Controlling attrition

Controlling attrition

In an ideal world, employees work hard, love their job, worship their workplace, feel like a family and would never leave. But let’s look at the real world, where employees quit at the drop of a hat. How can attrition be controlled? Sushmi Dey finds out

2006061520-2078761As the Indian pharmaceutical industry grows exponentially, companies are taking the big leap from survival strategy to competitive strategy. Hence, there is a constant thirst for the best and the brightest of employees. And the result—heavy attrition.

In addition, there are several other reasons as to why employees quit. The reasons are too varied to be clubbed together, but the bottom line remains the same—it is all about money!

Therefore, it is no wonder that the compensation levels in the industry are heading north. Companies are literally bidding for talent and luring away employees with attractive salaries and designations. While HR experts define it the function of demand and supply, it is a serious concern for employee retention.

A critical issue

After IT and BPO, it is now the pharma sector that is facing the issue of high attrition rates. For most HR managers, employee retention is the biggest challenge. “Attrition is pretty high in the industry these days. This year, we have witnessed almost 20 percent plus attrition and definitely I consider it very critical to the company,” said Dr Kashmira Pagdiwalla, Vice President-HR, Biotech Division, Intas Pharmaceuticals.

2006061521-1840727 Abraham T M Head-HR

Veeda CR

Whenever a well-trained and well-adapted employee leaves any organisation, it creates a vacuum. The organisation loses key skills, knowledge and business relationships. And it is not an easy task to find a sustainable substitute. “Situation is worse when it happens at a critical (decision making) position, as there is a scarcity of such technical resources in the market,” explains Abraham T M, Head-HR, Veeda CR, who feels attrition directly affects the company. Pagdiwalla says that recruiting and training programmes for employees is an expensive affair. The company has to invest a lot while recruiting an employee.

2006061522-1641208 Beena Handa Vice-President-HRM

Claris Lifesciences

Attrition is a universal phenomenon and no industry is devoid of it, but the degree fluctuates from industry to industry. “Major pharmaceutical companies in India are age-old and established, having their own culture and work practices and therefore, employee turnover will be a common phenomenon in such companies. But the CRO’s are in a nascent stage and it’s too early to comment,” Abraham says. According to Beena Handa, Vice-President-HRM of Claris Lifesciences, attrition is a serious issue in the pharmaceutical industry because the industry is knowledge-based and hence employees are its “assets”.

But why?

Many HR experts believe that money, though a key factor, is not the only one which makes employees quit. “Attrition also happens when people hate their working conditions, do not like their team-mates or perhaps do not like what they are doing. There are also cases when people leave their job for family reasons or when they wish to migrate. For example, girls often leave their jobs when they get married and shift to another city,” says Handa.

Experts also believe that organisational culture has a great impact on who stays and who goes. And the culture of an organisation is determined by the quality of the relationship between bosses and their subordinates. According to a popular saying—employees never leave the company, they leave their bosses. An inefficient boss creates poor work culture, which is one of the frequent reasons for quitting.

Employers often fail to understand the importance of providing opportunities for development of their employees or their career growth. A conducive working atmosphere, good culture, training and career growth with adequate salary are some provisions that control attrition, according to Abraham. Pagdiwalla asserts that at Intas, organisational culture does not give way for attrition. “We have an open, vibrant and dynamic culture where there is a lot of space for communication too,” he says.

“Every employee comes to his organisation with some aspiration,” says Handa. An organisation is viewed as a place where employees meet their aspirations of growth and development, values of trust, teamwork and transparency. If a company respects them and their skills, realise their potential and provide them with a healthy environment to learn and grow with flexible compensation, employees take that as a strong reason to stay on.

Recognising the contribution of outstanding achievers also inspires others to try hard and put in their best. A good organisational behaviour also focuses on areas like training, career development and believe in equipping workforce better on the professional front.

Experts say that good organisational behaviour is instrumental in extending the tenure of employees in the organisation as it increases their self-esteem, confidence, morale and motivation. A substantial growth of employee’s self-esteem is as important as the concept of learning in the industry. Otherwise, experts fear that pharmaceutical organisations will meet a sorry fate as far as retention policies are concerned.

Supply vs demand

However, Handa describes attrition as the function of demand and supply. “The demand comes from the growth of the industry and the policy of the company. These two things decide whether there is a demand of fresher or experienced employees. On the other hand, the supply comes from the educational institutions and the market,” she explains. She asserts that while the supply from the educational institutions is enough to meet the demands of the pharmaceutical industry, there is a lack of experienced people in the industry, which in turn has created an imbalance. The imbalance is crucial to the growth of the industry. While the industry is growing, not all companies are capable of taking fresh people and groom them. Hence, the current status demands experienced people and shortage of skills or retaining existing employees pose an issue for the industry.

Increasing the pie

In the current scenario, the demand of experienced and good employees is actually outstripping the supply. In such a situation, higher salary structures pose a major challenge in controlling attrition levels in the industry. Moreover, the salary growth plan is not well defined as well. All this encourages poaching by companies offering higher salaries. Though the salary is decided keeping in line with the market trends, the qualification, experience and the attitude of the individual matters. “Salary or even increments are dependent very much on what kind of value adding the person is or will do in the organisation,” says Handa. Agrees Abraham. He adds, “Internal imbalances should be avoided.”

When it comes to attracting talent, throwing fat carrots at potential employees can boomerang on the company. According to Pagdiwalla, fighting with salaries, prerequisites or designations as retention tools can prove to be self defeating since rivals can also follow the same path. Besides, HR experts from the industry believes that out paying is not a winning tactic for companies. The organisation’s reward strategy reflects its power to drive quality employees. Apart from salary, recognition of work is a healthy retention strategy. If the organisation values its employees, recognises and appreciates their skills and work, it pays. “It is important to keep an eye on fast track people who are intelligent and excellent performers. Performance is a primary requirement; therefore, excellent performers should be valued. They should be identified, nurtured and provided growth opportunity,” according to Handa.

HR’s role and strategies

As the struggle for reducing employee attrition rates is intensifying, recruiters are putting renewed efforts in identifying talent, which is committed and productive. However, while everyone is competing for talent, in experts’ opinion, a hiring spree can be a blunder sometimes. Stringent recruitment process could help reduce attrition to a certain extent.

An internal referral mechanism is also very useful in reducing attrition rates in companies. A thorough analysis of a candidate’s background or behaviour pattern, adaptability or liking would help the organisation with good resource pool and less attrition rates. “When we recruit an outstation candidate, we need to keep in mind that there could be an inclination for that candidate to move to a place closer to his or her native place. Such facts should be kept in mind while making a decision,” says Abraham.

Hiring stayers rather than stars is yet another strategy. According to experts, some of the most talented people often have the tendency to move on. The reason being their eagerness to climb by shifting from one company to another. But Handa opines that frequent job hoppers are not the ultimate gainers. “They gain or earn only in terms of money but those who opt to work in one organisation for long are able to learn and gain experience which pays in the long term,” she explains.

An efficient HR focuses on creating a good work culture and work out different strategies in line with organisational philosophy. According to experts, HR managers must use the combination of growth, learning opportunity and pay attention to employees’ personal needs and participation. The needs of the employees should be regularly gauged through open communication, polls and feedback mechanisms to maintain consistency in performance and high motivation levels.