Small firm, big on attrition – In search of agility

“We are a startup, facing a huge attrition, since the past few months. To make matters worse, the employees abscond creating a sudden abyss in production delivery. The clearance processes are never followed by them. They are not willing to pay the notice period amount neither willing to communicate. The knowledge transfer goes for a toss. The cost of hire and training sinks with each attrite. What can be done to save the situation and turn it around for the better? “

This is a statement we have heard repeatedly. Start-ups in almost every industry face the same challenge. A job at a newly started firm often boils down to a stop-gap arrangement. Freshers and interns make an easy entry to this segment of the industry. They continue to work until they land a job with their dream brand.  The company which hires them is held a ransom, to the growth path of the talent they hire. How can this situation be rectified to create a win-win deal for both the parties? Let’s drill down to the business and psychological areas that trigger attrition.
  • Big Picture- A large firm is more likely to appear financially solvent with many clients. Irrespective of the market condition, the demand for the talent within the company is perceived to remain high.  A higher salary and the growth promises are lucrative enough to wean talents to join them. The business factors may initiate growth from one level to another as the projects expand. Though, horizontal growth is offered to groom the talent before promoting them to the next level.
  • Opportunities galore– The large firms are globally located. This often allows the talent to travel onsite to deliver the projects.  Any talent would want to be in this kind of a secure environment. Here lies the difference. The perception of the offerings in a large firm wanes as the talents find themselves pigeon holed. Furthermore, in reality, resource pool and working through the hierarchy emerges differently to what is heard and read about them. The talent who is put on bench or resource pool experiences inaction for months with uncertainty looming large. The worst case scenario, is when creativity and technical prowess to build a path breaking product gets drained while working through the level for approvals. These are the tight spots, which no matter how much the talents are aware of, they still cannot gauge the frustration of being there. This marks the beginning for need to job-hop.
  • Psychological factors- Let’s map the psychological advancements of a talent joining a start-up. It would begin with a need for the basics, as in Maslow’s hierarchy of needs. This can be directly calculated to the employee life cycle. A fresher’s self efficacy and financial needs are minimal in the beginning. However, right after the first few months, the dreams of buying an Iphone and other financial plans, will crop up. Furthermore, the parent-child transactions of I am OK , You are OK finally changes to I am ok, You are ‘not’ OK. This contributes to making the grass greener outside the firm.
In such a situation, let’s focus on building agility of the organization through inductive processes. Here are my suggestions, with the characteristics of an agile organization, as shared in, A review of enterprise agility*
  1. Hiring strategies– Hiring the right fit is easier said than done. Each candidate realizes whether they want to work in a particular role, only when they start delivering. Create a process, where the right candidate is allowed to intern in the job before taking it up. Offer voucher payment, this would negate the cost of benefits to the firm. This will allow the candidate to assess their option to work in the company. At the same time, it would ensure that the company chooses the one who is good to stick around, rather than the ones who are looking for any port in the storm.
  2. Identify the job content– Review the job contents and club the ones that can be put under the freelancing category. This would offer the firm a bandwidth to choose from a wide range of talent and limit the length of association with the firm. If a freelancer is found good enough, a meaningful role can be offered, at a later point of time.
  3. Employee life cycle time line – Mostly, its 18 months for every employee. Divide the employees in different clusters, in terms of demography and age group to zero down on the aspirations. Let the life-cycle realistically start from three months to three years. Each time the employees complete a quarter, upgrade them in terms of certain tangible or intangible benefits.  Let it initially be intangible and then tangible to appraise loyalty.
  4. Skill matrix and cross training – How balanced is the skill matrix for each team? The firm here requires mapping the skill set of each member to what is required in a team. Identify the gaps between the highly skilled employees on certain areas and arrange for cross training. The aim should remain building a team, where every member would be effective to deliver on all the skills. The skills that can be easily trained can be grouped in a role where new employees can work and become billable at the shortest period of time. This can eventually be built to a level where almost every member is good to train others. The focus needs to remain on eliminating the dependencies of the talents to the role. This will require an extensive culture of learning within the firm. It needs to be driven with a top-down approach.
  5. Compensation planning –  A start-up will not be able to pay as high as a large company might have. The business budget will continue to shrink the benefits. Here the business risk needs to be minimized with a package that can remain attractive to the talents. Consequently, a shift of focus from every month’s fat-pay check to term-based incentives would work better. ESOP and profit sharing oriented packages will hold the talent for a longer duration. This will also justify the eligibility of the talent to earn higher benefits. Offering loyalty bonus at the end of 12,18 or 36 months can validate the gains to be made by them outside the organization.
  6. Legal and administrative proceedings – A training or travel bond is rampant, but such restrictive practices will foster a vindictive environment. Hence setting the processes, transparent and logical will ensure the matured employees stay on. On the contrary, to these restrictive practices, consider building a system for easy exit. This will not allow them to dishonour the firm’s process. A talent who does not value the firm, is no longer worth investing any more time. Recover every dues from the term-based benefits to be disbursed for the talent. Appraise and announce the departure of an employee. Every employee wants to be remembered for the efforts made. We all acknowledge, it’s humanly difficult for any leadership to remain cool when the best performer resigns. Mostly, right after salary is processed. However, a graceful exit will make an impact on the ones who stay behind. Involve the team to build agility, right after, when there is attrition. Discuss the challenge, which is there, caused by this sudden gap. Build in a process for collaboration. Offer it as an opportunity for someone else to step in.  Think differently, as the team members need to find the employer valuing an employee and offering them growth. This would remain invaluable to them. This would establish the firm as an employer of choice to all its employees in the long run.
  7. Craft the presence of the firm– Establish the organization as a hub of talent and innovation. Build a social interface for the company, allow your employees to blog their experience and share the videos of the leaders with company values. This effort is not to compete with the industry giants, but positioning differently to strike a chord with the talent pool. Here’s a case of extreme blogging by Scott Heiferman, CEO Meetup, Meetup profile. It is presented with a sense of humour and humility to attract the talent and create a sense of belonging. Identify what would work for your target talent and share it. Apart from this broadcast, the success of the firm. Each time there is new business, put a common mailer to every employee. This will bring in a sense of security. Share the client’s feedback.
Finally, let’s agree and acknowledge that talent movement is eternal.  There would be an accelerating requirement for talented workforce in the market outside the organization. Every new offer would be designed to make it look better than the existing job. However, the aim is to make an organization independent of these factors. Building systems that can run independently of its players should remain the goal.

*Ref:A review of enterprise agility: Concepts, Frameworks, and Attributes by Bohdana Sherehiy, Waldemar Karwowski , John K. Layer, International Journal of Industrial , Ergonomics, page 458,

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  • HR Student

    A very insightful article and well written. Thank you Nabomita for these inputs!