“Supervisors’ ability to manage employees vital”
10 % of employees change jobs because they are unhappy with pay package
Relationship with boss is a determining factor for quitting
CHENNAI: When hit by attrition, Indian companies often respond by raising salaries or complaining about their inability to raise salaries.
According to a new study, however, less than 10 per cent of employees change jobs purely because they are unhappy with their pay package. Instead, one in three employees lists their relationship with their boss as the single most important factor in deciding whether to stick to their jobs or quit.
“Any organisation which can improve its first line of management, its supervisors’ ability to manage people, will have a much better retention rate,” says Cabot L. Jaffee, chairman of Global Talent Metrics (GTM), the human resources services company which conducted the System for Talent Attraction and Retention (STAR) Research study in association with the Indian Institute of Management, Bangalore.
The study, which surveyed over 5,000 white collar workers from almost 40 companies, probes the role of demographic, psychographic and sociological factors in predicting attrition. Such research becomes important in light of the fact that early attrition is costing companies a fortune. Every employee who accepts the offer letter but then fails to show up costs between Rs.10,000 to 20,000, while the investment on training means that an employee who quits after six months on the job costs his company half his salary.
The solution is not to check your prospective employee’s past career record. According to the study, it doesn’t matter if the candidate has stuck to the same job for the last five years or has skipped between two or more jobs in just two years: they still have the same rationale while deciding whether to quit or not.
Relationship with their boss is number one on the list, closely followed by the clarity of their career path and opportunities for advancement. Salary, demographics and family circumstances are farther down the list.
A combination of these factors can be used to cluster employees and then check if their motivations match with what the employer offers.
This would aid in selection of the right employees and decrease attrition, says Mr. Jaffee.
“In a high growth industry like IT or retail, the quality of selection is a casualty. And good selection is at the heart of people management,” said Vasanthi Srinivasan, IIM-B professor whose team helped design the study. She points out that while a number of tests can judge the aptitude and skills of a candidate, it usually takes in-depth interviews and group discussions to judge attitude, which is key to fighting attrition. “Ten years ago, you hired someone after a 45 minute interview…In campus interviews today, you have about seven to 10 minutes, and most of it is focussed on technical knowledge and what the employee can do, rather than motivation assessment,” she said.
As a result of the study, GTM has produced a web-based HR tool called StarSelect to help companies streamline the recruitment process. It offers a simple way for recruiters to judge if a particular candidate’s attitude matches that of the organisation, according to Mr. Jaffee. He says testing proves that the tool can reduce attrition from 46 per cent to 20 per cent. The tool is being licensed to companies, with an approximate price tag of Rs.1.5 lakh a year for a 5,000-strong organisation.