Employee attrition continues to be a major problem within U.S. companies. It’s widespread, costly, and disruptive. According to research by Gallup, U.S. businesses lose $1 trillion dollars annually due to voluntary employee turnover. Other Gallup data showed that 51% of employees say they're actively looking for a new job or are open to one.
Yet until now companies have largely ignored talent risk. It is conspicuously absent from Enterprise Risk Management (ERM) assessments. Employee attrition is out of sight, out of mind among corporate executives. The problem has been relegated to HR departments.
Here’s the shocking truth: Most enterprise organizations don’t know their true attrition rates. Neither do they know the true monetary, strategic, brand, and corporate cultural costs from attrition.
It’s time to do three important things: 1) See talent as an enterprise-wide risk, alongside compliance, financial, operational, and strategic risks; 2) Admit that current methods to stem attrition are flat out not working; and 3) Let it be known that everyone owns talent risk within the modern organization — starting with the CEO.
Talent is a Major Enterprise Risk Factor
How talent attrition risk is being managed today isn't working. It’s unfair and unrealistic for management to rely on overburdened and ill-equipped Human Resources departments to respond with any scale to the problem. There is no enterprise-wide mandate and HR doesn’t have the charter or authority to dictate directives or best practices to cross-functional groups.
Until now, talent attrition has been difficult to control. The current data-driven approach relies on inputs from surveys, exit interviews, analytics, and meetings and conversations with employees. It’s cumbersome to gather the data and the data itself is of questionable value. No wonder it’s been excluded from ERM assessments.
Surveys are, at best, snapshots in time. If used at all, companies use internal surveys infrequently. But most importantly, the value of surveys is dependent upon the questions being asked. Do most companies know what those questions are when it comes to why attrition is occurring? Can they be sure that employees are answering those questions truthfully?
Exit interviews are highly suspect and often inaccurate due to low employee incentive to be direct or truthful. Data from these interviews is therefore of questionable quality.
Human Capital Management (HCM) analytics are cumbersome to generate due to a lack of automation that requires manual work. This type of analytics at best provides mere snapshots from relatively limited datasets. This use of data to stem attrition also looks backwards, not in real-time. It’s reactive rather than predictive.
Meetings and conversations with employees provide other channels through which managers can gauge employee job satisfaction. But these interactions are anecdotal and hard to measure or quantify objectively. Moreover, it’s impractical to use these interactions alone to track and glean actionable insights from variations among large workforces.
Change in Mindset + New Data-driven Tools
It’s time that enterprise organizations:
• Move the responsibility for addressing talent risk beyond HR departments. Talent needs to be considered an enterprise-wide risk that is owned by everyone, in every department, from the CEO on down.
• Approach talent retention in a new way; as a continuous process that relies on real-time monitoring and proactive actions based on a myriad of data inputs and insights that help track employee satisfaction levels and signs of impending attrition.
This type of ERM technology, focused on managing talent risk at enterprise scale, is what Praisidio’s first product is all about. Praisidio Procaire™ is cloud-based and relies on meta-data and A.I. models to provide early detection of talent risk, with features including risk identification, alerting, recommendations, and action workflows.
Talent risk is too big a drain on the enterprise. It’s time to swap the status quo for a better approach. Managing talent risk must become an ERM deliverable in the executive suite. A systematic, data-driven approach to managing talent risk — based on anonymous meta-data and powerful A.I. models — provides a new and better approach to enterprise-wide efforts to stem attrition and to create sustainable workplace cultures.