Last week, my cousin who works with a large IT company called to share that he is joining a new firm. He’d received a 75 per cent hike, and with 10 years of total experience in technology (coding), the new offer was well above Rs 45 lakhs. A truly attractive package that even many MBAs or even those in mid-senior management fail to earn.
On asking him why he had started looking for a new job in the first place, he narrated the circumstances that had pushed him to it. Apparently, many of his peers had quit because of which his workload had multiplied to almost triple the regular amount. Since the manager seemed to be least bothered about his plight and oblivious to the team’s suffering, my cousin had decided to look at prospects outside. He was surprised by how things turned out. He had four offers in less than a month. Spoilt for choice, he was left to decide on the offer that was most suitable!
There are many like my cousin who are now making the best use of the current labour market scenario. Some of the major IT players are losing close to 40,000 employees due to attrition, annually. Similarly, the medium-sized IT/ITES firms are experiencing close to 30 to 35 per cent attrition. Even the traditional sectors are losing some of their best employees in this ‘wave’.
What are the reasons behind this ‘intention to quit’? What can employees and organisations do in such a scenario?
Employees’ point of view
Cyclical labour market dynamics: It is always good to ride a wave when it is going up. That is when many employees can maximise their salaries, get into their dream companies, and receive better positions and roles. However, for those jumping ship when the wave is on a downward trend, it is “LIFO – Last in First Out” in many companies. So, the signals to watch out for are, ‘less hiring numbers’ and ‘optimisation of talent’ at startups. These are signs for employees to just hold on!
Evolving workplace: A few organisations will work fully from office (remember the mail from Elon Musk!), while some may go hybrid, and yet others may continue to work from home. For those with some commitments (to take care of immediate family, inability to commute, remote working, etc.), it would be a good idea to think twice before taking up a new offer. The work policies in the new organisation may be still evolving, leaving one with less control over workplace preferences.
Social capital: In the absence of a real reason to quit, it is best to give a thought to what one is leaving behind — in the intangible form. Credibility, past performance, relationships, and the extended network are just a few of the intangible assets one would have to let go, and these take time to build in a new organisation. With remote / hybrid working, it is going to take even more time and effort. Those who stay on for long may have an edge over many matters, including key projects and better growth.
Organisation’s point of view
Organisations are struggling to meet their business demands due to increased attrition. The issue is almost snowballing into a crisis. How can organisations manage this in a more structured manner?
Manpower optimisation: Is the existing strength really required? Can new technologies be brought in? Can individuals be provided enhanced responsibilities and growth? Seeking answers to these questions can help organisations be more nimble and agile. This would not only help current employees scale up but also help hire the right talent at the right cost. For instance, many are paid a lot more for the roles they are handling, primarily because of legacy issues.
Talent analytics: A clear view of the high potentials and performers can help identify the real cost of attrition. On an average, loosing a high potential or performer will have more than 10x impact on the firm. Organisations need to be aware of such talent and provide them with a much more wholesome experience in addition to rewards.
Hiring from troubled employers: Often employers will have to look at companies that are struggling within and outside the industry. At any point of time, there will be good talent coming out of such companies, and often it is a lot easier to hire them.
Clear employee value proposition: Research shows that even in these difficult times, only 25 per cent of large / mid-sized companies have articulated their employee value proposition (EVP). A strong EVP will send signals to current and prospective employees about the organisation’s strengths and status, making the organisation stand out.
Investment in managers and HR: The power of managerial effectiveness cannot be ignored. Fair and engaged managers are two of the factors that can make employees ‘stay’. If the HR is to ensure employee engagement, they need to be engaged first!
The author Sandeep K. Krishnan is a visiting faculty at IIM Ahmedabad.