Perhaps this is the uppermost question in the minds of CEOs and the officers responsible for managing the HR related functions of any enterprise. There are many solutions and almost all have been tried, but at the end of the day, leaves the CEO with a bad taste and a strong feeling of non-fulfillment and leaves the organization with substantial infructuous expenditure.
The scenario is of vital importance for the construction Industry, where the attrition rates are quite high, and the employees, owing to resurgence of the sector and higher demand for the qualified and experienced personnel, made job hopping very frequent.
According to the recent surveys, average attrition rates are pegged at senior engineers/managers - 16% p.a, mid level engineers/senior supervisors - 28% p.a, junior supervisors/workers - 35% p.a. Apart from the cost of recruitment, in-house grooming, familiarization expenses, the biggest bane is the lack of continuity of the responsibility, the cost of which is, indeed, intangible.
Such attritions are due to various reasons, and the major ones are: lure of higher emoluments and higher designations and "apparent" more "responsibilities," dislocation for family reasons, better increments granted to the colleagues, Improper and arbitrary HR Polities being practiced by the enterprise and of course several more!
The reasons stated above are of employees, whereas the employers have their own justifiable reasons, specially when it comes to reasons listed at d) & e).
The usual grouses of an employer are:
Recruitments offering with high package but not able to "deliver." No matter, whatever you pay, the employees have little sense of loyalty and for higher emoluments, which the competitors are ever willing to offer, they are ready to quit anytime. The increments granted are based on the evaluation of "performance" of the employee, and under performers should have no reasons to grudge.
Another interesting aspect is "Induced Attrition."
The recently recruited employees come at higher positions and with better emoluments and cause "heart burn" within the peer group, compelling them to contemplate searching alternate & better employment, thereby making the employer susceptible to greater attrition.
Analyzing the attrition rates in various hierarchical levels, one can say with confidence that the same is inordinately high, when it comes to entry level positions. Fresh engin- eers and managers stay the shortest period!
How does it translate in monetary values?
Averaging out the infructuous expenses the enterprise ends up losing nearly 2.23% of their overall turnover. Sadly, this accounts for almost 28% of the net profits, which goes unnoticed and affects the overall profitability adversely.
The solutions to meet this challenge are rather conventional, including: Adding such component as 'Contingent' expenditure and continue ignoring the same, "Poaching" seemingly better quali- fied personnel through competition, Offering 'Compensations,' when an employee has threatened to 'quit.'
None of the above recourses are permanent in nature & eventually hinder and impede the growth of the organization.
So, what are the solutions?
- Recruit young, through an impartial selection process, and let the employees grow within the organization.
- Pay decent salaries and not the extravagance. High salaries do not insure loyalty.
- Offer lower salaries, but better perks, especially those, who insure a secured future for the employees.
- Do not get bowled over by glossy qualifications, check the softer nuances for better longevity of the employees.
- Avoid "poaching." This does not help. A poached employee can get poached by someone else soon.
- Organization is your family, be personal in your dealings with employees, and keep the relation one to one basis.
- Instead of higher increments, offer employees more facilities & support in being able to provide better quality of life to their families.
- Limit hiring of employees from outside. Lateral entries are more disturbing than raising people from within.
- Train and groom your employees, who have shown promise to take up higher positions.
- For granting promotions & increments, use impartial, third party evaluation systems.
To support the Industry in this respect, CIDC has evolved a system of Proficiency evaluation, National Proficiency Evaluation Test (NPET) which is the independent assessment of engineering Proficiencies of Young Engineering graduates, diploma holders as well as supervisors. NPET covers those with Bachelor/Masters’ in Management & Architects.
CIDC Examination & Testing Board (CETB) established by CIDC conducts NPET under which preliminary screening based on Academic Achievements and work experience (for experienced professionals), written examination, interview and group discussions for all the categories.
Based on the three layered evaluation, a region wise merit list of the candidates is prepared and made available to the prospective employer organizations to select and employ bright and promising candidates.
The testing is based on the generic needs of the employer organizations upgraded from time to time. The test is conducted for fresh as well as experienced graduates and the scores achieved are kept valid for a period of 3 years from the particular date of test. Upon conclusion of the examination, the result is declared and the scores attained by the candidates are provided to them. In addition, an electronic card detailing the candidates achievement and other pertinent details are issued to the candidates for ready reference purpose.
CETB on demand forwards the attained scores/results to the prospective employer organizations, as nominated by the candidates, in confidence so that they can evaluate the candidate’s proficiency properly. The employer organizations include CIDC members and other Construction Industry Stakeholders. A complete list is available on CIDC website.
If a candidate scored lesser grade in one test, he or she can appear at the subsequent tests after a better preparation according to examination calendar in the subsequent sessions.
The test is very useful for evaluating the performance and prowess of the existing employees, who could be evaluated very objectively. Such tests can be conducted on demand by the employers and save them from the dilemma of determining in house promotions and increments, since it a very neutral and objective assessment of performance made available to them and the employees, would also have little reasons to grudge but shall motivate him/her to improve his/her performance, to get his/her rightful place.
This test will help the employer to reduce attrition and also save on infructuous costs. A penny saved, is two pennies earned after all!