MBA 699 Module 3 Milestone Two Employee Attrition Analysis example

Milestone Two: Employee Attrition at Prairieview Life Sciences and What It Means for a Sale

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Southern New Hampshire University

MBA 699: Strategic Opportunity Management

Module Three Milestone Two

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[Date]

The organization, setting and figures below are a composite written as a model document. No real employer, client, colleague or patient is described.

Milestone Two: Employee Attrition at Prairieview Life Sciences and What It Means for a Sale

Summary

In the last twelve months, 240 of Prairieview's 1,480 employees left, an attrition rate of 16.2 percent. Turnover is concentrated in manufacturing operations, sales and maintenance, among employees working regular overtime and among those in their first three years. The critical scientific and quality leaders, by contrast, are largely staying. For the exit strategy, the problem is not that Prairieview is losing its experts; it is that the company cannot keep the people who run its production lines long enough for them to become experts. A buyer will see this in due diligence, and the retention plan below is designed to change the trend before the company is marketed.

Data and Method

The analysis uses HR records for all employees on payroll during the last fiscal year, including function, tenure, overtime status and separation date, together with 168 exit interviews completed by departing employees, a 70 percent response rate. Attrition was calculated as departures divided by headcount at the start of the year. Both voluntary and involuntary departures are included, although involuntary separations were only 19 of the 240.

Attrition by Function

Table 1 shows departures and rates by function.

Table 1

Twelve-Month Attrition by Function

Note. Composite data from the fiscal year HR extract.

Reading the Functional Pattern

Manufacturing operations accounts for nearly half of all departures, 114 of 240, and its rate of 20.4 percent is well above the company average. Sales has the highest rate, but it is a small group and its departures are partly tied to a commission plan change last year. Maintenance and engineering is the less visible concern: its technicians keep the bioreactors and filling lines running, and each departure leaves shifts short of people qualified on specific equipment. The groups with the lowest turnover, regulatory affairs and process development, are the ones whose knowledge is hardest to replace. Among the 50 employees the company has designated as critical, 38 senior scientists and 12 quality leads, only 4 left in the year, a rate of 8 percent.

Overtime and Tenure

Table 2 shows two patterns that cut across functions.

Table 2

Attrition by Overtime Status and Tenure

Note. Composite data. Regular overtime means more than 8 overtime hours in at least half of all pay periods.

What Overtime and Tenure Tell Us

Employees working regular overtime leave at more than twice the rate of those who do not, and most of them work in manufacturing and maintenance. The overtime itself is partly a result of turnover: when trained operators leave, remaining staff cover their shifts, which raises strain and prompts more departures. Tenure shows a similar cycle. Nearly a third of new hires leave within a year, and together employees with less than three years of service account for 162 of the 240 departures. Research on turnover emphasizes that people stay when they are embedded in their work through relationships, fit with the job and what they would give up by leaving, and that these ties take time to form (Holtom et al., 2008). Prairieview is losing people before those ties develop.

Why People Say They Leave

Among the 168 exit interviews, the most common primary reasons were schedules and overtime (31 percent), pay (22 percent), limited career growth (19 percent), relationships with supervisors (14 percent), relocation or personal reasons (9 percent) and other reasons (5 percent). Pay matters, but it is not the leading reason. Allen et al. (2010) described the belief that people leave mainly for money as a common misconception, noting that job satisfaction, commitment, supervision and alternatives often matter more, and Prairieview's interviews fit that pattern. Several departing operators described learning of mandatory weekend shifts with only days' notice, and several said they saw no path from operator to technician or supervisor.

What a Buyer Will Conclude

A buyer's due diligence team will find three things. First, the production workforce is unstable, which raises questions about the company's ability to meet customer schedules and about hidden costs of hiring, training and overtime. Second, turnover is feeding itself through overtime, so it is likely to continue without intervention. Third, the scientific and quality core is stable, which is the most valuable finding for a buyer interested in Prairieview's capabilities. Buyers also know that turnover typically rises after an acquisition; Walsh (1988) found significantly higher departure rates among top managers of acquired firms than among those of firms not acquired, and uncertainty affects other employees as well. In technology-intensive acquisitions, Ranft and Lord (2002) found that retaining key people was central to preserving the knowledge being acquired. A buyer will therefore discount the price for both the current turnover and the expected increase after closing unless Prairieview can show the trend reversing.

Retention Recommendations

Four actions target the causes identified. First, stabilize schedules in manufacturing: publish shift schedules four weeks ahead, cap mandatory overtime per person per month and fund a float pool of trained operators to cover absences. Second, strengthen the first three years: a structured onboarding program with a named mentor for each new operator and technician, and check-ins at 30, 90 and 180 days. Third, create a visible career path from operator to senior operator, technician and supervisor, with the training and pay steps published. Fourth, protect the critical 50 with retention agreements tied to the completion of any transaction, reviewed by the guiding coalition.

Success will be measured quarterly: attrition in manufacturing below 15 percent within a year, first-year attrition below 20 percent, regular overtime reduced to fewer than 250 employees and no loss of more than two critical employees in any quarter. Showing buyers a falling trend over at least two quarters will be more persuasive than any promise about the future.

References

Allen, D. G., Bryant, P. C., & Vardaman, J. M. (2010). Retaining talent: Replacing misconceptions with evidence-based strategies. Academy of Management Perspectives, 24(2), 48-64. https://doi.org/10.5465/amp.2010.51827775

Holtom, B. C., Mitchell, T. R., Lee, T. W., & Eberly, M. B. (2008). Turnover and retention research: A glance at the past, a closer review of the present, and a venture into the future. Academy of Management Annals, 2(1), 231-274. https://doi.org/10.5465/19416520802211552

Ranft, A. L., & Lord, M. D. (2002). Acquiring new technologies and capabilities: A grounded model of acquisition implementation. Organization Science, 13(4), 420-441. https://doi.org/10.1287/orsc.13.4.420.2952

Walsh, J. P. (1988). Top management turnover following mergers and acquisitions. Strategic Management Journal, 9(2), 173-183. https://doi.org/10.1002/smj.4250090207