Discovering New Attrition Framework

As Malaysia’s economy head to reopening and stabilization (albeit it’s still far to goal), maintaining and attracting talent will be a top priority. Your attrition crisis will not be solved overnight, so HR leaders must understand the “why” behind employees leaving, in order to repair, humanize, outcompete or double-down on recruiting efforts accordingly.

Themalaysianreserve has reported that employers are reporting higher than usual turnover rate recently, with COVID still a primary blame, whereas a couple of other factors are attributed to be secondary to COVID effect. Of course, the artifact is not as impactful as The Great Resignation that took place in U.S. (which LinkedIn and Microsoft actually calls it The Great Reshuffling), HR leaders must ask themselves why is this happening.

What employees expect from employers and the work has fundamentally shifted. As the market reopens, employees are wasting no time to apply for job with better prospects when their expectations are not met. We can better look at this from various dimensions:

Something is not working for the employee;
Organizational goal is not aligned with employee’s need; and finally,
Employee looking for something better.

HR Leaders should understand where their employees falls into to intervene with best strategies/

A simple infographic for Attrition Drivers

Misalignment of Goal

Sources: (-1-) (-2-) (-3-)

After working for nearly two years amid uncertainty and managing larger workloads with more stressors, employees want more support from their employers to harmonize their professional and personal lives. Looking at the above, we can see that one of the central theme circles around mental health, whereas another central theme focused on managing the workplace.

Employees are expecting that their employers to be more proactive in creating a better work life for the employee, and that can be achieved via increased flexibility or greater commitment to well being. Along with the hot topic of COP26, some would also expect that their company participate in causes they believe it’s important.

HR leaders experiencing this would want to humanize their Employee Value Proposition (EVP). Adopting a more human approach towards EVP means to start taking care of employee’s holistic well being, and that would include an increase in their physical, financial and mental wellness.

Something Is Not Working

Over a series of casual interaction I had with most HR leaders, they believe that there is a pent-up turnover that pauses during pandemic hit, and when the economy reopens, the tsunami floodgate opens. This seems to be also the catalyst in the Great Resignation (source). For this to happen, the organization’s work experience has triggered an irreconcilable dissatisfaction for the employee. 

When an employee work from home, the influence of organization shrinks, their work experience relies heavily on a smaller number of key players, but the primary influencer would be their manager. The importance of a manager that can be empathetic and understanding in a connected virtual world is absolutely crucial, and when this doesn’t work out, employee will surely leave (source). Therefore, it is in HR leaders best interest to invest heavily in management as a main strategy urgently.

Career path too are less visible when employees work in a remote and distributed settings. When they can’t physically see “what’s next”, they can’t see their future projection and therefore, it creates a mental barrier in employee’s mind to forming a clear career path. Without the feeling of being invested in by their organization, employees might look for other opportunities before it is too late for themselves. Providing employees with a voice to communicate their aspirations, career opportunities and build toward these by connecting them to the skills they need, and opportunities and experiences that create the pathway to their next career move will be vital to retaining talent in a highly mobile labor market.

Employee Looking Out

In this situation, external environment is prompting employees to reconsider their work experience; employees here leave their organization for companies that appear to have better offerings.

Even prior to the pandemic, the phenomenon of the “casual candidate” (or passive candidate) caused challenges for organizations: Searching and applying for a new job has been easy, and the proliferation of job platforms and insights enabled platform such as Glassdoor (source) enabling candidates to peruse other companies’ offerings at any time with little effort, increasing the prevalence of a “grass-is-greener on the other side” mentality. In this rebounding economy, employees have a record number of open jobs to consider (see below from DOSM – source):

The number of online job vacancies rose for the fourth consecutive quarters to 90,502 in Q2 2021, an increase of 284 from 90,218 posted in the previous quarter. The number of online job vacancies posted in April, May and June was 33,877, 28,242 and 28,383 respectively.

Many organizations are undoubtedly working hard to backfill open positions, growing teams, and are thus offering higher-than-average compensation packages. One of the top drivers of attrition historically and especially today is compensation.

When the drivers of attrition are triggered by the external environment but are fundamentally related to the work experience, HR leaders can deploy one strategy: whether to match the perceived better offerings of other companies. Selectively outcompeting will be crucial for retaining critical talent. In this situation, organizations should identify whether talent searching externally is critical to the success of the business in the near term, also recognizing that the competition for compensation no longer applies to only highly skilled niche workers. A compensation increase for these specific roles, or targeted intervention showcasing potential career paths and skills development within the organization may be advantageous for long-term success and retention.

Conclusion

The attrition crisis facing organizations cannot be resolved overnight and organizations will be in for that in a long term. Any attempts to solve these crises must start with addressing the “why” behind the intent to leave. Only by seeking to understand why attrition is happening can employers deploy the appropriate strategy to mitigate it.

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