If you’re an established company or even one that is just starting to grow – one of your biggest challenges is perhaps a high employee attrition rate. Every year, organizations invest a ton of money to reduce employee turnover and into the subsequent re-hiring processes.
‘How to control attrition’ is therefore a burning question for human resources. As you know, employee turnover can either be voluntary or involuntary. If the causes are due to reasons such as retirement or illness, there are not a lot of organizations that can do or worry about it.
However, if employees leave voluntarily or because of reasons such as poor work culture and bad pay scales, there is some thinking the higher management can do. Below, let’s understand what causes employee turnover and how to reduce attrition of employees.
What Is Employee Attrition?
Employee attrition or the company's attrition rate is the number of team members that leave the organization over any given period. Employers lose out on a considerable amount of time and effort due to high employee attrition rates, and it is thus pertinent for them to have an attrition control plan in place.
As mentioned above, employee attrition can mainly be classified as either voluntary or involuntary. For efficient attrition control, employers need to take a hard look at company policies and solicit employee feedback on a regular basis.
Further, to calculate the employee attrition rate, employers can use the following formula:
No. of employees resigned/No. of employees at the start of the month + No. of employees joined – No. of employees resigned) X 100.
This can help you arrive at an accurate attrition rate and gather data for comparative analysis.
Now let’s delve deeper into the main reasons behind high employee turnover rates.
What Causes Employee Attrition?
Employee attrition occurs due to various reasons, such as poor company culture, limited professional development opportunities, or a poor work-life balance. From a macro perspective, the reason behind this is maybe a lacking or unsupportive work environment, one that employers must look at improving.
According to several surveys, poor management or uncompetitive pay scales can also force people to leave the organization. This is further fueled by glitches, such as a mismatch of job roles or skills of the employees and an overall lack of fringe benefits on the job.
One main factor employers must keep in mind while devising attrition control measures is the competitive landscape that employees are a part of. Since there is no dearth of job opportunities these days, companies need to re-evaluate the way their employees are feeling and consider investing in holistic employee engagement.
Below, we have listed the 7 best ways on how to reduce attrition rate of employees for companies:
How To Reduce The Attrition Rate Of Employees?
Now that we have discussed the reasons that can lead to employee turnover, let us go through the strategies to reduce attrition.
1. Set clear expectations
One of the biggest reasons that can cause employees to leave is if they’re hired for a role that doesn’t match their skill set. You can tackle this by having a clear job description in place right at the time of hiring. Further, goals or expectations set at the very beginning can also help evade such scenarios.
2. Offer competitive salaries
Another massive reason for employees feeling dejected at the workplace is salaries that are not on par with market standards. This is especially true with the millennial workforce who are on the lookout for the best competitive edge when it comes to picking jobs.
To handle this, employers can run a survey and compare their pay scales with those of their competitors. Further, they can revamp their budgets to account for salaries that are in line with market standards.
3. Extend professional development opportunities
Employees look for both personal and professional growth opportunities at work. Not offering enough avenues for career enhancement can cause them to quit. To avoid this, employers can extend higher learning and sponsored education options to employees. Further, they can offer their best team members growth via promotions in their current roles.
4. Conduct employee surveys
The causes for employee turnover are not the same across organizations. To understand what is causing your staff to leave, it is essential to delve deeper into their psyche.
How can you do this? One way is conducting exit interviews or employee surveys. Asking employees to anonymously list their pain points can help you analyze and eventually overcome them.
5. Invest in employee engagement
More and more companies are now looking at employee engagement as one of the strongest measures to control attrition. Keeping your team happy is the ultimate way to ensure better employee performance.
You can achieve this by means such as offsites, team building activities, mental health support, comprehensive medical insurance, and more.
6. Include benefits and perks beyond the CTC
Gone are the days when employees were happy with a good CTC. They are now looking for fringe benefits in addition to their monthly paychecks while evaluating whether a job is lucrative enough or not.
Employers can make their employees stay longer by offering perks such as remote work, complimentary wellness subsidies or support, gym memberships, sponsored lunches, and more.
7. Create an inclusive and positive workspace
To control employee attrition, companies can also look at revamping policies around diversity and inclusion. Organizations must adopt an open hierarchy and emphasize inclusive practices when hiring.
Further, training the management to lead with empathy and have a human approach at work can also help employees feel supported and satisfied.
Secure The Best For Your Employees With Loop’s Comprehensive Health Offerings
While we have understood what causes employee turnover and how one can best tackle it, attrition control measures can sometimes be heavy on the pocket. It could disturb a company’s budget and not all organizations can afford them.
However, with Loop’s holistic health plans, you can now extend several fringe benefits to employees at affordable costs. Our employee medical insurance plans not only offer complete health coverage for employees, but they also come with a range of holistic wellbeing solutions.
These include mental health support, access to group wellness sessions such as yoga and dance therapy, round-the-clock consultations with specialized and experienced doctors on the app, and preventive care solutions like diabetes care that ensure employees are healthy all year long.
For further information about our offerings, you can reach one of our experts who will help you understand our offerings better and curate a plan suitable for your needs.