Employee attrition—Exploring the post-pandemic landscape
The past couple of years has introduced a new set of challenges, leaving long-lasting repercussions on the BPM industry. While in 2020, companies experienced low attrition and added load from clients, mass layoffs and uncertainty were still looming over the workforce and are even more ubiquitous today.
The industry has seen a labor shortage, with a large number of people either leaving the workforce or looking for better opportunities in pursuit of passion, work-life balance, and more rewarding ventures.
The business landscape in the age of pandemic
In the midst of the pandemic, workplaces had already started to navigate and establish new norms to continue operations and delivery. However, certain rising issues compelled employers to better prepare themselves for the struggles they would experience.
Shortage of talent
According to the U.S. Job Opening and Labor Turnover Survey (JOLTS) August 2021 and the Bureau of Labor Statistics (BLS), September 2021, a record more than 4.4 million Americans had quit their jobs in September; 4.3 million had left their jobs the previous month in 2021.
There were 2.7 million more job openings in the U.S. than people actively searching for work. While businesses added 3.8 million jobs in 2021, according to the U.S. Chamber of Commerce, workforce participation was unprecedentedly low. Finding a sufficient workforce to fill these openings was somewhat challenging.
A survey by the U.S. Chamber of Commerce on the unemployed who lost their jobs during the pandemic studied what was keeping them from returning to work. The results showed:
- Nearly one in three, i.e., 33% of women, mentioned the need to be home and care for their children and family
- 28% of men mentioned that their industry was still struggling with the effects of the pandemic, and there were not enough good positions available
- Some still showed concerns about COVID-19 at work
- Others mentioned low pay being their reason
- Some people wanted to acquire new skills and competencies before re-entering the job market
The global IT service industry was also badly hit by high attrition rates that have only climbed since July 2021. In India, nearly half a million employees have left the top eight companies within the country. This attrition was a significant loss of experience, expertise, and upskilling investments. Businesses incurred further costs on recruitment, salary hikes, and retraining leaving businesses to explain and justify these costs to the company.
The job and employee market
Job openings in the U.S. unexpectedly dropped to 10.4 million, most likely attributed to declining economic expectations, contractions in commercial activity, breathers from hiring, statistical noise, or a combination of these factors.
According to the U.S. Chamber of Commerce, there were 7.6 million unemployed Americans, many of whom had not returned to work. On top of that, the expectations of the employees and potential candidates were driving attrition, fill-and-fit recruitment, as well as costs.
During these unprecedented times, participation in the gig economy had expanded rapidly, primarily due to the need to deliver necessities to consumers. This crisis had overturned the traditional 9-5, with many blue- and white-collar employees pursuing gigs for extra (or even primary) income. Many full-time workers had to join the gig economy reluctantly and out of necessity.
As this new way of working will continue to rise post-pandemic, talent leaders must have a strategy in place to accommodate this shift and ensure its long-term viability. Gigs allow schedule flexibility, and due to multiple commitments, shorter training cycles have become imperative to accommodate these schedules. However, it’s not easy as the training materials have become increasingly complex with more cognitive load.
Aside from the change in the business landscape as a result of the pandemic, customer expectations played a significant role in the changes. Today, customers and consumers are more:
- Connected – The average person spends 8 hours and 41 minutes a day online, which is more than the hours of sleep they get
- Empowered – Consumers today feel more empowered due to their network and connections. Facebook recorded an average of 338 friends per profile.
- Impatient – The majority of customers and consumers expect a quick response from a business within an hour
- Non-loyal – Consumers nowadays stop doing business with a brand if they receive poor customer service
- Demanding – Consumers buy more from businesses that offer a personalized shopping experience across their channels
Reasons for high employee attrition rate during the pandemic
To adapt to the evolving landscape, it has become imperative for organizations and business leaders to recognize the common drivers of this high rate of attrition and tailor solutions to address the specific needs of the employees.
A wide variety of personal and professional reasons played a part in attrition. However, the following specific drivers have led people to quit their jobs in our current climate:
- Unmanageable workload – As a result of the tremendous workload, many suffered from poor health, and the consequential labor shortage led to the remaining employees compensating for it.
- Lack of professional growth – Employees started to realize that their work was no longer challenging and meaningful, leading to fewer opportunities for innovation, creativity, and, as a result, professional growth.
- Poor interactions with colleagues and managers – Poor/negative interactions with their colleagues and noticeable problems with the leaders and managers are reasons for employees leaving.
- Burnout – While it was an existing problem, burnout intensified during the pandemic. A poll by Eagle Hill Consulting revealed that 58 percent of Americans were burnt out by August 2020, which was 45 percent more from the early pandemic days. The survey also revealed that the workload was the top cause of this burnout. Many consider leaving as the best option to address this problem.
- Necessity – Some employees quit during the pandemic out of necessity. Working parents have felt the need to choose their responsibility toward their children over their jobs. During the pandemic, the kids were home, and more women quit their jobs to help with
- Reassessment of priorities – Amidst the global lockdown, in the early stages of the pandemic, people had time to reflect on their priorities both in their personal and professional lives. This introspection fuelled high-risk career pivots for high rewards. There have also been changes in workplace norms that employees have come to appreciate and expect. In cases where the employer stopped offering such flexibility, employees chose to search for it elsewhere.
Addressing employee attrition at HGS
Attrition directly affects the bottom line, productivity, brand reputation, and morale. Therefore, aside from employing the traditional approach to address this, companies have had to prepare themselves for the impact, especially in a new and unfamiliar territory.
It’s not just about addressing the attrition but doing so in a competitive market while, at the same time, the company is trying to bounce back from the adverse effects of the pandemic.
HGS addressed the churning attrition through innovations for on-demand employee experience:
- Hiring: By drawing in the best talent pool, offering flexible options, and by doing so, adapting to their lifestyle.
- Learning and performance: Employing innovative training and upskilling methods in order to reduce cognitive load
- Operations management: Introducing Artificial Intelligence (AI) to ease the cognitive load through deep engagement and personalization
- Career development: Investing long-term in talent and continual development
- Engagement and retention: Being responsive to customers but at the same time, displaying sensitivity to the preferences of the employees
Businesses can strive to strike a balance by making strategic decisions today with smart workforce planning for the future. That is the best approach to address the present as well as achieve what they hope for in the future.
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Prakash Hariharasubramanian, Director & Practice Lead, Intelligent Process Automation (IPA), HGS
Prakash has led various IPA implementations across multiple industry verticals in his tenure of 7 years with HGS. In his role, Prakash develops IPA practice frameworks, creates IPA solutions, and serves as a key automation evangelist for HGS.
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