Tenure of employees is one of the critical Xs. Lot of research have proven that tenure of employees is correlated with attrition. Especially in call centre environment highest attrition happens in first few weeks (due to reality shock & inability to cope with night working) and also after 18months (due to boredom, health issues & perceived lack of growth).
I have done extensive work on retention. I have developed few analysis tools to calculate retention Vs rehire cost. Etc. I have published few of my articles. In the latest NHRD magazine, I have published an article on engagement & retention.
I have also developed a Six sigma score card on HR which drills down to vital Xs.
A gist from my latest article is given below:
The point at which an organization begins to incur cost in excess of incremental replacement costs is dependent on three factors:
Turnover rate
Experience quotient
Size of the Organization
Each factor can worsen or mitigate the effect of the others. So, for example, even a very high turnover rate at an organization with a large number of tenured employees may be manageable, whereas a much lower level of turnover may trigger the chaos point at a site with few experienced workers to train and coach the newcomers.
There is a real need here for retention metrics that can capture performance loss to the organization from turnover, not merely by head count. High performers contribute at different levels,
so the aggregate turn over numbers always mask the true impact of turn over.
By weighing employee turn over data based on the performance of As, Bs and Cs who depart, organization can better understand lost contribution to the organization, not simply volume of turn over.
In pockets of severe talent shortage, some firms can afford to pay more for skilled employees than others because of their ability to leverage it better than labor market competitors.
With out some assessment of this leverage, premium firms risk paying more to retain special talents than is economically rationale; for companies not leveraging scares skill set in a core competency area, retaining even a A
players may be too expensive.
Logic for Talent Mix Management
Employee Performance is skewed in any organization: Companies over compensate (and retain ) C talent and under compensate A talent, driving it out of the organization. By better understanding the magnitude of the performance skew, organization can craft performance management system more suited to retaining A talent.
Declining productivity with tenure: After reaching peak, productivity in much position begins to decline over time. Companies recognizing productivity tails-offs can manage tenures, structure rewards that do not retain people past peak productivity.
Bidding Wars in Labor market Hot Spots: When in sufficient talent exist to meet demand, some corporate bidders are at an advantage because they can leverage talent better than others. Companies that can not leverage as well premium to keep it.
Talent Insularity: Confident of the quality of internal talent pool relative to external market, many companies rely primarily on internal grooming. Insularity to the external market, however, can have the effect of reducing creativity, flexibility to changing external environment; most damaging in companies where internal talent falls below market average.
Internal Churn over: In an effort to maintain division economics, some business units trying to manage down both external turnovers in high- churn areas. These overall retention reduction goals may stifle internal churn that is beneficial to the organization.
The Cost of inexperience: intuitively, HR executives and line managers have long recognized that sustained high levels of turnover have a significant negative effect on productivity .High turnover, resulting in fewer experienced employees, means a smaller portion of the work performance has the institutional knowledge and organizational learning to do their jobs effectively.
However, beyond the mere shrinkage of the poll of effective workers, turnover has a more long lasting effect on the productivity of the entire organization. As experienced employees leave, they take with them years of training and learning, and leave vacancies for new hires that must start at ground zero. These new employees require acculturation by the remaining cadre of tenured employees. At excessively high levels of turnover, too few tenured employees remain to train the too quickly growing numbers of new hires, resulting in a discontinuous plunge in productivity.
You can see more details in the article.
Regards,
Sreekanth AK
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