Page 56 - Successful Onboarding

The Business Case for Onboarding • 45

The next thing we looked at was attrition mix—regrettable versus non-regret-
table, because as we have discussed, not all attrition is created equal.
Although the potential cost savings for lowering general attrition rates
through onboarding is compelling, the figure is just that—very general. With
this in mind, we set out to determine the cost of “regrettable” and “non-
regrettable” attrition under current and best-in-class attrition models. Under
current attrition rates, we assumed that 65% of attrition was regrettable (we
were sorry to see them leave), and 35% was non-regrettable (we were happy
to see them leave). Under this model, the breakdown of regrettable vs. non-
regrettable attrition under current conditions was the following:

• Aerospace & Defense: $3.8B regrettable vs. $2B non-regrettable
• Energy & Utilities: $2B regrettable vs. $1.1B non-regrettable
• Financial Services: $59B regrettable vs. $31.8B non-regrettable
• Healthcare: $7.3B regrettable vs. $3.9B non-regrettable
• Technology & Telecom: $4.7 regrettable vs. $2.5B
non-regrettable
• Consumer Packaged Goods & Retail: $1.8B regrettable vs. $1B
non-regrettable

Having broken down current cost of attrition by regrettable and non-
regrettable rates, the next step was to find how these costs would be
impacted under a best-in-class attrition mix scenario. We assumed that
attrition would shift from a 35% non-regrettable/65% regrettable ratio
under the “current model” to a 65% non-regrettable/35% regrettable ratio
under a best-in-class model. The results are shown in Table 1.2.

Table 1.2 Cost Savings Attributable to Favorable Attrition Mix
Current State Best-in-Class
Cost of Cost of Potential
Regrettable Regrettable Regrettable
Industry Attrition Attrition Cost Savings
A&D Industry $3.8B $1.7B $2.1B
Energy & Utilities Industry $2B $718M $1.3B
Financial Services Industry $59B $21.2B $37.8B
Healthcare Industry $7.3B $3B $4.3B
Tech & Telecom Industry $4.7B $1.7B $3B
CPG & Retail Industry $1.8B $794M $1.05B