A FRAMEWORK FOR EXPECTED ATTRITION

Since the early 2000s a string of new sectors in India started growing by leaps and bounds- in the early 2000s it was the IT and ITES sector, followed by Insurance, Telecom, Pharmaceuticals, Retail and most recently Infrastructure sectors. A new sector usually ‘buys’ manpower from related sectors, and so was the case with these sunrise industries.

Soon the Indian manufacturing sector started experiencing high employee turnover. This was especially true for supervisory workforce at factories, frontline sales force, and managerial workforce.

My stints during these high attrition periods were in a Sales HR and a Factory HR role. High attrition obviously caused a lot of management concern at Sales and Factory locations. The usual refrain was ‘Attrition levels must go down!’. I agreed with the usual refrains –attrition levels of 30-40% are unsustainable! But I was intrigued by the usual and only solution proposed ‘Let’s pay higher salaries!’. I thought ‘Yes, salaries must be competitive but if employees are poached at 2x or 3x of their present salaries there is precious little you can do about it if the only thing you do is increase salaries. Sooner or later someone would still pay high enough monetary incentive to lure away an employee.’ So finally we did get an appreciation of the non-monetary areas that we needed to focus on too to reduce attrition.

I remember a subsequent month when I was working on creating retention strategies. I was grappling with trying to figure out what should be the goal for our retention efforts. Should we ensure that no one leaves? Is 0 % attrition the ideal retention target? My first reaction was ‘Obviously 0% is not ideal. Think of a living system with absolute retention. The system would sooner or later die.’ What should be a good attrition figure then? Should we fix it at let’s say 8%- this would mean that 7.9% attrition is good but 8.1% attrition is bad? How do we arrive at the figure of 8%?

I had subsequently written an article back in 2006, about how to figure out an ideal attrition figure. I had contested, and still do believe, that 0% attrition is not ideal.

INTRODUCTION

Predicting attrition! – is it possible? To answer this we first need to ask a few basic questions:

• Are we looking at predicting overall attrition or are we looking at a few components of attrition?
• With what degree of accuracy do we want to predict attrition?
• Over what time span do we intend to predict attrition?
• At what level of aggregation – individual/group/organizational level – do we want to predict attrition?

In this note we have made an effort to answer a few of these and more. The emphasis is on attrition which should be reasonably expected. We would try to derive a simple mathematical model for this expected attrition rate and illustrate the same through the means of an example. This model is by no means exact or precise. It is just a useful representation of the reality.

FRAMEWORK

The expected attrition rate can be said to arise thanks to the hierarchal structure in the organization.

Let us take a simple case. Assume that there is a sub system, of an organization, with S+1 number of employees. There are 2 hierarchal levels (Level A & Level B). There are S numbers of employees who are reporting in to a single person D.

Let us assume that on an average an employee takes time T to get promoted from one position to another (for both levels A & B). Now an employee in level B can move up only when D (level A) moves out of that position. D can move out of the position in one of the 2 ways:

• He gets promoted to a higher position. Assuming the same kind of sub-system to be replicated across the organization, the probability of D getting promoted is 1/S
• He moves out of the role.

When one of the employees in level B moves up it is reasonable to assume that the remaining people in that level would move out.

Hence total number of employees in the system = S + 1

Remaining employees = 1 + 1/S

Attrition = S – 1/S

Therefore %age attrition p.a. = (S – 1/S)*100/(S+1).T = 100 * {1-1/S}/T

Example: If the span of control is 4 and the time period is 3 years.

%age expected attrition = 100 * {1-1/4}/3 = 25 %

Now in a real organizational context there would be variables which would come in (e.g.: T may vary from one organizational level to another). But these are variables which can be accounted for and hence we can arrive at an expected attrition level

CONCLUSION

The note tries to come up with a mathematically derived internal attrition benchmark. Therefore there would be an optimum attrition rate, which would be a function of the span of control and the time an employee would be expected to stay in a particular position. Attrition which is either lower or higher than this range may not be desirable from the organization’s point of view.

As these two variables change at different levels in the hierarchy the optimum attrition rate at a particular hierarchical level may be different.

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Sourav

A Note on Behavioural Indicators

Around June 2005, I was in the midst of handling for the first time selection processes independently. Taking an interview was an eye-opening experience.

‘How do you take a hire/no hire decision at the end of an interview?” was the primary question that intrigued me. On the basis of my initial experiences I had written the following note. Today, it still does inform my thoughts and actions.

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Let us divide the requirements of a candidate into 3 categories, viz:

• Knowledge
• Skills
• Attitudes

One may quickly reach the conclusion that I am speaking of competencies out here and consequently of behavioural indicators and Behavioural Events Interviewing (BEI’s). But that isn’t the case. Let me elaborate further.

To answer that question we have to first look at the definition of competencies.

Competencies are the underlying characteristics which are causally related to superior performance.

Hence there is a cause and effect relationship between the identified competencies and superior performance.

There are 3 underlying characteristics:

• Knowledge – what one acquires through learning. Is relatively easier to pick up than the remaining two and once acquired less stable.
• Skills – which one acquires through practice. Hence communication can be termed as a skill (the more you practice the better you become at it!). Hence there has to be an act of doing in it. Skills are tougher to pick up than knowledge but once acquired more stable.
• Attitudes – difficult to acquire but once acquired the most stable.

But the problem with these characteristics is that they are underlying. Let us elaborate this through the renowned iceberg model.

Consider the iceberg as constituting the universal set of competencies. About 9/10^th portion of an iceberg is below the surface of water (the Skills, Attitudes part), whereas only around 1/10^th is above the surface of water (the Knowledge part). Hence the hidden portion constitutes the majority of the iceberg and it also constitutes the:

• Difficult to acquire
• Once acquired, stable

, portion of the iceberg. Hence it constitutes the most important part of the iceberg but then it’s hidden. In a structured interviewing process where one has limited time to reach a conclusion it becomes tough to evaluate a candidate on these hidden aspects directly. Hence there is a requirement to look at indirect indicators of these competencies. This is where the concept of behavioural indicators comes in. One does competency modeling where the differentiating behaviour of superior performers are looked at and hence arrive at the competencies and the consequent behavioural indicators one needs to concentrate on during the interviewing process.

Let us elaborate this through a non work life setting. We would look at a situation which can be commonly understood by one and all. Let me ask you a question:

• Who is a better batsman – Virendra Sehwag or Sachin Tendulkar? Or how does one decide who is the better batsman of the two?

One may say we should look at the batting averages of both of them, or the number of test centuries, or the number of match saving/winning innings, etc. In all of these we are speaking of parameters which are ENDS.

The advantage in this situation is that the ENDS are easily measurable. But assume for once that this wasn’t the case, i.e. – the ENDS weren’t easily measurable, and we had been asked to make a judgement on whose a better batsman. In this case we don’t have the luxury of falling back upon easily measurable ENDS. So how does one get out of this fix? Let me propose a few plausible solutions to you. The basis of the solutions would be – we would look at the BEHAVIOURAL COMPONENTS which go into their batting.

Behavioural indicators	Tendulkar	Sehwag
He reaches out to the pitch of the ball while playing	Yes	No
Demonstration of Hand eye co-ordination	Good	Outstanding
Counterattacks under pressure	Sometimes	Always
Aggressive behaviour on the field	Medium	High

“Due to the lack of concrete END metrics we would arrive at a conclusion of who is a better batsman depending on an evaluation of the above behavioural indicators.”

To a cricket buff, the above analysis would be nothing short of absurd! At the end of the day the results matter. People can have different ways of arriving at them.

Let me throw up one more situation .Sehwag started playing later than Tendulkar. Say the BCCI after having seen Tendulkar play in the earlier part of the 1990’s decided that they want to model every budding cricketer’s behaviour on the basis of the = Tendulkar’s cricketing behaviour. These behaviours would be used as:

1. Selection criteria for selection into the Indian team, and
2. Training youngsters at cricketing camps.

Had this happened, would we have a Sehwag in our midst today? Wouldn’t we have naturally eliminated the possibility of a Sehwag being groomed? By following the above model we would be essentially creating clones within the system – and that would happen because we are trying to get too specific with our specifications, i.e. – we are going down to the behavioural indicator level.

But in an interview process when one is trying to predict future results we rely on these intermediate measures. One may say that they would give reliable results but are the results valid?

Hence the first bone of contention is “Is there only one right way of achieving success?”

We would revert to cricket to explain the second bone of contention too. BEI’s are based on competency models. Competency modeling is supposed to look for “differentiating behaviours” between high performers and others.

Sunil Gavaskar was a renowned batsman of his times. Would he have been successful in the present “one day international’s heavy cricket itinerary? Based on the limited amount of one day internationals he had played we can make a reasonable guess that “his success in one day internationals would have been less than in test match cricket”. This brings us to the second bone of contention with respect to competencies.

Behaviour which leads to success in one kind of setting needn’t necessarily lead to success in a changed environment.

Hence the two problem statements can be framed as:

• In any given situation is there only one way of achieving success?
• Are behaviours, which have been found to be causally related to success in a particular environment, necessarily successful in a changed environment?

“So are we speaking of not using competencies at all?”

The classification of competencies into K, S & A’s per se seems to be fine but further classifying them into behavioral indicators and using these for taking people decisions seems to be flawed.

But how does one then evaluate a candidate on his hidden competencies – the S’s and the A’s?

That’s a question to which even I don’t have an answer right now but trying to reach a conclusion on them through a BEI seems to be the wrong way out.

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(Sometime in 2005)

Later I would come to a conclusion that what you can standardize in a Selection process is ‘What do you Select candidates on?’ and ‘How do you gather data during a Selection process?’ You can have guidelines for Selection/Non-Selection decision making, but these guidelines would support subjective judgment and not replace it.

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Sourav

Need Based Learning and Emergence of Meaning

Some days back a colleague and I were discussing about ‘meaning based learning’. He said he disagreed with this concept; the reasons being:

• Many a times we stumble across something useful.
• The moment we decide that we want to learn something, we close ourselves to other learning’s which might have, otherwise, emerged in the process.

My mind wandered back to something I had heard a few years back. A senior had mentioned that his learning retention used to be better when he learnt something which was of importance to him at that point of time. That was the first time I had heard about ‘meaning based learning’ and it had made sense to me then.

I later read about ‘phenomenology (Donald, Snygg, and Combs)’ which give credence to meaning based learning theory.

I must accept that the concept does make sense. Many a things which have stayed with me over a period of time have had some meaning to me at the point of time at which it got inculcated. So be it MBTI, Transactional Analysis, etc……..these had significant meaning for me at the time I focused on them.

But there also have been things which I have stumbled across in my life which have stayed with me e.g.: What matters more – Youth or Youthfulness? Experience or Capacity for Experience?- these are not things which I aimed for but I stumbled across.

But then, even though I had stumbled across these learning’s, they had relevance for me at that point of time. Hence there was meaning associated with them though I was not necessarily looking around for solutions/learning’s.

So the term should be Need based learning (directed or stumbled across- which has relevance/meaning for us) and this would be different from Meaning/direction Oriented Learning (where Learning is an outcome of only ‘directed’ efforts).

I remember another discussion with a different colleague. He was talking of wanting something to happen (getting fixated to one outcome - which would arise from a fear of waiting for a situation to emerge and consequently being uncomfortable with the unknown outcomes which might emerge) vis-a-vis allowing a situation to emerge.

What I can make out from this is that we need to be keyed on to what are our developmental needs at a point of time, and consciously work on addressing these need but also be open to ‘accidental/stumbled upon learning’. At the same time the our mindset should be ‘let things/learnings emerge’ instead of ‘I need answers quick’. In this way we would avoid a major learning disenabler, Cognitive Dissonance, too.

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Sourav

Being OK with not being OK

A few months ago a colleague asked me if i had a model to depict the challenges a new joiner faces at work. I told him about a framework i used to follow for an induction program I handled in a previous role:

• Program objective: An individual should be in a position to take over independent handling of any role in the function he/she has been hired for at the end of the induction period.
• Program focus: the triad of Learning, Contribution and Relationships and how all 3 need to be worked on.
• Program Principles: How do you facilitate the anxiety associated with learning (getting over the Cognitive Dissonance problem)? ...my statement about “One has to be OK with not being OK for some point of time.” This would allow you not to jump to the first acceptable solution (just because you wanted to get over your learning related anxiety).

This framework, in parts, has been influenced by an understanding of the difference between Orientation and Induction – a difference highlighted to me by a senior colleague in my 1^st year of working.

This is a helpful framework for looking at the program. It comprehensively covers the way the company would look at the program. It also considers a major difficulty which the learner faces in the learning process.

But is that all that is required to ensure an effective induction process?

We say that the role of the learner is paramount in the learning process. If the learner does not want to learn then there is not much a trainer or a facilitator can do about it. I also have usually believed (though lesser nowadays) that all learning is meaning based (Snygg and Comb’s theory - phenomenology).

So can we as a facilitator/process owner create a context through which an individual derives meaning for the learning? The choice to learn or not to learn would still rest with the individual but atleast we would have created a space in which the meaning for the learning may find expression.

Some years back I had read about a learning cycle theory, frequently used in NLP. The theory is about 4 successive stages in learning, viz:

• Unconscious Incompetence
• Conscious Incompetence
• Conscious Competence
• Unconscious Competence

This model has a lot of face validity. When a newcomer comes into the system, he/she is in a stage of unconscious incompetence. How do we facilitate the movement to Conscious Incompetence? (providing a context from which an individual derives meaning for learning). This seems to be the crux of the issue.

I am not sure whether we can tell an individual the meaning. A space has to be created in which an individual reflects/experiences something and consequently derives his/ her own meaning.

How is this space created? Well, that’s where the role of the facilitator comes in.

The consequent challenges would be to provide the resources which allow the individual to work towards Conscious Competence while at the same time anchoring him/her around “It is OKAY, NOT TO BE OKAY for a certain point of time.”

All of these would have to be done with the additional process of anchoring the newcomer towards the importance of the active role of the learner in the whole process – “You can take a horse to the water, you can give the horse enough water to drink, tell the horse that drinking is good for its health, but the choice to drink or not to drink lies with the horse.”

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Sourav

P.S.: Over the last year I have started developing an alternate point of view on meaning based learning. Learning is not necessarily meaning based..You also stumble upon learning!:)

Conflicting priorities in Career Management

Career Management, as distinct from succession planning, supposedly takes care of aspirations of employees. Hence it is from the point of view of the employee.

But is an employee the only party involved in the process of shaping his career? There exists a number of ‘lenses’ – organizational lens, lens of the parent hierarchy (as manifested by immediate boss), lens of the ‘receiving’ hierarchy, and lens of the employee himself.

What are the interests of these different lenses and how do they interact to shape the career of an employee?

Organizations might have different definitions of career growth. Vertical as well as horizontal movements might be seen as growth avenues. There also might be an assumption that all individuals want vertical/horizontal career growth.

One of the biggest stumbling blocks to career planning comes from the immediate superior of an individual. The immediate superior has a primary interest –that of ensuring performance of his team. It becomes easier for him to ensure team performance if an individual stays longer. This primary interest at times is at odds with the interest of the individual. Sometimes you will find superiors not sharing details of career opportunities with their subordinates, as they do not want to let go of them. This is where mechanisms like Internal Job Portals come in. But even when you provide visibility of career opportunities to individual employee’s, a boss still wields significant power. He may actively dissuade an employee from applying for certain positions. I wonder whether this kind of behavior is over the board. He may also act very difficult in letting go of an employee who has been selected for another position (‘He is working on important projects. I can’t relieve him from his current role for next 6 months.’)

Even within the same company you find some departments/functions where employees from non-traditional backgrounds do well, and other departments/functions where a non-traditional profile struggles to perform. Career Moves involve making moves outside your own specialization areas. A recipient function plays a large role in setting up a cross-functional mover for success or failure. From an organizational perspective, it is important to recognize which functions are hostile to incoming career movers and work with them to change their behaviors. From an individual employees perspective, it is important to factor in what kind of support systems would be available in a function the employee is considering making a movement into. The recipient function also faces a challenge of figuring out on what basis to select/reject internal candidates – a sensitive issue.

What about the individual employee? Career Management/Planning is meant to take care of his aspirations. What happens if an employee wants to specialize but the company believes in general managerial competence? What happens if an employee wants to work in different functions in a company that believes in specialization? Many a times employees equate growth with promotions – how does a company ensure that even horizontal movements are seen by employees as growth opportunities? Career Management is based on the assumption that employees are aspirational. There are different life stages when an employee may not desire movement. Would such an employee not be considered ‘career oriented’ and subsequently ‘discounted’? For an employee his career is enmeshed with the other roles he plays outside work in his family/society– what happens when there are clashes between these different roles?

Career Management/Planning is necessary but there are multiple and conflicting priorities that tug at the process. At the end of the day, the ‘employee lens’ is what a Career Management/Planning process is supposed to cater to. But this can be done effectively only by identifying and managing the conflicting priorities of all stakeholders.

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Sourav

Workforce Diversity in India!

Ensuring diversity of workforce is a prerogative for most companies worldwide. In USA, the historic origins of diversity lie in part in Equal Opportunity Employment Act. In one of the Scandinavian countries (Norway if I am not wrong) there is a mandate that 50% of the board members of all companies have to be women. There is currently an intense battle happening in UK between the government and Industry on issue of increased representation of women in the workforce.

What does diversity of workforce mean in Indian context?

Reservations in government services and in public educational institutions are the first overt measure we have seen towards this end.

India is a country of cultural diversity. This also gets reflected in the cosmopolitan nature of its cities – Mumbai, Bangalore, Delhi, Kolkata, Hyderabad, etc. A company in India which broad-bases its recruitment from different parts of the country and different kinds of institutes usually has cultural diversity.

Meritocracy based entrance examinations for most institutions of higher education in India also ensure there is representation of people from different socio-economic backgrounds in companies.

The challenges in India seem to be around ‘gender diversity’, and ‘international workforce diversity’. ‘Gender diversity’ problem is something many companies have tried to consciously address for sometime. Many industries, specifically service industries, have seen significant increase in participation of women in workforce.

But what about ‘international workforce diversity’? Many Indian companies today are becoming multi-national. Do we see representation of their international (non-Indian) workforce in the company’s leadership? Is this international workforce considered a source of top leadership talent pipeline?

I don’t see much of ‘international diversity’ in manufacturing industries in India.

Maybe a good starting point for this would be ‘Skill based jobs’. In a survey done by Manpower in 2011, R&D jobs were found to be the ones for which companies in India faced most severe talent shortages.

Pharmaceutical companies and leading edge technology companies may soon become the torchbearers for ‘international workforce diversity’ in India.

Indian companies which are looking at using R&D capabilities as a source of competitive advantage might also turn to be the first to adapt an ‘internationally diverse workforce’ manpower model.

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Sourav

Can You Show me the Way?

A few months back a colleague had shared an article on health status of Developmental processes in different companies.

The article laid out a framework for a robust developmental process – evaluation, feedback, and planning. It subsequently elaborated on what the study had found about the existence/effectiveness of these sub-processes in different companies.

While most companies seem to do a good job of evaluation, lesser number of companies focus on providing feedback to their employees on the basis of evaluation. A miniscule number of companies focus on providing adequate developmental opportunities and on the effective usage of these opportunities, on the basis of the evaluation shared.

Is this framework complete? Does it cover all important aspects required to ensure effectiveness of developmental processes?

I think it does but it doesn’t flesh out some important aspects of the Developmental Planning and Execution phase. The presence/absence of these aspects can ensure the success or failure of the process.

Firstly, individual ownership for his/her own development. If i am not interested in my development, the efforts of others on my development would not result in any progress.

Secondly, I might know that I need to develop but how do I go about doing it? If I were to look back at the times I have developed/not developed can I pinpoint the reasons for it? This certainly is not an easy task.

There is a risk that a developmental planning discussion degenerates into one blind asking the another blind to draw the way out for him. The intention of both the parties (even though positive) would not fructify into results.

Hence an evidence generating procedure (evaluation and feedback is one manifestation of it), developmental opportunities (identification and deployment), individual ownership, trust in the relationship, and a shared understanding of how an individual develops (and this understanding has to be at the individual level) seems to be the crux of the matter when it comes to Developmental processes.

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Sourav