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As corporates struggle to find the workers they need, attrition continues to be a bane. Employers can do a lot more to reduce the number of people leaving the firm, says a top HR official.
Ketan Kapoor, CEO and Co-founder, Mettl, an assessment and skill measurement company, cited a study by Mercer Inc that showed that 45 per cent of employers reported turnover costs of $10,000 per lost employee, while 20 per cent reported costs closer to $30,000.
Hidden costs
“Studies show 75-90 per cent of new employees will decide whether or not to stay in the job within the first six months of employment. Although high turnover costs may not produce recordable associated losses, many employers and HR professionals underestimate the high impact of hidden costs,” Kapoor told BusinessLine .
Apart from the financial burden of recruitment, interviewing, hiring and training, employers also have to deal with reduced employee morale and lost company knowledge, credibility and sometimes even customers.
“Employers don’t currently put in the necessary effort to understand why an employee decides to leave when they do. Sometimes the cause could be as innocuous as a lack of guidance in the first few months, to an overall disconnect with other team members. Cultural fitment is another issue. How the company architects the growth of each and every new individual is paramount,” Kapoor said.
Campus recruitments
Skilled worker shortage is another hurdle employers are facing. To expand the pool of skilled workers and meet the demand, employers are taking the campus route to attract quality talent.
In its recent Campus Hiring Report, Mettl concluded that top IITs and IIMs tend to bag 137 per cent and 121 per cent higher salary packages, respectively, compared with other institutes. CS/IT graduates received the highest annual package of ₹6.9 lakh.
Conducted across 114 engineering and 80 management institutes during the recently concluded campus placement season, the report said employers continue to face many challenges: from early attrition to an inability to retain candidates even after rolling out lucrative offers. In a region-wise analysis of management institutions, it was observed that west India held a leading position with 17 per cent higher compensations than the average salary recorded. In addition, graduates from technology domain received the highest average salary package of ₹14.8 lakh a year.
Post-MBA, general management roles accounted for the maximum number of hires at 31 per cent, while roles in senior management were the highest paid jobs, commanding 118 per cent more than the average salary of MBA graduates.
Kapoor said, “In this era of business dynamics where millennials take over the army of workers, employers not only need the best fit for the role, they also need people to stay engaged, satisfied and devoted to the organisation.”
Causes of attrition
Inadequate pay, poor work-life balance, and lack of professional development were cited as the reasons for attrition.
“The learning and development team cannot put a full stop to this attrition rate, but can definitely control it to some extent. Scheduling psychometric assessments at random for batches of employees has been discovered to be an effective manner to delve into the mindset of a dissatisfied employee, much before the decision to quit is made,” Kapoor said.
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