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Talent management tops the list of CFO concerns, so the results of an analytics study of attrition drivers at Deloitte in the US hold useful lessons, reckons Cesar Bacani

This article was first published in the January 2014 China edition of Accounting and Business magazine. 

We hear so much about analytics as a concept these days – but not so much on how it is applied in the business. So it was very interesting to me to read about how Deloitte, the world’s second largest accounting firm by revenue, has been deploying analytics.  

Deloitte’s US practice is trying to understand the dynamics of attrition among its more than 61,000 partners, principals and staff. Last year, it analysed extensive time-series-based HR data that included information about age, gender, travel expenses, timesheets and project financials. It also looked at market-related information such as the unemployment rate and gross domestic product change in the US.

Writing in Human Resource Executive Online, Deloitte US consultants Amel Arhab, John Houston, Vishwa Kolla and John Lucker discussed some of the drivers that they discovered motivate finance professionals and other specialists at the accountancy firm:

  • Those who did not travel or had a disproportionately lower level of travel than their peers tended to leave Deloitte.
  • Those who took all of their paid leave tended to stay on, compared with peers who did not take time off or whose responsibilities made it difficult to do so.
  • Those who frequently worked with teams comprising members regarded as star performers tended to leave at a higher rate than those not so frequently assigned.
  • Those who blogged regularly and/or participated actively in social media networks exhibited lower attrition rates.

These patterns are particular to Deloitte in the US, of course, but the correlations are suggestive. It is not inconceivable for finance professionals in other accountancy firms to respond in similar ways.

The findings should help managers ‘identify actionable insights among complex patterns,’ write the Deloitte consultants, ‘patterns related to individualised employee attrition and other factors that allow for proactive actions to avoid the loss of the most valued team members.’

At Deloitte in the US today, employees who travel on business extensively but do not take much vacation time will have their travel and project schedules modified. ‘Similarly, when employees reach a certain time threshold at their current positions, rotation and training programmes would be triggered and redeployment strategies initiated,’ the authors report.

Other actions that can be taken include slowing down the work pace of a mid-tenure employee assigned to high-burn projects that require a lot of travel, encouraging employees on high-burn projects to take more time off between assignments, and assigning lower tenured employees to projects that involve travel.

What if the employee is underperforming? Some in Deloitte who were flagged as likely to leave had been rated at the lower end of the performance axis. In these cases, wrote the consultants, no action was taken, although they didn’t say whether the underperforming employees eventually left of their own accord.

For those star performers the company wants to retain, the consultants stressed the importance of communicating the reasons for any intervention. If changes to schedules and assignments are not explained clearly, this could send the wrong signals – that the company has lost trust in the employee, for example.

That’s all to the good. The cost of attrition has been estimated to range from 50% to 200% of an employee’s annual salary, from costs to recruit, training of new hires and productivity losses to intangibles such as employee morale and reputational issues.

It would seem that the resources Deloitte dedicated to its workforce analytics study would easily pay for itself if the attrition rate is indeed brought down.

Cesar Bacani is editor-in-chief of CFO Innovation

Last updated: 10 Jan 2014