Company Background
American Express Company is a global firm that specializes in providing payment card services. As a global payments firm, it mainly provides credit and charge cards to customers and enterprises. Card processing fees collected from companies that accept American Express (Amex) are its primary source of income. Its headquarters is located at 200 Vesey Street in New York City’s Lower Manhattan neighborhood, specifically in Battery Park City.
Company Challenges
Upon reviewing the SWOT analysis of American Express, it is evident that the company faces a challenge due to a higher attrition rate (Department, n.d.). Employee attrition refers to the uncontrollable and unpredictable reduction of the workforce due to retirement, resignation, sickness, or death. The attrition rate measures the number of employees who leave the company. Employee retention is crucial for a company’s success, and the attrition rate is a key metric that provides insight into how effectively the organization retains its employees.
Causes and Impact of High Attrition
American Express has a higher attrition rate in its workforce compared to other organizations in the industry. As a result, the company has to spend more than its competitors on developing and training its employees. The situation needs improvement, as high attrition and turnover rates can indicate underlying problems within the company. The problem leads to lost opportunities, hiring costs, lower productivity, and employee replacement, which can cost one-half or two times the annual salary (Kurniawaty et al., 2019).
Retaining employees and developing talent is in the company’s best interest. High attrition can be time-consuming, as every recruit needs to review CVs, screen candidates, and conduct interviews. After making an offer to an employee, they need to be onboarded and trained. Constant change makes it harder for employees to develop positive working relations with coworkers, resulting in a lesser sense of community and teamwork.
High attrition rates have been attributed to different factors in the company. Employees who feel they are not being paid enough are likely to leave the company when they get an offer for a higher salary. Employee recognition may lead to attrition if employees feel they need to be appreciated more in the workplace. Top-performing employees may feel stagnant in their current roles and seek career advancement opportunities.
Additionally, employees may feel overwhelmed by the workload or experience extreme stress, leading them to consider leaving the company. High attrition rates may negatively impact the company. American Express faces threats of a workforce shortage in the global market, posing a challenge to the steady growth of profits (Department, n.d.). Offering recommendations is crucial in helping the company address this challenge.
Recommendations for Reducing Attrition
Competitive Salaries and Compensation
American Express should consider offering competitive salaries and total compensation, as well as keeping up with market rates. Payments and benefits are primary reasons people take jobs and show up for work on a daily basis. Competitive salaries and compensation would be key to convincing workers to stay, followed by generous time-off policies and benefits.
The company should start by offering appropriate salaries to attract talented and qualified candidates. It should offer regular raises and monitor what other companies pay for similar roles, particularly for hard-to-fill positions. The organization should expect to pay more for those with demanding skills in pharmacies that are tied to project completion. Establishing a talent management process can help identify top performers and correct imbalances by conducting an analysis that may limit compensation.
Promoting Healthy Communication
The company should promote healthy communication among employees. It will succeed by establishing opportunities for employees to bond with one another, such as through lunchroom conversations or happy hours. Cultures in the organization should help promote communication among workers. This will help determine why people leave the organization and identify its differentiators and areas for improvement. Communication is key to sustaining employee engagement, especially after the onboarding process, where employees may feel isolated if not treated fairly.
The company should have goals to update frequently and share with the entire team, and maintain two forms of communication to ensure everyone can be heard. Employees need to feel appreciated, and follow-up should help demonstrate initiative and value in response. Setting the tone for leadership effectiveness and employee engagement initiatives can help reduce the employee attrition rate. It is essential to reaffirm the confidentiality of statements made by employees to ensure they are not scared of offering feedback. Feedback should be appreciated and listened to; action should then be taken based on the results.
Flexibility in Work Arrangements
The company should consider offering flexibility to give them more latitude to boost retention. According to Chung & Van der Lippe (2020), many employees leave their jobs because they lack flexible working options. Others felt they would be more level if the company offered flexible work. Flexibility may include telework or remote work, flex time where employees are required to work a standard number of hours, part-time schedules, job shares, and compensated work weeks. In addition, flexibility would help minimize the stress resulting from the organization’s workload.
Work-Life Balance
Another essential strategy the company would employ is prioritizing work-life balance. Work-life balance is a source of struggle for many employees and can lead to burnout in the workplace, prompting them to seek other roles. Once integrated into the company’s culture, work-life balance clarifies that everyone can take advantage of policies to keep employees happy. As a result, the employees feel more comfortable in the workplace and can be more productive. Work-life balance reduces employees’ resentment and helps avoid issues with stress; hence, employees tend to be retained at the workplace.
References
Chung, H., & Van der Lippe, T. (2020). Flexible working, work-life balance, and gender equality: Introduction. Social Indicators Research, 151(2), 365-381. Web.
Department, S. M. (n.d.). American Express SWOT analysis matrix (strengths, weakness, opportunities, threats). Fern Fort University. Web.
Kurniawaty, K., Ramly, M., & Ramlawati, R. (2019). The effect of work environment, stress, and job satisfaction on employee turnover intention. Management Science Letters, 9(6), 877-886. Web.
