DR.

VISHWANATH KARAD MIT WORLD PEACE

UNIVERSITY

FACULTY OF MANAGEMENT

SCHOOL OF MANAGEMENT (PG)

CCA Parameter I: Individual Assignment

BATCH 2022-24

Title: “Attrition and It’s Effects on Organization”

Name of the Students:

 Tejas J. Purkar
 Anosh Jadhav
 Pooja Vishwakarma
 Tanvayee Khatavkar
 Anagha Maideo
 Vaishavi Kumar

Division: XI

Course Name: Quantitative Techniques for Business Decision

Making

Submitted to: Dr. Sunita Jatav

Date of Submission: 22nd October 2022

 ABSTRACT

This paper is all about Attrition and its effects on organizations. Employee attrition is
one of the most sensitive issues that business organizations face. The attrition rate is the
percentage of employees or customers who are lost but are not replaced. It simply keeps track
of employees who have gone missing. Employee attrition happens when your workforce
shrinks over time due to unavoidable factors like employee resignation for personal or
professional reasons. Employee attrition occurs when employees leave a company for any
reason, including personal or professional issues. Employee turnover has a wide range of
direct and indirect consequences throughout a business.
The purpose of this paper is to give a theoretical overview of the classical and
contemporary business strategies that can be implemented in a more or less modified form by
collecting data.

KEYWORDS

Employee Attrition, Retention Strategy, Organization, Downsizing, Gender.

AIMS AND OBJECTIVES

1. To determine employee attrition in the company.

2. To determine the need of employees searching for a new job.
3. To determine the high contribution factors which affect employee attrition.
4. To analyse the impact of demographic factors on attrition.

INTRODUCTION
 The success of any business organization largely depends on its employee’s
uninterrupted contributions in steering the organization forward. Needless to say, as an
employer, when we invest in new talents, we want them to stay with us for the longest and
add value to your business. However, on contrary to that, large employee turnover rates have
become a big concern for employers all across the globe.
In fact, employee attrition is one of the most sensitive issues business organizations
are concerned about. According to the U.S. Bureau of Labour Statistics, 4 million Americans quit
their jobs in July 2021. The IT companies in India are facing a 15% attrition rate. After all, high
employee attrition rates can shut down a business given the massive costs of employee
turnover.
The attrition rate is the loss of employees or customers who are ultimately not
replaced. It simply tracks lost employees.
A high attrition rate means that more employees are leaving than are being brought in,
while a low attrition rate means that vacant roles are being promptly filled. High employee
turnover can ultimately lead to higher attrition rates as the more vacant roles there are, the
more difficult it is to fill them all.
Losing employees inevitably puts work onto other employees who may already be at
their limit. This will cause issues with delays and missing deadlines, in favor of hitting others.
This could further affect the company’s culture and employee satisfaction.
If an employee either leaves or is let go from an organization, an organization would
then need to build a strategy in order to fill that role with the proper talent. If the role was
deemed redundant the strategy changes. It could be beneficial to move the job to other
departments or the employees. This would cut down costs but it might overburden other
employees.

Tejas J. Purkar

Employee attrition occurs when the size of your workforce diminishes over time due
to unavoidable factors such as employee resignation for personal or professional reasons.

Employees are leaving the workforce faster than they are hired, and it is often outside
the employer’s control. For example, let’s say that you have opened a new office designated
as the Sales Hub for your company. Every salesperson must work out of this office – but a
few employees cannot relocate and choose to leave the company. This is a typical reason for
employee attrition.

Both the employer and the employee have recently lost faith in one another. The
former believes that an employee can leave the company at any time, and the latter believes
that the former can dismiss the employee at any time. Whoever is at fault, regardless of this;
workforce loss is unavoidable. Attrition refers to this labour loss, regardless of the cause.
 Attrition is a frequent occurrence regardless of the business or organizational
structure. Every organization has a challenge that not only slows production but also has
heavy long-term expenses and a reduction in the organization's reputation. Consequently,
there is a requirement to investigate this multifaceted issue and offer workable solutions.
Kinds of attrition: -
1. Natural attrition: It happens as a result of reasons and circumstances outside the
control of both the individual and the organization. These elements might include
death, insanity, etc.
2. Voluntary attrition: When an employee leaves the company of their own free
decision, it is called voluntary attrition. Pull factors like higher salaries elsewhere,
better chances for career advancement, etc. are to blame for this type of attrition.
3. Involuntary attrition: When employees leave their employers because of
unfavourable forces or push factors, such as a flawed promotion policy or biased
performance reviews, this is known as involuntary attrition.
4. Compulsory attrition: It occurs as a result of both governmental and organizational
laws and regulations. It includes attrition that occurs as a result of reaching retirement
age, reaching the end of one's employment, etc.
Anosh Jadhav

Employee attrition can be predicted if the circumstances are stable, wherein a pattern
can be understood from the parameters that influence the employees and the organisation. We
can be aware of some parameters beforehand like retirement age or unpredictable factors like
the performance of the company, funding, the management etc. However, which employee is
going to leave, the time and the reason can be answered based on the analytical models
developed because of data analysis. These predictive algorithms help the company gain better
understanding and measures can be taken to prevent them. These models basically work upon
the classification of employee profiles based on factors like age, sex, marital status, education
level, work experience etc. and generates various levels of risk of attrition. Sometimes
There are other parameters like performance over the years, how much is the Pay
raise, what work batch it is and the educational institution are also taken into consideration.
The accuracy of the model is directly proportional to the selection of parameters which leads
to the generation of the type of the predictive model that is going to be most suitable for the
organization. Creating the model many statistical and AI algorithms are designed to construct
predictive models.
Tanvayee Khatavkar

Employee attrition refers to when workers leave a company for whatever cause,
including personal or professional problems. Attrition can have both voluntary and
involuntary causes. Attrition isn't always a terrible thing in many circumstances, and while
many organisations are aware of the drawbacks, there are also certain advantages. Attrition
can occur for a variety of reasons, including death, resignation, retirement, and the most
prevalent reason, pay or compensation. Numerous other circumstances, such as interpersonal
relationships, health issues, the desire to return to one's home country for family reasons, high
levels of stress, and a lack of work-life balance, might influence a person's decision to leave a
company.
Does employee attrition hurt businesses as well? same, what does it actually cost an
organisation? Of course, in today's world, when someone leaves their position, it produces a
lot of disruption in the company, and if it's a tiny company, the disruption is even bigger.
Understanding and controlling attrition inside the organisation is crucial.
Pooja Vishwakarma

Attrition is widely recognized as one of the most serious issues confronting

organizations today. Employee turnover has numerous direct and indirect consequences
throughout a company. Most businesses today recognize the importance of reducing attrition
and invest in doing so. However, these methods do not always guarantee success, particularly
in mature organizations. However, minimizing the impact of attrition is one area where
mature organizations can focus their efforts. Assuming a constant rate of attrition that cannot
be reduced, organizations can attempt to quantify the direct and indirect effects of attrition
and identify opportunities for reduction. Processes can then be put into place to minimize
these impacts of talent loss, and ensure those transition periods in the organization happen
smoothly as well as reduce reliance on critical personnel. The direct consequences are
relatively easy to quantify: costs must be incurred in order to recruit and train new
employees. Other employees' workloads generally increase during the recruitment process,
which can result in overtime costs but also affect their own productivity.
A high attrition rate indicates that more employees leave than are hired, whereas a
low attrition rate indicates that vacant positions are quickly filled. High employee turnover
can eventually lead to higher attrition rates because it is more difficult to fill all vacant roles.
A high attrition rate also indicates that your employees are dissatisfied with your company.
As a result, they will only spread negative information about your company. This will
jeopardize your company's reputation and make it difficult to find suitable replacements.
Many organizations in Covid-19 have faced the issue of high attrition.
Anagha Maideo

Attrition is primarily concerned with the transfer of personnel from one company to
another; this implies that organizations must also deal with the employment of new
employees and handling employee departures. The multiple causes of this movement will be
explored in this section in accordance with the information obtained by academics and the
researcher's understanding of the topic. These causes can be divided into push and pull
elements. Labour turnover is described by Abbasi and Hollman (2000) as the movement of
workers within the labour market between jobs and occupations as well as between
employment and unemployment. Employee turnover was defined by Armstrong (2010) as the
ratio between the average number of employees employed over a particular time and the
number of employees who departed the business during that period.
Employee turnover is a major problem for most businesses since it is an expensive
investment, particularly in high-paying job sectors, where the employee turnover rate is the
highest. Any company's staff turnover rate is affected by a variety of factors, including both
employer and employee-related issues, according to Beardwell (2004). Employee turnover is
largely influenced by factors such as pay, benefits provided by the employer, attendance, and
job performance. Armstrong claims further that high labour turnover rates have a negative
impact on morale, productivity, profitability, and efficiency for both individual firms and the
economy as a whole. This study explores the relationship between organizational productivity
and employee attrition in this context.

Vaishavi Kumar

LITERATURE REVIEW
 Perhaps organizations have several employees retire at once. It can take time to fill
those vacant spaces. In doing this, an organization can work to increase employee retention.
Common causes for High Attrition Rate:
 Declining Company Culture
 Low Employee Satisfaction
 Poor Benefits Package
 Don’t get a Promotion
 Relocation
 Resignation
 Personal Reasons.
A unique set of strategies will be required to combat each of the above concerns.
Knowing the heart of problems is crucial to building the proper systems and recruitment
strategies needed to stabilize rising attrition rates.
High Employee attrition can Hinder business performance in the following ways;
1. Destroys Organization’s Reputation
2. Regular Disruptions in Workflow Management
3. Lowers another Employee Morale
4. Diverts Funds from True Business Growth
5. Hinders the Potential of HR Managers.
Tejas J. Purkar

Employee attrition & retention is a manifestations of employee movement in an

organization, which is deliberated by the researcher in HR. They are two sides of the same
coin. Employee attrition & retention may be the result of the negative or positive influence of
various factors (Zhang, 2005). There is a sea change in the needs and wants of the employees.
Their expectation can be expressed as their wish to be employed at a place to work to that of
being employed at a Great place to work. The organizations that are able to cope with these
typological alterations of employee profiles will be able to improve employee commitment,
reduce attrition, and hence will be able to retain their employees. Meaghan et al (2002) draws
attention on controlling attrition, he states that the value of employees to an organization is a
very crucial element in the success of the organization. He further states that this value is
intangible and cannot easily be replicated, therefore, managers should control attrition.
Anosh Jadhav
 Classification models tell us the employees based on the risk to leave the company on
the other hand non-linear regression model gives us the probability of attrition when we think
that the outcomes are dicrotous.
The decision trees model evaluates loss based on information gain and variation
reduction. The models that require multiple parameters the decision tree model tends to
become very large and complex. In such cases, the random forest method can combine
various decision trees using multiple algorithms so that we understand the complexities and
the predictions. Besides these models aim to provide good predictability. However, choosing
the right model is very important for example in the organization a model using an artificial
neural network can provide better predictability than a decision tree model but the decision
tree model can be easier to understand and implement at a lower cost thus depending on the
organization various models have to be tried before making the final decision. Output
depends on the chosen model.
Benefits of the Predictive Attrition Model
This model is helpful while making the following decisions:
 Evaluation of employee requirements, their strengths and weaknesses
 Cost of new talent acquisition can be minimised
 Analysis and assessment of the loss in expertise and skillsets
 Measurement of financial and productivity loss due to attrition
 Minimise the loss
 Provides good understanding of workforce supply and demand
 Able to prepare contingency plans based on the information provided
Tanvayee Khatavkar

There are many variables that influence a person's decision to quit a job since they
deal with a variety of issues, and there are many obstacles for the organization when an
employee leaves because they can't keep hiring people, training them, and spending so much
money on them.
Therefore, the organization must take care to ensure that the employee won't
encounter these issues, or else this could create a lot of negative impressions about the
company and destroy its reputation. There are certain recommendations that the business can
adhere to;
Suggestions:
· Provide reasonable and competitive pay
• Creating a successful training programme.
• Employee recognition and reward
• Equity options
• Make the hiring process stronger
• Employment possibilities
• Post-mortems, Work-life balance
Pooja Vishwakarma

It is difficult to determine who contributes and who has employee attrition can be
controlled. According to various studies/surveys, everyone is contributing to the dominant
attrition. High attrition does not occur for one or two reasons. The manner in which the
industry is projected and the rate at which the expansion of businesses plays a significant role
in attrition. The specific reasons for attrition vary in nature, and it is fascinating to learn why
people change jobs so frequently. Nowadays, the primary reason for changing jobs is to earn
a higher salary and receive better benefits. While attrition cannot be blamed on some of the
possible reasons for employees alone.
Reasons for high attrition-
1. Organizational matter
2. Working environment
3. Job profile
4. Salary and other benefits
5. Lack of flexibility
6. Poor learning and development opportunities
Anagha Maideo

Conceptual Framework Employee Attrition Hom and Griffeth (1994) defined employee
turnover as the voluntarily leaving of employees from their businesses. Staff turnover,
according to Loquercio et al. (2006), is the percentage of employees that leave their jobs
within a specified time frame but before the anticipated expiration of their contracts.
Workforce turnover, according to Singh et al. (1994), is the rate of change in a company's
working staff during a specific period of time. Staff turnover, according to Glueck (1989), is
the end outcome of both some employees leaving the company and other ones joining it. The
quantity of employees moving in and out of a company is known as turnover, according to
Kossen (1991). Any organisation may experience staff turnover, either voluntary or
involuntary.
Voluntary turnover is defined as termination that is started by the employee, as opposed to
involuntary turnover, which refers to termination that is initiated by the employer.
Involuntary turnover might result from long-term illness, death, relocation abroad, or
employer-led termination. (1998, Heneman). A person's anticipated likelihood of remaining
or leaving a hiring organisation is referred to as turnover (Cotton & Tuttle, 1986). Employee
turnover has various names, such as quits, attrition, departures, mobility, migration, or
succession.
Vaishavi Kumar
 HYPOTHESIS

HO: There is a significant relationship between employees and the organization.

H1:  There is no significant relationship between employees and the organization

RESEARCH METHODOLOGY

 Type of research – Descriptive Research 

 Sample Population – people between the age group of 21-50
 Sample size -61
 Data collection methods – Data can be classified into two types-:
 Primary data:  primary data has been collected by conducting the physical survey. We
did a physical survey by visiting a company called United Mart.
 Secondary data:  secondary data has been collected through various websites.
 DATA ANALYSIS & INTERPRETATION

Q.1

We have collected the data from the Male & Female gender.

Q.2

We have collected the data from different age groups. We have segregated them into
three categories. With the help of the above pie chart, we can say 95.1% of them are from the
group of 21-30 and 5% of them is from 31-40 group.
Q.3

Corporate culture, sometimes termed organizational culture, is a composite of the

common values, attitudes, standards, policies, performance and actions of management and
employees. Corporate culture is rooted in and is an outgrowth of a company’s goals,
strategies, structure and tactics.

There are two fundamentals of corporate culture – formal and informal.

1. Formal: It tends to be organized in steep hierarchies that reflect major differences in

status and power. Formal organizational culture is purposefully planned. Examples
include the corporate hierarchical structure, written company policies and basic
operating procedures.

2. Informal: It values more egalitarian organizations with smaller differences in status

and power unlike Formal one. Informal is all about status equality. Hierarchy is
absent and mostly managers discuss decisions with colleagues and take feedback from
employees. Addressing each other is in a casual way. Informal corporate culture
evolves from human interactions and social connections. Examples of informal
corporate culture include informal groupings such as lunch groups and special project
groups.

What we have observed in the survey is that almost 70% employees prefer "Formal”
culture & 30% employees prefer “Informal” culture. Basically, it depends upon the
behaviour and the mindset or sometimes habitual things of where to do work.
Q.4

Job security has become an illusion these days, especially in corporate world.
Uncertainty is the new normal for companies, and very few of them have learned how to
thrive in this new standard. Uncertainty isn’t a bad thing. It just means that opportunities have
a much shorter half-life, but also that their number dramatically increases. Many traditional
companies look for long term strategies that become hopelessly outdated before they are fully
implemented.

In our analysis, don’t wait for an employer to give you a false hope of job security.
You, yourself, create an INCOME SECURITY. Learn how to create multiple income
channels, even if many of them are relatively minors. That way you will never lose all of
your income at once. Over time, and depending on how aggressive you are at creating those
channels, you might not even need a normal job-related income anymore.

Q.5
Q.6

Definition-
1) Recognition- Identification of someone or something or person from previous
encounters or knowledge.
2) Acknowledgment of the existence, validity, or legality of something.

When the members of the team work towards a certain project, they are given tasks
and roles which everyone works hard towards achieving them. Appreciation and
recognition are the factors that motivate employees to work more or work more
efficiently.

According to the pie chart-

47.5% of people feel that they are appreciated for the work they receive. A certain
amount of constructive feedback Is also very important in a project. These people are not
very likely to leave the organization because they feel appreciated for the work they are
doing for the organization.

21.2% of the people have voted for MAYBE which shows that they haven’t received
as much recognition as they deserved during the work. These people are the ones which
can stay in the organization if appropriate recognition is given to them. When the rate of
acknowledgment drops, people tend to leave the organization.
31.1% of the people who have voted for no are very likely to leave the organization.
These can be due to more than one reason.
1) Not enough recognition
2) Recognition is given to the wrong person
3) No recognition at all.
 All these factors are negative factors of motivation and if a person does not feel motivated
to work at the organization, they are most likely to leave.

Q.7

Managers in the company play one of the most important roles. A manager when
given a project has the capability to make the project or break it. When it comes working with
a team of people the manager has to have the leadership qualities which make the team work
to the goal.

Leaderships

Autocratic Beurocratic

Leader
dictates the Responsibilities are
procedures, known and also
roles. discussed

Both leadership styles have their own pros and cons.

The Pie chart shows that 47.5% of people that voted for YES are comfortable with
their manager and are sure that the problems will be addressed to. This shows that the
organization’s managers hear their employees’ voices and make sure that they are solved in
the best way possible. People in this organization would not like to leave as the people they
work under make them feel belonged and also make them feel that the company will try and
solve project-related problems for them to reach the target.
Most people leave the organization majorly due to the bosses or the managers they have to
work under. 16% of the people who have voted for NO have somewhere or the other felt that
their voices have not been heard. These people are most likely to leave the organization. This
situation arises due to 2 possibilities
1) The demand of the employee is out of the scope of the organization to be considered.
2) The Managers are not trying to address the problem at all.
In the second situation, the employees would not feel like working for the organization as
it is not trying to solve the issue.
36% of the people who have voted for MAYBE will most probably leave the organization in
the future.

Q.8
 The question was "Will employees still stay in the same organization if they can get
more package offer from another organization? ", and 44.3% of respondents said "YES," as
shown in the pie chart above. The majority of respondents want to change their organization
because of salary increases, regardless of whether their current employers' cultures are
positive or they are experiencing no workplace issues. There are 24.6% of employees who are
unsure of their want to remain at their current position, and there are 31.1% who will not do
so because they are content with the organization, with its culture, with their salary, with their
manager, with their work, and with their work-life balance.
Suggestion: Employers should provide their staff with a positive work environment,
wage increases, and a decent work-life balance.

Q.9
 The majority of the employees, or 55.7%, respond "NO" to the question of whether
they would still leave their current employer even if they received the same salary in a
different one. This is because they are happy with the company's culture and the work they
do, and they also feel well compensated and appreciated. 18% of employees are unsure
whether they wish to change jobs or not; they may do so in the future or remain with the
company until its conclusion. and the remaining 26.2% of employees said "YES" when asked
if they wanted to switch employers, even when another organization offered them a better
package.
These workers said they did so because they didn't like the company's culture, their
manager, their work, or the lack of a good work-life balance; their happiness at their current
position took precedence over money, so there must be a problem with the organization or the
manager.
Suggestion: Employers should provide employees with appropriate work-life balance,
adequate recognition, and competent managers because people want more than just money—
they want respect, knowledge, the ability to learn and progress in their careers.

Q.10

Bullying behaviour might be:

  Verbal. This could include mockery, humiliation, jokes, gossip, or other spoken
abuse.

 Intimidating. This might include threats, social exclusion in the workplace, spying,

or other invasions of privacy.

 Related to work performance. Examples include wrongful blame, work sabotage or

interference, or stealing or taking credit for ideas.

 Retaliatory. In some cases, talking about the bullying can lead to accusations of
lying, further exclusion, refused promotions, or other retaliation.

 Institutional. Institutional bullying happens when a workplace accepts, allows, and

even encourages bullying to take place. This bullying might include unrealistic
production goals, force overtime, or singling out those who can’t keep up.
According to our survey out of all the respondents 88.5% people have never been
discriminated against or bullied in any way at the workplace while 8.2% of them feel that
they have been bullied at their workplace, remaining 3.3% of our respondents are not sure
whether they have been bullied or not at their workplace. As we can see, though not
significant portion but there are people who feel that they are not treated equally at the
workplace, indiscrimination can be in any way, and as an organization, it is Company's
responsibility to make sure that there is no indiscrimination in their organisation.

TESTING OF HYPOTHESIS

Through the survey conducted, we can say that our hypothesis H1 is accepted

FINDINGS

 Managers should make sure that the employees feel heard and belonged. At times the
situations might not be very favourable but helping out the members during the
project makes them work efficiently which in turn increases the performance.
 Managers should make sure they are giving appropriate recognition to the employees.
They should also keep in mind and pay attention to the matters of giving one’s credit
to someone else which often happens in the organization. After all, appreciation leads
to positive motivation which makes the employees perform better.
  Employers should provide their staff with a positive work environment, wage
increases, and a decent work-life balance.
 Even though the employees are satisfied with the nature of their job, it is identified in
the study that many employees prefer to change their job due to a lack of growth
opportunities in their job.
 Employers should provide employees with appropriate work-life balance, adequate
recognition, and competent managers because people want more than just money—
they want respect, knowledge, the ability to learn and progress in their careers.
 Encourage employee pride by offering innovative programs that demonstrate that they
are important to the success of the company.

CONCLUSION

This study concludes that to reduce attrition industries should create some
opportunities for the growth of their employees within the organization by adopting new
Innovative Technologies and Effective training programs. Employee satisfaction is essential
to any effective employee retention strategy - any good HR manager knows that.
The predictive attrition model helps us to take preventive measures and also make
better hiring decisions by deriving the trends in the candidate’s performance based on past
data can be easier to predict future trends as well as can be used to hire new employees. The
HR department can use the employee data to predict the attrition rate, and the reasons that are
behind the attrition, and also take the appropriate measures to prevent attrition.
To reduce attrition industries should create some opportunities for the growth of their
employees within the organization by adopting new Innovative Technologies and Effective
training programs also employee’s satisfaction is also important.
 While working in the organization employees should be well satisfied with the
facilities which are provided by the organization. Also, the willingness of employees while
working is more important. If an employee is not satisfied the companies growth will suffer
and company can make huge loss.

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