Adversity Quotient: Curbing Employee Attrition Rate by building Employee Resilience

Dr. J Venkatesh1 & G. Shivaranjani2
Adversity Quotient: Curbing Employee Attrition Rate by building Employee Resilience


This paper aims to study the key drivers of attrition and create awareness about AQ which helps to develop resilience in employees there by reducing the attrition rate in organizations. A reduction in the number of employees through retirement, resignation or death denotes the percentage change in the labour force of an organization. A high percentage change in attrition rate will cause nightmare to the organizations success and prosperity. Organizations are working hard to retain their talents as employee attrition is a costly offence so they have to develop their own sensing device to know the cause of attrition whether it is because of Internal or External Factors. The AQ Profile helps you to hire the most resilient people for organization of any type and nature and helps to hire, retain and maintain prospective talents in today’s changing contexts.

Keywords: Adversity Quotient, Employees, Attrition, Resilience, Organization.

The term “Attrition Rate” can be defined as “A reduction in the number of employees through retirement, resignation or death.” It denotes the percentage change in the labour force of an organization. High percentage of labour turnover is not desirable for the organization because new workers are engaged in place of the workers who left the organization. Staff attrition rate and workers absenteeism means significant costs to the organizations. In many organizations, workers are leaving even after the organization is spending huge amount of money for the benefits of the workers. The biggest challenge faced by the corporate houses these days is not attracting the prospective employee but retaining the talent. Attrition has been a never ending problem for every organization especially the developing countries like India due to either lack of appreciation or lack of proper job sculpting. It not only affects the morale of other employees but also on the financial position of the organization. As it becomes very necessary for the HR managers to understand the factors that prompt employees to quit an organization, firms are adopting many retention strategies to combat the attrition problem. It is not easy to find out, who contributes and who has the control on the attrition of employees. Various studies conducted indicate that everyone is contributing to the prevailing attrition and it does not happen for one or two reasons. The way the industry is projected and speed at which the companies are expanding has a major part in attrition, the specific reasons for attrition are varied in nature and it is interesting to know why the people change jobs so quickly. The main reason for changing jobs is for higher salary and better benefits but in call centers the reasons are many and it is also true that for odd reasons people change jobs, at the same time the attrition cannot be attributed to employees alone. Organizations must develop its own sensing device to know whether it is the internal or external factor that is causing the attrition. Employee attrition is a costly dilemma for all organizations. In today’s taxing business climate, managing company’s competent and skilled human capital is vital for success. The extent of the impact of attrition on an organization cannot be fully understood if there is no attempt to quantify the costs. The more complex approaches to costing turnover give a more accurate and higher estimate of the costs. When a competent employee is to be replaced an organization incurs a variety of costs including those related to recruiting, selection, training and suboptimal performance while learning the job and companies usually turn to increasing the compensation for employees to retain them. Employee attrition costs 12 to 18 months salary for each leaving manager or professional. In the current scenario where every organization wants to be at its competitive best, high attrition rate can really act as a threat to success. Attrition is a very serious challenge especially to rapidly growing organizations. Before it explodes, the organizations should seriously workout strategies to reduce the turnover so that the organizations should not suffer and its planning for the future should be giving close attention to why attrition is occurring in the present.
Figure 1: Indicates the Expected Employee Turnover
The above figure is an indicative which helps to understand the employee mindset and helps companies to figure out why their employees are thinking in such a manner. In India sectors like infrastructure and banking where new players are entering the field will continue to suck in talent. The infrastructure industry has nearly $1 trillion of investment been planned in the years to 2018 and there will be huge demand for labor in India’s finance, insurance, real estate and construction sectors totaling 14% of employment in the organized sector and raising turnover in these activities. Nearly 55% of Indian employees expressed concerns about the fairness of their compensation and the extent to which benefits meet their needs 48%. One in every three employees expressed concern over a lack confidence in being able to achieve their career objectives with their current employers 37% as a result they are concerned about opportunities for learning and development 39% and supervisory coaching for their development 36%.Organizations need to give serious thought to how they will stack up against these factors now before the job markets begin to improve and those who don’t take any preventive measures are likely to find employees exiting in increasing numbers as more opportunities become ready available to talent force. Worldwide average employee turnover rates over the next five years are predicted to rise to 23.4% and the number of global departures in 2018 is expected to be at 192 million. The predicted turnover rates are forecasted to be higher where market prospects are better so employees in emerging markets will continue to have opportunities and be among the first to take flight. Attrition is not bad always if it happens in a controlled manner. Some attrition is always desirable and necessary for organizational growth and development.

Background of the Study

Studies of Stoltz (2000), described how one can cope with adversity in their professional and private lives. He found out that there are three components of human capacity that is required capacity existing capacity and accessed capacity. Required capacity is the amount of capacity that is demanded from a person as they encounter greater adversity in their jobs and lives. Existing capacity is what people have when they begin a job, when they are hired. It consists of their experience, aptitudes, knowledge, talents everything. Accessed capacity is what a person taps what they actually use. Most people according to him actually access tap and use between 5% and 25% of their existing capacity. A study conducted by Johnson (2005) determined the relationship between explanatory styles and AQ. This further examined the existence of correlations between each of the construct and performance in a high adversity occupation, sales. A total of 112 western area sales region of a leading Fortune 500 company in the computer hardware industry were the respondents. The study utilized the Attribution Style Questionnaire of Peterson et al, the Adversity Response Profile of Stoltz and a demographic data sheet to collect data. The results appear that the AQ model provide a more complete and consistent framework for identifying who is empowered and who is helpless. This provides evidence for the relationship among working professionals like sales personnel who work in a very demanding environment. An article in the Philippine Daily Inquirer about Adversity Quotient by Velasco (2002) struck the attention of the researcher and started her interest to make a study on AQ. There was no local study found in the Philippines during that time. Two years after, Lazaro (2004) conducted and presented her study on adversity quotient and performance level in the 5th Asian Regional Congress of Industrial Relations Association (IIRA) held in Korea. She studied the missing factors of success and excellent performance among selected middle managers. The capacity of each employee is the basis of organizational capacity where the manager handles the smallest unit. These managers handled multifaceted tasks being exposed to different people of various organizational levels creating demands greater speed, capacity and capabilities. A multi-source assessment or 360-degree feedback process was used in determining the performance of a middle manager. This instrument viewed performance accurately by getting input of supervisors, peers or colleagues, subordinates, and clients from all angles. The study employed the descriptive, co relational method of research to determine the relationship of adversity quotient and performance level of middle managers using the 360-degree feedback system. The selected middle managers of the different departments of the City of Manila showed a high correlation between AQ and performance level of the respondents as revealed by the 360-degree feedback system. A study of Schmidt (1999) compared the adversity response scores of leaders in education to leaders in business and industry. Her study transferred the concepts related  to  adversity  responses  of  business  leaders  to  the  educational  realm  and provides the leaders with information and support to make changes in the current system. Areas of research investigated and discussed were hardiness, resiliency, learned helplessness, self efficacy, attribution theory and the individual responses to challenges and how these areas of study relate to leadership effectiveness. Viscott (1996) in his book on Emotional Resilience deals with the bouncing back from an emotional setback. While one’s work and career may take up most of one’s time, it is relationships that take up most of one’s life. Interpersonal relations and the emotions attached to them can have the deepest influence and endure for the longest when they disturb a person’s emotional equilibrium. What one then needs is emotional resilience. The book guides one through the process of natural therapy so that one can deal better with the adversity. On the face of it the book appears to be meant for psychotherapists. The fact however that is any adversity affects one’s emotions as every adversity has a feeling component and it is this effect which lasts for a long time in the form of anxiety, causing dysfunctionality when it diffuses to other areas of his life. Thus, when emotional resilience is taken care off then general resilience will automatically improve as well.  The book is a detailed account of how one can help oneself out of an emotional trauma and back to emotional mental health.
Adversity Quotient

Adversity is the one unavoidable aspect of our lives which truly defines us as people. Stoltz categories most people in the work place as the following:
  1. Quitters - Bitter, depressed, and emotionally numb
  2. Campers - Satisfied with sufficing and not striving
  3. Climbers - Have a strong faith in something bigger than themselves.
Stoltz goes on to compare these three categories in Maslow’s Hierarchy of Needs:
  • Quitters are often stuck on psychological and safety needs.
  • Campers are focused on safety, belonging, and esteem needs.
  • Climbers work their way up to self-esteem needs.
So, the employees have to judge and assess themselves in which category they belong to and how to climb up the corporate ladder of success, learn to change their goals, ambitions and thought process and how they will overcome all sorts of work-life related pressure and know to deal with situations in an easy going manner and be successful having healthy lifestyle.
No one can deny that in the different stages of life, people encounter or face different hardships, difficulties, challenges, adversities, sorrows, or great losses, which are difficult to bridge. However, people do not respond in the same way to identical situations. There are some people who, despite of seemingly insurmountable odds somehow keep going, while others are pounded down by an incessant avalanche of change. These individuals are able to consistently rise up and break through being more skilled and empowered as they go. All this reflects one’s self concept, confidence in one’s abilities and courage to face adverse situations. This means, that there is some measurement to determine the ability of an individual to handle adversities, which is known as Adversity Quotient®. Resiliency comes from "the everyday magic of ordinary, normative human resources". Adversity Quotient®(AQ) is the science of human resilience(Stoltz, 2000). Resilience in psychology refers to the idea of an individual’s tendency to cope with stress and adversity. This coping may result in the individual “bouncing back” to a previous state of normal functioning, or simply not showing negative effects according Masten (2009). Resilience is a dynamic process whereby individual exhibit positive behavioral adaptation when they encounter significant adversity (Luthar, Cicchetti, and Becker, 2000) According to Stoltz (2000), Adversity Quotient measures one’s ability to prevail in the face of adversity . It explains how one responds to adverse situations, and how one rises above adversity. Stoltz (2000) said that life is like mountain climbing and that people are born with a core human drive to ascend. Ascending means moving toward one’s purpose no matter what are the goals. AQ is the underlying factor that determines one’s ability to ascend.Stoltz (2000) further indicated that “people who successfully apply AQ perform optimally in the face of adversity the challenges, big and small, that confront us each day. In fact, they not only learn from these challenges, but they also respond to them better and faster. For businesses and other organizations, a high Adversity Quotient workforce translates to increased capacity, productivity, and innovation as well as lower attrition and higher morale.”

Key Factors of Attrition
Fig 1: Indicates the Reasons for Employee Turnover

From the above figure we infer that the organizations face an array of individual, organizational and other concerns that are attributable to increase attrition levels. The monetary expectation of employees are increasing day by day and has turned to be one of the major reasons for attrition as people leave the organization because they have been offered a higher salary in the current competitive scenario as it is easy for employees to find positions that leverage their experience and pay better. Employees with prior relevant experience are a precious commodity in today’s fast growing market. Therefore, it is not unusual for fast growing companies to fill new jobs with external applicants who have prior relevant experience with other companies bringing them in at one level higher than their current level or providing them a new role with greater responsibilities. This contributes to the perception by passed over internal talent that career growth is slow in the current organization which results in further attrition. The majority of the work is off shored to India and has popularly been from the United States necessitating night shift work due to time zone differentials and the proportion of employees who can work during the Indian work day is low. Continuous night shifts affect the health of some while others just cannot adjust to them as a result of cultural and social factors some women employees leave because they are not able to convince their families of the need to work night to it we see the work that has been off shored has been repetitive, mechanical, service level driven and involves high transaction volumes as younger recruits find it monotonous once they have mastered the process. Attrition due to the work environment is typically due to a lack of trust in the fairness of the system, issues around safety and care of employees, effectiveness of the channels to address employee grievances, accessibility of the senior management team and other related environmental issues. The lack of ample opportunities to learn new skills or undergo training or further education is occasionally cited as a reason for leaving. To ensure that they rapidly meet high demand levels, organizations are not always able to hire resources with the right skills and experience when and where they are needed. Resources who are put on assignments that are not in line with their skills or career aspirations may leave if they are not rotated to a favorable assignment soon enough. Stress due to various factors like work time, repetitive nature of work, work load, irate customers, travel time, call volume, long working hrs, insufficient breaks, pressure to perform on metrics, health issues. Many of this younger population are not sure what they want to achieve in their careers and represent flight risks. Certain strategies can be adopted to reduce attrition rate in the organizations. The different strategies can give different dimensions to control attrition rate. These are Recruit Focus on the right fit model, robust evaluation procedure both technical and practical tests, reference checks and implementing Adversity quotient profile for screening employees are some of the ways of sourcing talent. Training helps in identifying the potential talent from employees and later helps to sharpen their latent skills. The best people have to be elevated into potential prospects of succession planning. Retention of talented employees is always the most important agenda for any company to grow by giving them higher salaries, faster growth opportunities, better performance based bonus amounts, advanced training opportunities, recognition awards, reflects in the salary increase are some factors used to differentiate rewards for superior performers psychological relationship between leaders and employees is very crucial and helps combat attrition level to a greater extent.
Ten Simple ways to Build Employee Resilience

  1. Develop a strong sense of purpose
Resilient people have a strong sense of purpose and meaning for why they are doing, what they’re doing and are guided by a vision that gives meaning to their work and lives.
  1. Develop a healthy sense of control
The emphasis is basically on personal control. Resilient people focus their energy on those events that they have influence over, rather than situations beyond their control. They accept circumstances that cannot be changed.

  1. See change as a challenge or opportunity
Resilient people tend to see change as a challenge to confront and overcome, rather than an unbearable problem or a stress to avoid. They also see change as an opportunity for self reflection, learning and growth.
  1. Develop self confidence
Resilient people have a healthy concept of self. They believe in themselves and their strength and ability.
  1. Be optimistic
Maintain a hopeful outlook, expecting good things to happen. People with an optimistic outlook do better at managing stress and chaos. When you catch yourself thinking negatively, challenge yourself to reframe the situation more positively.
  1. Build good social support
Resilient people rely on others to help them survive tough times. Developing a good social support network of friends and family can help lessen the impact of stress in our lives.
  1. Become flexible and adaptable
Resilient people are able to adapt to new people and situations quickly. They can let go of the old way of doing things and quickly learn new procedures and skills. They can also tolerate high levels of ambiguity and uncertainty in situations.
  1. Use sound problem solving strategies
Resilient people use their logical and creative mind to map out sound problem solving strategies. They set realistic goals and outline a specific plan of action.
  1. Have a good sense of humor
Research shows that humor can lessen the impact of stress. Resilient people are playful and curious. They find the humor in rough situations, and can laugh at themselves.
  1. Stay healthy
A good diet and regular physical activity helps alleviate stress. Resilient people take care of their body and mind. They exercise regularly, take time for relaxing activities, and maintain balance in their lives.
Resilience will not prevent challenges from coming your way. However, it will help you be prepared mentally for whatever comes your way - whether taking on an increased workload, having your pay cut, or being laid off. Resilience will not only help you survive, but thrive, in the workplace.
According to top researchers, top management consistently underestimates the cost of poor hiring decisions, which includes various factors like cost of recruiting, time involved recruitment process, selection with pre and post screening, placement, additional training and development and all HR efforts put in to grow a single employee. The AQ Profile is popular in today’s scenario as it has been tested widely and it is free from all sorts of biases across say gender, ethnicity, and age, and proven to be the most robust instrument in today’s existence for measuring and developing human resilience. It evaluates the effects of a bad hire like employee morale, productivity, and customer retention costs when the employee under performs. The effect is so very severe that say more than 20 Lakh is spent for each bad hire which is the true cost of a business, hence AQ minimizes the risks associated with hiring in any sector.
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