CHAPTER 1

1 INTRODUCTION AND BACKGROUND OF THE STUDY

In the best of worlds, employees love their jobs like their subordinates work diligently for their
employers, get paid accordingly and have ample of chances to prove their capability and potential
for the sake of advancement and flexible schedules so that they could attend their family and
personal needs whenever required and necessary which gives work life balance and would never
leave the organization.

But then there’s the reality, employees do leave either because they don’t feel there’s work life
balance, hate the working pressure, hate the organizational culture, or they want more money, they
want a change or want to pursue higher studies or want to shift to their native place or unfair
appraisals.

In the modern era hiring the right candidate and retaining him or her has become the greatest
challenge to the HR department in any organization. With the increased business developments
and job opportunities, attrition has become a major problem faced by any organization. Retaining
the key talent is very important for the organization sustainable growth. Thus, countering and
controlling attrition has become a very big concern in the business world.

Throwing money at people and giving them fancy car doesn’t helps in building a competitive
workforce. In today’s employment environment it is difficult to create a competitive advantage. It
involves much more than just a lot of aggressive recruiting or strong attention to retention. In order
to achieve work force stability with all its financial and operational advantages employers must
invest energy in resources with a wide range of discrete strategies with the help of these strategies
it is possible to create a comprehensive model for building and maintaining that solid, stable
workforce that drives more dollars to the bottom line.

It has been observed that employees sticking to an organization for a longer period seems to be
loyal towards the management and the organizations. No organization can survive if their top
performers quit, it is essential for the organization to figure out issues pertaining to the employee’s
exit. Employer invests time and money in an employee to make him ready to work and understand
the culture of the company, new joiner is completely raw, and the management puts in effort to
groom him, train him. It would be completely waste of time and money for the organization if the
organization fails to retain the employee.
The following categories fall under attrition:

 Voluntary retirement
 Death
 Dismissal
 Resignations
 Abandons
 Superannuation

Resignations is the key element which must be focused as the other elements are not much in
control, so the employer must bother regarding the resignations in the organizations. Resignations
plays a major role with regards to the term attrition, many of the top performers might be resigning
due to various reasons and figuring out those reasons involves greater effort. Once those reasons
are found it would be easy for the HR manager to think what has to be done to bring down the
attrition rate.

Employee retention has become a threat for the organizations in the current scenarios. Employees
once being trained has the tendency to move to other organizations for better prospects. Better
salary, flexible timings, growth, better ambience are some of the factors which makes an employee
to think of migrating from an organization to another. Whenever a top performer expresses his
willingness to move on, it is the responsibility of the management and the human resource
department to interfere and figure out the exact reasons leading to the decision.

Resignations might happen due to

 Work life balance

 Organizational culture
 No transparency in decisions and communications
 Higher studies
 Lack of growth opportunities
 Lack of recognition of individual performance
 Employee willing to shift to his/her hometown
 No complaint resolutions
 Lack of autonomy
  Unfair appraisals
 No futuristic orientations

These are the major reasons which a resigning employee gives to the employee, the organization
must understand what is lacking to make the employee’s experience better at the workplace.

1.1 CONSEQUENCES AT ITC PSPD:

ITC which is traditionally known for its Tobacco business is looking to diversify themselves into
Paper boards and specialty paper division (PSPD) as its flagship business which is due to enormous
growth opportunity that ITC has seen in this segment. ITC has seen the attrition rate climbing up
year by year, its high time for them to take a call with these regards. Being a major player in
paperboard and specialty paper division it is a concern for the organization employees leaving
within short span after joining.

With the reputation and its brand among the market, employees leaving the organization climbing
up year by year, it is very important for an organization to bank on its human capital. If the attrition
rate keeps on climbing up every year it turns out to be a serious threat for the organizations. When
it comes to financial the company is doing great, but the company has been failing continuously
in retaining their top performers. The management can spend some part of their profits to make
the employee’s experience better than ever.

The attrition rate at ITC PSPD has gone up by 8% in the year 2018-19, and the employees leaving
the organization has been found majorly in a level and at a location.

To figure out the factors affecting to the attrition, human resource management at ITC PSPD has
made a decision to focus on the employee feedback seriously, on which the reasons causing to the
resignations can be captured and corrective measures can be taken accordingly to make ITC PSPD
a better place to work and make the employee’s experience better than ever.

1.2 Meaning of Attrition:

In general attrition is the process of reducing something’s strength or effectiveness through

sustained attack or pressure. But with regards to Human Resource Management attrition refers to
the phenomenon of the employees leaving the company or reduction of staff voluntary or
involuntary reasons which can be through natural means like retirement, or it can be through
resignation, termination of contract, or when a company decides to make a position redundant.
Attrition in a company is usually measured with a metric called attrition rate, which simply
measures the no of employees moving out of the company (voluntary resigning or laid off by the
company).

Many of times it is found that people fail to understand the difference between attrition and
turnover, Attrition occurs when an employee retires or when the employer eliminates the position.
The big difference between the two is that when turnover occurs, the company seeks someone to
replace the employee. But in the case of attrition, the employer leaves that vacancy unfilled or
eliminates that job role.

How to calculate Attrition?

 Plug the numbers into the following formula: Attrition Rate = Number of
Attritions/Average Number of Employees *100.
 For example, suppose a telecommunications company had 150 employees as of April 1,
2015. During that month, 20 employees voluntarily left the company. Also, the company
hired 25 new employees.
 First, calculate the average number of employees. The beginning number was 150. If 20
people left and 25 people were hired, then the ending number was 155. The average number
of employees for that month can be calculated with the equation (150+155)/2=152.5
 Next calculate the monthly attrition rate. In this month, 20 people left, and the average
number of employees was 152.5. The monthly attrition rate can be calculated with the
equation (20/152.5)*100=.1311*100=13.11}
 The attrition rate for April, 2015 was 13.11 percent.
CHAPTER 2
2.1 Industry Profile:

Paperboard and specialty packaging division (PSPD)

Market Overview:

The market for paperboard packaging is expected to expand at a CAGR of more than 4.5% during
the forecast period of 2019–2024. Major factors driving the market studied are the growth in e-
commerce sales and increasing demand for folded carton packaging. However, availability of
high-performance substitutes is expected to hinder the growth of the market studied.

 Advancement in packaging machinery and paper converting equipment is likely to act as

an opportunity in the future.
 Asia-Pacific dominated the market across the world with the largest consumption in 2018.

By product of paperboard and packaging includes:

 Corrugated and solid fiber boxes

 Folding paperboard boxes
 Set-up paperboard boxes

By end-user the industry will be:

 Food and beverage

 Non-food non-durable goods
 Durable goods
 Manufacturing

Key Market Trends in Paperboard and specialty packaging industry:

Increasing Demand from Food and Beverage

 The food and beverage industry is the largest end user for the paperboard packaging market
and accounts for more than half of the global market share.
 The food and beverage industry majorly utilizes coated unbleached boards for packaging
of beverages, and corrugated container boards for packaging of fruits, vegetables, and food
 products. The acceleration of frozen foods is likely to drive the demand for folding carton
packaging.
 Change in lifestyle and a growing young population lead to a higher demand for branded
and packaged substances.
 According to the Flexible Packaging Association, the beverage sector in the United States
accounted for nearly 50% of the packaging market. Currently, over 30% of the Americans
order food twice a week, and this is expected to grow at 3% in the coming years.
 Moreover, on-the-go consumption, in countries like India, China, Japan, is further fuelling
the demand. In countries, such as China and India, the food and beverage demand is always
on a higher side, which is subsequently driving the paperboard packaging market.
 Such positive growth in the food and beverage industry is expected to increase the demand
for paperboard packaging during the forecast period.
Major players in Paperboard and Packaging industry are:

 ITC Limited
 Tamil Nadu Newsprint and Papers Limited
 J K Paper Limited
 Seshasayee Paper and Boards Limited
 NR Agarwal Industries Limited

Asia-Pacific Region to Dominate the Market:

 The Asia-Pacific region holds significant potential for development, in terms of the most
prospective countries.
 In terms of consumption, in 2018, Asia-Pacific held a significant market share, followed
by Europe.
 Whereas, North America is expected to display a sluggish growth in the global paperboard
packaging market, as the market is matured in this region.
 There has been an increasing migration of rural population to cities, which is likely to
reinforce the consumption patterns of packaged food.
 It is predicted that nearly two-thirds of the people across the world may live in cities in the
coming years.
 The Asia-Pacific paperboard packaging market is also expected to grow at a high rate,
owing to emerging food and beverage, electronics, cosmetics, and pharmaceutical
industries, due to economic development.
2.2 Company Profile:

ITC Limited is established in 1910, under the name of Imperial Tobacco Company of India
Limited, as the company’s ownership progressively Indianised the name of the company was
changed to Indian Tobacco Company in 1970 and then to I.T.C Limited in 1974. In recognition of
the ITC’s multi-business portfolio encompassing a wide range of businesses the full stops in the
company’s name were removed effective September 18, 2001. The company now stands
rechristened ‘ITC Limited’ where ‘ITC’ is today no longer an acronym or initialized form.

The Company's beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the
centre of the Company's existence. The Company celebrated its 16th birthday on August 24, 1926,
by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road)
Kolkata, for the sum of Rs 310,000. This decision of the Company was historic in more ways than
one. It was to mark the beginning of a long and eventful journey into India's future. The Company's
headquarter building, 'Virginia House', which came up on that plot of land two years later, would
go on to become one of Kolkata's most venerated landmarks.

Though the first six decades of the Company's existence were primarily devoted to the growth and
consolidation of the Cigarettes and Leaf Tobacco businesses, ITC's Packaging & Printing Business
was set up in 1925 as a strategic backward integration for ITC's Cigarettes business. It is today
India's most sophisticated packaging house.

The Seventies witnessed the beginnings of a corporate transformation that would usher in
momentous changes in the life of the Company. In 1975, the Company launched its Hotels business
with the acquisition of a hotel in Chennai which was rechristened 'ITC-Welcomgroup Hotel Chola'
(now renamed My Fortune, Chennai). The objective of ITC's entry into the hotels business was
rooted in the concept of creating value for the nation. ITC chose the Hotels business for its potential
to earn high levels of foreign exchange, create tourism infrastructure and generate large scale direct
and indirect employment. Since then ITC's Hotels business has grown to occupy a position of
leadership, with over 100 owned and managed properties spread across India under four brands
namely, ITC Hotels - Luxury Collection, WelcomHotels, Fortune Hotels and WelcomHeritage.
ITC Hotels recently took its first step toward international expansion with an upcoming super
premium luxury hotel in Colombo, Sri Lanka. In addition, ITC Hotels also recently tied up with
RP Group Hotels & Resorts to manage 5 hotels in Dubai and India under ITC Hotels' 5-star
'WelcomHotel' brand and the mid-market to upscale 'Fortune' brand.

In 1979 ITC Limited has expanded into Paperboard and Specialty Papers and which was
consolidated and expanded in 1990 and later ITC entered into Agri Business strengthening
farmers’ linkages and in 2000 into Lifestyle Retailing and information technology

To sum it up ITC at present is into:

 Fast Moving Consumer Goods

 Paperboards and Packaging
 Agri Business
 Hotels
 InfoTech

ITC’s E-Choupal program is the world’s largest rural digital infrastructure empowering 4 million
farmers. The e-Choupal model has been specifically designed to tackle the challenges posed by
the unique features of Indian agriculture, characterized by fragmented farms, weak infrastructure
and the involvement of numerous intermediaries, among others.

E-Choupal also unshackles the potential of Indian farmer who has been trapped in a vicious cycle
of low risk taking ability > low investment > low productivity > weak market orientation > low
value addition > low margin > low risk taking ability. This made him and Indian agribusiness
sector globally uncompetitive, despite rich & abundant natural resources.

Such a market-led business model can enhance the competitiveness of Indian agriculture and
trigger a virtuous cycle of higher productivity, higher incomes, enlarged capacity for farmer risk
management, larger investments and higher quality and productivity.

Further, a growth in rural incomes will also unleash the latent demand for industrial goods so
necessary for the continued growth of the Indian economy. This will create another virtuous cycle
propelling the economy into a higher growth trajectory.
Launched in June 2000, 'e-Choupal', has already become the largest initiative among all Internet-
based interventions in rural India. 'e-Choupal' services today reach out to over 4 million farmers
growing a range of crops - soyabean, coffee, wheat, rice, pulses, shrimp - in over 35000 villages
through 6100 kiosks across 10 states (Madhya Pradesh, Haryana, Uttarakhand, Uttar Pradesh,
Rajasthan, Karnataka, Kerala, Maharashtra, Andhra Pradesh and Tamil Nadu).

The problems encountered while setting up and managing these 'e-Choupals' are primarily of
infrastructural inadequacies, including power supply, telecom connectivity and bandwidth, apart
from the challenge of imparting skills to the first time internet users in remote and inaccessible
areas of rural India.

Several alternative and innovative solutions - some of them expensive - are being deployed to
overcome these challenges e.g. Power back-up through batteries charged by Solar panels,
upgrading BSNL exchanges with RNS kits, installation of VSAT equipment, Mobile Choupals,
local caching of static content on website to stream in the dynamic content more efficiently, 24x7
helpdesk etc.

Another path-breaking initiative - the 'Choupal Pradarshan Khet', brings the benefits of agricultural
best practices to small and marginal farmers. Backed by intensive research and knowledge, this
initiative provides Agri-extension services which are qualitatively superior and involves pro-active
handholding of farmers to ensure productivity gains. The services are customized to meet local
conditions, ensure timely availability of farm inputs including credit, and provide a cluster of
farmer schools for capturing indigenous knowledge. This initiative, which has covered over 64,000
hectares, has a multiplier impact and reaches out to around 70,000 farmers.

ITC Corporate Governance:

 Management must have the executive freedom to derive the enterprise

 Freedom of management should be exercised within a framework
 Trusteeship, transparency, ethical corporate citizenship and control accountability
Governance structure is as follows

 Strategic Supervision – Board of directors

 Strategic Management – Corporate Management headed by CEO
 Executive Management – Divisional chief executives

Remuneration Policy of management staff is:

 Business specific
 Reviewed and revised periodically
 Variable pay of annual performance bonus
 ESOP’s at middle and senior levels

Remuneration Policy of non-management staff is:

 Business specific
 Through negotiations with recognized trade union

ITC Limited code of conduct:

 Good corporate governance

 Good corporate citizenship
 Exemplary personal conduct in relation to company’s business and reputation

ITC Limited also has a risk management committee:

 Headed by CEO – Chairman

 Executive directors
 Senior members of management
ITC PSPD

ITC’s leadership position in the value-added Paperboards segment in India is anchored on the
popularity of its array of brands that caters to a wide spectrum of innovative packaging, graphic
and communication requirements. ITC’s B2B brands like Cyber XLPac, Safire Graphik, Carte
Lumina, Omega Barr, IndoBev, Neo WhiteBliss , Pharma Print and Opaque Tissue, among others,
are differentiated products meant for specific packaging and graphic usages and today enjoy top
of mind recall for their distinct print and performance qualities. This range of superior offerings is
manufactured at ITC’s world-class Paperboards facilities, which represent the most environment
friendly pulp mills in India.

ITC PSPD mills are in Bolaram – Telangana, Sarapaka – Telangana, Thekkampathy – Coimbatore,
Tribeni – West Bengal.
CHAPTER 3
3.1 Need and importance of the study:

As HR managers one of the prime duties is to keep a track of attrition. The rate at which employees
leave impact the organization drastically. This intermittent exit by employees is known as attrition.
And this phenomenon has become a serious concern in ever management.

Attrition rate has always been sensitive issue for all the organizations. Attrition not only affects
the business but also the brand image of a company. A company that has a high attrition rate is not
always a sought after enterprise by job seekers. The reason can vary from numerous ranging from
low remuneration to zero benefits. The need for attrition analysis is a must as it assists HR
managers to ascertain reasons for employee exits.

Attrition analysis – Why is it must in every organization?

Attrition was not taken seriously until recently the late 90’s when companies began facing a
shortage of talent. People leaving organizations after a span of 6 months to a year was no joke and
required serious deliberation. However, one reason that industrial psychologists suggested was –
competition. Through attrition analysis it was found that if company A offer good perks and better
opportunities than company B, it is a natural tendency of humans to seek greener pastures. Thus,
HR managers began working on promoting company values

Attrition analysis contributes to the details generated by HR managers on employees leaving the
company. The metrics offer accuracy in terms of the reasons given by employees themselves.
Apart from this, a wider avenue for change and dynamism also emerges from analysis of attrition.

Some of the benefits of attrition analysis are as listed below:

1. It brings to fore the cause of employee disengagement

2. Enable HR managers develop long-term strategies to reduce attrition
3. Competitive measures to enhance company brand image
4. Develops and shades drills that benefit both the management and the employees
5. Enhanced work culture
6. To understand the needs and wants of the employees
With regards to ITC PSPD division there is a need to focus on the attrition due to the number of
employees leaving the company is high and is a serious threat to the company, so the unit is
concerned with regards to the attrition rate going up year by year.

Even though the unit is doing well in terms of revenue but the unit has been failing badly in order
to bring down the attrition rate. Thus, there is a need to study the reasons and understand why the
attrition rate is going up year by year and implement necessary actions in order to bring down the
attrition rate and make the organization a better place to work.

It is also necessary to understand each and every reason causing for the resignation of the employee
and assess the impact created by the factors and understand the relationship, analyze and evaluate
the factors causing for the attrition rate.

3.2 Objectives of the study:

The objectives of this study are to find out

 To understand the factors causing to Attrition

 To know the relationship and impact of Work Life Balance on Attrition
 To analyze the impact of Recognition of Individual Performance on Attrition
 To evaluate the impact of Transparency of decisions and communications on Attrition

3.3 Scope of the study:

The study of my project includes 5 locations of ITC PSPD:

1. Badrachalam
2. Bolaram
3. Tribeni
4. Kovai
5. DHQ & Branches
And also my study includes all those employees who belong to the levels like:

 Level 3
 Level 4
 Level 5
 Level 6
 Level 7

Note: Of which Level 3 being the top level employees and Level 7 being the low level managers

And my study includes all the functions involved in ITC PSPD unit, they are

 Business Excellence
 Finance
 Human Resource
 Marketing and Sales
 Plantations
 Projects
 Raw Materials
 Technical
 Materials

Note: all the functions are classified into 8 as mentioned above

 The study is made out of the data of the employees resigning from the organization in the
financial year 2018-19
 The exit process of ITC PSPD unit includes mainly 3 reports:
1. Unit Report
2. Exit Interview
3. Employee Feedback
Limitations of the study:

 The study is based on the employee’s feedback, exit interview and unit report – the
employee’s might play a safe game by just being positive about the organization but in
reality they don’t feel so.
CHAPTER 4
Literature Review:

Attrition is a critical issue and pretty high in the industry these days. It’s the major problem
which highlights in all the organizations. Though the term ‘ATTRITION’ is common, many would
be at a loss to define what actually Attrition is, “Attrition is said to be the gradual reduction in
the number of employees through retirement, resignation or death. It can also be said as
Employee Turnover or Employee Defection” Whenever a well-trained and well-adapted
employee leaves the organization, it creates a vacuum. So, the organization loses key skills,
knowledge and business relationships. Modern managers and personnel administrators are
greatly interested in reducing Attrition in the organization, in such a way that it will contribute
to the maximum effectiveness, growth, and progress of the organization. Retaining employees
is a critical and ongoing effort. One of the biggest challenges in having managers in the place
that understands it is their responsibility to create and sustain an environment that fosters
retention. Staff requires reinforcement, direction and recognition to grow and remain satisfied
in their positions. Managers must recognize this and understand that establishing such
fundamentals demonstrates their objectives to support nature and motivate their employees.
This study is an outcome of the topic called “A Study on Employee Attrition and Retention in
Manufacturing Industries in Nellore District, Andhra Pradesh”. The main objectives of this study
is to know the reasons, why attrition occurs, to identify the factors which make employees
dissatisfy, to know the satisfactory level of employees towards their job and working conditions
and to find the areas where manufacturing industries in Nellore District is lagging behind.
(Lavanya, 2019)

Despite several studies carried out on employee retention, the strategic human resource
researchers are still investigating the causal mechanisms between HR practices and firm’s
performance mostly related to voluntary turnover as a critical component. (Shaw, 2005)

Employee retention plays a vital role in bridging the gap between the macro strategies and
micro behavior in Organizations. This is because it ensures stability and connects the
experiences of individuals in Organizations on a continuous basis to the critical measures of
success factors in the Organization. The decision of leaving the Organization is not easy for an
individual employee as well as significant energy is spent on finding new jobs, adjusting to new
situations, giving up known routines and interpersonal connection and is so stressful. (Boswell,
2005) (Boudreau, 2005) (Tichy, 2005).

Key employees, who have done amazing in their education and are hardworking, always feel
the need to be rewarded and recognized for their performance in the organization. Their
enthusiasm to work and perform better depends a lot on the organizations‟ way of rewarding
and recognizing them. So, if an organization has an environment that provides prospects for
further development and self-actualization, this would reduce the chances of an employee
leaving the organization. (Arthur, 1994)

Human Resource is considered to be the most valuable asset in an Organization. It continues to

play, even in the computer age, when everybody feels that men have a little role to play. It is
true that computer, to some extent, does play a role, but programming and feeding such
programme require manual operations. In other words, the application of manpower has no
substitute and therefore, it has a continuous role to play. The main problem against the
manpower development is attrition. The rate of attrition is increasing every day so that
production and profit decrease. Noteworthy is the continuously growing rate of attrition among
the IT, ITES and other Software based companies. This has made the companies to take up
research studies based on their employees, especially to identify the factors of attrition. This
research helps to know about the employees' attitude towards the company and the work, also
highlighting various other direct and indirect effects of attrition on production, cost, discipline
and efficiency in the industry. (K, 2011)

An issue that every company deals with is attrition. Sales being an especially high attrition
function makes this analysis paramount. Sales attrition is a result of several components
including un optimized sales compensation, unrealistic quotas, ineffective mentoring, career-
path ambiguity, training inefficacy or just bad recruiting. Hence the ability to slice and dice sales
attrition many ways to understand trends and their root-causes can seriously help sales
leadership make the required changes to build a healthier more performing sales force.
Numerically analyzing attrition is a bit tricky. This stems from the fact that the base of
employees is continually in flux. Every month new hires join the sales force, some employees
are involuntarily terminated, some voluntarily leave the company and some others go inactive
without leaving the company like when they go for a long-term leave of absence. Additionally
quality of attrition is important. Let's say two companies of about the same size lose about 25
salespeople a month. Are they experiencing the same problem? What if one company is losing
more experienced salespeople whereas the other was losing mostly salespeople only 2-3
months in the company. Both these companies have wildly different problem. The first one may
have an issue like their sales compensation program not rewarding top performers enough but
the other one may have a recruiting issue since new hires are probably not relating their job to
what they were told during recruiting.

There are myriad ways in which we can slice attrition. In this blog we'll list a few methods:

Attrition rate

The rate of attrition or the inverse retention rate is the most commonly used metric while
trying to analyze attrition. The attrition rate is typically calculated as the number of employees
lost every year over the employee base. This employee base can be tricky however. Most firms
just use a start of year employee count as the base. Some firms calculate it on a rolling 12
month basis to get a full year impact. This ratio becomes harder to use if your firm is growing its
employee base. For example, let's say on Jan 1st of this year there were 1000 employees in the
firm. Over the next 12 months we've lost 100 employees. Is it as straight forward as a 10%
attrition rate Where it gets fuzzy is how many of those 100 employees that were lost were in
the seat on Jan 1st. were all the 100 existing employees as of Jan 1st or were they new hires
during the year that termed. Hence the attrition rate must be looked at in several views. (Pillai,
2014)
A major problem in high employee attrition is its cost to an organization. Job postings, hiring
processes, paperwork and new hire training are some of the common expenses of losing
employees and replacing them. Additionally, regular employee turnover prohibits your
organization from increasing its collective knowledge base and experience over time. This is
especially concerning if your business is customer facing, as customers often prefer to interact
with familiar people. Errors and issues are more likely if you constantly have new workers.
(Sharma, 2018)

In today's competitive business environment, the impact of attrition on a business can be

detrimental to both the bottom line and morale. Attrition can involve the loss of employees or the
loss of customers. Either employee turnover or failure to retain customers over time can
challenge managers. To decrease attrition, managers must understand the causes of customer and
employee turnover, the costs associated with attrition, and finally, institute measures to reduce
attrition rates.

Costs of Customer Attrition

Companies budget for marketing every fiscal year. Built into that budget are costs to acquire new
customers and a forecast of revenue that the company expects from customers. Any percentage
in turnover of customers will impact the bottom line. Whenever a company loses customers,
money must be spent on such things as marketing and staffing to acquire new customers.
Customer attrition costs will ultimately decrease the company's annual rate of growth.
Conversely, retention of customers has a positive effect on revenue and long-term corporate
growth.
Costs of Employee Attrition

The costs of employee attrition range from quantifiable numbers to hidden costs. When
employees resign from companies, costs are incurred in recruiting new employees and training
them. Productivity will be lower until new hires learn the business. If it is a customer-based
business, customers could be dissatisfied if the new hire is not proficient. The business could
lose customers who are dissatisfied with service. Revenue would decrease. (Gray, 2014)
Employee attrition & retention is manifestation of employee movement in an organization,
which is deliberated by researcher in HR. They are two sides of same coin. Employee attrition &
retention may be result of the negative or positive influence of the various factors (Zhang, 2005).
There is a sea change in the needs and wants of the employees. Their expectation can be
expressed as their wish to be employed as a place to work to that of being employed at a Great
place to work. The organizations that are able to cope up with these typological alterations of
employee profile will be able to improve employee commitment, reduce attrition and hence will
be able to retain their employees.

An organizations‘human capital core is comprised of the talented employees, making it

significant to highlight their turnover behavior influence on an organization‘s competitive
advantage (Lee and Steven, 1997; Shaw, 1999; HoukesInge, 2001). The academicians,
researchers and practitioners have been continuously focusing on the facts that the increased
attrition not only hampers the productivity of the organization, but also increases the cost of
recruiting, training the new entrants. It also creates a negative image with reference to employer
branding in the minds of the prospective employees about the kind of organization. Hence, if the
issue of attrition and retention not handled effectively, it not only sets the organization for talent
crunch but will also reduce the pool of talented prospective employees, which may give its
competitors an added advantage. (Sharma S. , 2013)

(Mobley, 1977) Has defined employee turnover as a situation where an employee is engaged in
a particular role in an organization and then leaves the organization after a certain point of time.
(Hollman, 2000) Have defined employee turnover by categorizing it into two categories:
voluntary and involuntary. Voluntary turnover is usually when employees leave and join the
competitors and of course it also results in transfer of the intellectual capital to the competitive
organization. On the other hand involuntary turnover denotes dismissal of employees.
The significance of managing the human capital or the talent pool has always come in the
picture. No matter what the industry is, no industry can afford to lose its employees at a faster
rate. And this is the reason why employee turnover or employee attrition has caught the attention
of researchers from epochs. No doubt a lot has been worked on this, but still t ill date the issue of
attrition is unmanageable. Managing attrition is an intimidating task for almost all the industries
and it is even for difficult for the service industries. The reason being, these industries are highly
dependent on their talent for generating high quality knowledge for their business operations and
of course profitability, which is the ultimate objective of every organization. These industries
revolve around employees and moreover, growth of the service industries is highly dependent on
its employees. So, an increase in the attrition rate, hampers their performance.

Men, Money, Machine and material are the well-known resources that an organization possesses.
Managing assets is crucial for every organization and organizations have realized that the most
crucial asset or resource that they have is their “human capita l”. Anything that generates wealth
is termed as a capital and there is no doubt on the fact that human resource of any organization
are at par with the capital, because they generate value and capital for the organization.

A plethora of studies have been conducted in the past which have talked about attrition. Existing
literature fortifies the prominence of understanding the entire concept of attrition – its reasons,
factors and ways of overcoming or at least reducing it. It is a big time concern which requires
strategies to be framed at the organizational level and departmental level. Conducting surveys or
research would not serve the purpose, till the time the practitioners take these results and
incorporate them in their organization.

In order to maintain a dependable talent pool, organizations need to work hard to understand the
causes behind attrition. Employees have the knowledge, skills and the bargaining power. They
can switch to companies which offer them better prospects. It is now becoming difficult for
companies to identify what can help in reducing attrition. Compensation or any other monetary
benefit is not just the only key factor. Researchers have identified organization’s culture, job
role, relationship with subordinates and superior, recognition, etc. to be the factors that affects
attrition across industries.

High attrition thus raises questions on a wider level, ranging from companies policies to their
culture and other practices. Every individual is different and so is their reason to stay in an
organization or leave an organization. These reasons vary with age, experience and family
responsibilities. Problem of attrition occurs when employees leave their jobs for some reasons.
This means that employees would not leave their job if those reasons would be eliminated. This
might sound simple and easy, but it has taken decades of research to understand attrition and
organizations are still struggling to deal with it. (Mehta, 2017) (Madan, 2017)

In the book Human Resource Management , Chapter number 16- Labor Problem , page number
16.1 -16.5 the author has explained that Labor turnover is a serious problem among the industrial
workers not only in India but in the whole universe. When an employee moves, shifts or migrates
from one organization to another organization it is called as employee turnover.
Moving from one organization to another organization for a better and comfortable payment and
a decent job is a natural tendency of every employee and this leads to 38 employee turnover. The
author describes that if the employee turnover is up to five percent it is tolerable but when it
exceeds this limit it creates serious problems for an organization and it should be properly
studied.
Employee turnover is the indicator and warning about the health of an organization that
something is wrong with it but it does not explain the reason behind it .It does not diagnose the
disease of an organization ,but just indicates about poor health and hence it must be properly
studied by the management
. High employee turnover may be due to many reasons such as poor plans and policies, poor
personal practices or poor supervision and so on. It is also an indicator of low morale.
Learning
The author has explained that labor turnover is a serious problem among the industrial workers
not only in India but in the whole Universe. It is an indicator of poor health of an organization
and should be properly studied. It may be due to poor plans and policies, poor personal practices
or poor supervision and low morale among employees are the major reason of employee
turnover. (Seetharaman.S, 2007)

Saiyadain Mirza S., Tripti Pande Desai (2007) describes in chapter one -Human Resource
Management in 21st Century of his book Emerging Issues in Human Resource Management , An
Indian perspective that retaining talented employees is a leadership issue . Authors focus on
Human resource strategies and suggest some measures to retain employees and reduce attrition.
Lack of clarity of the policies, discrimination, and lack of effective management are the major
factors of employee attrition. Employee attrition can be reduced by a flexible approach of the
management.
There are various measures by which a management can retain its skilled employees such as
attractive salary and benefit package, providing training and development programmes and
providing opportunities for their growth so that employees can face the new challenges and feel
value for them. These factors are very important for reducing attrition of skilled employees.

Learning
The author describes that lack of clarity of the policies, discrimination, and lack of effective
management are the major factors of employee attrition. (Saiyadain Mirza S., 2007)

References:

Works Cited
Arthur. (1994).
Boswell. (2005).
Boudreau. (2005).
Gray, C. (2014). The Impact of Attrition on a Business.
Hollman, A. a. (2000).
K, C. (2011).
Lavanya, D. L. (2019). A STUDY ON EMPLOYEE ATTRITION AND RETENTION IN
MANUFACTURING.
Madan, P. (. (2017). A Comprehensive Literature Review on Employee Attrition.
Mehta, M. M. (2017). A Comprehensive Literature Review on Employee Attrition.
Mobley. (1977).
Pillai, S. (2014). HOW TO ANALYZE EMPLOYEE ATTRITION - HR ANALYTICS. incentius.
Saiyadain Mirza S., T. P. (2007). Emerging Issues in Human Resource Management, .
Seetharaman.S, B. V. (2007). Human Resource Management, . Scitech Publications (India) Pvt.
Ltd., .
Sharma, N. (2018). People Analytics with Attrition Predictions. towardsdatascience.
Sharma, S. (2013). REVIEW OF LITERATURE ON FACTORS INFLUENCING ATTRITION
AND RETENTION.
Shaw, G. a. (2005).
Tichy. (2005).
CHAPTER 5
5 ANALYSIS AND INTERPRETATION:

Trend Line showing Resignations from the past 3 years

96
94
94
92
90
88 87
86 85
84
82
80
78
2016-17 2017-18 2018-19

LEVEL WISE EMPLOYEE RESIGNATIONS:

Level 2016-17 2017-18 2018-19

L3 (PP11-12) 1 2 1

L4 (PP9-10) 0 1 0

L5 (PP6-8) 9 9 27

L6 (PP4-5) 47 48 44

L7 (PP1-3) 28 27 22

TOTAL 85 87 94
 DEMOGRAPHIC WISE COUNT OF RESIGNATIONS:

YEAR TOTAL MALE FEMALE

2016-17 85 74 11

2017-18 87 73 14

2018-19 94 85 14

LOCATION WISE RESIGNATIONS COUNT

LOCATION WISE 2016-17 2017-18 2018-19

BCM 45 56 44
DHQ 11 5 19
TRB 12 16 18
KOV 13 7 14
BOL 4 3 1
TOTAL 85 87 94
 EXITING MANAGER FEEDBACK - DIMENSIONS RATED 1 AND 2 BY
RESIGNEE (EMPLOYEE FEEDBACK)
% OF PEOPLE WHO
Dimensions rated by the exiting manager GAVE DIMENSIONS
Rating :1 and 2
Work-life balance 37%
Recognition of individual performance 19%
Transparency of decisions and communication 19%
Complaint resolution 11%
Opportunity to offer feedback and suggestions 11%
Opportunities for individual and career growth 10%
Fairness of treatment 10%
Concern for employees 10%
Level of cooperation and trust at the workplace 10%
Futuristic orientation 8%
Appropriate support from your manager 7%
Level of engagement at the work place 5%
Organisation- wide teamwork and collaboration 5%
Autonomy at work 4%
Organisation's image and reputation 0%

Rating Stands for

1 Poor
 Needs
2 improvement
3 Satisfactory
4 Excellent
FUNDAMENTAL REASONS OF EXIT
 FUNDAMENTAL REASON OF
TOTAL L-7
EXIT

Location constraint/Near hometown 14 8

Issue with remuneration 15 7

Higher studies 13 4

Lack of growth 7 4
FUNDAMENTAL REASON OF
Role issue TOTAL
7 L-6
3
EXIT

Higher studies 13 7

Personal reason/Own business 13 7

Issue with remuneration 15 6

Better job opportunity 9 6

Location constraint/Near hometown 14 5

FUNDAMENTAL REASON
TOTAL L5
OF EXIT

Personal reason/Own business 13 6

Role issue 7 4

Better job opportunity 9 3

Higher studies 13 2

Issue with remuneration 15 2

POSITIVE EXPERIENCES – TOP – AT VARIOUS LEVELS

POSITIVE EXPERIENCES TOTAL L-7

Learning opportunities 51 14

Peer support 22 5

Positive social life 8 4

Good accommodation at mill 3 3

Autonomy 14 2

POSITIVE EXPERIENCES TOTAL L-6

Learning opportunities 51 22

Peer support 22 12

Good organization culture/ Work

8 5
culture

Team support/Team work 8 4

Positive social life 8 3

POSITIVE
TOTAL L-5
EXPERIENCES

Learning opportunities 51 15

Autonomy 14 9

Peer support 22 5

Team support/Team
8 3
work

Good superior
4 3
subordinate relation
 LEVEL WISE – NEGATIVE EXPERIENCES

NEGATIVE EXPERIENCES TOTAL L-7

Unfair appraisals 6 3

Work Life balance 11 3

Additional responsibilities 6 2

Isolated 2 2

Issue with remuneration 7 2

NEGATIVE EXPERIENCES TOTAL L-6

Work Life balance 11 6

Lack of growth opportunities 11 5

TPM/Excess documentation 6 5

Issue with remuneration 7 3

Lack of support and guidance from

department/Immediate 6 3
superior/Support to shift in charge
NEGATIVE EXPERIENCES TOTAL L-5

Lack of growth opportunities 11 5

Lack of transparency in promotion

7 3
policy/Communication policy

Work Life balance 11 2

Issue with remuneration 7 2

Lack of support and guidance from

department/Immediate superior/Support to shift in 6 2
charge
SIGNIFICANT INSIGHT FROM EMP FEEDBACK – LEVEL WISE

EMP FEEDBACK TOTAL L7

Job rotation 2 2

Better opportunity 1 1

Excess documentation 1 1

Focus on employee wellness 1 1

Good work culture 1 1

EMP FEEDBACK TOTAL L6

Mentoring/Training 2 1

Food availability 1 1

Good working experience 4 1

Higher studies 1 1

Issue with remuneration 2 1

EMP FEEDBACK TOTAL L5

Good working experience 4 3

Role clarity/Grade issue 2 2

Issue with remuneration 2 1

Work life balance 2 1

Lack of growth opportunities 1 1

 INTERVIEWER ASSESSMENT – LEVEL WISE

Interviewer
TOTAL L-7
Assessment

Closer to hometown 12 5

Issue with
7 5
remuneration

Family
13 4
reason/Personal reason

Career growth 7 3

Higher studies 12 3

Interviewer Assessment TOTAL L-6

Higher studies 12 6

Better opportunity 11 6

Family reason/Personal reason 13 5

Closer to hometown 12 4

Issue with remuneration 7 1

Interviewer Assessment TOTAL L-5

Family reason/Personal reason 13 4

Higher studies 12 3

Better opportunity 11 3

Closer to hometown 12 3

Career growth 7 3