No exhaustive listicles here. Just two offbeat practices.
The following conversation played out in Bengaluru, India’s Silicon Valley, sometime last year.
Me: How’s it going, sir?
Ola driver: Madam, so much work these days. Very low commissions from the other cab companies. So for now, I’m driving for Ola full time.
Me: Meaning? Tomorrow you will drive for some other company?
Ola driver: Who knows about tomorrow? It all depends on the commissions, madam.
For the uninitiated, Ola Cabs is one of the top taxi-hailing app firms in India. With over 900,000 driver-partners, it’s also one of the largest employers of frontline staff.
I’d have let the above conversation pass, if it was a one-time occurrence. But disgruntled cab drivers continue to shift companies easier than they shift gears, hurtling towards the next job that pays them more. And such exchanges, well, they’re now conversation starters in my daily commute.
Turns out, a high turnover of frontline staff is not limited to the cab industry alone. E-commerce, manufacturing and hospitality, retail: all of them struggle with this problem.
Frontline employees across most industries are generally last in the line-of-command, are customer-facing and hard-pressed for time.
In most cases, employee turnover is a process, not an event. It occurs over time as the employee becomes less engaged with his/her employer, a process that could take days, years (or even months for this worker segment). The vast body of research targeted at slowing down attrition distills to one factor: engagement.
So, I went down the rabbit hole and came across a gazelleon ways one could engage with employees. Since they are all easily Google-able, I’ll refrain from mentioning them. But I came across two unlikely engagement practices that demanded real-estate on this blog. So here goes,
1) Practicing constructive non-conformity:
Translation: Giving frontline employees some degree of freedom in hierarchical and process-driven setups.
From first glance, this might seem dangerous. Especially since frontline employees often execute mission-critical processes everyday. But, evidence from successful companies says otherwise.
At Brazil’s Semco Group, a 3,000-employee conglomerate, factory workers set their own schedules and production quotas and even choose the amount and form of their compensation.
Since all financial information is public, everyone knows what everyone else makes. People who pay themselves too much have to work with resentful colleagues.
Attrition in the company? Below 2% since 1981, according to CEO Ricardo Semlar. The company’s performance? Revenue grew from $4 million in 1980s to over $160 million in 2000s.
Here’s another example: At hospitality chain Ritz-Carlton, employees have considerable freedom to question and change the exhaustive set of standards (about 3,000+ of them ) that the company has developed.
If an employee can make a case for a better customer experience with a new standard, their suggestion implemented across all chains. These can range from how to slice a lime to which toiletries to stock in the bathrooms.
As of 2015, Ritz had a turnover rate of 20%, compared to the industry average of 100%.
2) Using training to enforce psychological contracts
All companies train their employees. But does your company really go the full distance to train them?
If you’re wondering if that makes any difference at all, well, it does.
When a company trains their employees (and trains them really well), employees know they are being cared for.
That’s when psychological contracts kick in. Psychological contracts are ‘promises’ or ‘expectations’ exchanged between employers and employees. Unlike formal contracts of employment, they are often tacit or implicit.
The theory of psychological contracts with respect to training has been proven to make employees obligated to reciprocate to employers. It also makes them feel the organisation supports them, and trust the employer.
Starbucks exploits this theory to the fullest extent possible.
Besides regular training, it provides opportunity for their frontline staff to study the coffee-making process, right from growing coffee, to making that perfect cup of espresso.
Starbucks’ attrition rate? About 65% compared to an industry average of 150–400%.
Here’s another one-time event that continues to gather rave reviews even to this day: Back in 2013, the company invested $35 million to train 9,600 store managers to their Leadership Lab: a 400,000 square foot experience with 21 projector screens and 5,000 coffee plants, to show store managers the full scale of effort and impact that Starbucks creates.
At the end of it, Starbucks had reinvigorated store managers and helped them redefine their commitment and passion towards the organisation.
Starbucks is also known to encourage and sponsors employees’ formal education, making it amply clear that it is interested in their career growth. The resulting success from such organisational practices have sparked off many-a-case studies that occupy hallowed halls of business schools.
So, there. Freedom and psychology: Two weird ways nip attrition in its infancy.
I’m sure if the cab driver had heard me speak of this, he’d go:
“Freedom aa? Psychology aa? Haha no no! Commission madam, commission!”
But then, history knows better. And now, so do you.