When we hear about a company’s high attrition, the common perception is that the work culture is not favourable. Without understanding the context and industry-related nuances of a company, most people question the culture of the company. In general, a high attrition rate is always seen as a negative quality and results in fingers being pointed at the work environment of the organisation. But is it really true? Can high attrition rate be always attributed to a bad work culture?
Jitender Panihar, global head – HR, MoEngage
CEO of a top IT giant in India mentioned in a one of his interview, whenever there is a high momentum the attrition rate is bound to go up. Even Jitender Panihar, global head – HR, MoEngage, agrees that before commenting on the high attrition rate of a company, there is a need to understand the context.
High attrition rate can be caused by many factors other than just a bad work culture. Lakshmanan MT, CHRO, L&T Technologies, points out that since in the demand for tech talent has increased in the IT industry, people have many options available in front of them. It is not just the IT or tech industry where techies are in demand. Their demand has increased multi-fold across industries as the process of digitalisation has increased, and accelerated thanks to the pandemic.
Lakshmanan MT, CHRO, L&T Technologies
Another reason for attrition is the skill mismatch ratio. Many a time, due to bad hiring, candidates may turn out to be wrong fits, and may end up leaving the company or even be terminated on the basis of low performance.
Also, with the ‘great resignation’ phenomenon being quite active in the job market, people tend to leave one career to look for another opportunity.
As Lakshmanan explains, “If the average industry rate for attrition is 20 per cent. A company with a good work culture may have an attrition rate of 18 per cent. So even with a positive work environment, the difference is just two per cent”.
Suruchi Maitra, former CHRO, Lenskart, admits that there could be many reasons for the increase in voluntary attrition rate in a firm. The women employees may be at different stages in their life cycles. Some get married, become mothers and so on, which makes it necessary for them to take a break. However, not all may rejoin after taking a break from their corporate career.
“For any company, aiming to stay somewhere close to the average industry-wise attrition rate is good. A rate of 10 per cent above the industry average is serious and a cause for concern. It may point fingers at the overall work environment of a company,” enunciates Maitra.
Additionally, even when a company is undergoing transformation, some employees may not be able to adapt to the change and prefer to leave for other opportunities. Panihar gives an example of a tech services company which has a culture of developing an entrepreneurial mindset in its employees. He shares that many employees from that company leave to start journeys of their own in the corporate world. This is also a significant reason for voluntary attrition.
Suruchi Maitra, former CHRO, Lenskart
“Even great cultures can have high attrition rates,” shares Panihar. “There is always a taboo around attrition. The moment someone puts in his or her papers, people start becoming sceptical,” adds Panihar.
To conclude, there can be multiple reasons for higher rate of attrition in a company. Personal choice of career change, enhanced aspirations of high performers, expectation of higher compensation by employees, or even change in the expectations of the company from its employees, with higher benchmarks in the performance management system can be the cause. Whatever the rate of attrition may be, it is very important to understand the ‘why’ behind it.