The sharp increases in employee turnover since the 2019 pandemic is costing the UK millions. And it's more than just recruiter fees that we need to worry about.
Have you ever been blind-sighted by a resignation from a key player on your team?
They seem happy at work, and their career is going great until one day they arrive at work with the news that they are moving on. What?
Maybe you didn’t see it coming, or perhaps you did but underestimated the impact their departure would have on your company? And of course, how could you have seen the warning signs, when everyone is working from home?
When your company is smaller—around 20 to 25 people—it’s easier to keep a pulse on everything. You know exactly who’s who and what each person contributes, making surprises like unexpected resignations rare. But as your team grows to 100 or more, maintaining that level of insight becomes increasingly challenging. That’s when surprise attrition can hit you hardest.
Since the 2019 COVID-19 pandemic, attitudes toward work have shifted dramatically. The trend of "quiet quitting," where employees disengage without formally resigning, has become more common, making it harder to detect dissatisfaction until it’s too late. The demand for remote work has surged, with employees prioritising flexibility and work-life balance like never before. Additionally, there is a growing insistence on more robust commitments to diversity, inclusion, and equity. Today’s workforce expects not only fair treatment but also proactive support in these areas. Companies that fail to meet these expectations risk losing top talent.
Of course, a certain percentage of employees will always move from one company to another for various reasons—whether it’s for new opportunities, personal growth, better compensation, or simply a change of scenery. While you can’t stop everyone from leaving, you can manage this risk effectively.
How do we manage this important risk?
This blog post outlines how a shift towards ongoing data-driven attrition assessments of the talent pool could defend companies from painfully high turnover costs, improving employee satisfaction and workforce stability.
I will be highlighting key features of a solution, and the steps needed to make it happen.
Regrettable Attrition
Regrettable attrition refers to the loss of employees who are particularly valuable to your company, where their departure is considered a significant loss. These are typically high-performing, skilled, or key employees whose exit negatively impacts the team's performance, morale, or continuity.
Characteristics of regrettable attrition include:
High Performance: the employee consistently exceeded expectations and made significant contributions to the team or company.
Critical Skills: they possessed specialised skills or knowledge that are not easily replaceable or exceed budget capabilities.
Leadership Potential: the individual had the potential for future leadership roles or was already in a key leadership position.
Cultural Fit: they were well liked by peers and aligned well with the company’s values and culture, positively influencing the work environment.
Unexpected Departure: their departure was not anticipated, and retaining them would have been desirable for the company.
The impact of losing a critical team member can ripple throughout your company. The most immediate cost is often recruitment fees, which can be substantial, especially when searching for top-tier talent to fill a specialised role. Additionally, as overall attrition rates rise within your company, the demand on your resources intensifies. High turnover means dedicating more hands to the continual recruitment process, diverting focus and energy away from other critical business areas.
The ongoing cycle of hiring, training, and integrating new employees not only strains your HR team but also pulls managers and experienced staff into the process, further disrupting productivity and increasing operational costs.
The financial implications don’t stop there.
Once a new hire is onboarded, there’s the time and cost associated with getting them up to speed. According to Michael D. Watkins, author of The First 90 Days, the learning curve for new recruits in complex environments can extend up to 180 days before they become fully competent and able to work with minimal supervision and assistance. During this period, the new employee is more likely to consume resources rather than contribute meaningfully, placing additional strain on the existing team.
Moreover, the departure of a key player can disrupt the continuity of work quality. Experienced employees have deep institutional knowledge and a refined understanding of their roles. Their absence can lead to gaps in expertise, project delays, and a decline in the consistency and quality of output. The resulting instability can affect team morale and productivity, further compounding the costs of turnover.
Manageable Turnover
Building on the discussion of losing critical talent, it’s also important to understand manageable turnover. This type of attrition typically involves employees who, while valuable to the company, do not possess highly sought-after or expensive skills. Their roles are generally easier to fill, and the associated costs, both in recruitment and training, are relatively lower. These positions often require skills that are more readily available in the job market.
However, the situation becomes more complex with employees who fall into the middle ground between critical talent and manageable turnover . These individuals are often high potentials, demonstrating trends toward future leadership and strategic value within the company. They possess skills and attributes that make them stand out, not only for their current contributions but also for their potential to drive the company’s future success.
Identifying and nurturing high-potential employees is key to solid succession planning. In smaller companies, single points of failure in critical roles pose significant risks. Keeping track of those who fall into this category helps your leadership team make informed decisions about where to allocate development resources.
By investing in their development and creating clear career pathways, you can ensure a stronger leadership pipeline and mitigate the risks associated with turnover in critical roles.
What Can I Do To Reduce Turnover?
Using something like an Attrition Index Score Model is a powerful way to get control of high turnover. It is a tool designed to provide a comprehensive view of employee dynamics within your company. It starts by profiling all employees based on various themes, categorising them into three groups: critical, potential, and non-regrettable. This profiling assesses each employee's role, skills, and impact, allowing for a nuanced understanding of their value and potential risk.
The model further distinguishes employees by categorising them as business-critical, mission-critical, or involved in business-as-usual (BAU) functions. This nuanced approach ensures that the analysis focuses on varying levels of importance and potential impact.
Central to this model is the use of heat maps that visually represent the spread of employees across these categories and highlight their likelihood of departure. By incorporating data collection and regular reviews, the model offers a dynamic view of where potential issues might arise, aiming to de-risk the impact and costs of regrettable attrition.
Implementing an Attrition Index Score Model goes beyond identifying employee categories by also prescribing tailored strategies for managing and developing individuals based on their value to the company. It functions like a radar, pinpointing potential hotspots within your company and offering actionable recommendations to address these risks proactively.
By detailing specific approaches for engaging and developing employees, whether they are business-critical, mission-critical, or involved in BAU functions, such a model helps mitigate potential issues before they escalate. This ensures that you are not only aware of where the risks lie but are also equipped with strategies to prevent disruptions and maintain stability.
This level of transparency is invaluable for decision-making, allowing HR teams and leaders to proactively address concerns and manage talent effectively.
Without robust data on attrition, managing employee turnover is akin to playing a random game of whack-a-mole—constantly reacting to issues without a clear strategy. By identifying risks through attrition index models, companies can integrate these insights into their balanced scorecard framework, ensuring that the management of regrettable attrition not only highlights specific risks, but also aligns with broader strategic goals, providing a more goal-oriented approach to enhancing overall workforce stability.
Data empowers you to make informed decisions, offering a structured approach to understanding and managing attrition.
Key Takeaways
While no model can guarantee a perfect outcome, the Attrition Index Score Model places you firmly in the driver’s seat, giving you greater control over your business. By fostering a more controlled environment, it reduces the stress and uncertainty that can weigh heavily on executives and senior leaders, ultimately supporting better decision-making and improved well-being.
Your Key Takeaways
Monitor Attrition Trends: Track employee departures to understand their impact and mitigate potential risks effectively.
Leverage Data Insights: Use data on employee engagement and sentiment to make informed decisions and identify critical talent.
Prioritise Key Players: Focus on retaining business-critical and mission-critical employees to prevent disruptions and maintain stability.
Implement Effective Strategies: Employ tailored approaches for managing and developing employees based on their category to address risks proactively.
Reduce Stress with Data: Utilize tools like the Attrition Index Score Model to reduce uncertainty and stress, supporting better decision-making and executi
Author: Nadeen Sivic
Date: 01 August 2024
Comments