Staff Attrition and Implications for Human Resource Managers

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Executive Summary

HR managers have a responsibility to manage the company’s human resources to ensure that business objectives and strategic plans are met. One element of this responsibility is attrition, which is a voluntary or involuntary loss of employees. The process typically happens when employees choose to transfer to a different company or retire. However, some organisations have poor organisational culture, which leads to attrition because the staff is unsatisfied with work conditions, rewards, benefits and other elements of work. The three studies, examined in this paper, attribute high attrition rates to work hours, compensation, inadequate work-life balance and some organisational factors, for instance, having no support from a supervisor. Notably, two of the studies focus on retail and hospitality industries, while one examines the work of a technology-related field and the differences in results can be attributed to the varied work conditions. This report aims to investigate three articles on attrition and implications of this process for the HR managers and discuss different research methods.

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Attrition

Introduction

It is natural for an organisation to lose some of its employees, the gradual reduction of the number of personnel happens because people choose to retire or transfer to a different company, and in some cases, they are terminated. Although most companies experience some level of attrition, high rates can be harmful and lead to a lack of manpower. As a result, the necessary tasks may be left unattended because there is no one who can perform them. Considering this, an HR manager should keep track of the current attrition rates and ensure that high turnover, the company avoids the need to address high turnover.

The term ‘attrition’ can be defined as a process of a gradual reduction in the number of people a company employs. This can be caused by non-organisational factors, such as death or retirement; however, in some cases, attrition is attributed to the inadequate organisational environment. Voluntary attrition is the focus of this paper since it can harm an organisation’s performance. From an HR perspective, attrition means additional costs and resources required to account for the staff members who resigned voluntarily. A significant problem is the cost associated with having to advertise positions, hire and train new staff members. By having a comprehension of the attrition rates, an HR manager can effectively hire people based on the organisation’s needs, especially for critical positions. According to a report by Itachi (2017), high attrition results not only in additional spending but also is associated with a loss of knowledge and skill. Therefore, high attrition has both financial and non-financial implications for a business, which can adversely affect the company’s operations.

Generally, attrition can be addressed through a motivation policy, company culture and compensation programs. The goal is to ensure that top-performing employees and those in critical positions do not leave the company. This paper will analyse three papers on employee attrition and synthesise the current knowledge on how HR managers can address attrition. In addition, it will provide an outline of research methods, their strengths and weaknesses.

Methodology

Stages of the Research Process

In total, there are ten stages in any research process. First, a researcher has to define a significant issue that requires attention (Cooper, 2018; Itani, 2017). Secondly, they should review the literature and find evidence supporting the significance of the issue and how others addressed it. The third step is the development of a hypothesis, which is a narrow research question that includes a possible resolution to a problem. The next step of the research process is determining the design and sampling methods. Next, a researcher collects data, which can be done by using both primary and secondary sources. A researcher has to analyse the data through data processing and measurement. This is followed by a hypothesis testing, which is a step where a researcher tests the data in relation to the hypothesis. If the hypothesis is correct, the researcher proceeds to interpret the theory and the results of the study, and this is the final stage of the research process. Finally, to share the results, a researcher prepares a report with findings, objectives and methodology.

This paper analyses research where the authors applied one of the following methods — interviews or questionnaires. A questionnaire is an easy way to collect responses from study participants because they can be distributed either face to face or by using online resources, for example, Survey Monkey. Surveys can contain either close-ended questions or open-ended questions, although most surveys use close-ended questions because it allows the researcher to quickly analyse and interpret results.

The main advantage of a survey is that it can be carried out by one researcher, who will distribute the questions and analyse the findings. However, because there is no face-to-face interaction between a respondent and an interviewer, survey questions can be interpreted incorrectly. Another disadvantage is the subjectivity of responses and inability to ask any follow-up questions to clarify some responses.

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Unlike surveys, interviews are designed to collect a lot of information from their responders since they are encouraged to respond in a manner comfortable to them with as much time dedicated to each response as necessary. There are three types of interviews — semi-structured, unstructured and structured. The difference is in the amount of guidance an interviewer provides to the participants. The main advantage of any type of interview is the amount of data that a researcher can collect, some responses may differ from what was initially anticipated. Moreover, interviews are face-to-face interactions, meaning that the interviewer can ask follow-up questions and clarify some responses if necessary. However, the disadvantages include more time to plan and conduct interviews and higher costs when compared to questionnaires. Overall, both surveys and interviews are valid methods of data collection and the main difference between the two is an effort to complete each and the amount of information the researcher can collect.

Discussion

The First Study

Haldorai et al. conducted their research in 2019 to determine what caused attrition at a five-star hotel. Notably, this study focuses on an industry where attrition is typically high because the demands of the jobs and a need to work on a 27/7 schedule are usually difficult to adjust to. The authors considered factors that were determined in prior research — work hours, work and life balance hindered by the job responsibilities, emotional exhaustion, career progression, inadequate pay and work environment (Haldorai et al., 2019). In this study, 308 full-time employees with at least one year of experience were surveyed.

The authors tested several models with different types of factors, and validity was checked through Average Variance Extracted (AVE). As the results suggest, in the short-term, turnover intention is provoked by emotional labour, work overload and interpersonal tensions (Haldorai et al., 2019). From the medium-term perspective, the issue of work and life balance added to the employee’s intention to leave. Finally, in the long-term, both factors of the short-term and long-term attrition contributed to the intention to leave an organisation.

Notably, apart from the questionnaire, the researchers used the pull-push-mooring framework. This framework is used to explain human migration, but it can be applied for HR purposes as well since the basis of it is the factors that prompt a person to leave, or push factors, and those encouraging them to stay, or pull factors. One can see different types of attrition factors in Figure 1. Additionally, mooring factors are the social, personal or cultural perception and attitudes that affect the way a certain job is perceived.

Types of factors that explain employee attrition based on Haldorai et al.’s
Figure 1. Types of factors that explain employee attrition based on Haldorai et al.’s (2019) research (created by the author).

The strength of this study is that the authors focused on the short-term, medium and long term intentions to leave. Moreover, the researchers also included questions that should provide insight into why people do not want to join the hospitality industry, which enables HR managers to have a comprehensive assessment of the industry and organisational factors that may need to be changed to hire people more effectively. One limitation of this study is the subjectivity of responses, which is an outcome of the design that Haldorai et al. (2019) used. Another potential issue is that surveys in this study were close-ended, which did not provide the participants with an opportunity to mention their own perspective on attrition.

The Second Study

The second study is by Gayathri and Thaiyalnayaki, and it was conducted in 2020.

473 women who work for information technology (IT) companies in Chennai were asked to answer survey questions. The author used journals, magazines and other printed sources to develop the questionnaire with potential factors that impact the attrition rates. The following factors were contributing to the attrition in these IT companies: compensation, organisation’s environment and culture, lack of support from superiors and no opportunities for career development (Gayathri and Thaiyalnayaki, 2020). Hence, in the IT industry, there is an issue of financial compensation and company culture that prompt employees to leave.

This study examines an industry where the nature of work differs from that in the hospitality or retail sectors, mainly because the employees do not always have to communicate with the customers face to face and work hours are not a determinant factor. Hence, issues of work hours and work-life balance were not reported by Gayathri and Thaiyalnayaki (2020), instead, the focus shifted on the companies’ environment and opportunities for career development. The strength of this study is that Gayathri and Thaiyalnayaki (2020) used two methods of data collection, including questionnaires, to collect primary data and a literature review to collect secondary data. One limitation is that the authors examined Indian companies, meaning that the responses may differ for IT employees in other regions.

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The Third Study

The final study in this paper is by Bagchi (2020) who used interviews to study the attrition rates and causes specifically for the retail industry in India. The author selected face-to-face interviews because prior studies on the topic provided generalised findings.

The frontline employees noted that ‘competitive pay, work-life imbalance, work stress due to long working hours’ prompted them to leave their jobs in retail (Bagchi, 2019, p. 20). Moreover, the author reports that the average service time reported by the respondent is 12 months, which means that attrition rates in the retail industry are high.

One significant finding of this study is that employees report being happy with the work culture and freedom they are provided, and most report that they feel valued at their position. However, Bagchi (2020) concludes that the majority of the interviewed feel uncertain about the policies of their employers, for example regarding seeking leaves, and do not have an understanding of career development opportunities available to them. Moreover, many complain about having little time they can dedicate to being with their families.

The strength of this study is the design since interviews allowed the author to gain an in-depth understanding of the HR functions and attrition. Moreover, the author provides much evidence from the interviews that point to the issues in the way retail businesses structure the work of their frontline employees, which is very helpful. Hence, despite some limitations, such as a limited sample, this study is a valid research work that highlights the problems contributing to high attrition rates in the retail industry.

Comparison of the Sources

All three studies, despite examining different industries and using varied data collection methods, show similar results. Moreover, all authors agree that high attrition has a negative effect on the organisation’s ability to function. Notably, a study by Haldorai et al. (2019) incorporates the three types of attrition factors and short, medium- and long-term perspectives, making it the most comprehensive review of attrition factors out of the three pieces of research. Other researchers used a simplified approach to structuring interview and survey questions, where potential contributing factors to attrition derived from the literature were included.

There is a difference in the specific attrition factors connected to the different industries that were the focus of these studies. For example, the two studies that focused on work-intensive industries that relied on their employees’ communication and cooperation with the customers show that work conditions, mainly work hours and emotional distress are the major contributors to attrition (Bagchi, 2020; Haldorai et al., 2019). In another case, organisation specific factors, such as culture, environment, communication with leadership and opportunities for career development were ranked as the most important for the employees.

However, there is a possibility that there is some bias that affected the responses of the employees. For example, Bagchi (2020) surveyed current workers of a retail chain, and their responses indicate satisfaction with the work environment and culture. However, the current employees may be reluctant to share their actual feelings about the work due to fears of their employees finding out, despite the fact that the study is anonymous. The two other studies also focused on examining the responses of the current employees, which means that these studies are potentially subjected to bias. Finally, even exit interviews do not provide full clarity regarding the employee’s leaving intentions because the latter may want to avoid providing feedback to their employer.

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Data Analysis

Based on the three studies, six attrition factors displayed in Figure 2 are distinguished. The following – are most likely to contribute to an employee’s decision to leave the company. As the three research studies suggest, high attrition is the result of extrinsic, or organisation-specific factors, including salary, benefits and management behaviour. The following are the key attrition factors:

  • Work and life balance
  • Compensation
  • Organisation’s culture
  • Work Environment
  • Policies
  • Support from supervisors
  • Career development opportunities
Attrition factors are based on the result of the three studies
Figure 2. Attrition factors are based on the result of the three studies (created by the author).

The attrition at these companies is an acute issue because the employees are unsatisfied with their working conditions; thus, they choose to leave. Multiple aspects hinder people from enjoying their jobs and having stable interpersonal relationships. As a result, the necessary tasks may be ignored because there is no one to complete them. The companies suffering from attrition face multiple issues including productivity reduction, financial losses, and some others. However, specific strategies can be implemented to prevent an organization from a high level of attrition.

First, searching for approaches to improve the workers’ aptitudes is useful for the business, the client, and the representative. Numerous focuses use multi-skilling as an approach to be more effective. Utilized effectively, it can likewise be viewed as an advancement device. Representatives will be prepared in new abilities after specific timeframes or potentially arriving at a particular presentation level (Cooper, 2018). Whenever conveyed effectively, this gives workers a feeling of accomplishment and makes assortment in an occupation. It can be accomplished without a monetary prize bringing about roused staff who will remain with the business longer as they move along the expertise way while meeting the business requirement for productivity.

Openness and communication are of the utmost importance for any successful business. Any organization requires its employees to comprehend the objectives of the company. It is significant that representatives realize the part they need to play in the process. There have been various acceptable correspondence models where worker centre gatherings are utilized to implement changes, and bosses are being used to drive growth forward and give the representatives a voice (Itani, 2017). Targets should be adjusted and imparted successfully, and results should be accounted for and talked about. Numerous focuses now have electronic innovation to show execution details and working examples. The utilization of intranet destinations to lead data can likewise be extremely viable. People should utilize all the correspondence media that are accessible and recall that what may not appear to be critical to an administrator might be urgent to an operator.

Work-life balance is a complex issue in the modern world. Workers need to comprehend that the business must satisfy its clients’ needs. In contrast, the company must understand that the representatives have outer weights and do everything they can to support them. The family-accommodating enactment presentation has constrained many contact habitats to take a gander at how they plan staff (Cooper, 2018). The representatives regularly make these plan decisions through centre gatherings, continually remembering that the business needs should be met. Each worker is extraordinary and has unique abilities and skills (Sood, 2017). It is inappropriate to expect what everybody needs or wants; therefore, giving alternatives is an excellent method of finding the right answer.

While preparing is regularly too short to consider teaching all that one wishes, training strength is significant, so new counsellors are not overpowered by managing furious clients, for instance when they start all-day work. Due to the shortage of personnel, firms often distort the benefits of the job in order to attract new candidates who will substitute those who left (Itani, 2017). Nonetheless, if they over-guarantee or underestimate the benefits and obligations of the work, companies will be at high risk of early dismissals. Not every worker is ready to conform to the new rules. Therefore, all aspects should be instructed in the first instance to avoid misunderstandings.

Conclusions

Overall, this paper examines the issue of employee attrition and how HR managers can address it. Attrition is a negative phenomenon since it leads to additional costs, time constraints and efforts from an HR manager necessary to account for the personnel who left the company. In some cases, high attrition is critical, especially when employees in key positions consider transferring to a different company or industry. This paper also reviewed the steps of the research process, which can help an HR manager to collect and analyse information about their company, for example, when attrition rates are high, and the HR wants to understand the causes. Two approaches to data collection – interviews and surveys are also examined as a way of collecting data.

Recommendations

The recommendations in this section target the following stakeholders: employees and HR managers. The first category will benefit from the advice because it targets the improvement of work conditions. As Halderai et al. (2019, p. 46) note, ‘negative impact of employee turnover involves increased costs in terms of multiple stages of HR tasks, such as recruitment and selection, training, and development’. The second category’s main responsibility is to ensure that an organisation functions efficiently, which includes ensuring that there are enough employees at key positions. Hence, this will help them manage the work of their organisations. The owners of a business or leaders of an organisation are stakeholders as well because attrition improvement will result in cost reduction associated with having no need to hire new staff and work efficiency improvement.

To implement the advice from this section, the author recommends developing and implementing an attrition management program. The main objective is to maintain a stable workforce. Hence, the first step is to examine a company’s attrition data and monitor the metric regularly to ensure that any significant changes will be uncovered in time. Another suggestion is to survey the employees to determine the factors that are important specifically for people in a particular company since the three examined studies indicate that some differences in attrition factors may be present based on industry. The following steps are a part of the proposed attrition management program:

  • Establish attrition metrics and monitor attrition levels.
  • Reexamining the remuneration and benefits systems or implementing them if the company does not have any.
  • Reexamine employee compensation and readjust compensation according to the average in the labour market.
  • Consider working schedules and work hours for employs in the hospitality and retail industries.
  • Develop and communicate policies on sick leaves.
  • Encourage supervisors and leaders to support subordinates and communicate with them (establish training programs to facilitate this, if necessary)
  • Create career development plans for the employees and discuss career development opportunities for key employees.
  • Work of developing organisational culture, starting with the companies mission and vision statements.

Recommendation One

The first recommendation refers to the improvement of managerial actions. A high level of attrition is a result of flawed management system in the organization, and by acting too strict, managers prompt workers to leave their workplaces. The decrease in productivity of employees is the main symptom of excessive diligence of managers and leaders. To avoid massive leaves, an organization should conduct a meeting with managers and supervisors and tell them about proper leadership models to be used. Moreover, it is vital to explain that a strict management style is not productive.

Recommendation Two

There is an urgent need to create career opportunities for workers. Not many people are ready to spend years having one job position. It is simply impossible to be a waitress or a housekeeper for many years. Such situations lead to the consequences that employees merely do not have an urge and motivation to perform better (Itani, 2017). Therefore, there is a need for the company to provide benefits and job opportunities for those who stand out. Moreover, firms can establish some benefits for those who work for years.

Recommendation Three

The third recommendation concerns development of the communicative environment. Communication is a key to solving multiple issues; however, some organizations neglect it. Without proper communication, employees do not perform well and seek for better opportunities (Cooper, 2018). Hence, to establish an appropriate environment and avoid leaves, a company should implement a set of actions concerning conversation improvement. Such operations can include team-building meetings, training programs, and other activities which boost interrelations within a company. Moreover, they comprise praising, complimenting, and acknowledging their employees’ successes.

As it was identified, the primary stakeholders are employees and HR managers. They are people who define the organizational environment and impact the company’s general performance (Itani, 2017). Managers are the drivers of changes because they direct an organization in many ways stating new goals and the means of achieving them. Meanwhile, employees play an important role by completing minor tasks that lead to accomplishment of the large ones. Therefore, both sides will be affected by the implemented changes.

The first category would receive multiple benefits, and, most importantly, it will obtain a genuine desire to work harder. By establishing contact with the managers, workers would not have as many problems and misunderstandings as they used to have. Moreover, constant conversations will help to strengthen interpersonal relationships and trust. On the other hand, managers will benefit from communicating by receiving better outcomes and achieving set objectives. Close contact with the employees will provide respect for managers.

If managers create new opportunities for their staff, many employees will choose to perform better under different circumstances. In addition, managers will identify who works most efficiently and offer them a further prosperous career path (Sood, 2017). Knowing that there are certain benefits, staff will improve the company’s operating performance in general, as they know that managers care for them.

In general, managerial actions will define a company’s success as their role is central in delegating the tasks which make it possible to achieve multiple goals. Supervisors’ behaviour is a reflection of employees’ pattern of conduct (Cooper, 2018). Therefore, managers are in charge of creating an appropriate environment if they want their workers to bring success and changes.

Reference list

Bagchi, S. (2020) ‘Employee attrition and its controlling measures: a case study of a retail store in Pune’, IJASSH, pp. 20-25.

Cooper, D. (2018) Business research: a guide to planning, conducting, and reporting your study. London: Sage.

Gayathri, K. and Thaiyalnayaki, M. (2020) ‘A study on causes of attrition among the women employees working in selected information technology (IT) companies in Chennai city’, Journal of Critical Reviews, 7(8), pp. 3039-3051.

Haldorai, K. et al. (2019) ‘Factors affecting hotel employees’ attrition and turnover: Application of pull-push-mooring framework’, International Journal of Hospitality Management, 83, pp. 46-55.

Itani, S. (2017) The ideological evolution of human resource management. London: Emerald Publishing.

Sood, P. (2017) ‘Attrition: The possible scenarios and solutions’, International Journal of Education and Management, 7(3), pp. 381-383.

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