Funny thing about some words that start with A: some can be good and some can be dreadful. I guess it applies to more than just the Capital Bowel, but think about it. For instance, everyone likes Alcohol, yet we shun Alcoholism. Same thing happens in Corporations. There are some “A” words all Corporations love, like “Attitude”, “Agreeable” or “Assertiveness”…yet every big Company shivers at the mere mention of Attrition, the one A word that means something is very, very wrong.
The word per se can refer to different things yet it usually implies the reduction of the size of a workforce by not replacing personnel. What it really means though is that people is leaving, and that is never good for a Corporation. Just to be clear though, Companies speak of attrition when it becomes visible, meaning when people leave often enough to be considered as non-natural in the lifecycle of their employees. All companies know that people come and go but they make it (or should make it) their mission to provide an environment in which people prefer to stay, not to leave.
Here’s a list of examples of how attrition can affect a Company.
Attrition means something changed in the Company. And that, regardless of how good change can be for the Company itself, is not always good for everyone at that Company. Some people can’t stand change and resist it regardless of how much their managers might want to include them in such change. Some others might just oppose, plainly, to a set of conditions, old or new, that piled together account for more that they can take. Attrition can mean that something in the fundamental conditions of the Company changed in such a way that it affects more than just the casual employee that resigns.
It can also mean nothing changed. Extremes are never good if sustained for a long period of time. Lets say that, for example, you live in a country where inflation increases 20% year over year. Regardless of what perks your Company might be offering employees, a 20% inflation means their money is not worth the same just 12 months after they get it. They can’t save, or invest. Money goes away faster than they can make it. If this goes on for too long, they will certainly look for more profitable options such as working for other Companies that can work the inflation out for them.
Attrition can take a Company out of business. Just imagine this: your whole business is based on a unique set of products or solutions, developed in such secrecy and protected by so many patents that the Company just never thought the key people that actually created your star product or made it great, might leave. What if your competitors finally find a way to entice them, or if they decide to start up their own venture? Even if the entire process was documented and knowledge was safely kept in paper, how can you replace talent such as that? And of course, the market will know.
It can affect the Company’s market value. Not just because of intellectual property that might walk away with talented people. It might stop being interesting for future candidates as well. A Company where people doesn’t want to stay is not a Company that can draw in people, no matter how much money you drop on them. Even the fastest and most successful careers are made over time and need nurturing. A Company that people leaves for whatever reason does not translate into a safe environment for career development.
Even assuming there are valid reasons for people to leave a Company, it never goes unnoticed. Not to the Company losing employees, not to others hiring those employees.