MBA 699 - Milestone Three

Johnathon Davis

3-1 Milestone Two: Employee Attrition Analysis Report

MBA 699

Professor Shindell

September 11, 2022

3-1 Milestone Two: Employee Attrition Analysis Report

The following study will analyze the available workforce for the company. The people that work for a company are its most valuable asset. Potential buyers can learn about the company's human resources capabilities by conducting an assessment of the company's talent. This will allow them to make informed decisions about whether to keep on board key employees for a smooth transition or let go of those who will be superfluous after the acquisition is finalized. Examining the company's HR, looking at turnover rates, and forecasting how many employees will remain after purchase are all necessary steps.

Current Employee Demographics

After looking at the numbers, we find that there are a total of 83 workers, but only 69 are now employed. Age, sex, marital status, education level, and years of experience are only a few of the factors shown in the following tables, which show the current employee demographics. A majority of the existing workforce (60 people) consists of people in their thirties (10 people) and their twenties (40 people). There are now 11 workers in their 40s and just 8 workers in their 50s or older. Ten percent of adults lack a high school diploma, twenty-five percent have an associate degree, and thirty-two percent have a bachelor's degree. Two-thirds need a master's degree or more, while just four percent need a PhD. There are 59% males and 41% females in this sample. Divorce rates are at 28%, while marriage rates are at 39%, and single people make up 33%, from 12 percent for those with no experience to 25 percent for those with more than 15 years in the field.

I have picked a Pareto chart and a pivot chart to illustrate essential demographic information. Below, using a Pareto chart, one can see the age distribution of all workers; for instance, the majority of employees are between the ages of 20 and 38; this is an important consideration since the firm has to make long-term plans to keep these people engaged. The educational system is shown in the pie chart below. This data is crucial since it will show the firm who has the skills and knowledge to help them succeed.

Attrition Analysis

The terms "attrition" and "turnover" are often used interchangeably, although referring to distinct events. The term "attrition" is used to describe positions that are abandoned without being filled, whether freely or involuntarily (Walia & Soodan, 2015). When an employee departs and is replaced, this is referred to as turnover. Attrition is an inevitable aspect of every business, and it may have both positive and negative consequences on the workforce already in place and the recruitment process as a whole. Attrition rates in the workplace may be affected by a wide range of factors, both internal and external. The more you understand the many forms of attrition and how they affect the workplace, the better equipped you will be to deal with it and keep valuable employees from leaving. After receiving training, a new recruit takes on the same duties as their predecessor, who has the same title. Employee churn is a term used to describe the combined review of attrition and turnover. Attribution is summarized in the following graphs:

There are several causes of employee turnover, including salary, lack of progress, terrible working circumstances, and more" (Lim & Misra, 2019). Employee disinterest is among the top five causes of turnover. The R&D division has lost the most employees (71%), and its members also tend to take fewer business trips. Employees with little experience or education are also more inclined to quit for greener pastures. The bulk of those who departed were lab technologists in the research and development department, and they left the firm within the first two years for financial reasons. Fourth, they didn't perceive any opportunities for advancement, and fifth, their work-life balance was average at best.

i) Income: There is a significant disparity in the average incomes of men and females, as shown below:

The monthly average for female employees who left the organization was around $7,819, while the monthly average for male employees was $4,735. It is possible that this is one of the reasons why there is a high male turnover rate at the organization; the male employees may have the impression that there is no compensation equality.

ii) Promotion: It took at least 4 years for women to be promoted, whereas men took a year or less.

From the graphs, we can see how long it has been since past workers were promoted, how often they received training, how old they were on average, and how long they had worked at the firm. When comparing the years of experience and education of male and female employees, you will notice a significant gap.

iii) Training: According to exit interviews, training staff is a problem. Former female employees received training once per year, whereas former male employees received training twice per year.

Male employees, while receiving somewhat more training, departed the organization at a quicker rate than female employees.

iv) Work-Life Balance: Though I include work-life balance as a component of job satisfaction, I think it merits separate attention due to its importance in avoiding burnout and lowering stress levels in general (Kohll, 2018). Those who have just departed the organization are millennials, and this concept has a different meaning for them than it does for their parents or grandparents. Former workers' responses to this question seem to be extremely neutral, suggesting that they are neither happy nor unhappy with their work-life balance.

v) Job satisfaction: There is no universal method for gauging an employee's contentment with his or her present position since it depends on the person's unique set of circumstances and the extent to which his or her job fulfills those requirements (Weir, 2013). Former workers departed the firm for various reasons.

In this table, I've calculated the average pay increase, performance rating, work-life balance, and length of employment based on the spreadsheet data. Indicators of satisfaction or dissatisfaction are more pronounced in females than in men.

For those employees who left the company, the least year(s) of the promotion before leaving was one year, while the employee who took the longest time to be accorded a promotion before leaving was given a promotion after 6 and 15 years. A typical worker quits at the age of 36. Additionally, the usual employee leaves their position sometime between the sixth and seventh year. Looking at the dataset, there seems to be no correlation between the training times and the years an employee spends at the company since we can see a situation where an employee with no training worked for 22 years before leaving while an employee with 6 training (which is the highest number of training so far) left only after one year. It is also important to note that male employees left the company more than female employees.

Retention

A company's success is frequently determined by the employees it chooses to work for it. Skilled workers who will succeed in their positions and provide value to their teams may be recruited with careful planning (Michael & Crispen, 2009). A percentage is a common way to represent the retention rate. That rate has to be quite high. There are a variety of retention tactics that might help organizations keep their employees longer such as renumerating employees fairly, offering a generous benefits package, pproviding a range of scheduling options, and bbuilding an interactive new employee orientation.

It would seem that the trends are comparable or heading in the same way when comparing previous workers with current ones and the reasons why the former employees departed. Current workers have an average age of 36; the vast majority work in research and development as lab technicians; their income is much lower than that of other roles, and the vast majority have not been with the firm for very long. Potential buyers may be concerned about low levels of training since the average training time over the last year has only been 2.7 hours.

Actionable Steps

The corporation may take certain steps to reduce employee turnover, particularly in high-stakes departments like research and development. Reducing turnover by half would just need some minor adjustments to the training program, such as updating the modules and doubling or tripling the present training duration. By including a training program that sends R&D and sales staff on business trips, the organization may help re-engage the teams and demonstrate its commitment to them. The next step is to consider the possibility that numerous roles have a beginning pay scale and that it could be time for HR to examine market compensation and rework the scale to include some kind of bonus or incentive. Pay for different roles within the firm, particularly those with the highest turnover, may be adjusted by working closely with finance. Finally, consider rethinking flexible work arrangements, such as paid time off or telecommuting. To help its employees achieve a better work-life balance, some organizations provide unlimited paid time off (PTO) for particular professions, while others offer flexible scheduling or telecommuting alternatives.

References

Lim, M., & Misra, J. (2019). Work/Life balance. Sociology. Retrieved from https://doi.org/10.1093/obo/9780199756384-0218

Kohll, A. (2018). The Evolving Definition of Work-Life Balance. Retrieved from https://www.forbes.com/sites/alankohll/2018/03/27/the-evolving-definition-of-work-lifebalance/?sh=5118e33f9ed3.

Michael, O. S., & Crispen, C. (2009). Employee retention and turnover: Using motivational variables as a panacea.  African journal of business management,  3(9), 410-415.

Walia, K., & Soodan, S. (2015). Attrition: Exploring dimensions of employee attrition in the IT industry.  Effulgence-A Management Journal,  13(1), 64.  https://doi.org/10.33601/effulgence.rdias/v13/i1/2015/64-71

Weir, K. (2013). More than job satisfaction. Retrieved from https://www.apa.org/monitor/2013/12/job-satisfaction.

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