Over the years, the percentage attrition rate has been one of the most important KPIs to track the performance of the Human Resource Departments of organisations. For establishments that develop metrics to award the highly revered “Best Place to Work” recognition award, it has become pertinent to track the rate of employee turnover. All these points to the fact that employee exit plays a major role in charting the next course of action for most organisations.
Employee exit could be voluntary or involuntary. By definition, voluntary exit describes when an employee willingly (resignation), possibly for other jobs, education, starting own business, etc. On the other hand, involuntary exit refers to when an employee leaves an organisation due to dismissal, redundancy, termination, retirement, or death.
A school of thought believes that employee exit, whether voluntary or involuntary, may be considered positive for the organisation. This is based on the view that; it allows the organisation to refresh and inject new blood to drive its operations.
On the other hand, employee exit may be necessary if an organisation is going through any of the following:
- Structural revamp
- Financial Concerns
- Technological disruptions
Where there is an issue is when voluntary employee exit or turnover becomes frequent, it can lead to several unintended consequences for the organisation. The consequences may include disruption in workflow within the organisation, loss of confidence in the organisation, culture dilution and higher costs for replacements in terms of money and time. Exit may also generate instability/uncertainty in the organisation. Productivity may suffer and, consequently, loss of businesses and clients with the attendant drop in revenue.
Research has shown that organisations with exceptional people practices that promote consistent employee engagement and inclusion tend to retain employees over a long time. However, organisations with poor employee practices and engagements tend to experience frequent turnover of staff.
The unintended consequences, as highlighted above, usually force organisations to review their people policies and practices.
Some of the forced actions that may have to be considered in addressing frequent employee exits will include:
- A rethink and review of HR policies, including performance management
- A review of employee engagement and communication programme
- A review of compensation and reward management system
- The development and deployment of employee value propositions for an inclusive people programme.
The HR practitioners, focusing on avoiding the unintended consequences of frequent staff turnover, should embrace and deploy effective and inclusive people management programmes in the organisation. This will involve a lot of imagination, frequent and consistent communication on employee matters throughout the organisation.
To get good advice on how to reduce your employee turnover, ramp up employee engagement practices and redesign your policies to align with solid retention strategies and practices, please send us an email today through people@phillipsconsulting.net.
pcl. has over 28 years of experience working with clients across sectors to deepen their employee retention and engagement strategies.
Written by:
Chidera Onyeanusi
Analyst
