organizations know that workforce effectiveness is important to achieving business results, only 42 percent of those surveyed say managers devote sufficient time to people management The study, Integrated Talent Management, was based on research with 1,900 individuals from more than 1,000 public and private sector organizations around the world. It was undertaken by IBM and HCI to identify the return on investment of integrated talent management. Heidi Sprigi, president of Knowledge Infusion defines talent management as: “The process of managing the supply and demand of talent, to achieve optimal business performance is in alignment with organizational goals”. A survey conducted in 2010 by Knowledge Infusion in conjunction with the International Association for Human Resource Information Management (IHRIM) found that approximately half of all respondents said their companies had no integration between systems and talent management processes, and only fair to poor organizational alignment of the workforce to business goals. According to Kevin Wheeler, internationally known expert in talent acquisition and management says, “Most companies perform two or three components of a talent management system well, but the total system seems to be elusive without executive level involvement.” In a recent article by Dr John Sullivan called ’Talent Management Road Kill, Part 2’, he says, “There is a growing trend of choice HR jobs being awarded to non-HR professionals following years of senior management dissatisfaction with HR in general. Talent management is seen as a strategic task by senior leaders, but the perception is that HR professionals are generally incapable of executing talent strategies.” While most senior managers may believe that HR lacks the skill set to effectively run a talent management programme, senior management has not determined how to create a fully integrated talent management strategy. Cindy Marsh says that key roles from the executive management team through lower levels should be included in the succession plan of an organization in order to prevent business disruption. A business strategy of an organization must include a talent-management element that incorporates a set of HR policies and practices that management commits to implement. The organization will be in a position to measure via an audit how well talent management is being addressed when accountability is in place. This audit model is organized around five components including values, people, development, systems, and processes. Objectives of the Study To Study the Impact of Employee Attrition on People Management in Organisations. To find out the reasons for employee attrition. To analyze the reasons for layoffs. To develop ideas for nurturing talent To list out the role of HR strategies in talent management Reasons for Attrition Though the rising attrition within industries is a well discussed topic but very few HR executives have been able to pinpoint the ‘exact’ reason for this growing trend. A recent Hewitt “Attrition and Retention” survey shows one of the top reasons for talent attrition is inequity in compensation They also show that 27% of the employees in their EXIT interview mentioned compensation as the primary reason The other reasons are, Limited career opportunities Role stagnation Mismatch of job profile Job stress and work-life imbalance Odd working hours Lack of authority provided to accomplish one’s task Marriage, Social pressure Brand image of a new company Lack of Good working conditions Layoffs The Reasons are as follows: Due to lack of work Organizational change Termination of specific projects. Availability of fewer positions than there are employees entitled to such positions Employees ineligibility to continue in a position following its reallocation to a class with a higher salary range Employees ineligibility to continue in a position following its reallocation to a class with a lower salary range Elimination of positions due o work of the position being competitively contracted Importance of Talent Management Globalization: Now for any jobseeker, the whole world is a potential place to find employment. One can know the opportunities available in any part of the world easily and the number of talent seekers has also increased. Increased Competition: Increased competition in the market place has necessitated the need for consistently good performance on the part of organizations. These have made the companies to put in all efforts to hire and retain the best talent in the respective field of operations. Increasing Knowledge: The knowledge era has necessitated the retaining of those talents which have the ability to assimilate new technologies and knowledge, which are growing at a pace never seen before. Benefits of Talent Management The organization benefits from: Increased productivity and capability; a better linkage between individuals' efforts and business goals; commitment of valued employees; reduced turnover; increased bench strength and a better fit between people's jobs and skills. Employees benefit from: Higher motivation and commitment; career development; increased knowledge about and contribution to company goals; sustained motivation and job satisfaction. Managing Talent Here are some of the measures that should be taken into account to hire and retain talent in the organization, to be efficient and competitive in this highly competitive world: - Hire the Right People: Proper care must be taken while hiring the people itself. It would be beneficial for an organization to recruit young people and nurture them, than to substitute by hiring from other organizations. Care must be taken to fit the right person to the right job. Keep the Promises: Good talent cannot be motivated by fake platitudes, half-truths and broken promises. Unfulfilled expectations can breed dissatisfaction among the employees and make them either leave the organization or work below their productive level. Promises made during the hiring stage must be kept to build loyalty among the employees, so that they are satisfied and work to their fullest capability. Good Working Environment: It has to be accepted by the organizations that highly talented persons make their own rules. They have to be provided with a democratic and a stimulating work environment. The organizational rules must be flexible enough to provide them with freedom to carry out their part of task to their liking, as long as the task is achieved. Opportunities should also be provided to the employees to achieve their personal goals. Recognition of Merit: It is highly motivating for any person if his talent is recognized and is suitably rewarded. One way is providing them with salary commensurate with their performance. Promotions and incentives based on performance are another way of doing it. Another way is by providing them with challenging projects. This will achieve two objectives - it makes employee feel that he is considered important (a highly motivating factor) and gets the work done in an efficient manner and brings out the best in the employee. Providing Learning Opportunities: Employees must be provided with continuous learning opportunities on and off work field through management development programmes and distance learning programmes. This will also benefit the organization in the form of highly talented workforce. Shielding from High Work Pressure: If an organization has to make the most of the available talent, they should be provided with adequate time to relax, so that they can de-stress themselves. It is very important to provide them with holidays and all-expenses-paid trips, so that they can come back refreshed to work and with increased energy. They must also be encouraged to pursue their interests which are also a good way of reducing work environment stress. Recreation clubs, entertainment programmes, fun activities within the work area will also reduce the work life stress of the employees and develop camaraderie among the workers and result in a good working environment. Suggestions: Talent management practices can have crucial impact on society. It provides economic stability. A new frame work for talent management has to begin by being clear about the goal. Here are few suggestions which company can look in to Target for completion of work should not pressurize an employee, care should be taken to see that it does not hamper an employee’s personal life Counseling sessions should be conducted for treating depression among employees. Seminars can be conducted on how to balance personal and professional life Make employees always part of work culture. If possible, companies can try to fix flexible working conditions for those experienced and senior employees, who are working for long tenure Motivation is the biggest factor which drives work, so a word of appreciation, praise in front of others motivates an employee Along with it perks,increments,bonus can even increase the working tenure and productivity of an employee New entrants needs to be made aware of realistic situation from day one itself so that companies do not waste resources on providing training to them Keep an eye on competitors and try to bring changes accordingly Provide opportunities for development There should be open communication among levels in the company. Proper performance appraisal should be designed and explained with transparency New improved tracking system for effective recruitment can be used Conclusion HR managers should give close attention to reasons for attrition , who needs to be laid off, what is employee expecting from them and what makes them happy to contribute to organizations growth. To ignore why people are leaving the organization is to ignore the organization greatest assets – its people. People in organizations are needed to perform tasks, but they are not just mere tools. They represent organization dreams, ambitions, creativity and innovation. And to retain these valuable assets is one of the surest ways to build an organization. Approaching talent management from a comprehensive view point will enable companies to analyze, plan, forecast and execute business plans. Roles and responsibilities will be well defined and performance measures are designed to reward employees that contribute to the overall well being of the company. Highly demanding business environment makes it imperative for organizations to build competence in the form of superior intellectual capital. It is agreed by almost all CEOs of big companies that it is the human resource - a talented one - that can provide them competitiveness in the long run. So it is the duty of the HR department to nurture a brigade of talented workforce, Right person for the right job - is the new mantra. References: Article by Prof Peter Cappelli, Professor of Management, Director, Center for Human Resources, The Wharton School - University of Pennsylvania. Managing Talent in Flat world – An INFOSYS Perspective by Nandish Patil Talent Management FAQ - HR World Trends in Human Capital Management, The Emerging Talent Management Imperative: A Knowledge Infusion White Paper. Ebscohost site: Using talent-management audits can improve HR's results, by Preziosi, Robert C.1 www.nasscom.com www.talentmanagement101.com www.thehindu.com/business/article78173.ece