In light of the surprising news about the $8 billion price tag of attrition at Amazon, it’s worthwhile for every large enterprise with a high volume of frontline workers to see where there is an opportunity for change.
The Great Attrition that began in 2021 still impacts frontline workers now.
What is attrition in the workplace?
According to Gartner, the definition of attrition is the departure of employees from the organization for any reason (voluntary or involuntary), including resignation, termination, death, or retirement. Attrition rate is the rate at which employees leave an organization divided by the average number of employees at the organization over a given period of time.
What is a normal attrition rate?
Even in healthy companies during steady economic environments, it is estimated that a company will lose 18% of its workforce annually.
How much does attrition cost?
While attrition at your workplace may not be costing you $8 billion, it does cost an average of $1,500 per lost hourly employee which adds up when you employ hundreds of frontline professionals.
Consider these elements of cost that go into a single churned employee, as stated by People Keep:
- Recruitment costs
- Onboarding costs
- Lost productivity
- Lost engagement and impact on employee morale
- Customer service and errors
- Training costs
- Lost institutional knowledge
- Cultural impact
Talent managers know that replacing an employee takes far more time and money than figuring out how to keep them. In fact, a recent SHRM study showed that it costs companies six to nine months of an employee's salary to replace him or her.
So, what can enterprises do to decrease the likelihood of attrition?
Stop it before it starts
Keeping your frontline employees satisfied is about more than just increasing wages or adding benefits. While these are important and worthwhile endeavors, they aren’t the only elements that keep employees loyal.
So, how can you make sure you set both your team and yourself up for success? Address the problem before it even happens.
1. Improve candidate experiences
Believe it or not, it’s important to start addressing attrition before an individual becomes an employee. In a world where even lengthy time-to-hire for frontline workers is under 20 days, and 40 percent of candidates reject offers because another employer gave them an offer faster, speed is truly the most important element of making a positive impact on candidates.
Remember, the first impression a candidate has of your company is likely one of the few impressions they will have before becoming an employee.
In a market where frontline candidates are limited, and open positions are many, having a quality candidate experience is essential. Those who choose to accept a job offer likely have a predetermined attitude toward your company (and hopefully a positive one) simply from their hiring process. So, it’s essential that you get off on the right foot and invest in a painless, streamlined, and positive candidate experience to get ahead of attrition down the line.
2. Create hands-on onboarding
The 90-day rule is a concept that’s been making its rounds in the HR sphere. The theory is that if a new hire stays for 90 days, they will likely stay with the company for at least a year.
If that is the case, companies should invest heavily in getting new hires to (at least) that 90-day mark. However, while nearly 60% of organizations have onboarding programs, 88% of employees still state that their company doesn’t do a great job onboarding new employees. This shows that simply having a process in place is not enough. Onboarding needs to be hands-on and personalized.
While these numbers seem bleak, research also shows that organizations with strong onboarding processes increase new hire retention by 82% and that employees are 69% more likely to stay with a company for three years if they experience a great onboarding process. With onboarding costing, on average, over $1,500 per hourly worker, this isn’t just a conversation about overall employee satisfaction, it’s about managing cost and monitoring ROI.
3. Check-in with new hires
While onboarding should include training for the job and information about benefits, pay, and bonuses (if offered), check-ins are really all about how your new team member is feeling about their role and the company. Feedback from these interactions can highlight early indicators of potential turnover that can be addressed when they come up rather than regretted when they lead to resignation.
In a perfect world, the hiring manager or HR manager could have 1:1 check-ins 2 weeks, 4 weeks, 60 days, and 90 days after new employees’ first day of work. But, for most frontline or high-volume hiring teams, this is not scalable. But this shouldn’t be where the conversation about ongoing feedback ends.
Instead, leading talent acquisition teams have started leveraging tools and platforms to make this feat possible. The capabilities of these technology solutions often include utilizing automated text check-ins or new employee surveys to measure sentiment and identify individuals at risk of leaving.
Dig deeper into the root cause
1. Ask what your employees care about
It’s essential to know what actually makes your employees tick. We’ve found that developing defined candidate programs builds the foundation for employee satisfaction. As mentioned above, many employees leave their new job within 90 days. This is often because employers have either misrepresented or the new employee has misunderstood their role and responsibilities.
The three primary elements impact a candidate’s desire to pursue a job which are:
1) Hiring process
2) Compensation package
3) Differentiating perks
(We dive into these further in the 2023 Guide to What Frontline Candidates Want). And these all play a role in the long-term satisfaction of new hires.
Still, sometimes the best way to understand what your unique employees want or need from you as the employer is to ask. Utilizing automated, anonymous surveys with both candidates and employees, you can better see what draws applicants to your organization and what helps retain new hires.
2. Understand why frontline employees leave jobs
It’s no secret that the Great Attrition has dramatically impacted frontline-fueled organizations. But it’s hard to determine if the underlying issues that led to it were previously known issues that were not addressed or unknown issues that were aggravated by the pandemic. Either way, the workforce upheaval may have been cushioned if leadership had actionable insight prior to the mass exodus.
In hindsight, we can see that the three top reasons employees left their jobs in 2021 were pay being too low (63%), lack of opportunities for advancement (63%), and feeling disrespected at work (57%). And 2022, sadly, we saw these statistics change very little, with the reasons for leaving being pay being too low (63%), lack of opportunities for advancement (63%), and feeling disrespected at work (56%).
If the biggest struggle facing frontline-dependent organizations is staffing (which it often is), then these organizations must address the issues that are known. Steering the ship is one issue, plugging the holes is another. It won’t matter how well the boat is oriented if it is sinking. In the same way, it won’t matter how many new hires an organization can hire if it cannot keep them.
3. Perform an automated exit survey (and do something with the feedback)
While performing exit interviews for each individual who leaves may be ideal for gathering data, it’s not a realistic expectation for industries with a 144% turnover rate. Instead of attempting this or losing the valuable information those exiting employees bring, innovative recruiting teams have leveraged automation to help ease the burden without losing the valuable information.
With recruitment automation technology, HR teams can perform an exit survey through email or SMS. Of course, only a percentage of those messages will be responded to, but those who do will offer insight into why they left. This can help people managers address consistent challenges that employees may be facing that could otherwise go unnoticed.
The caveat to gathering this data is that you must actually act on this feedback. If it is captured just to collect dust, it will not help you reduce attrition or encourage future employees to stay longer.
Remember, attrition is addressable
While attrition is not avoidable for frontline employers, it is addressable. Making changes that will truly impact attrition long term, though, requires intention.
It’s no secret that frontline talent acquisition and HR teams have a lot on their plates, but with the right tools, tactics, and support, these teams can make a huge difference in the overall health of their businesses.
Reduce attrition with better candidate experiences
As we now know, how an employee feels about their job or about the company within the first 90 days has a huge impact on if they will stay beyond that. And, what they experience as candidates greatly influences their employment going forward.
So, it’s essential that talent acquisition and recruiting teams invest in creating great candidate experiences. See how your team can accomplish this in frontline industries here.