Sunteți pe pagina 1din 10

FACTORS AFFECTING JOB SATISFACTION

AND THERE BY EMPLOYEE TURNOVER IN


INDIAN IT INDUSTRY

3/9/2014
Submitted by:
Group 9

1

INTRODUCTION
Employee turnover is an important aspect that can make a significant impact on any organization in
terms of performance, growth and general business outcomes as human capital is central to any
organizations goals. Employee turnover is defined as the rate at which employees enter and leave a
company in a given fiscal year. We have chosen IT industries for our research because it of the
following reasons:
IT industry is one of the largest employers of engineering graduates in India in the services
sector and contributed 7.5% to the Indian GDP in FY 2012.
IT industry faces the highest employee turnover as compared to any other industries not only in
India but also globally, and
Also, 2 out of 3 members of our group are ex IT professionals which added to the motivation to study
the issue of high turnover rate in this industry. Some reasons why it is very important to measure the
employee turnover in IT industry are:
1. Turnover is expensive:
Employee turnover can have significant cost implications to a company. These can be in terms
of time, money, and other resources as mentioned below:
Managers time in trying to retain the employees as well as conducting Exit interviews
Delays in service delivery to the customers
Cost of hiring new employees and offering signing bonuses and relocation expenses
Providing on the job training to the new employees which incurs costs as well as
supervisors time and effort.
2. Turnover impacts business performance
Employee turnover can impact business performance in the following ways:
Affect the morale of the workforce: If more people leave an organization then it
can bring negative sentiments in the minds of other employees and they will also
have a tendency to look for better options.
Effect on sales growth: If more people leave an organization then it might reduce
sales growth as the client might not be satisfied with the work of the new
employees as they will not have the required skills/experience and might not
deliver upto their expectations.

3. Finding qualified employees is becoming more difficult: Once talented employees leave an
organization it becomes difficult to replace them and also it incurs a huge amount of cost to
hire them.
2

IT industry employs knowledge workers and hires mostly fresh engineering graduates. Huge
amount of money is spend in training them in various skills. When we consider a knowledge
sector like IT, the turnover rate is expected to be in the range of 50%. Its especially high in the 16 -
24 year age bracket where a Mercer survey found that 66% of participants were thinking about
leaving their jobs. Turnover costs are expected to be about 150% to 200% of base salary of replaced
employee. As economic conditions around the world improve, employee turnover is expected to rise
significantly.
Considering all the above reasons it becomes necessary for companies to know the reasons for
employee turnover, the percentage of turnover population, costs incurred in relation to the
turnover as well as policies required to reduce turnover.
REASONS FOR EMPLOYEE TURNOVER
Employee turnover is basically of four types:
Voluntary: Voluntary turnover consists of employees exercising their free choice to leave.
Involuntary: Involuntary turnover consists of separations where an employee unwilling leaves.
Functional: Functional turnover is when low performing employees leave
Dysfunctional: Dysfunctional turnover is when high performing employees leave
Among the four types of employee turnover, what any company wants to prevent or reduce
are Voluntary and Dysfunctional turnover. Prior research suggests that these are the most
common reasons for turnover in the IT industry.
We have limited the scope of this study to Factors affecting job satisfaction and there by
employee turnover in Indian IT industry.
The important factors identified in the earlier studies related to job satisfaction are the poor
working condition, peer group behavior, routine nature of the job and the working hours.
These particular findings from the majority of the researches conducted in western business
environments were typically from software based industries and business operating with severe
time constraints, stiff deadlines and varying work order.
METHODOLOGY
To study the stated issue, we analyzed data from both primary and secondary sources. Under
secondary data analysis, we read articles relevant to the issue at hand. We looked up the best
practices in HR followed in the Indian IT industry and also the reasons of such high an attrition
rate in this industry in previous researches done in this area. This analysis gave us clarity on the
topic and helped us to structure our research.
3

For primary data analysis, we floated a questionnaire among both ex- and current IT
professionals to measure their level of job satisfaction.
KEY FINDINGS
The following are the key findings after the analysis of the primary data:
Overall, about 62% of the respondents were found to be dissatisfied with their jobs in IT
sector.
Overall, the respondents believed that the work environment in the organization
(73.97%), work timings (72.6%), Relationship with supervisor (68.49%) were the top
three reasons for lack of job satisfaction in that order.
While both male and female respondents believed these to be the top three reasons,
female respondents gave Work Timings as the most important reason. This can be
correlated by the fact that people in IT industry have to work long hours. Since most IT
firms operating in India work for foreign (predominantly Western) clients, odd work
timings are but a characteristic of an IT job. There are projects where 24X7 support is
required and employees have to come in shifts. While both male and female employees
would find these aspects to be unappealing, female employees face safety issues and
also cultural issues if they have to work late or in night shifts.
About 49% and 41% of the respondents were found to be dissatisfied with the salary
and compensation respectively. 31% were found to be dissatisfied with the salary hikes.
IT companies have been a good payer in general but prospects have changed due to
factors like global recession in post 2007, weakening of the rupee since the last couple
of years, among others. These factors have affected the business as a whole and the
salaries have since then remained comparatively stagnant because of them.
Overall 42% of the respondents were either satisfied or very satisfied with Onsite
Opportunities. This has been an important factor which attracted people into the IT
industry. Post the global meltdown in 2007, US began to cap on the number of H1B visas
being issued. The Indian IT industry has been one of the most vehement opponents of
this move and has lobbied time and time again with the Indian government to increase
the cap.
Over 54% of the respondents felt that they did not have an opportunity to use their
skills and abilities on the job. Also over 46% of respondents felt dissatisfied with the lack
of variety in work assigned to them. Especially post 2007, most US based companies
have cut down on developmental projects. So IT companies have been forced to take on
more and more maintenance contracts to stabilize revenues. This has in turn increased
monotony in the work and also made people feel that they are overqualified.
4

Lack of skill development or training activities is seen by over 60% of the respondents as
a cause for dissatisfaction. This can be correlated with the fact the fact that one of the
biggest fears an employee in a knowledge based industry like IT has is the fear of getting
outdated by technology. They need to constantly update themselves to continue being
relevant.
About 56% of respondents feel that work pressure is a cause for dissatisfaction. This
again can be correlated with the nature of work in the industry where lot of work needs
to be completed within tight deadlines.
About 42% of the respondents do not feel that the career advancement opportunities in
terms of roles and responsibilities are good in the IT arena. Respondents do not rate an
IT job well on learning opportunities too, with about 53% respondents being dissatisfied
on that parameter. That may be a criteria for them to decide to drop out of job and
pursue a Post-Graduation course like MBA or M-tech to acquire more skills and make
themselves available for better roles
Respondents were found to be satisfied with the communication between co-workers at
work place. Since IT professionals are well educated, this finding is not much surprising.
We also see high levels of similarity between response of male and female respondents
to majority of the factors.
HR PRACTICES TO INCREASE JOB SATISFACTION AND REDUCE
TURNOVER
Based on our research findings, most of the employees are highly dissatisfied on various
parameters for which we suggest the below best practices to be followed:

1. Safe, Healthy and Happy Workplace
Creating a safe, healthy and happy workplace will ensure that your employees feel homely and
stay with your organization for a very long time. This includes proper cab facilities to be
provided to all the employees, office working conditions in terms of ambience and
surroundings, facilities to be provided to employees working in night shifts, proper medical
facilities etc. There should be proper feedback mechanism to capture their pulse through
employee surveys.
2. Open Book Management Style
Organizations should share information about contracts, sales, new clients, management
objectives, company policies; employee personal data etc. which will ensure that employees
are enthusiastic and motivated. Through this open book policy, organization can create a
culture of participative management and ignite the creative endeavor of the work force. It
involves making employees engage in strategic decisions, thus aligning them to your business
5

objectives. The organization should be as much open as it can. Employee self-service portal,
Manager on-line etc. are the tools available today to the management to practice this style.
3. Performance linked Bonuses
Paying out bonuses or having any kind of variable compensation plan will highly motivate
employees to perform and deliver their best to the organization. Bonus must be designed in
such a way that people understand that there is no payout unless the company hits a certain
level of profitability. Additional criteria could be the team's success and the individual's
performance.
4. Knowledge Sharing
Employees are dissatisfied with their organizations as they feel de motivated due to
unavailability of technologies and they wanted to learn. Thus, organizations should adopt a
systematic approach to ensure that employees as given enough opportunities to learn and
share knowledge among each other. Organization can store knowledge in databases to provide
greater access to information posted either by the company or the employees on the
knowledge portals of the company. When an employee returns after attending any
competencies or skills development program, sharing essential knowledge with others should
be made mandatory. Innovative ideas (implemented at the work place) are good to be posted
on these knowledge sharing platforms.
5. Highlight performers
Many employees are dissatisfied for their work are not appreciated or highlighted.
Organizations should create profiles of top performers and make these visible though company
intranet, display boards etc. It will encourage others to put in their best, thereby creating a
competitive environment within the company.
6. Open house discussions and feedback mechanism
Employees lack motivation to perform and remain dissatisfied with their work as there is less
learning scope in their work place and also there is lack of proper feedback from senior
management on their work. Open house discussions, employee-management meets,
suggestion boxes and ideas capture tools such as Critical Incidents diaries are the building
blocks that can help the Managers to identify & develop talent.
7. Reward Ceremonies
Employees are also dissatisfied for their efforts and contributions are not recognized and
rewarded. Merely recognizing talent does not work, you need to couple it with ceremonies
where recognition broadcast.



6

BIBLIOGRAPHY
Bhatnagar, Subhash, India's Software Industry.
S Janani, Employee Turnover : Present Scenario of Indian IT Industry, research paper published
in Indian Journal of Applied Research, Vol 4, Issue 3.
Dr Tapan K Panda, Job Satisfaction of Dotcom Employees An Indian Experiment.
Biju Varkkey & Rupa Korde, Exploring Job Satisfaction in India using Paycheck India Survey Data.
http://www.nasscom.in
Popular Financial newspapers.
















7

EXHIBIT QUESTIONNAIRE
1. Rate the company you have worked for based on the following parameters? In case of
multiple companies please rate the company you last worked for?

Parameters
Very
Satisfied
Satisfied
Neither Satisfied
nor Dissatisfied
Dissatisfied
Very
Dissatisfied
a. Salary
b. Growth prospects
c. Work pressure
d. Work timings
e. Onsite opportunities
f. Learning opportunities


2. Please indicate your level of satisfaction with the following statements pertaining to your work
experience in IT organization:


Statements
Very
Satisfied
Satisfied
Neither
Satisfied
nor
Dissatisfied
Dissatisfied
Very
Dissatisfied
a. The work environment in your
organization

b. Variety of work assigned to you
c. Contribution of work to organizations
business goals

d. Autonomy in decision making at your
level

e. Opportunities to use skills and
abilities in your job

f. Relationship with immediate
8

supervisor
g. Communication between co-workers
h. Career advancement opportunities in
terms of roles and responsibilities

i. Managements recognition of
employee job performance

j. Work-Life Balance
k. Compensation
l. Training and skill development
activities

m. Salary hikes
n. Job Flexibility


DEMOGRAPHICS

Name (Optional)
______________________________
1. Age (in years)
19-22
23-25
26-28
29 and more
2. Gender
Male
Female

Marital Status
Single
Married
Organization
____________________________________________

Designation
___________________________________________
9


Work Experience (in months)
0-12
13-24
25-36
37-48
49 and more
3. Annual Salary (in Rs.)
0 - 2,00,000
2,00,001 - 5,00,000
5,00,001 - 10,00,000
10,00,001 and above
Factors affecting job
satisfaction and there by employee turnover in Indian IT industry - group 9.xlsx

S-ar putea să vă placă și