Caging the Bird – How to Stop Attrition in the Rebounding Economy…

The recession was a demonstration of knee jerk HR cost reduction strategies, some hidden behind the facade of best practices and rationalization. From freezing promotions to outright firing people, rules of fixed hours and reduction of employee engagement budgets, most that our IT and ITeS giants achieved was to create dissatisfaction amongst the recipients of the shellacking. And dissatisfaction was not from the strategies executed but from the complete failure at communication.

India’s second largest software exporter Infosys reported an attrition of 15.8% in the June quarter, a historical high. So was the case with Wipro where such high attrition rates were last seen when the company emerged out of the dot-com bubble. Most companies are now raising their hiring targets for the year. India’s biggest IT firm TCS plans to hire 40,000 in FY11, 10,000 more than what it had guided earlier. All this is quite an about-turn from a year ago when nobody wanted to jump jobs.

Most people working in the IT and ITeS industries understand business dynamics to the extent that their jobs, salaries and promotions are dependant on US and European economies. And there would be blood spilt back home for bullets fired in western economies. The strategy of most of the majors of concealing this truth or sugar coating the reality was detrimental to three key factors that keep people sticking to their workplace, viz. loyalty, perception of fairness and the underlying belief that ‘somebody cares’.

Some of the strategies like the widely unpopular iRace from Infosys, increasing working hours by Infosys and Wipro and basing performance measures on technical tests as administered by Wipro have successfully weeded out some poor performers and kudos to this achievement. What it has led to however is the fact that the good and excellent performers have lost loyalty, perceptions of fairness and ‘some cares’. The outcome is rather predictable and the likes of Infosys and Wipro are bleeding talent to higher salaries. A sector-wise analysis by Rediff Business shows that BPO, ITeS will witness attrition level of as much as 40-45 per cent this year, and IT  will witness upward if 30 per cent attrition; standing highest in the rankings.

You cannot preach “salaries are not everything'” in good times, attack cost saving through brutal salary reduction measures in bad times and hope no one will notice!

So, now that the slaughter is complete and all secrets have been decoded and laid out in the open, the problem being faced by most major companies is their ability to hold on to their best employees who are being sold to higher salaries and prospects of promotions (read: prospects of not being treated like commodities). One approach that is definitely not working is the “back to the basics” approach as these blunders have no precedence.

It is my hypothesis that there are four groups of disgruntled employees lurking in the ‘pool’ and while there can be a homogenous approach towards attrition reduction, each of these employee groups needs separate treatment if one were to treat the ailment instead of the symptoms. 

ASSETS: Hard working, smart, loyal  and seeking objective career value

Value to the Company: These are employees that contribute maximum value to an organization as high performers and loyal employees with high productivity and highest influencing powers over other groups.

Treatment of Depression: These are the employees that have been worst affected by the treatment handed out from HR by limiting (often meaningless) performance measures and growth inhibitors exemplified by strategies like iRace.

Behavioral Symptoms: The ASSET employees have reacted to the mindless economic depression measures in the most severest manner

1. They have developed a distinct disloyalty for the organization which is passed across as opinions to other groups
2. They are on the lookout for anyone who will promise any growth in span, responsibility and/or salary
3. Suspicious of managers trying to leverage their capabilities and sell their cause
4. They are vocal about their opinions against policies and procedures and have the knowledge and  influence the POTENTIALS and PASSIVES     

These are employees that have the skills and the ability to drive opinion and also the group that will hurt the most through attrition since their knowledge and levels of loyalty have been built over a period of time and will be very difficult to replace from the open market. In addition, once they do attrite, they tend to poach employees in their influence group and tend to spread a negative opinion of their former workplace. 

In the worst case scenario they have already left the organization and causing injury through poaching employees or negative opinions. In the best case, these employees are disgruntled and are on the verge of a potential attrition. It is very important in either case to be able to identify this group accurately as any mistake in equalizing them with other groups will only further their eagerness to stick to their guns.

ASSETS are ideal candidates to break the rules for. They contribute a significant portion of the value the company takes to their customers and it is important to make them feel important and wanted at this stage through measures of exceptions to the general rules & policies that have been laid down. In their disillusioned state of mind, an out of turn promotion or a salary hike or a reward bonus will need to be given out in order to hold them back and give the company a chance to influence a re-evaluation.

If granted the opportunity to redress some of the grievances that have cropped up in the collective psyche, it is crucial to communicate the truth about what happened and why it happened, even at the cost of admitting HR or Senior Management misdeeds.  The ASSETS are most often the opinion makers and opinion leaders and their loyalty and admiration is key to holding together the other groups.

It is also important to reach out to the members of the group that have already moved on, in some form of alumni engagement. This increases the chances of these employees not undertaking a passive poisonous PR outside and also consider coming back on the rolls.      

POTENTIALS: New, hard working, ambitious and seeking objective career value

Value to the Company: These are employees that have the potential to develop into assets over a short period of time and contribute through beyond expectations in performance.

Treatment of Depression: Most of these employees would have joined just before the economic recession took a grip and have been exposed to a significant amount of negativity among the tenured employees viz. the ASSETS and PASSIVES. 

Behavioral Symptoms: The POTENTIALS are naturally aggressive employees and spend significant time and energy in thinking and structuring their career paths. However, due to inexperience or prejudices, these employees are very vulnerable to form opinions from what they see and hear around from their high performing role models and general employee buzz. Inquisitive by nature, these are employees that are most often going to query the managers and HR with uncomfortable questions.

These are employees who are malleable and will mould the culture of the company going forward. HR and managers need to be proactive listeners when managing this group, especially after the exposure to a lot of negativity as I mentioned before. And it is more important to listen to their questions and ensure fair and transparent answers to the members of this lot to be able to address the apprehensions that  eventually lead to the POTENTIALS leaving and following ASSETS and PASSIVES.

And most importantly, there is a need for focused effort and resources to communicate with the POTENTIALS as they are often the agents who will influence the ASSETS on the verge of moving on by transmitting influence against prejudices ruling  over the ASSETS. 

PASSIVES: Tenured, average performers and seeking stability & security

Value to the Company: The PASSIVES are a group of average achievers with tenure and seeking stability and security. The PASSIVES is really the collective common that represent the organization wide behavior and culture, be it in their adherence and knowledge of policies or or in their knowledge of different segments of the organization (especially valuable in large organizations where the various wings have limited knowledge of each other). They may not represent the ambitious and cutting edge of the employees but these are the middle-class equivalent of the consumer markets – crucially important for sustainability and stability.

Treatment of Depression: Some of them got fired or denied promotions based on a competitive measure against the ASSETS. Most of them got moved around and out of their areas of comfort vis-a-vis their friends and managers in brutal organizational restructuring.

Behavioral Symptoms: These people are most often the followers and tend to take a direction as directed by the ASSETS in the company. Hence, the impact of the recessionary measures on PASSIVES is two-fold. One, they have been hit by a sense of insecurity in their competition with the ASSETS as the ones who may or may not get the pink slip. Two, they often cling to the opinion makers within the ASSETS and at a sub-conscious level get led by the ASSETS’ opinions and actions. The loss of their corners of comfort and loss of friends in the recessionary job-cuts have left this group rather insecure and very often performing lower than expected.

The approach towards the PASSIVES needs to be slowed as drastic measures can actually reset the insecurity and prejudices. The PASSIVES being a group seeking stability and security are not in a hurry to leave the organization and hence gives us time to treat them well.

The first and most effective means of winning loyalty and assurance from members of this groups is to reinstate their corners of comfort, where possible. Where this is not possible, managers and HR needs to be sensitive in trying to re-build a new comfort corner for them.

There needs to be indirect communication through the key influencers of this group, viz. the ASSETS and this needs to be handled for sure, but must be managed with subtlety. The ASSETS need to be assured and thereby passing communication back to the PASSIVES of the changing ways through example driven motivation. 

SLEEPERS: New, average/poor performers and non-ambitious

Value to the Company: The SLEEPERS are the least value to the company and very often actually detractors of value. SLEEPERS are non-performers and therefore by “back to the basics” logic dissatisfied employees for no fault of the company. They are new and hence form opinions based on little knowledge and littler understanding, which opinion then becomes poison served out in common and recreational areas.

Treatment of Depression:  Most of these people were hired just before and just after the recession and have not been impacted very much on their own. But they do form fuel to the fire of negativity and also serve as the inertia to the destruction.

Behavioral Symptoms: The group generally comprises of non-participants and most of the impact this group has is in common and recreational areas. They are difficult to be identified distinctly from PASSIVES at a glance but most managers know over a period of time who the SLEEPERS are.

The SLEEPERS need to be weeded out for mentoring or elimination depending on the individual companies policies and culture. This will help is clearing out the nebulous negativity to a great extent and also free up precious resources to be invested in the POTENTIALS, ASSETS and PASSIVES.