Maintain your Talent by Predict Employee Attrition - Part 1

Every running operational business, business process, and company sustainability is never regarded by employees role who work inside. Employee as talent is one of the valuable assets of each company as the backbone of any organization. With their various skillset to fulfill each position based on the required role, ranging from operations to determining the success and performance of the company in the future.

Unfortunately, there were many employees who decide to quit their jobs and leave the company. It often happens that employees come and go from each company which caused a turnover of employees due to the change of old employees with new ones. The natural causes of employees who decide to left the company, there are many causes that could influence an employee to leave their current employment. Natural causes such as retirement, resignation, health reasons, etc. all fall under causes of employee attrition.

There are a lot of factors that made employees decide to leave the company too earlier, A lot of these reasons are related to job satisfaction and personal fulfillment. It happened when employees feel dissatisfied with the working conditions or they feel less accomplished working at these jobs, they are more likely to take the exit. In cases like this, employers are left in the lurch after such decisions have been made because there are usually no plans for the replacement of these staff.

This phenomenon is called Employee Attrition, which is the loss of employees through other means than sacking without replacement. The impacts of attrition on a business can be harmful to earnings or profits and morale. This phenomenon normally happens in employees from most companies in various sectors, such as FMCG, Technology, manufacturing, etc., and also happens in the entertainment sector in talent management and music groups like unsatisfied and under-appraised talent, that make talent decide to leave the music group or its agency.

This Predictive Analytic Use Case is divided into Part 1 and Part 2, where Part 1 on this page will begin with the company’s phenomenon explained above, then identify what is Employee Attrition, then Recognize why employee attrition happened by investigating the factors, then Part 2 will discuss and explain how to solve the problem by predictive analytics on the employee.

What is Employee Attrition?

Employee attrition is the gradual reduction in employee numbers. Employee attrition happens when the size of your workforce diminishes over time. This means that employees are leaving faster than they are hired. Employee attrition happens when employees retire, resign, or simply aren’t replaced.

Employee Attrition is the silent killer that slowly but surely destroys any organization in a very little amount of time. While many companies invest lots of time and money in recruiting employees and training those employees, there isn’t enough attention invested in solving the issues that cause top talents to leave. The performance of the organization totally depends upon the quality of employees in that organization.

Retaining existing employees who have proven competence on a track record is cheaper than recruiting a new employee to replace a previous employee who left more expensive, due to the training cost that must be spent until the new talent’s ability and competence match to previous employees. This can affect the company’s productivity due to the gap time caused by the loss of progress, which is usually run by the previous best talent.

Thankfully, technology is now able to provide employers with the actionable insights they need to better understand their employees and make any necessary changes that are required to maintain the productivity level, and also prevent the best talent that will leave the company. People analytics is able to reveal the true drivers behind attrition.

If this concept with its method is generally applied to companies that run in FMCG, Technology, Manufacturing, etc. where enterprise or startup business runs generally predict employees as talents who will quit. How implement this concept and its method if it going to be applied in the entertainment field, to predict talent who will leave the agency or turnover to another agency? Likewise for talent in group music, can this concept with its method be applied to prevent the talent that has willing to leave the music group?

This Predictive Analytics Use Case applies the concept and its method from Employee Attrition Prediction, by using sample data from Enterprise or Corporate that runs in the Technology sector, IBM. This Case began with the company's HR or Supervisor who wants to discover the employee who has willing to leave the company, with certain indicators based on the employee’s information which determine which employee will quit. Thus the company prevents employees who will leave the company, by predicting the employees.

What are the causes of Employee Attrition?

This data is about IBM employees with characteristics that are represented in the form of features below regarding the benefits and facilities obtained, and the results of a survey about their job satisfaction, which is a factor as an indicator if there is a possibility of employees leaving the company.

The data is about IBM Employees with its characteristics that are represented by features below regarding the benefits and facilities acquired, employee survey’s result about job satisfaction, these factors are could indicate if there the employees probably will leave the company. Before Predicting Employee Attrition, let’s investigate the cause of the problem, and why an employee left the company. what is the reason that makes the employee decide to left this company? is it caused by the employee who is unsatisfied? or an employee who underachiever by the management? Let’s Check it out.

Business Travel is travel undertaken for work or business for leisure purposes or regularly commuting between one’s home and workplace. This benefit provides comfort to the employee that helps the employee release the fatigue by placing in a different work atmosphere from home and workplace, thus making the probability of the employee staying longer in the company. Although overall more employees stay if we focus on the employee percentage that decides to leave that the probability of employees will leave is greater for employees who rarely get business travel than those who frequently.

Department is the division of an organization with a specific task in large scope based on the division’s field. Each department have different task based on the required fundamental role of each company such as,

  • Research & Development takes the role in research and development of the market, customer needs, creation and development of products, then when the product is launched in the market and used by customers until the process to maintain or update the product if necessary based on customer feedback.
  • Sales take a role in marketing and selling the product beginning with by-product launching, monitoring the product sale, and interacting with customers to respond to the feedback given.
  • Human Resources handles human resources from candidates who apply for the job, monitoring employees internally, looking for potential candidates externally from people from educational institutions and social media that are urgently needed by the company.

According to the definition of each department, this bar chart below displays that the departments have the more possibility of employees leaving the company comes from the Research & Development division because their role is so crucial, that caused by the heaviest work demand from the entire departments, so this department should get concerned the most.

Each Department has a Job Role as a smaller group with more specific tasks based on the employee’s ability and work experience level. This bar chart display there the Job Role has more possibility of employees leaving the company coming from the department of Research & Development such as Laboratory Technician and Research Scientist, And department Sales such as Sales Representative and Sales Executive.

According to the previous explanation of the department, job roles from the Research & Development department such as Laboratory Technician and Research Scientist have crucial roles in product development and market research. Department of Sales’s Job Roles also has more possibility of employees leaving the company comes such as Sales Representative and Sales Executive, because their equally crucial role to Research & Development, such as product selling process with pre-determined sales targets and strategies, thus bring work pressure that affects on employee satisfaction and comfort during the work, which in the end have willing to leave the company.

Marital Status is the employee who legally has a marital state, most companies provide the benefit to each married employee more than a single status employee. This bar chart below displays that single-status employees have more possibility to leave the company instead of married status employees, this is affected by the benefits and facilities which make employees prefer to stay longer.

married employees also have more work demands and responsibilities on family needs than single employees, if the employee wants to look for other opportunities. Meanwhile, an employee with single status still has space for looking for other opportunities outside because still hasn’t responsibilities that make him survive as unemployed as well as a Job Seeker.

Overtime is extra working time that exceeds normal working hours until confiscate the rest time. The employees that work overtime drain more energy than employees who only work during normal working hours, it confiscating employee time that should be taken for breaks. thus productivity and employee health both physical and mental harmed.

The bar chart below presents that the more overtime taken by employees make the more probability the employee going to leave the company. And vice versa less overtime taken by employees makes the more probability the employee to going to stay longer.

These bivariates overall prove that the most significant factors to Employee Attrition are overtime because it will be harmful to employee health, and make employee under pressure that make employee decide to leave the company. Then the Department with its Job Role takes a crucial role during the running of the business such as the creation and development of the product until the selling process with pre-determined targets and strategies, these make employees who worked in this role under pressure which make employee decide to leave the company. And then marital status also bring effect to employee’s probability to leave the company, it occurs to single-status employees that still have fewer benefits and still looking for many other opportunities

After that let's investigate which factors that affect the employee's decision to leave the company, by observing the entire variables from the dataset with multivariate correlation using heatmap visualization. Based on this Heatmap Correlation which is thicker and darker the blue color represents the Positive Correlation, the bigger correlation value from a variable indicates that it has a strong effect on employee attrition. And vice versa on the Negative Correlation, the smaller correlation value from a variable indicates that it has a strong effect on employee attrition.

The following list below are the multivariate correlation results to Employee Attrition

  • Overtime which represents the extended working time that exceeds normal hour until confiscated employee’s break time is the strongest factor in Employee Attrition which represent more overtime taken by the employee, the bigger possibility of an employee will leave the company.
  • Distance From Home is the distance the employee travels to reach the job on a day-to-day basis, is the strongest factor also to employee attrition which represents the bigger probability of employees who will leave the company, if the distance from home is further.
  • Monthly Income represents the Salary received by each Employee, which represents a smaller salary acquired by an employee brings more probability of employees who decides to leave the company.
  • Job Level is the level at which the employee is working, which represents if a lower level of job position makes an employee more probably to leave the company. Like, look out for another opportunity outside the company.
  • Stock Options Level is a level of opted for sharing the stock, more stock options are offered and the higher level of stock options will decrease the probability of employees leaving the company.

To be continue

Then in the next part, the process will continue by discussing and explaining how to solve the problem by predictive analytics on the employee. Then the model will be applied to the real dataset. Here’s the continued link -> Maintain your Talent by Predict Employee Attrition - Part 2.

So, if there is anything to ask or if you have anything to discuss, go to my discussion section in the comment section below.

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