The Hindu Business Line : Some attrition needed to stay healthy

Bangalore, Oct 6 Attrition is healthy. For an economy that’s on a hiring spree, this may sound unacceptable, but some HR managers do believe that a company needs an optimum level of attrition to stay healthy.

While 60-70 per cent employee turnover — which some sectors are experiencing — signals danger, there is a view that 24-30 per cent attrition per annum is healthy for an organisation. Says Mr Ashish Taneja, CEO, Vertex, a Gurgaon-based BPO, “About 3-4 per cent attrition per month is sustainable and if this includes involuntary exits too, I think it’s good for the organisation.”

Dr Pallab Bandhyopadhyay, Chief People Officer, Cambridge Solutions, says that about 15-20 per cent attrition is an optimum figure, but it’s not sheer numbers that matter. “We have to consider what kind of people we are losing. We may be losing some amount of actual knowledge during this attrition.” Ms Hema Ravichandar, who provides Strategic HR Advisory to organisations, does not consider attrition numbers important. “Companies should recognise consistent poor performers and send them out.”

There are certain caveats to the attrition issue though, says Mr C. Mahalingam, Senior Vice-President and Chief People Officer, Symphony Services. For instance, when a company wants a high-performing team, then the bottom five per cent have to be shown the door. Also, when the company is not growing aggressively enough, it’s better to let go of over-ambitious people. There’s also a situation when the talent pyramid starts swelling at the top, then the axe falls on the senior people.

A senior HR manager of a Bangalore-based BPO recently remarked that in some cases, long-stay employees may not be such a good thing after all. “We do look forward to some exits after a couple of years, either because of their lack of performance or because they cannot align their growth to organisational growth.”