Unwanted employee attrition is like a leaky bucket costing the U.S. economy $1 trillion per year. It’s also like the proverbial frog in slowly boiling water who doesn’t notice he’s dying until it’s too late. Executives have come to accept the leaky bucket of attrition and the need to continually top it off with new hires.
Tech has a 13.2% attrition rate, the highest of any industry. In the retail and consumer product industry, attrition is 13%, it’s 11.4% for media and entertainment, and so on. A 2019 study of turnover in the life sciences industry found that 67% of respondents said they would be looking for a new job within a year. Other studies have found that replacing experienced employees can cost 2.5 times their salary. These attrition rates and costs are truly destructive to businesses.
Enterprises often compound those costs by mandating that recruiters replace employees as fast as they’re leaving — faster if the company is growing. It’s like replacing a car every two years instead of investing in regular maintenance and keeping the car for a decade. But the key to managing talent risk, keeping people engaged and happy in the workplace to increase the value of work while decreasing churn, isn’t rocket science — it’s now data science.
Retention Should be Considered a Company-wide Problem
First, it's time to stop passing the retention buck to HR and the People, Innovation, and other miscellaneous departments. Because retention should be everyone’s problem. All levels within enterprise organizations need to be held accountable for talent management, starting with the CEO and the C-suite on down. Alongside strategic, financial, operational, and compliance risks, talent risk is mission-critical.
CEOs must own talent risk because it can impact employees, customers, partners, suppliers, and shareholders. CFOs must own talent risk because it directly impacts profitability. CTOs and engineering executives must own talent risk because it profoundly impacts innovation and product delivery. HR executives are already focused on talent risk because of the destabilizing impacts of attrition.
The Retention Team: A New Way to Manage Talent
Imagine a cross-functional team within every enterprise — I’ll call it the Retention Team — that is laser-focused on employee engagement, wellbeing, and retention. It would represent various departments and roles and report directly to the CEO.
The group would concentrate its efforts on employees and roles that are the most important to the organization’s success. It would manage these strategic human assets, using data to understand what problems they’re having, how to better engage and reward them, and how to turn other actionable workforce intelligence into proactive action. This data would complement what is available to today’s recruiting organizations, including job aggregators, recruitment customer relationship management (CRM) systems, applicant tracking systems, employee referral applications, and human capital management (HCM) software.
The New Retention Tool - Procaire™
Retention Teams now have access to data-driven intelligence and analytics, based on huge data sets turned into actionable insights via machine learning and artificial intelligence tools. Procaire™ from Praisidio is the first AI-based, software-as-a-service (SaaS) Enterprise Risk Management (ERM) solution, purpose-built to use meta-data and analytics to:
- Detect the early signs of attrition risk at an individual or group level
- Identify and display trends that adversely impact talent risk, and productivity (such as decreasing engagement, disconnection, stagnation, burnout, overdue promotions, and compensation deficits)
- Suggest responses and workflows designed to address attrition risk, enhance employee engagement, and ensure accountability and follow-through
Employee attrition has met its match with Procaire. But don’t take our word for it. Take the new Retention Team Challenge and try Procaire for free at www.praisidio.com