In the March edition of this column, we’d spoken of
how after assessing tens of thousands of employees over almost a decade, we at
Transforma had stumbled upon a key benefit of conducting these assessments : a
sharp reduction in the level of attrition
However, this does not capture the full picture. While
reduction of attrition levels by over 80% is certainly a benefit that has made
us sit up and take notice of this ( for us ) unanticipated benefit of
assessments, a larger story lies not in the
quantity, but the quality of attrition : not just how many, but who is quitting
Reductions of the order of magnitude that we have
witnessed in the quantity of attrition do make for compelling reading. And the
magnitude of benefits to the organization is easier to identify, and therefore,
comprehend. Let us take one example of this
In an organization we have been working with since
June ’10 : for almost two years now, one of the locations of their operations
is a major metro. Attrition levels of 60% had been par for the course and had
been accepted as a reality that the organization has resigned itself to dealing
with, justified by statements such as ‘There are too many opportunities in a
large city’ or ‘The younger generation is always looking out for jobs that pay more’
Applied to the team, this meant having to recruit
about 40 odd personnel every month or nearly 500 per annum. The upshot of this
: both money as well as time required to be expended on conducting this activity.
While actual cash outlays were on fees paid to recruitment agencies, the time
required on going through CVs, interviewing the candidates, inducting them and
installing them productively into their jobs could have been far better
utilized in expanding business or improving the profitability of the business
Over the past two years, the attrition rates had
fallen from about 60% in June ’10 to 12% by December ’11, and now to 2 – 3% ( March
’12 ). The immediate benefits of this dramatic fall in the number of employees
quitting the organization are easy to identify. Even the less visible quantifiable benefits too are not too difficult to
comprehend
An example of this would be in order here : earlier,
the induction program activity was conducted over a day or two, since an
average employee was expected to last only a few months. Hence, the
productivity of the new recruits after a nearly non-existent induction was a
fraction of what was expected. Besides, as a consequence of this near-zero
investment in induction, almost every issue would be escalated to the
supervisor or team-leader, who would not only end up having to do the
subordinate’s job, but end up feeling frustrated at the kind of issues he’d
perforce have to deal with, every day
While the gains from reducing the quantity of attrition
to nearly nil levels can clearly be listed and the volume of benefits out of
the same set out, the much bigger story in this organization lies not in the
reduction of the quantity but the change
in the quality of attrition : who was leaving earlier and who is it now
In the period previous to the involvement of
Transforma, the criteria by which candidates were selected for recruitment were
the accepted ones : degrees earned, industry experience, domain knowledge et
al. The shift that we typically bring in is moving the focus from
qualifications to human qualities : is the prospective employee the sort to look
for immediate gains or will he be willing to work towards deferred
gratification? Is he likely to view his compensation as an entitlement or does
he believe he has to earn his right to it? Is he the sort to wait for explicit
instructions to undertake a task or does he set his own agenda? Will he go the
extra mile only when he sees an immediate and clear monetary benefit to him or
fears retribution, or does he take the initiative because his values and
beliefs tell him to do so?
In the absence of an assessment of these human
qualities, and a focus instead only on the qualifications, we end up taking on
board people with all the right qualifications with no guarantee that the
belief systems that drive truly great performance are in place. Worse still, we
give them positions of responsibility, with teams reporting in to them
When we take on board people after assessing them on
the basis of qualities, not qualifications, they create a culture in which the
bad ones voluntarily leave. Else, the
people with the right values and beliefs are the first ones to leave the
organization. The ones who stay on further strengthen the culture of
zero-initiative, rent-seeking and display effort only against immediate and
clear monetary gains. And they chase out the ones with the right values
In effect, what happens is best described by Gresham’s
Law from the field of economics : Bad money drives good money out of
circulation
No comments:
Post a Comment