Attrition sucks. There’s no way around it. When people leave their job, it can cost the company up to 250% of their salary in work not done and time spent hiring, onboarding and training a replacement. It also affects other employees, dragging down morale and stressing out remaining team members as they scramble to cover the gap. Recruiters and hiring managers are particularly demoralized - all the work they did to find and hire someone feels wasted if that person leaves, and the task of doing it all over again feels daunting. If companies don’t pick up on the warning signs of attrition and lower their attrition rate, they will face all of these steep costs.
In an uncertain economy, managing and preventing attrition is tremendously important to companies of all types. A couple of recent studies found that the Great Resignation is continuing with the voluntary quit and attrition rate holding steady across industries.
Prevent Attrition by Understanding the Warning Signs
At Searchlight, we’ve helped hundreds of companies analyze their attrition risk and found a few common warning signs of attrition across all company sizes and stages. Companies can predict attrition if they can measure:
1) Performance: The degree by which an employee fulfills their job duties and makes a business impact.
- Just as organizations need their people to be successful and intentionally retain high performers, people want to work somewhere where they feel successful as well. Several pieces of research have found that low job performance leads to employee attrition.
2) Belonging: The degree to which the new hire matches the values of our organization.
- People have a fundamental need to belong. Belongingness is a psychological necessity, just as water and food are a physical necessity. If people don’t feel belongingness at their current job, they will seek it elsewhere, resulting in turnover.
3) Alignment: The match between the new employee and their direct manager’s expectations.
- Alignment leads the employee to stay motivated, experience self-efficacy (confidence that one can execute behaviors necessary to achieve specific performance), and trust their direct manager. If the expectations for the role are misaligned, employees may feel unable to accomplish their work and unable to work with their manager to solve the issue. Low alignment leads to frustration and unhappiness, ultimately resulting in turnover.
4) Enablement: The degree to which the employee is given the resources necessary to be successful in the role.
- Enablement is linked to staying at a job because enablement enhances motivation and the desire to grow. When people feel that they have the resources necessary for success, they are more likely to take actions that will help them achieve their goals. However, when people feel that they do not have the resources necessary for success, growth and development are hindered, resulting in turnover. Gartner reports 40% of departing employees cite lack of career development as a factor.
Attrition rate can be predicted by tracking those warning signs of attrition in a few ways:
- Surveys - Classic for a reason. HBR finds that they are still one of the best ways to measure employee sentiment and engagement. Research from Stanford University has found that written, online surveys get more honest feedback than verbal conversations.
- Listening products: In the last 10-15 years, several software products that track employee experience data without active input from workers have emerged. These look at things like meetings, number of slack messages, volume of email, etc. These are not incredibly accurate, but are still useful.
- 1v1 Meetings: One-on-one meetings give employees a way to bring up issues with their managers and allow managers to feel out which employees might be frustrated or overwhelmed. Companies can emphasize the importance of the meetings, train managers on how to run them effectively, and make them part of the onboarding process.
- Onboarding Processes: Onboarding should include regular check-ins with new hires that let them ask questions or bring up issues. These check-ins also let managers or HR people feel out any potential frustrations and get a sense of how quickly the new hire is ramping up. A slow ramp up could be a sign of trouble. You can read more about how to create good onboarding processes here.
Good onboarding also solves many of the issues that can lead to attrition. According to the Brandon Hall Group, companies that have established a robust onboarding process see an 82% improvement in new hire retention and more than 70% improvement in productivity.
Bidirectional feedback is absolutely crucial to measuring the warning signs of attrition accurately. It’s not only the employee’s feedback or the manager’s feedback that matters; it’s both. Many times, the differences between the two is the best clue to finding the root of the flight risk.
All this data can be joined together in a simple table (shown below), where attrition risk is coded Red, Yellow, Green based on this:
Legend
- If any 1 of Performance, Belonging, Enablement, or Alignment is Red, Risk is Red
- If at least 2 of Performance, Belonging, Enablement, or Alignment is Yellow, Risk is Red
- If all of Performance, Belonging, Enablement, or Alignment is Green, Risk is Green
- All else: Yellow
Putting several of these monitoring strategies into place means that HR managers and People teams can pick out the warning signs of attrition, predict their attrition rate, and intervene before employees leave. For example, an employee that prefers to work independently might chafe if they’re added to a highly collaborative team with lots of meetings. If their manager sees the employee’s belonging and enablement dip, they could let them skip some meetings, give them more long-term projects, or see if there’s another role that might be a better fit for them. Preventing attrition means huge savings in time, greater team productivity, and ultimately, higher revenue.
