Check attrition to

increase profitability of
your firm
Attrition refers to the gradual
reduction in the work-force (and
not replaced) due to reasons like
resignation and retirement.
Attrition results in loss of
employees as well as the loss of customers; it in-turn increases the costs and
decreases the profit margin of a company.
Though its not possible to eliminate the attrition completely, its possible to
reduce the attrition rate significantly by focusing on some of the factors
causing the attrition. Low attrition rates boost both the profitability and morale of
the team.
Here are few factors that influence attrition and remedies to reduce the
attrition rate.
Salary and benefits
This is one of the main causes of the employee turnover rate being so high.
Employees are always in search of jobs which pay well. Employees always flock to
companies who offer more benefits. So it is very important to recognize the skilled
employees and offer them salary and benefits on par with the industry standards.
Working environment and work pressure
Employees prefer to work in an environment which is apposite for them. This is the
most common reason why employees change companies very frequently. The
companies should evaluate and amend their work procedures and policies from
time to time to enable employees to use their full potential and even gain
significant work experience. Employees would certainly leave the organizations if
the work pressure is too much or too low. There are many cases where employees
have left the company due to no projects or assignments. If they find an
appropriate work environment and satisfying job in a specific company, they
would not mind staying in the same organization for several years.

Page 1 of 4

PlanBmatters.com

Leadership style
There is a popular saying in the industry, employees do not leave the organization
but leave their bosses. In order to be a good manager, it is important to be a good
human being. There are few Dos and Donts for a good leader.
Dos
1. Empower employees
2. Let employees take ownership
3. Rotate responsibilities
4. Make room for fun
5. Set a mission statement for the team
6. Be flexible
7. Facilitate tools and equipments required to perform their duties
8. Be polite
9. Be an active listener
10. Set clear instructions
11. Identify issues and resolve on time
12. Appreciate the good work
13. Provide constructive feedback
14. Encourage two way communication
15. Be a role model
16. Conduct one-on-one / team meetings regularly
Donts
1.
2.
3.
4.
5.
6.
7.

Behave rudely
Gain authority over the team/individuals
Have no empathy
Communicate ambiguously
Have no transparency
Make partiality and discrimination
Make difficult to approach

Employee motivation
Motivation is something which has to come from the employees. However, boss
should facilitate good working environment where employees are motivated to

Page 2 of 4

PlanBmatters.com

perform their duties. According to Abraham Maslows Hierarchy of Needs defines

five basic need levels for motivation.
1.
2.
3.
4.
5.

Physiological basic necessities such as food, water, sleep, etc

Safety security of body, of employment, of resources, etc.
Social friendly, energetic, and fun filled environment
Esteem self-esteem, confidence, respect by others, etc.
Self-actualization morality, creativity, problem solving, etc.

Wrong job
It is important to hire right people for the right job and not best people. If its a
wrong hire then it leads to errors and delays in deliverables. Finally, he/she resigns
as he/she lacks right skills to perform the duties.
Training
Training is an important aspect without which the required results may not be
achieved, though the employee may have the right attitude, energy, and
enthusiasm. Leaders have to identify the training needs of the staff from time to
time and facilitate the same. This helps employees to gain the competencies to
move to various levels and creates an opportunity for career and personal
development.
Advancement and promotion
Many employees leave the company due to no scope for advancements or
promotions. In such cases, they prefer other companies which may provide them
with higher posts and increased compensation packages. The companies need to
evaluate and modify their promotion policies in a fair way which would enable
promotions for candidates on the basis of employee performance. In a condition
where there is no raise or promotions, employees can be given an opportunity to
explore other areas within the organization by way of secondments or temporary
duties. This change may be refreshing for the employee and away from the
monotonous work.
Apart from the above factors, it would be ideal to do an Engagement Survey
and calculate attrition rate of the company. This helps in taking corrective
measures on time to reduce attrition rate. After all, employees are the most
valuable resources in increasing efficiency and profitability of a company.
Page 3 of 4

PlanBmatters.com

The article appeared first on http://PlanBmatters.com/

Author: Shyamala Yesuraju
Source: http://planbmatters.com/check-attrition-increase-profitability-firm/

Page 4 of 4

PlanBmatters.com