The Hindu Business Line : Attrition is the name of game

Rapid employee turnover, or attrition, has become a bothersome feature of the competitive milieu in the post-globalisation era. It is becoming a pervasive characteristic of business enterprises, so much so it is hard to find an employee sticking to any particular firm for more than five-six months.

Attrition comes about essentially in two ways: First, the opening of numerous opportunities for self-advancement, in line with one's own talents and ambitions. There is no putting down of smart people always on the lookout for bettering their career prospects and compensation packages. There is no point in lecturing them on loyalty, commitment and the like, because those bygone values have taken a beating from the consuming desire to get rich quick and live in luxury. And why not, they ask themselves, if they can get the best terms for themselves by legitimate means based on their capabilities and bargaining skills?

The second reason for attrition is the tempting offers deliberately dangled by firms keen to plug the gaps caused by the exit of their employees, as also to attract persons of better calibre and track record, to improve their bottomline.

There are many instances of bitterness and bad blood resulting from inter-firm `poaching' which is rampant.

The manpower outflow on both these counts is facilitated by the ubiquitous Internet which is exploited to the utmost by employers and employees alike. Resumes/offers are posted, contacts made, deals struck and new positions taken — all at the speed of light! The occurrence of any vacancy due to attrition means the enterprise having to write off the considerable expense and time it may have put in for training the employee and fitting him into the tasks assigned to him. Also, there is the risk of the departing employee carrying with him data on the business techniques and plans, including any product or process under development, which may be of great benefit to rivals. Finally, the time and trouble involved in locating, training and inducting a suitable replacement and the consequent disruption in the working of the firm may entail a price which is heavy.

Ineffective expedients

Any number of expedients have been, and are being, tried but have proved ineffective. Binding the new appointee to an undertaking to put in service for a fixed period on pain of payment of a penalty has been found to be impractical, because an employee determined to quit will find ways of getting round it. Giving a pay raise, fast-track promotion, adding to perks such as free house, transport, stock option and the like, even the novel handout of a `retention bonus' paid in the event of his sticking to the company for an agreed duration — have all been of limited value. There has been no dearth of experiments with functional autonomy, foreign tours and deputations, high-sounding designations and so on under the guise of creating a sense of belonging and inducing the employee to identify himself with the fortunes of the company. All to little avail.

It appears, therefore, that the right question to be posed in respect of employee turnover is not whether it is good or bad for business and the economy. In the overall, the good and the bad may cancel out each other and the sum total of the effects may be the same. Since it is in any case built into the situation, enterprises had better learn to live with it as best they can, instead of letting themselves be thrown off their stride by it.

B. S. RAGHAVAN

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