How to Reduce Attrition Through HR Analytics

Employee turnover and attrition are to be expected to some extent, but excessive levels can be costly to organisations.

For example, if your turnover rates are higher than you’d expect, you can find that you’re spending a lot of extra budget on recruitment and training initiatives. For some companies, it can be about maintaining a competitive advantage too. No one wants to think that they’re spending on training only for a competitor to receive the benefit of a skilled employee.

Attrition and turnover can come down to many possible “human” factors. It can be difficult to quantify the causes, but HR analytics can explore the data to pinpoint any patterns. 

Here are some factors to consider when using HR analytics for attrition and turnover:

Define your data points first

The best data sets are built with a goal in mind. This means you should always be thinking about which data points are relevant when it comes to analysing attrition or turnover. Without a clear definition, it’s easy to get lost in the woods of endless data.

For example, any data related to employee satisfaction could come into play when it comes to making the decision to leave. The more detailed you can get, the more useful the data. A simple satisfaction score tells you about overall feelings, but it doesn’t tell you “why.” More useful data drills down a bit more – how satisfied are employees with their level of training? How satisfied are they with benefits and compensation? How satisfied are they that the company values their opinion? How satisfied are they that their manager does a good job?

Some other data points that may come into this include age, level of compensation, how long they have been with the company, how long since their last pay raise, results of their last performance review and their perceived work/life balance. (This is not an exhaustive list, but you get the idea).

When you look at “satisfaction related” data points, you start to build a picture of the overall sentiment of employees. You might notice patterns, for example “employees in this job role tend to leave after two years if their salary hasn’t gone beyond €X.”

Analyse the job role

Sometimes attrition or turnover requires analysis of the job role in the first place. For example, sometimes a new position is not really needed, or sometimes the job description needs updating for current conditions.

You can reduce future attrition if the job roles are kept current. This includes looking at any factors that may impact the role in the near future, such an expected merger that may create redundancies soon.

HR analytics can provide key insights to management on the value of each position by examining some key questions for the role. For example:

• Is the position itself necessary, or can the work be divided among current roles? Can this be done without drastically impacting the daily work (or time spent at work) of others?
• Could it be more cost effective to add the duties of this role to someone else’s and pay them more to do it?
• If the position is necessary, should it be a full or part-time role?
• Is the position likely to become obsolete with advances in technology? Many roles have disappeared due to automation, for example.

One key question that most employers will usually want the answer to is whether the job role adds to their bottom line. There is an increasing focus on this in competitive markets where minimising costs have become essential. Employers walk the line of adding value to the company versus an expense that is not critical (as cold as that may sound!).

Use analytics to boost engagement

If a company has a problem with turnover or attrition, improving employee engagement is a proven way to reduce those issues. What does HR analytics have to do with it? You’re on the pulse of data that can help to prevent good employees from leaving.

There are a number of factors that drive employee engagement (or lack thereof). One thing that HR Analytics can monitor- it’s about the stories people have to tell.

Every person has work stories and those can play a key role in defining how people connect in an organisation. There can be plots and subplots like any other story, but those help shape how employees feel about their work.

HR analytics can uncover those plots and subplots. Digging into the data helps you to discover why some employees have good stories and why others have bad ones. The article recommends that you start with the basics, such as “do employees feel proud to belong to the organisation?” This is because many HR departments get so buried in data it can be difficult to discern the most valuable insights.

Some key basic elements go into engagement and are important to monitor. Factors include: leadership, performance, talent management, the effectiveness of the job role, employee rewards and having shared values.

Capture feedback effectively

Another thing HR analytics can do to help prevent or reduce attrition is to ensure that employee feedback, the most crucial of data is captured effectively. For example, if you’re basing most of your analysis on feedback from exit interviews, you’re always doing a post-mortem rather than getting in front of an issue early. Exit interviews are important, but it would be better to know about any “bad stories” as early as possible!

Capturing that feedback is essential for your company to be able to grow and be adaptable. HR should be requesting feedback at regular intervals (more regularly than an annual appraisal, for example) and keeping track of current sentiment among employees.

As part of collecting effective feedback, it’s important that HR can reassure employees that offering honest feedback is “safe” for them. There is often suspicion among employees when it comes to gathering data – they want to know that it won’t somehow be used against them. Creating a culture where transparency is encouraged will help with getting valuable feedback before it comes to an exit interview.

Final thoughts

Employee turnover and attrition can be disruptive and costly for organisations, especially if turnover goes beyond what should normally be expected. In markets where competition for talent can be fierce, a critical role of HR analytics can be to find practical ways to help reduce attrition.

The factors that impact attrition are wide-ranging, however they can all come back to the employee’s story of what makes them feel positively or negatively toward their employer. Engagement is often looked at as one “metric,” but the reality is multiple things go into it.

HR analytics needs to start with clear definitions for data points and have robust practices for gathering good feedback. There are good opportunities for analysts to take a proactive role, rather than just a post-mortem of data.