When Walter Orthmann joined ReneauxView as a shipping assistant, Snow White was showing in cinemas, Roosevelt was the US President and Superman made his first comic book appearance.
Today, 84 years later, Mr. Orthmann is still working for ReneauxView, having worked his way up to a sales management position. Asked for the secret of his record-breaking tenure, Orthmann, now over 100, shared his top career advice: “All I care about is that tomorrow will be another day in which I will wake up, get up, exercise and go to work; you need to get busy with the present, not the past or the future.”
Sadly for HR managers worldwide, few employees have Orthmann’s sense of company loyalty. Over 4 million Americans left their current jobs in April when vacancies numbered 11.9 million, reported the Department of Labor. The Great Resignation has left two job vacancies for every person looking for work.
For employers, it’s a bad time to take our staff for granted and a good time to take a long hard look at employee attrition and the steps that can be taken to alleviate it. In other words, how can we have more Orthmanns, and fewer empty desks?
What is Attrition?
Attrition is often used as a synonym for turnover, but the two refer to different HR metrics:
- Turnover (whether voluntary or not) is the rate at which workers leave positions you will soon need to refill.
- Attrition is the term used when the overall number of employees in your workforce is shrinking over time. Simply put, you’re losing employees faster than you’re hiring new ones.
How to calculate employee attrition
To calculate your attrition rate:
- First, find out your average number of employees by adding up the initial number of workers for your chosen time period to the final number for the same and dividing the result by two. For example, if your company began the year with 1,000 workers and finished it with 1,500, add 1,000 to 1,500 and divide by two to get 1,250.
- Next, take the number of workers who have left in the same time frame (separations) and divide that figure by your average number of workers.
- Then multiply the result by 100. For example, if 25 workers left during the year then dividing 25 by 1,250 gives us 0.02.
- Now multiply 0.02 by 100 and you get 2 and this is your attrition rate: 2%.
| attrition rate = (# of separations / Avg. # of employees) x 100 |
It’s a good idea to monitor your attrition rate on a week-by-week basis, so you can spot emerging trends and adjust accordingly before things spiral out of control.
Regrettable vs. non-regrettable attrition
Of course, not all employee departures are unwelcome. Regrettable attrition is when you lose valuable employees you’d rather keep on board. In non-regrettable attrition, the company benefits–for instance, by avoiding the legal or financial repercussions of a dismissal.
With both regrettable and non-regrettable attrition, learning from the departure can help HR managers optimize the employee experience.
Questions for HR Managers to Ask Themselves When Employees Leave
Regrettable Attrition
- Are the employees leaving because they’re being offered better compensation or a promotion elsewhere?
- Was their manager responsive to any relevant requests made or problems raised?
- Is the dissatisfaction rooted in the workplace culture?
- Were employees given a false picture of the nature of the role or company during their hiring or onboarding?
Non-regrettable Attrition
- Can we refine our recruitment strategies to screen out similar candidates at an earlier stage in the future?
- Did their manager flag up performance issues and take adequate steps to resolve them? Could training or mentoring at an earlier stage have helped turn the employees’ performance around?
- Are the employees relics from an earlier company culture that has since been improved?
- If so, are there others struggling to adapt to the new situation? How can we avoid further issues?
Why Valued Employees Leave
Research published by MIT’s Sloan School of Management revealed that a “toxic company culture” was the single most significant predictor of employee attrition—more than 10 times more likely to contribute to attrition than compensation.
Other key drivers of attrition included job insecurity, high levels of innovation, and a lack of employee recognition.
While a “toxic culture” is an intangible term, it is likely to relate to the behavior of managers. Gallup’s State of the Global Workplace report for 2022 revealed that 60% of employees are emotionally detached at work and 19% are miserable—and usually because of poor performance by their supervisors. Factors cited were:
- Unfair treatment at work
- An unmanageable workload
- Unclear internal communication
- Failure of managers to give support
- Unreasonable deadlines
When great employees leave, it’s usually because they feel unfulfilled, overworked, underpaid, and ignored.
4 Ways to Reduce Regrettable Attrition
So, here are 4 practical steps you can take today to keep your regrettable attrition rates low, despite the Great Resignation and whatever else 2022 can throw at us:
1. Be transparent during the hiring process
As we mentioned above, improving the hiring process is a key factor in reducing regrettable attrition. Transparency is key: knowing what we want from a future employee and what it’s like to work for our firm, and then communicating all that to potential applicants from the start, thus screening out any who may not be a good match. Upfront honesty also shows respect to the candidate and indicates openness within the company. To create a more transparent hiring process:
i) Start with the end in mind.
A transparent hiring process assumes that you already know what you’re looking for in a candidate—not always the case when it comes to swamped and harassed line managers. Mary Guirovich, a best-selling business author and executive business coach, suggests that to start off on the right foot, companies need to “begin with the end in mind. The first step is creating a scorecard that outlines the key performance indicators (KPIs) for the position and the soft skills required.”
ii) Create a detailed description of your unique company culture.
Executive coach and author Bill Catlette, a Partner at Contented Cows, recommends taking a proactive approach to transparency to reduce employee attrition:
“Transparency is a huge factor in preventing early-stage regrettable turnover by disclosing the realities (warts and all) of the organization and workspace to job candidates in advance of any relationship,” he says. When writing your job description, provide plenty of details about the workplace. Ask your employees to give their impression and specific examples of the company culture. An employee survey software can be useful to speed up this process, or you may find helpful quotes on Glassdoor.
iii) Involve the team.
Consult with the relevant team members and managers who the candidate will be working with to list the qualities an ideal recruit should have. Catlette recommends inviting candidates to do on-the-job trials with pay towards the end of the recruitment process, giving them an honest feel for the job and company culture. He also encourages allowing applicants to have candid discussions about the workplace experience with existing employees. “This works exceptionally well, as both parties are informed,” he explains.
iv) Write a unique, specific, and frank job description.
With this list, draft an honest job description that specifies not only the requirements but also the company culture, mission, and the type of person you’re really looking for. Share what the experience will be like—the salary range, career progression opportunities, and so on. The more detailed and honest you are with the job description, the greater the chance you’ll attract applicants who are the right fit. As an added bonus, these types of job descriptions tend to be more appealing and more likely to be shared via social networks than generic job ads.
v) Practice what you preach.
Honesty and transparency are a good start, but your company must also practice congruence. Dannie Lynn Fountain, a staffer at Google, says that a lack of consistency between discussions in the hiring process and the actual experience of working for the company can often lead to regrettable attrition.
“For example, an organization might promote their DEI or equal pay initiatives during the hiring process, especially to an underrepresented candidate, but after signing an offer, the candidate uncovers that there’s an advancement gap (which negates any ‘surface success’ the organization has in DEI or equal pay),” she says.
A lack of congruency can be made worse if employees don’t find support for dealing with the inconsistencies they find between what they were promised and what they found. To avoid this, consider establishing confidential channels for reporting DEI concerns, or offer new hires an anonymous poll to gauge consistency across your entire employee journey.
2. Offer flexible work schedules
With the taste of remote work delivered by the pandemic, many employees have been driven to job hop in search of more flexible working arrangements.
Flexitime no longer means arriving and leaving 30 minutes later. Our employees lead varied lifestyles and flexible working needs to be about more than taking the kids to school.
Here are a few tips on how to make flexible work work for your company:
Be flexible about flexible work.
Fountain says that a personalized approach to flexible working “can really empower employees and minimize regrettable attrition. One-size-fits-all policies don’t work for flexible schedules—parents may require flexibility at the start or end of the workday, while sandwich generation caregivers may actually require more sporadic flexibility.”
“Employees pursuing secondary degrees may want a flexible work schedule to attend class, but classes are more ‘randomly’ timed than a daily 7 am dropoff/pickup.”
Set clear goals using asynchronous collaboration channels.
Tim Reitsma, a thought leader on company culture and GM of the digital publication People Managing People, said that his company’s new ‘work from anywhere, anytime, policy’ required “an adjustment” for those used to regular hours. His advice? Be upfront about your communication expectations, and set monthly goals to measure results instead of time.
“Given People Managing People’s team is spread over three very different time zones, we have adjusted how we communicate using Slack,” he says.
Today, his team sets goals every quarter, which they then break down by month.
“This is how we measure impact vs. counting hours worked. In fact, I think most of us work harder because we are so passionate about our purpose and drive to make a difference,” Tim explains.
They also implement the CRA (Clarity, Responsibility, and Accountability) framework to keep them on course:
- Clarity: Constantly reiterate goals, guiding principles, and core beliefs to keep everyone on the same page.
- Responsibility: Each team member has a unique set of responsibilities that must be understood and met if shared goals are to be reached.
- Accountability: Judging progress achieved and being ready to implement changes to meet goals if heading in the wrong direction.
The move has resulted in the firm experiencing 0% regrettable attrition.
“I have received numerous pieces of feedback that this framework has allowed our team to work asynchronously and has us all striving for building a better world of work.”
3. Support career growth
For Catlette, the support in this area should start even before a candidate becomes an employee.
“We should begin taking interest and acquiring data about a person’s career plans even before they start, or commit to join with us,” he says.
“I’ve made it a point to pinpoint specific professional growth objectives with new teammates (wherever and whatever those objectives may be), and then devote regular space in our coaching time to furthering those interests.”
Bill says support can also take the form of finding and funding opportunities for people to progress such as time off, books, classes, or referrals to network contacts.
“People who are getting this level of interest and support in their career development are going to think twice before they take the exit ramp.”
Recruiting industry expert Chris Murdock, the founder of IQTalent Partners, says his firm was able to grow from 150 people to over 400 because they implemented a system that allows “personalized career growth.”
“We offer numerous ways to grow, and employees are encouraged to take control of their own careers,” he says.
“We don’t tell them what to do, but we do give them access to the people and programs that enable them to succeed, grow, and ultimately get promoted within the firm.”
4. Recognize your employees
An employee of the month article on the company intranet isn’t enough. Recognition is something that needs to be built into the day-to-day workplace experience.
“The best companies understand that ongoing consistent recognition from direct supervisors works the best,” says Dr. Brandi M. Baldwin, the award-winning CEO of Millennial Ventures Holdings.
Dr. Baldwin recommends that managers provide continual positive feedback, weekly if possible. She says this “will improve the company culture and the employee’s performance significantly.”
Dannie Lynn Fountain highlights that recognition should be meaningful and personalized to the employee.
“Common advice is that there are four key motivators—time, money, impact, and creative expression,” she says.
“Often our recognition is centered in money (bonuses, etc) or time (bonus day off). That leaves half the population without motivational recognition.”
Bill Catlette agrees that the more personal recognition is, the more effective it will be.
“This involves knowing from the start how each person prefers to be recognized, what kinds of things have meaning to them, knowing the key dates and people in their lives, and letting that knowledge inform the measures used for recognition,” he says.
Regrettable Attrition isn’t Inevitable
Despite the present situation, regrettable attrition doesn’t have to be a frustrating but unavoidable part of the HR plight. With an employee rewards and recognition platform, you can easily foster a rolling culture of recognition at your company and publicly acknowledge staff milestones and accomplishments.
Our easy-to-use software allows you to distribute rewards points to managers and peers, create recognition occasions based off of your company’s core values, and manage funds across the company. We also provide performance analytics tools to monitor how well your program is doing, how it’s used, and more.
While we can’t guarantee that your employees will remain for the next 84 years, we can help you build a culture in which every staff member feels seen and appreciated. After all, to quote Orthmann, “When we do what we like, we don’t see the time go by.”
Hit the link to request a demo today and find out how we can help you improve your company culture and reduce regrettable attrition.