2 HONEY Introduction

&
Turnover is of considerable concern to managers because it disrupts normal operations and necessitates the costly selection and training of replacements, the costly hiring and training the new employee to regain the lost customer and supplier contacts. Employee retention is obviously one of the most important challenges in organizations ability to keep employees in the organization and avoid unwanted turnover. Employees who have relatively low levels of satisfaction are indeed the most likely to quit their jobs. In addition, organizational units with the lowest average satisfaction levels tend to have the highest turnover rates. Not many companies seem to understand and focus on retention until it's too late. Key employee retention is critical to the long term health and success of company business. If companies are losing critical staff members, they can safely bet that other people in their departments are looking as well. Managers readily agree that retaining the employees ensure customer satisfaction, product sales, satisfied coworkers and reporting staff, effective succession planning and deeply imbedded organizational knowledge and learning. How to create an environment that makes employees want to stay. It's not always about money. Recognition programs, feeling valued and the employees' senses of worth to their employers are some factors in motivation. For a variety of reasons, managers also are interested in the satisfaction of members of their organization. It can affect employee commitment to the job and organization, employees willingness to do more than is required, their creativity or flexibility. It can also affect absenteeism and turnover. Employee turnover or resign could disrupt normal operations and necessitates the costly selection and training of replacements. Reducing employee turnover required the management efforts of companies.
Its Engineering College, Greater Noida
&
Attrition is a universal phenomenon and no industry is devoid of it, but the degree fluctuates from industry to industry on the basis of their capacity to manage low attrition rate. Attrition not only affects the quality of service, but also leads to increased expenditure on training and development, thereby affecting the overall organizational performance. Several companies are trying out different ways to manage low attrition rate. Be it an IT sector, or BPO, they are trying out their ways to manage lower rate of attrition by creating a healthy work environment, work-life balance, corporate brand building and so on. There is a famous Chinese proverb which says that If you want returns for 1 year, invest in crops. If you want returns for 10 years, invest in trees. But if you want returns for 100 years, invest in people Yes, it is the people who hold the attraction in todays highly competitive world. With increasing attrition levels, it is necessary to have creative retention strategies. Here in this Research, ATTRITION & RETENTION PROCESS is done on the WIPRO & TCS Company.
&
Wipro Company Profile
Azim H. Premji Our Chairman Azim H. Premji, senior executives of Wipro and external members who are global leaders and visionaries, form the Wipro Board of Directors which provides direction and guidance to the organization
What Wipro Does: transforming your business

Wipro IT Business, a division of Wipro Limited (NYSE:WIT), is amongst the largest global IT services, BPO and Product Engineering companies. In addition to the IT business, Wipro also has leadership position in niche market segments of consumer products and lighting solutions. The company has been listed since 1945 and started its technology business in 1980. Today, Wipro generates USD 6 billion (India GAAP figure 2009-10) of annual revenues. Its equity shares are listed in India on the Mumbai Stock Exchange and the National Stock Exchange; as well as on the New York Stock Exchange in the US. Wipro makes an ideal partner for organizations looking at transformational IT solutions because of its core capabilities, great human resources, commitment to quality and the global infrastructure to deliver a wide range of technology and business consulting solutions and services, 24/7. Wipro enables business results by being a transformation catalyst. It offers integrated portfolio of services to its clients in the areas of Consulting, System Integration and Outsourcing for keyindustry verticals.
&
Leadership at Wipro: building trust
With more than 100,000 associates from over 70 nationalities and 72 plus global delivery centers in over 55 countries, Wipros services span financial services, retail, transportation, manufacturing, healthcare services, energy and utilities, technology, telecom and media. Wipros unwavering focus has been on business transformation with matchless innovation in service delivery and business models. More than 800 active clients that include governments, educational institutes, utility services, and over 150 Global Fortune 500 enterprises have benefited from this approach.
Factsheet
Wipro is the first Indian IT Service Provider to be awarded Gold-Level Status in the Microsoft Windows Embedded Partner Program
Wipro is the worlds largest independent R&D Services Provider
Wipro is the world's first PCMM Level 5 software company
Wipro is one among the few companies in the world to be assessed at CMMI Level 5 for V1.2 across offshore and near shore development centers
World's first IT Services Company to use Six Sigma
&
The pioneers in applying Lean Manufacturing techniques to IT services
Wipro is the worlds first SEI CMM/CMMI Level 5 IT services company
The first to get the BS15000 certification for its Global Command Center
Functional RFID Enabled Concept Store and Global Data Synchronization Laboratory BS7799 and ISO 9000 certified
Among the top three offshore BPO service providers in the world
Wipro is a strategic partner to five of the top ten most innovative companies in the world* (*Technology Review Innovation Index 2005)
Over 50 industry specific Centers of Excellence'
108,071 employees
One of the most preferred employers for top class talent (Survey by Hewitt Associates, Fortune Magazine, and The RBL Group, 2007)
&
Awards
Wipro is one of the most recognized and respected companies worldwide and has been awarded with innumerable corporate awards for the various milestones and innovations achieved.
2010 Wipro featured in FinTech rankings on Top 25 Enterprise companies published by the American Banker and Bank Technology News, and IDC Financial Insights. Wipro's Identity and Access Management (IDAM) Solution - IDAMin-a-Rack has won the Global Product Excellence Award 2010 in the Identity Management Solution Category . Partner of the Year Award for Systems Integration, Applications and Middleware from Oracle. Outstanding Partner of the Year Award from Radware . Leadership Award in the Solution Partners Category by RSA, India. e Indus Towers Customer Award for Excellence in Delivery- Wipro was the only IT partner to receive an award from Indus. Bharat Gaurav Award, 2010 for Nagarajan A., VP, Business
&
Operations, Wipro Arabia for excellence in keeping Indian Flag high in other countries. Wipro receives Most Outstanding Alliance Partner of the Year Award in Asia-Pacific and Japan from HP. This is the third time in the last five years that Wipro Technologies has been recognized by HP Software and Solutions. Wipro Infotech is the Indian IT Company of the Year 2009. Springboard Research chooses Wipro for impressive revenue growth, client acquisitions and push towards Green technologies. Wipros CIGMA wins NASSCOM Award for Process Innovation as CIGMA enables customers to manage IT outsourcing engagements through business linked KPIs rather than traditional IT SLAs. CIGMA integrates cutting edge technology and process elements to deliver stability of the clients business platform at a lower cost. Wipro receives 2010 Global Impact Award from Metro Atlanta Chamber of Commerce for success in job creation and positive impact on Atlanta's economy in 2009 .
Wipro Group Companies

Wipro Consumer Care & Lighting Wipro Consumer Care and Lighting (WCCLG), a business unit of Wipro Limited, started with vegetable oil production in 1947 and has since come a long way and established a profitable presence in the
&
branded retail market. With a vast plethora of products spanning soaps, baby care products, health and wellness, Wipro's products have touched the lives of millions of consumers across India and global markets. It is also a leader in institutional lighting in specified segments like software, pharma Wipro EcoEnergy Wipro EcoEnergy, the renewable energy services arm of Wipro, is a one-stop shop for all the renewable and alternative needs of your organization. Our scope of work provides the entire range of sustainable and energy efficient solutions such as, Customized clean-energy solutions for institutional clients Energy Efficiency (reduce) and Renewable Energy (replace) Consulting, implementation and managed services We work on the industrial scale; our technologies are proven, have direct customer relevance, and are commercially viable. We are technology agnostic because we work on best technologies & recommend the same based on your unique environment. Wipro EcoEnergy provides clean and sustainable energy solutions for all kinds of spaces, from factories to institutions and from offices to homes. Wipro Infrastructure Engineering Wipro Infrastructure Engineering, a division of Wipro Limited, delivers precision-engineered, world-class hydraulic cylinders, components and solutions, and truck hydraulic components to OEMs
&
globally in the infrastructure and related industries. It represents the Kayaba, Kawasaki, Sun Hydraulics and Teijin Seiki range of hydraulic products in India. With state-of-the-art manufacturing facilities and extensive product development and testing facilities, Wipro Infrastructure Engineering has emerged as a leader in the hydraulic cylinders and truck tipping systems market in India. Wipro has recently entered water treatment business and provides ultra pure water treatment systems and solutions for various industries. Wipro GE Medical Systems Limited Wipro GE Medical Systems Limited is focused on delivering advanced solutions for significant challenges faced by healthcare organizations today. Wipro GE Healthcare, a joint venture between Wipro and GE, is part of GE Healthcare South Asia and caters to customer and patient needs with a commitment to uncompromising quality. We successfully manage a continuum of clinical information across the entire enterprise and our highly energized team provides superior customer and patient satisfaction, maximizing customer productivity with Six Sigma quality and uncompromising integrity.
Wipro Services
1- Business Technology Services 2- Enterprise Application Services 3- Infrastructure Management Services
&
4567Business Process Outsourcing Product Engineering Services Enterprise Technology Integration Total Outsourcing
Delivering strategic BPO services and solutions that match the high stakes
Business Process Outsourcing optimizes business performance to attain value creation. There has been a tremendous upsurge in the outsourcing industry in many developing countries, like India which aid in reducing costs and increasing service quality. Wipro Business Process Outsourcing (BPO) is a leading provider of BPO services focusing on the complex, voice and non-voice based segment of customer-care services. The integrated solution approach provides enhanced value to the customers through process standardization, process simplification and process optimization. Customer services are provided from outsourcing companies in North America, Central and Eastern Europe, India, China and Latin America. Enterprise BPO The technology dependency across industry domains has increased with each passing year. At Wipro BPO we have leveraged our range of enterprise services to enable diverse domains meet existing technology and functional requirements. Our best-in-class solutions provide you with a platform to take your enterprise to the next level of operational excellence.
10
&
Domestic BPO With nearly 500 players, Indias domestic business process outsourcing (BPO) market is set to touch USD 6.82 billion (around Rs 31,700 crore) by 2013. The domestic BPO market is evolving into third-party transformational outsourcing relationships from the existing captive dominated market structure. This implies that rather than merely running isolated processes for customers, BPOs would engage more deeply to identify and transform core business processes to add greater market value in the creation and delivery of end products and services
Tata Consultancy Services (TCS) Company Profile
Shri Ratan Tata (Chairman) Heritage and Values Established in 1968, Tata Consultancy Services has grown to its current position as the largest IT services firm in Asia on the basis of its outstanding service record, collaborative partnerships, innovation and corporate responsibility. We are proud of our heritage as part of the Tata Group, which founded by Jamsetji Tata in 1868 is one of Indias most respected institutions today.
11
&
Our mission reflects the Tata Group's longstanding commitment to providing excellence: To help customers achieve their business objectives by providing innovative, best-in-class consulting, IT solutions and services. To make it a joy for all stakeholders to work with us. Our values: Leading change, Integrity, Respect for the individual, Excellence, Learning and sharing. Our ability to deliver high-quality services and solutions is unmatched. We are the worlds first organization to achieve an enterprise-wide Maturity Level 5 on both CMMI and P-CMM, using SCAMPISM, the most rigorous assessment methodology. Additionally, TCS Integrated Quality Management System (iQMS) integrates process, people and technology maturity through various established frameworks and practices including IEEE, ISO 9001:2008, CMMI, P-CMM , ISO 27001, ISO 20000, ISO 14001, OHSAS 18001 and Six Sigma.
Services:
y
IT Services Custom Application Development Application Management Migration & Re-engineering System Integration Testing Performance Engineering
IT Infrastructure Services IT Service Desk

12
&
Data Center Management End User Computing Services Application Management Services Managed Security Services
y
Enterprise Solutions Supply Chain Management Master Data Management Customer Relationship Management RFID Call Management Oracle SAP Microsoft
Consulting OptimizeIT Cloud Advisory Services Infrastructure Optimization IT Process & Service Management Information Risk Management
Business Process Outsourcing
13
&
Customer Interaction Management (CIM) Finance and Accounting Human Resources Outsourcing Knowledge Process Outsourcing Supply Chain Management Reconciliations Benefits Administration Payroll Industry-specific Offerings
y
Platform BPO Solutions HRO Platform BPO Solutions F&A Platform BPO Solutions Procurement Platform BPO Solutions Analytics Platform BPO Solutions
Business Intelligence & Performance Management Business Intelligence Business Process Management Enterprise Data Management Integration Services Knowledge Management / Enterprise Content Management
14
&
y
Engineering & Industrial Services New Product Development Solutions Product Lifecycle Management Plant Solutions & Services Geospatial Technology Solutions Industry-specific Offerings
Small and Medium Business TCS IT-as-a-Service Key Benefits
More information
y
Connected Marketing Solutions Interactive Marketing Solutions Enterprise Marketing Management Solution Advanced Marketing Analytics Solution
Software:
y
TCS BaNCS
A comprehensive suite of products developed specifically for the banking and financial services industries Banking Solutions
15
&
Capital Markets Solutions Insurance Solutions
TCS Technology Products
These products can help enterprises across industries achieve greater efficiency and competitive edge.
16
&
In reviewing the Literature on Attrition, many of the resources found referred on attrition and retention as the same issue. In addition most resources,that referred to attrition and retention. Attrition is the reduction of numbers through resignation, retirement or death (Websters new american Dictionary,1995). Retention as being the act of retaining or the power to reatin. According to a report by K. Joanne McGlown (1981), attrition in the BPO service started to become very evident in the 1980s. In an article by Susan McHenry Waging War on Attrition she classified the shortage of emergency medical services workers as a crisis in 1999 (McHenry, 1999, pp. 29-33). McGlowns study was initiated by a recommendation from a gathering of bpo and EMS service leaders in 1979. They wanted to study the causes of the high attrition rate in the bpo and EMS field. This was a very significant issue, because for many organizations, their employees were their greatest assets (Stanton, 1977). But up until that point, according to McGlown, no one had done much research to determine reasons why attrition in this field was on the rise. While on the surface attrition seems like a negative problem, as McGlowns report suggested. However, years later, others saw attrition differently. Hom and Griffeth (1995) suggest that turnover is not inherently negative. While they agree that turnover creates some cost and negative reactions, they believe there are two types, one of which may be good for employers. Hom and Griffeth believe that functional turnover is beneficial to an organization because poor performers are replaced by better performers. They agree with McGlown in
17
&
their idea of dysfunctional turnover, this suggests that when good performing employees leave, poor performing employees stay (Hom & Griffeth, 1995). In article written by Candice Solie (2003) in Public Safety Communication, suggests that to uncover the reasons behind turnover, the issue should be separated into two categories. Solie feels there is avoidable and unavoidable turnover of employees in organizations. Unavoidable turnover, according to Solie, would be the most difficult to correct because it occurs due to personal reasons, family reasons, or employees that are unable to handle some aspects of the job, such as shift work. However, she feels that to reduce turnover, managers must address avoidable turnover issues, such as job dissatisfaction or early termination due to an inability to perform their job (pp. 12-14). Leigh Branham (2000) in her book Keeping the People Who Keep You in Business: 24 Ways to Hang On To Your Most Valuable Talent, believes that zero percent turnover is undesirable and unrealistic. She goes on to suggest that some turnover is good, mainly because it keeps organizations vibrant and new people come in with fresh ideas, approaches and attitudes. Branham feels that organizational efforts should focus on retention of good employees that attrite for avoidable reasons. People seek employment in BPO organizations just as they seek employment at other organizations. They use methods such as newspaper advertisements, internet job posting, recruitment by department members and several other proven methods (IFSTA, 2004). But with so many options of workplaces, what makes an individual choose to join one particular place? Denton suggests that by being an employer of choice, good people will come and stay (1992). Employers such as Federal Express, through their aggressive employee relations and incentives programs, boost a one percent turnover rate within their employees (Denton, 1992). Programs such as this make them a marketable employer to job seekers. IFSTA (2004) suggests that one of the main reasons people want to enter the BPO profession is the desire to serve others. People are motivated to experience the gratification of helping someone who is in need. This gratification is the basis of human behavioral theory that many behavioral scientists, such as Abraham Maslow, studied in the 1940s (Patten, Jr., 1981). Patten referred to man as a creature of need. He tied this into the model that Maslow developed, the human hierarchy of needs. After a couple of basic human needs are met, Maslows human motivation theory has people seeking social belonging. Therefore, by joining an organization that would allow a person to be a part of a team that helps others
18
&
and they receive compensation for it; this satisfies several basic human motivational needs (Patten, Jr., 1981). People that seek to become bpofighters are looking for a challenge (IFSTA, 2004). The physically demanding work presents a person with challenges that sometimes pushes their bodies to the outer limits. The challenge of a daring rescue attracts those that like to accomplish difficult tasks. The BPO profession is a profession that has many unknowns, therefore, keeping work interesting and challenging. When jobs are no longer challenging people become bored. In the book Loveem or Loseem, Beverly Kaye and Sharon Jordan Evans suggest that job enrichment makes work interesting and presents new challenges (Kaye & Jordan-Evans, 1999). In todays changing world, many obstacles are being presented to the managers and supervisors in the BPO profession. Diversity in the workforce is growing. Though it may seem like a management challenge, actually, a diverse workforce may be a companys greatest asset (Denton, 1992). Denton adds that diversity in experience and perception is at the core of creativity. Hom and Griffeth (1995) suggest that if the turnover rate is not managed, companies may find themselves having to compete more aggressively to attract diverse groups such as women and minorities; these are the fastest growing groups in the labor market. Denton also believes it will take a lot of managerial expertise to manage todays diverse workforce. During the 1980s and 1990s organizations and businesses experienced some of their most explosive years of growth (Harris & Brannick, 1999). While organizational growth was occurring, employee demand rose proportionally. However, according to Harris and Brannick, employee dedication also changed to reflect the instabilities they faced on the job. For years employees were asked to faithfully support the bottom line of the organization. But with the onset of major corporate downsizing and mergers, many of which caused major layoffs, employees began to change their focus. Harris and Brannick believe that a lot of employees have changed their focus from the bottom line and fast track promotions to quality living through family and personal time. They believe this has increased the turnover rate and thereby reduced the available workforce. Because of corporate restructuring, downsizing, and the reduction in job security; organizations can no longer rely on past retention practices (Hom & Griffeth, 1995).
19
&
Contrary to popular belief, people leave companies for many reasons other than pay. While pay is a great motivator and it helps people to satisfy some of their basic human needs, its often low on the reasons for leaving their workplace (Branham, 2000). Branham believes there are several basic reasons why people leave organizations. People dont perceive an opportunity for advancement. Also, they feel they cant use their natural talents nor do they see their work as important. Branham suggests people cannot link the pay to their performance and they have unclear expectations of their job. She goes on to suggest that in the job market with a shrinking workforce, employees no longer have to work in companies where there is an abusive management style. As stated earlier, Denton (1992) believes that by being the employer of choice, good people will come and they will stay. Branham agrees that the first step to retention of employees is to be the company people want to work for. There are many reasons that organizations attract good employees and increase retention. In a 1997 report on Retention Management Practices performed by the Saratoge Institute, they suggest that companies can no longer rely on compensation and benefit packages to attract and retain the best workers. They believe there is a strong push to be the company of choice and the center of this idea is corporate culture. In Saratoges research they found that to change corporate culture, key areas such as career advancement opportunities, work / life balance, and work environment flexibility issues had to be changed or improved to compete for the peak performers in the job market. In their book Now Hiring Lauer and Gebhardt (1997) maintains that a good training program is where retention starts. They suggest that a happy manager that acquires the right employee skills will ultimately motivate the employees. Data from training programs should be tracked and analyzed so that favorable influences and actions can be replicated. The same idea holds true for negative influence. They can be eradicated from the training program for an organization. These actions should help guide the organization into being the employer of choice (Phillips & Ron, 2002). To understand the forces that influence people to seek employment at a particular organization, first the literature points to the need to understand basic employee motivation. Steers and Black (1994) suggest in their book Organizational Behavior, that motivation is the force that energizes, directs and helps to sustain human behavior. They go on to suggest that motivation is based on distinct parts, with those being an energetic force that drives people to
20
&
behave a certain way and the internal drive that is directed towards something. However, to understand it all, Steer and Black elude to the fact that human motivation is best studied as a system of perspectives on how these forces guides a persons direction. To understand what issues were critical to him as the BPO Department Chief and how attrition and retention may affect his decisions as they related to the operation of the department. Chief Burton believes that the department has a turnover problem. Since he became Chief of the department in 2004, he feels that a lot of people have resigned for various reasons. (M. Burton, personal communication, April 5, 2006). Walker alluded to the fact that, years ago turnover of employees was almost non- existent. (J. Walker, personal communication, July 25, 2006) Aaron Clark an employee that resigned and returned to TCS & WIPRO was interviewed to gain an understanding of the factors that affected his decisions to leave. He chose to leave after he was given an opportunity to fulfill some unmet training needs and to work with his close friends. (A. Clark, personal communication, September 12, 2006). Brandon Wyche was interviewed after his resignation. He was asked what the major factors were that contributed to his decision to resign. He felt that he wanted to return to college. However, he didnt have any connections to the area and he wanted to be closer to his family (B. Wyche, personal communication, June 7, 2006).
21
&
1. To know the causes of ATTRITION & RETENTION in an organization. 2. To understand the present level of attrition in BPO industry 3. To examine the attrition rates in two different categories- which can be managed and which cannot be managed 4. To know about sustainability of employees in IT and BPO sector. 5. To get aware about employability of employees. 6. To analyse the exact behavior pattern of employees to retain in IT and BPO sector. 7. To get aware for reasons behind turnover in IT and BPO sector. 8. To propose various retention Schemes.
22
&
1- Every industry use this approach for its goodwill. 2- More results founded in B.P.O sector, because attrition rate is too high in that sector. 3- Whole concepts are related to human resource sector, for knowing performance about employees. 4- To get aware about reputation of the industry.
23
&
1- Helps in getting employability rate of employees. 2- Helps in knowing about sustainability of employees. 3- For analyses the retaining factors of employees. 4- To get reasons behind joining in IT sector for employees. 5- To get aware for getting corrective measures of turnover of employees. 6- To get aware about proper pay & retaining resources of employees to sustain in IT sector.
24
&
1-Non availability of some relevant data.

2-Time consuming process,because of two different aspects of different topic in same research. 3-Data is not geographically located,presented by using practical approaches. 4-Exact reasons were not founded for getting retained in same sector. 5-Relation between two topics are quite difficult approach.
25
&
INFORMATION ABOUT PRIMARY & SECONDARY DATA

SAMPALING PLAN There is no sampling plan as such as the study involved in understanding the various processes and analyzing them the study involved in the detailed analysis of secondary data calculated from various sources and therefore no sample size and plan has been considered. SOURCES OF DATA Data has been collected through literature survey and experts opinion The Part of data is collected from various primary and secondary sources. PRIMARY SOURCES Information gathered through interview and discussing with departmental members. SECONDARY SOURCES y Internet y Magazines & Journals
26
&
ATTRITION
Meaning- A Reduction in number of employees through Retirement, Resignation, or Death The attrition rate has always been a sensitive issue for all organizations. Calculating employee turnover rate is not that simple as it seems to be. No common formula can be used by all the organizations. A formula had to be devised keeping in view the nature of the business and different job functions. Moreover, calculating attrition rate is not only about devising a mathematical formula. It also has to take into account the root of the problem by going back to the hiring stage. Attrition rate: Meaning- The rate of Shrinkage of Size Or Number. There is no standard formula to calculate the attrition rate of a company. This is because of certain factors as:
y
The employee base changes each month. So if a company has 1,000 employees in April 2004 and 2,000 in March 2005, then they may take their base as 2,000 or as 1,500 (average for the year). If the number of employees who left is 300, then the attrition figure could be 15 percent or 20 percent depending on what base you take. Many firms may not include attrition of freshers who leave because of higher studies or within three months of joining.
27
&
y
In some cases, attrition of poor performers may also not be treated as attrition. Calculating attrition rate:
Attrition rates can be calculated using a simple formula: Attrition =(No. of employees who left in the year / average employees in the year) x 100 Thus, if the company had 1,000 employees in April 2004, 2,000 in March 2005, and 300 quit in the year, then the average employee strength is 1,500 and attrition is 100 x (300/1500) = 20 percent. Besides this, there are various other types of attrition that should be taken into account. These are:
y
Fresher attrition that tells the number of freshers who left the organization within one year. It tells how many are using the company as a springboard or a launch pad. Infant mortality that is the percentage of people who left the organization within one year. This indicates the ease with which people adapt to the company. Critical resource attrition which tell the attrition in terms of key personnel like senior executives leaving the organization. Low performance attrition: It tells the attrition of those who left due to poor performance.
Attrition Costs One of the best methods for calculating the cost of turnover takes into account expenses involved to replace an employee leaving an organization. These expenses are: A. Recruitment cost The cost to the business when hiring new employees includes the following six factors plus 10 percent for incidentals such as background screening:
28
&
y y y y y
Time spent on sourcing replacement Time spent on recruitment and selection Travel expenses, if any Re-location costs, if any n Training/ramp-up time Background/reference screening
B. Training and development cost To estimate the cost of training and developing new employees, cost of new hires must be taken into consideration. This will mean direct and indirect costs, and can be largely classified under the following heads:
y y y y
Training materials Technology Employee benefits Trainers Time
C. Administration cost They include:

y y y y
Set up communication systems Add employees to the HR system Set up the new hires workspace Set up ID-cards, access cards, etc.
Attrition is the biggest problem faced by BPOs these days. Attrition rate in BPOs is more than the attrition rate in any other sector. It is very important to control this attrition rate. Many retention schemes are applied in BPOs for retention.
29
&
A single tool like training alone is not sufficient for employee retention. The best results for employee retention can be achieved by applying different tools strategically. Let us now learn about various strategies which can boost successful employee retention in BPOs. 1. First know the cost. This is the most basic and initial part of the retention process. A good retention plan needs all the facts. The turnover cost includes cost of selection process, hiring, induction, training, lost productivity, etc. 2. Hire from known sources like employee referrals through trustworthy employees. 3. Hire the right people. Retention starts with recruitment itself. Identify the characteristics of the people you want to hire who fit in organizations culture. To retain employees, the people who are productive and are likely to stay for a longer time should be hired. 4. Focus on employee orientation. It is the first impression that the employee takes home with him. A proper welcome form the management will encourage the employee to stay with the organization. 5. Individual development. Develop career plans for employees. Initiate mentorship and higher education programs to keep the learning and development moving. 6. Training for managers. An important factor that keeps the employee in the organization is the manager. Employees need a manager who manages them well. A manager should be a good listener and motivator. Proper training should be given to the managers. 7. Find the reason why employees are leaving. Conduct exit interviews with the employees after 3-4 months of leaving the job. This is because most of the employees would not like to reveal the true reason of quitting the job as long as they are in the organization and are associated with the job. The exit interviews can be conducted online. Then the employees can talk straightfrom-the-shoulder.
30
&
8. Employee recognition. Star of the month, top performer, picture on bulletin boards, appreciation cards and certificates, etc, increase employee moral and confidence. This is a great way to retain employees of a call center. 9. Employee Retention Strategies The basic practices which should be kept in mind in the employee retention strategies are: 1. Hire the right people in the first place. 2. Empower the employees: Give the employees the authority to get things done. 3. Make employees realize that they are the most valuable asset of the organization. 4. Have faith in them, trust them and respect them. 5. Provide them information and knowledge.
6. Keep providing them feedback on their performance. 7. Recognize and appreciate their achievements. 8. Keep their morale high. 9. Create an environment where the employees want to work and have fun. The business process outsourcing (BPO) industry in the country which is expected to employ around one million people by 2008 is facing the challenge of finding quality human resources given the current attrition rate of around 50 percent.
31
&
Analysts say attrition rates vary by 20%-40% in some firms, while the top ones averages at least 15%. Nasscom in a report said the outsourcing industry was expected to face a shortage of 262,000 professionals by 2012. The size of the Indian BPO market is likely to be around $9-12 billion by 2006 and will employ around 400,000 people, ICRA said in its Indian BPO industry report. Mercer India said the industry should look beyond the traditional areas of recruitment and some thought should be given to employ physically challenged people and housewives. The reasons for the high rate of attrition was due to various factors like salary, work timings, other career options, adding that there is always the danger of costs increasing while billing rates decline. With 245,100 people employed at the end of March 31, 2004 against 171,100 last year, the industry witnessed a hiring growth rate of about 40-42 percent. On the hiring front, the industry absorbed about 74,000 people in 2003 despite the attrition rate of 45-50 percent being a matter of concern. Attrition rates in IT-enabled business process outsourcing sector have come down from the 30-33 per cent being witnessed of late to about 25 per cent now, according to statistics compiled by the National Human Resource Development Network.
32
&
Attrition rates US Australia Europe India Global Average % 42% 29% 24% 18% 24%
*Source-Times News New York (2003)
If you compare attrition rates for a Voice and Non-voice process, then attrition rates are significantly lower in a non-voice process. As the industry moves up the value chain and becomes a full-scale BPO player, attrition rates will further decrease. For BPO service providers, moving up the value chain is critical, given the attrition rates in the industry, which are on an average higher in low value-added segments (in call centres) as compared to higher value-added segments like engineering. It will not be possible for the industry to arrive at a blanket agreement on poaching but bilateral agreements between companies are being signed. Basic norms are
33
&
being put in place and code of ethics is being stressed upon by industry. Companies are being encouraged to adopt responsible behavior in order to ensure that the industry does not become a victim of its own actions. Industry needs to go aggressive but not cannibalistic. In order to ensure a consistent flow of trained manpower in the future, the industry needs to work with the government to introduce courses at a school and college level, which are in line with the requirements of the ITES-BPO industry. India has one of the largest pool of English speaking graduate workforce. The challenge for the industry is not in employment but employability. The industry is also hiring professionals from outside the industry in order to meet its steady supply of manpower. Honest corporate managers will tell you that to make offshoring work, you need at least a 300% to 400% wage spread between American software writers, engineers, accountants, and call-center employees and their Indian and Chinese counterparts. Labor costs have to be very, very low overseas -- not just lower -- to compensate for time-shifting, managing over such long distances, and decreased productivity. High attrition rate, price wars, poor infrastructure and lack of data protection laws could derail India's booming outsourcing industry. This seemed to sum up the views of BPO fraternity at the Nasscom summit here.
34
&
Tackling Attrition Head-On Industry experts feel, as the industry was still in its nascent strategy there was lot of strategies available to reverse this trend and make it an attractive employer. NASSCOM ITES-BPO forum has identified HR as one of the key challenges of the ITES-BPO industry and has formed a special task force to address short-term challenges such as Attrition and also long-term challenges such as ensuring availability of a skilled talent pool. To arrest this trend, companies can look into various options like good rewards, bonding programme, flexible working hours and stronger career path. With attrition rates ranging between 30-60 percent in the BPO industry, HR specialists feel that a scientific and analytical approach should be implemented. The tremendous turnover rate is undeniably one of the main problems faced by the BPO industry globally. HR specialists at the Nasscom 2004 summit brainstormed on various approaches to handle this bugbear- either declare war on attrition and tackle it head on, or adopt a more scientific analytical approach. Pay cheques alone are not enough to retain employees. Management also needs to consider other aspects like secure career, benefits, perks and communication. The attrition battle could be won by focusing on retention, making work a fun place,
35
&
having education and ongoing learning for the workforce and treating applicants and employees in the same way as one treats customers. Companies need to go in for a diverse workforce, which does not only mean race, gender diversity, but also include age, experience and perspectives. Diversity in turn results in innovation and success. The 80:20 rule also applies to recruitment, she quipped, since studies showed that 80 percent of the company's profit comes from the efforts of 20 percent of the employees. So BPOs need to focus on roles, which have the most important impact. According to experts, the cost of attrition is 1.5 times the annual salary. Age should not be a barrier for training employees and could in fact bring in more stability to the company. With the global financial meltdown it appears employees prefer to stick to their current jobs as much as possible. In November 2008 BPO attrition fell to 30%. The attrition rate in few leading companies are,
y y y y
Infosys BPO 28% Wipro BPO 18% TCS BPO 21-22% Tesco HSC has seen a 6% drop in attrition
36
&
BENEFITS OF ATTRITION Attrition is not bad always if it happens in a controlled manner. Some attrition is always desirable and necessary for organizational growth and development. The only concern is how organizations differentiate good attrition from bad attrition. The term healthy attrition or good attrition signifies the importance of less productive employees voluntarily leaving the organization. This means if the ones who have left fall in the category of low performers, the attrition in considered being healthy. Attrition rates are considered to be beneficial in some ways:
y
If all employees stay in the same organization for a very long time, most of them will be at the top of their pay scale which will result in excessive manpower costs. When certain employees leave, whose continuation of service would have negatively impacted productivity and profitability of the company, the company is benefited. New employees bring new ideas, approaches, abilities & attitudes which can keep the organization from becoming stagnant. There are also some people in the organization who have a negative and demoralizing influence on the work culture and team spirit. This, in the long-term, is detrimental to organizational health. Desirable attrition also includes termination of employees with whom the organization does not want to continue a relationship. It benefits the organization in the following ways: o It removes bottleneck in the progress of the company
o o
It creates space for the entry of new talents
It assists in evolving high performance teams There are people who are not able to balance their performance as per expectations, lack potential for future or need disciplinary action. Furthermore, as the rewards are limited, business pressures do not allow the
37
&
management to over-reward the performers, but when undesirable employees leave the company, the good employees can be given the share that they deserve. Some companies believe attrition in any form is bad for an organization for it means that a wrong choice was made at the beginning while recruiting. Even good attrition indicates loss as recruitment is a time consuming and costly affair. The only positive point is that the realization has initiated action that will lead to cutting loss.
Impact of attrition Direct impact: A high attrition indicates the failure on the companys ability to set effective HR priorities. Clients and business get affected and the companys internal strengths and weaknesses get highlighted. New hires need to be constantly added, further costs in training them, getting them aligned to the company culture, etc.,all a challenge. Indirect impact: Difficulty in the company retaining remaining employees and to what extent? Problem for the company in attracting potential employees. Typically, high attrition also leads to a chronic or systemic cycleattrition brings decreased productivity, people leave causing others to work harder and this contributes to more attrition. All this has a significant impact on the companys strength in managing their business in a competitive environment. Source: Redileon executive search
38
&
Analyzing the impact
Productivity and profitability are both impacted, either negatively and positively, according to the type of attrition. Even good attrition is indicative of loss as recruitment is a time consuming and costly affair. It is tantamount to investment that has gone astray. Having said that, good attrition minimizes the adverse impact on business while bad attrition accentuates the loss, stated Nair. The cost of hiring is sometimes not less than two to three times the salary of the employee. The impact on work progress is tremendous, particularly if a project is underway and one of the key people leaves. It leads to dip in entire organizational efficiency, and a lot depends on how it is able to cover the setback, pointed out Rao. Organizations should execute top of the line retention policies in the right earnest and consistency. They should be more employee-centered and look for further ways to bond employees to their companies. Company performance is optimally aligned to the skills its employees possess. High attrition implies that certain necessary skills are vulnerable or are not present due to employees being lost. This results in lower than optimal levels of business performance. If the skills are constantly not available, the situation gets compounded into a crisis with key projects, revenues, etc., getting affected. Business is then reduced to just managing crisis, added Bhardwaj. For example, a 2 percent attrition difference can make a significant difference in the ultimate business impact.
The Attrition Problem

According to NASSCOM data, the attrition rate for voice-based BPOs is around 55-60 per cent and 15-20 per cent for the non-voice based processes. The attrition rates and the retention have become the major threat and the biggest challenge for the human resource professionals of the sector. In fact, the outsourcing industry is expected to face a shortage of 2,62,000 professionals by 2012. The human resource professionals of the BPO sector are focusing their strategies on tackling the disruption caused due to the shortage of the skilled manpower as well as the
39
&
unplanned or the undesired exists. The top reasons for employees to leave a BPO company are:
y y y y y y y y y y
Monotonous work (repetitive nature of work and the average number of calls) Physical strains because of long and odd working hours No growth opportunity/lack of promotion For higher Salary For Higher education No personal life Problems with peers and managers Policies and procedures Conducive work culture or environment Handling abusive calls
The high attrition costs increases the costs to the organization considerably. They have to combat the amount of disruption due to unplanned exits. The more the people leave an organization, the more it is a drain on the companys resources like recruitment expenses, training and orientation resources and the time. The high attrition rate also affects the productivity of the organization. The attrition cost has been estimated to be as high as 76 per cent of the annual salary costs for the low-end BPOs. The voice-based processes, which are facing an attrition rate of 60 per cent, are incurring the attrition costs of 27 per cent of the total operating costs. The high attrition costs the BPO industry a huge amount of loss in terms of the expenses and the losses incurred on recruitment process, the training and development of the hired. In the year 2004-05, such expenses amounted to a loss of Rs. 300 crore and a total loss of 25 % of the annual revenue to the Indian BPO industry. Also, the retention strategies like providing higher education opportunities to the employees, creating growth opportunities for employees add to the burden of costs to the company. Another problem being faced by the BPO industry is Poaching. Poaching refers to taking away the experienced professionals by competitors by offering them better salary, benefits than the competitor. With the already saturated market for
40
&
the talented professionals, poaching is becoming a common practice by the organizations. All these people costs are weakening the position of India as the low-cost destination in the worldwide BPO industry. Another point of view explaining the high attrition rates in the BPO industry comes from the psychologists who argue that physical strains like sleep disorders, depression, odd working shifts, learning foreign accents, constantly handling abusive calls and high stress levels are also the major reasons of the high attrition rates in the BPO industry. There are also pressures from the society for not allowing the youngsters to work in night shifts. This also discourages the youngsters from joining the BPO industry.
Addressing the Problem

Although a large number of youngsters are attracted to the BPO industry because of the high salary packages offered by the MNCs to graduates and even the undergraduates; also the sophisticated work environment, the facilities like free meal and transportation etc.; failure to cope with the stress of the odd shifts, the monotonous work, the compensation packages and the opportunities for higher education fails to sustain them in the organizations. For the Indian BPO industry to sustain its growth and position, the human resource professionals have to re-formulate their strategies to check the problem of the attrition rate without losing their cost-effectiveness. BPOs will have to change their mindset and the practice of- No matter I have a high attrition rate, I can cope up if my recruitment process is good to creating a synergy between the work life, growth opportunities, and the requirements of the job to control the attrition in the organizations. The HR professionals need to redesign the HR policies for the industry without comprising on the cost competitiveness of the Indian BPO industry, to retain the employees in the organizations and to retain Indias position as the low cost destination for business process outsourcing worldwide.
41
&
In the next article, well have a look at the western culture being promoted by BPOs in India and how the youngsters are losing out in the bpo.
Managing the problem

There is no sure-bpo solution to control attrition. The only way out is to manage it well. This can be done by having cautious hiring with proper systems and processes in place to ensure that only the right talent is inducted into the company. Those found lacking in particular skills or competence should be informed of the expectations from them and put through a training process. Continuous skills upgradation opportunities should also be provided to good employees for their growth and development. Career management, ESOPs, increments, rewards, and ambience are significant retention measures, said Ganti, reminding that both kinds of attrition are unhealthy for business. When productive people leave it is understandably bad, but even when desirable attrition happens (after crossing six to seven months), it definitely impacts the business. It is loss of opportunity and investment gone badly. Consequently organizations like Calsoft have tried their best to ensure that attrition is kept below the industry average. Today an employee is clear on his needs and what he wants out of the job. This makes the function of employee life cycle management more critical and one that requires more attention and focus. By carefully tuning and aligning employee aspirations with the companys overall objectives, to a large extent, attrition can be substantially reduced, stated Nair. Constant analyses of the causes that lead to employee turnover will go a long way in curbing the problem from the root stage. The top management should continuously focus on the issue and implement effective recruitment and retention measures.
42
&
RETENTION
Employee retention is a process in which the employees are encouraged to remain with the organization for the maximum period of time or until the completion of the project. Employee retention is beneficial for the organization as well as the employee. Employees today are different. They are not the ones who dont have good opportunities in hand. As soon as they feel dissatisfied with the current employer or the job, they switch over to the next job. It is the responsibility of the employer to retain their best employees. If they dont, they would be left with no good employees. A good employer should know how to attract and retain its employees. Retention involves five major things:
<<Compensation>>
<<Environment>>
<<Growth>>
<<Relationship>>
<<Support>>
43
&
COMPENSATION Employee retention would require a lot of efforts, energy, and resources but the results are worth it. Compensation constitutes the largest part of the employee retention process. The employees always have high expectations regarding their compensation packages. Compensation packages vary from industry to industry. So an attractive compensation package plays a critical role in retaining the employees. Compensation includes salary and wages, bonuses, benefits, prerequisites, stock options, bonuses, vacations, etc. While setting up the packages, the following components should be kept in mind: Salary and monthly wage: It is the biggest component of the compensation package. It is also the most common factor of comparison among employees. It includes
o o o o
Basic wage House rent allowance Dearness allowance City compensatory allowance
GROWTH Growth and development are the integral part of every individuals career. If an employee can not foresee his path of career development in his current organization, there are chances that hell leave the organization as soon as he gets an opportunity. The important factors in employee growth that an employee looks for himself are:
44
&
Work profile: The work profile on which the employee is working should be in sync with his capabilities. The profile should not be too low or too high. Personal growth and dreams: Employees responsibilities in the organization should help him achieve his personal goals also. Organizations can not keep aside the individual goals of employees and foster organizations goals. Employees priority is to work for themselves and later on comes the organization. If hes not satisfied with his growth, hell not be able to contribute in organization growth. Training and development: Employees should be trained and given chance to improve and enhance their skills. Many employers fear that if the employees are well rained, theyll leave the organization for better jobs. Organization should not limit the resources on which organizations success depends. These trainings can be given to improve many skills like:
y y y y y
Communications skills Technical skills In-house processes and procedures improvement related skills C or customer satisfaction related skills Special project related skills
Need for such trainings can be recognized from individual performance reviews, individual meetings, employee satisfaction surveys and by being in constant touch with the employees. SUPPORT Lack of support from management can sometimes serve as a reason for employee retention. Supervisor should support his subordinates in a way so that each one of them is a success. Management should try to focus on its employees and support them not only in their difficult times at work but also through the times of personal crisis. Management can support employees by providing them recognition and appreciation.
45
&
Employers can also provide valuable feedback to employees and make them feel valued to the organization. The feedback from supervisor helps the employee to feel more responsible, confident and empowered. Top management can also support its employees in their personal crisis by providing personal loans during emergencies, childcare services, employee assistance programs, counseling services, et al. Employers can also support their employees by creating an environment of trust and inculcating the organizational values into employees. Thus employers can support their employees in a number of ways as follows: By providing feedback By giving recognition and rewards By counseling them By providing emotional support RELATIONSHIP Sometimes the relationship with the management and the peers becomes the reason for an employee to leave the organization. The management is sometimes not able to provide an employee a supportive work culture and environment in terms of personal or professional relationships. There are times when an employee starts feeling bitterness towards the management or peers. This bitterness could be due to many reasons. This decreases employees interest and he becomes de-motivated. It leads to less satisfaction and eventually attrition. A supportive work culture helps grow employee professionally and boosts employee satisfaction. To enhance good professional relationships at work, the management should keep the following points in mind. Respect for the individual: Respect for the individual is the must in the
46
&
organization. Relationship with the immediate manager: A manger plays the role of a mentor and a coach. He designs ands plans work for each employee. It is his duty to involve the employee in the processes of the organization. So an organization should hire managers who can make and maintain good relations with their subordinates. Relationship with colleagues: Promote team work, not only among teams but in different departments as well. This will induce competition as well as improve the relationships among colleagues. Recruit whole heartedly: An employee should be recruited if there is a proper place and duties for him to perform. Otherwise hell feel useless and will be dissatisfied. Employees should know what the organization expects from them and what their expectation from the organization is. Deliver what is promised. Promote an employee based culture: The employee should know that the organization is there to support him at the time of need. Show them that the organization cares and hell show the same for the organization. An employee based culture may include decision making authority, availability of resources, open door policy, etc. Individual development: Taking proper care of employees includes acknowledgement to the employees dreams and personal goals. Create opportunities for their career growth by providing mentorship programs, certifications, educational courses, etc. Induce loyalty: Organizations should be loyal as well as they should promote loyalty in the employees too. Try to make the current employees stay instead of recruiting new ones ENVIRONMENT It is not about managing retention. It is about managing people. If an organization manages people well, employee retention will take care of itself. Organizations should focus on managing the work environment to make better
47
&
use of the available human assets. People want to work for an organization which provides Appreciation for the work done Ample opportunities to grow A friendly and cooperative environment A feeling that the organization is second home to the employee Organization environment includes
y y y y y y y y
Culture Values Company reputation Quality of people in the organization Employee development and career growth Risk taking Leading technologies Trust
Types of environment the employee needs in an organization

y
Learning environment: It includes continuous learning and improvement of the individual, certifications and provision for higher studies, etc. Support environment: Organization can provide support in the form of work-life balance. Work life balance includes:
48
&
o o o o o o
Flexible hours Telecommuting Dependent care Alternate work schedules Vacations Wellness
Work environment: It includes efficient managers, supportive co-workers, challenging work, involvement in decision-making, clarity of work and responsibilities, and recognition.
Lack or absence of such environment pushes employees to look for new opportunities. The environment should be such that the employee feels connected to the organization in every respect.
IMPORTANCE OF EMPLOYEE RETENTION Now that so much is being done by organizations to retain its employees, why is retention so important? Is it just to reduce the turnover costs? Well, the answer is a definite no. Its not only the cost incurred by a company that emphasizes the need of retaining employees but also the need to retain talented employees from getting poached. The process of employee retention will benefit an organization in the following ways: 1. The Cost of Turnover: The cost of employee turnover adds hundreds of thousands of money to a company's expenses. While it is difficult to fully calculate the
49
&
cost of turnover (including hiring costs, training costs and productivity loss), industry experts often quote 25% of the average employee salary as a conservative estimate. 2. Loss of Company Knowledge: When an employee leaves, he takes with him valuable knowledge about the company, customers, current projects and past history (sometimes to competitors). Often much time and money has been spent on the employee in expectation of a future return. When the employee leaves, the investment is not realized. 3. Interruption of Customer Service: Customers and clients do business with a company in part because of the people. Relationships are developed that encourage continued sponsorship of the business. When an employee leaves, the relationships that employee built for the company are severed, which could lead to potential customer loss. 4. Turnover leads to more turnovers: When an employee terminates, the effect is felt throughout the organization. Co-workers are often required to pick up the slack. The unspoken negativity often intensifies for the remaining staff. 5. Goodwill of the company: The goodwill of a company is maintained when the attrition rates are low. Higher retention rates motivate potential employees to join the organization. 6. Regaining efficiency: If an employee resigns, then good amount of time is lost in hiring a new employee and then training him/her and this goes to the loss of the company directly which many a times goes unnoticed. And even after this you cannot assure us of the same efficiency from the new employee REASON BEHIND ORGANISATION LEAVE Employees do not leave an organization without any significant reason. There are certain circumstances that lead to their leaving the organization. The most common reasons can be: Job is not what the employee expected to be: Sometimes the job
50
&
responsibilities dont come out to be same as expected by the candidates. Unexpected job responsibilities lead to job dissatisfaction. Job and person mismatch: A candidate may be fit to do a certain type of job which matches his personality. If he is given a job which mismatches his personality, then he wont be able to perform it well and will try to find out reasons to leave the job.
y
No growth opportunities: No or less learning and growth opportunities in the current job will make candidates job and career stagnant. Lack of appreciation: If the work is not appreciated by the supervisor, the employee feels de-motivated and loses interest in job. Lack of trust and support in coworkers, seniors and management: Trust is the most important factor that is required for an individual to stay in the job. Non-supportive coworkers, seniors and management can make office environment unfriendly and difficult to work in. Stress from overwork and work life imbalance: Job stress can lead to work life imbalance which ultimately many times lead to employee leaving the organization. Compensation: Better compensation packages being offered by other companies may attract employees towards themselves. New job offer: An attractive job offer which an employee thinks is good for him with respect to job responsibility, compensation, growth and learning etc. can lead an employee to leave the organization.
51
&
RETENTION STRATEGIES The basic practices which should be kept in mind in the employee retention strategies are: 1. Hire the right people in the first place. 2. Empower the employees: Give the employees the authority to get things done. 3. Make employees realize that they are the most valuable asset of the organization. 4. Have faith in them, trust them and respect them. 5. Provide them information and knowledge. 6. Keep providing them feedback on their performance. 7. Recognize and appreciate their achievements. 8. Keep their morale high. 9. Create an environment where the employees want to work and have fun. These practices can be categorized in 3 levels: Low, medium and high level.
52
&
RETENTION MYTHS The process of retention is not as easy at it seems. There are so many tactics and strategies used in retention of employees by the organizations. The basic purpose of these strategies should be to increase employee satisfaction, boost employee morale hence achieve retention. But some times these strategies are not used properly or even worse, wrong strategies are used. Because of which these strategies fail to achieve the desired results.There are many myths related to the employee retention process. These myths exist because the strategies being used are either wrong or are being used from a long time. These myths prevent the employer from successfully implementing the retention
53
&
strategies. Let us learn about some of these myths. 1. Employees leave an organization for more pay: Money may be the motivating factor for some but for many people it is not the most important factor. Money matters more to the low-income-employees for whom its a survival issue. Money can make an employee stay in an organization but not for long. The factors more important than money are job satisfaction, job responsibilities, and individuals skill development. The employers should understand this and work out some other ways to make employees feel satisfied. When employees leave, management tries to retain them by offering more money. But instead they should try to figure out the main reason behind it. Issues that are mainly the cause of dissatisfaction are organizations policies and procedures, working conditions, relationship with the supervisor and salary, etc. For such employees, achievement, growth, respect, recognition, is the main concern. 2. Incentives can increase productivity: Incentives can surely increase productivity but not for long term. Cash incentives, volume work targets and speed awards are old management beliefs. They can generate work speedily and in volumes but cant boost employee commitment. Rather speed can hamper the quality of work produced. What really glues employees to their work and organization is quality work, meaningful responsibilities, recognition, respect, growth opportunities and friendly supervisors. 3. Employees run away from responsibilities: It is a myth that employees run from responsibilities. In-fact employees feel more responsible if they are given extra responsibilities apart from their regular job. Employees look for variety, greater control on the processes and authority to take decisions in their present job. They want opportunities to learn and grow. Management can assign extra responsibilities to their employees and appreciate them on the completion of these tasks. This will induce a sense of pride in the employee and will improve the relationship between the management and the employee. 4. Loyalty is a thing of the past: Employees can be loyal but what they
54
&
need is an employer for whom they can be loyal. There is no reason for the employee to hop jobs if hes satisfied with the employer. 5. Taking measures to increase employee satisfaction will be expensive for the organizations: The things actually required to improve employee satisfaction like respect, career growth and development, appreciation, etc. cant be bought. They are free of cost. An employer or management that reacts well to the employees ideas and suggestions is enough for the employees to be retained.
RETENTION SUCCESS MANTRAS

TRANSPRENT WORK CULTURE environments where employees are constantly striving to achieve business goals under time restrictions; open minded and transparent work culture plays a vital role in employee retention. Companies invest very many hours and monies in training and educating employees. These companies are severely affected when employees check out, especially in the middle of some big company project or venture. Although employees most often prefer to stay with the same company and use their time and experience for personal growth and development, they leave mainly because of work related stress and dissatisfactions. More and more companies have now realized the importance of a healthy work culture and have a gamut of people management good practices for employees to have that ideal fresh work-life. Closed doors work culture can serve as a deterrent to communication and trust within employees which are potential causes for work-related apathy and frenzy. A transparent work environment can serve as one of the primary triggers to facilitate accountability, trust, communication, responsibility, pride and so on. It is believed that in a transparent work culture employees rigorously communicate with their peers and exchange ideas and thoughts before they are
55
&
finally matured in to full-blown concepts. It induces responsibility among employees and accountability towards other peers, which gradually builds up trust and pride. More importantly, transparency in work environment discourages work-politics which often hinders company goals as employees start to advance their personal objectives at the expense of development of the company as a single entity. Employees comprise the most vital assets of the company. In a work place where employees are not able to use their full potential and not heard and valued, they are likely to leave because of stress and frustration. In a transparent environment while employees get a sense of achievement and belongingness from a healthy work environment, the company is benefited with a stronger, reliable work-force harboring bright new ideas for its growth. QUALITY OF WORK The success of any organization depends on how it attracts, recruits, motivates, and retains its workforce. Organizations need to be more flexible so that they develop their talented workforce and gain their commitment. Thus, organizations are required to retain employees by addressing their work life issues. The elements that are relevant to an individuals quality of work life include the task, the physical work environment, social environment within the organization, administrative system and relationship between life on and off the job. The basic objectives of a QWL program are improved working conditions for the employee and increase organizational effectiveness. Providing quality work life involves taking care of the following aspects: Occupational health care: The safe work environment provides the basis for the person to enjoy working. The work should not pose a health hazard for the person. The employer and employee, aware of their risks and rights, could achieve a lot in their mutually beneficial dialogue.
56
&
Suitable working time: Organizations are offering flexible work options to their employees wherein employees enjoy flexi-timings for dedicating their efforts at work. Appropriate salary: The appropriate as well as attractive salary has always been an important factor in retaining employees. Providing employees salary at par with the other counterparts of above that what competitors are paying motivates them to stick with the company for long. QWL consists of opportunities for active involvement in group working arrangements or problem solving that are of mutual benefit to employees or employers, based on labor management cooperation. People also conceive of QWL as a set of methods, such as autonomous work groups, job enrichment, and high-involvement aimed at boosting the satisfaction and productivity of workers. It requires employee commitment to the organization and an environment in which this commitment can flourish. Providing quality at work not only reduces attrition but also helps in reduced absenteeism and improved job satisfaction. Not only does QWL contribute to a company's ability to recruit quality people, but also it enhances a company's competitiveness. Common beliefs support the contention that QWL will positively nurture amore flexible, loyal, and motivated workforce, which are essential in determining the company's competitiveness. SUPPORTING EMPLOYEES Organizations these days want to protect their biggest and most valuable asset and they want to do this in a way that best suits their organizational culture. Retaining employees is a difficult task. Providing support to the employees acts as a mantra for retraining them. Employers can also support their employees by creating an environment of trust and inculcating the organizational values into
57
&
employees. The management can support employees directly or indirectly. Directly, they provide support in terms of personal crises, managing stress and personal development. Management can support employees, indirectly, in a number of ways as follows:
y
Manage employee turnover: Employee turnover affects the whole organization in terms of productivity. Managing the turnover, hence, becomes an important task. A proactive approach can be adopted to reduce attrition. Strategies should be framed in advance and implemented when the times arrives. Turnover costs should also be taken into consideration while framing these strategies.
Become employer of choice: What makes a company an employer of choice? Is the benefit it offers or the compensation packages it gives away to its employees? Or is it measured in terms of how they value their employees or in terms of customer satisfaction? Becoming an employer of choice involves
58
&
following a road map which tells where to go as a brand.
y
Engage the new recruits: The newly hired employees are said to be least engaged in the organization. Keeping them engaged is an important task. The fresh talent should be utilized to maximum before they start feeling bored in the organization. Optimize employee engagement: An organizations productivity is measured not in terms of employee satisfaction but by employee engagement. Employees are said to be engaged when they show a positive attitude toward the organization and express a commitment to remain with the organization. Employee satisfaction also comes with high engagement levels. So, organizations should aim to maximize the engagement among employees. Coaching and mentoring: Employees whose work performance suffers due to poor interpersonal relationships or because of lack of interpersonal skills should be provided proper coaching by their superiors. Planed coaching sessions help an individual to work through issues, maximize his potential and return to peak performance.
FEEDBACK Feedback acts as a channel of communication between the employee and his manager. The amount of information employees receive about how well or how poorly they have performed is what we call feedback. It is a dialog between a manager and an employee which acts as a way of sharing information about the performance. It suggests where the employee performance is effective and where performance has to improve. Managers can provide either positive feedback or negative feedback to employees. This feedback helps the employee
59
&
assess his performance and identify the improvement areas. Positive feedback communicates managerial satisfaction. Positive recognition for good performance boosts up morale of employees and results in performance improvement to a higher productivity level. It is believed that positive feedback is the only type of feedback that generates performance above the minimum acceptable level. Negative feedback obviously communicates managers dissatisfaction. However, negative feedback sometimes make employee to put more efforts to improve his performance. But such times are very rare. Moreover this improvement is short term. Some managers do not provide any kind of feedback to their employees. Due to no feedback, employees may assume that they are performing productively or they may feel that the manager is satisfied with their performance. Studies reveal the performance tends be same or even decreases if no feedback is provided. Thus, feedback is necessary because:
y
It builds trust and enhances communication between manager and employee. It gives managers and employees a way to identify and discuss skills and strengths. Positive feedback leads to employee retention and motivation. It helps in identifying performance areas that need improvement and specific ways to improve them. It acts as an opportunity to enhance performance by identifying resources for skill development. It is an opportunity for managers and employees to assess and identify career and advancement opportunities.
y y
60
&
y
It helps employees to understand the effectiveness of their performance and contributes to their overall knowledge about the work
Managers have tendency to ignore good performances of their employees. Providing no feedback may demotivate employees and may lead to employee absenteeism. Input from managers side is necessary as it help employees to improve their performance and increase productivity.
COMMUNICATION Communication is a process in which a message is conveyed to the receiver by the sender. The message may be or may not be in a common format or language that both the sender and receiver understand. So there is a need to encode and decode the message in the process. Encoding and decoding also helps in the security of the message. The process of communication is incomplete without the feedback. Communication is the solution to almost everything in this world. Same applies to employee retention also. Straight-from-the-shoulder communication is what the employees need from their employers. Employees look for organizations where communication and process are transparent. Nothing is hidden and shared with the employees.
61
&
There are 3 categories of employees:

y y
A: Who will leave their current employer in 3 years of their employment B: Who have a probability of leaving their current employer in next 3 years C: Who will stay with their current employer in the next 3 years
Category A: These are the employees who lack communication with their employers.
62
&
Category C: These are the employees who have proper, well structured communication with their employers. Communication is also the way to win the employees trust in the organization. Employees trust the employers who are friendly and open to them. This trust leads to employee loyalty and finally retention. Employers also feel that the immediate supervisors are the most authenticated and trusted source of information for them. So the organizations should hire managers who are active communicators. Communication mediums
y
Open door policy: Organizations should support open door policies so that the employees feel comfortable and are able to express their doubts and feeling to their employers. Frequent meetings and Social gatherings Emails, Newsletters, Intranet and many more
y y
So there should be effective communication across the organization and this communication should be two-way. Communication alone can lead to unimaginable heights of employee retention.
MANAGING EMPLOYEE RETENTION

The task of managing employees can be understood as a three stage process: 1. Identify the cost of employee turnover 2. Understand why employee leave 3. Implement retention strategies Identify the cost of employee turnover: The organizations should start with identifying the employee turnover rates within a particular time period and benchmark it with the competitor organizations. This will help in assessing the whether the employee retention
63
&
rates are healthy in the company. Secondly, the cost of employee turnover can be calculated. According to a survey, on an average, attrition costs companies 18 months salary for each manager or professional who leaves, and 6 months pay for each hourly employee who leaves. This amounts to major organizational and financial stress, considering that one out of every three employees plans to leave his or her job in the next two years. Understand why employees leave: Why employees leave often puzzles top management. Exit interviews are an ideal way of recording and analyzing the factors that have led employees to leave the organization. They allow an organization to understand the reasons for leaving and underlying issues. However employees never provide appropriate response to the asked questions. So an impartial person should be appointed with whom the employees feel comfortable in expressing their opinions. Implement retention strategy: Once the causes of attrition are found, a strategy is to be implemented so as to reduce employee turnover. The most effective strategy is to adopt a holistic approach to dealing with attrition. An effective retention strategy will seek to ensure:
y
Attraction and recruitment strategies enable selection of the right candidate for each role/organization New employees initial experiences of the organization are positive Appropriate development opportunities are available to employees, and that they are kept aware of their likely career path with the organization The organizations reward strategy reflects the employee drivers The leaving process is managed effectively
y y
y y
64
&
Manager Role in Retention When asked about why employees leave, low salary comes out to be a common excuse. However, research has shown that people join companies, but leave because of what their managers do or dont do. It is seen that managers who respect and value employees competency, pay attention to their aspirations, assure challenging work, value the quality of work life and provided chances for learning have loyal and engaged employees. Therefore, managers and team leaders play an active and vital role in employee retention. Managers and team leaders can reduce the attrition levels considerably by creating a motivating team culture and improving the relationships with team members. This can be done in a following way:
y
Creating a Motivating Environment: Team leaders who create motivating environments are likely to keep their team members together for a longer period of time. Motivation does not necessarily have to come through fun events such as parties, celebrations, team outings etc. They can also come through serious events e.g. arranging a talk by the VP of Quality on career opportunities in the field of quality. Employees who look forward to these events and are likely to remain more engaged. Standing up for the Team: Team leaders are closest to their team members. While they need to ensure smooth functioning of their teams by implementing management decisions, they also need to educate their managers about the realities on the ground. When agents see the team leader standing up for them, they will have one more reason to stay in the team. Providing coaching: Everyone wants to be successful in his or her current job. However, not everyone knows how. Therefore, one of the key responsibilities will be providing coaching that is intended to improve the performance of employees. Managers often tend to escape this role by just coaching their employees. However, coaching is
65
&
followed by monitoring performance and providing feedback on the same.
y
Delegation: Many team leaders and managers feel that they are the only people who can do a particular task or job. Therefore, they do not delegate their jobs as much as they should. Delegation is a great way to develop competencies. Extra Responsibility: Giving extra responsibility to employees is another way to get them engaged with the company. However, just giving the extra responsibility does not help. The manager must spend good time teaching the employees of how to manage responsibilities given to them so that they dont feel over burdened. Focus on future career: Employees are always concerned about their future career. A manager should focus on showing employees his career ladder. If an employee sees that his current job offers a path towards their future career aspirations, then they are likely to stay longer in the company. Therefore, managers should play the role of career counselors as well.
66
&
HOW TO INCREASE EMPLOYEE RETENTION
Companies have now realized the importance of retaining their quality workforce. Retaining quality performers contributes to productivity of the organization and increases morale among employees. Four basic factors that play an important role in increasing employee retention include salary and remuneration, providing recognition, benefits and opportunities for individual growth. But are they really positively contributing to the retention rates of a company? Basic salary, these days, hardly reduces turnover. Today, employees look beyond the money factor.
employee retention can be increase by inculcating the following practices:
67
&
1. Open Communication: A culture of open communication enforces loyalty among employees. Open communication tends to keep employees informed on key issues. Most importantly, they need to know that their opinions matter and that management is 100% interested in their input. 2. Employee Reward Program: A positive recognition for work boosts the motivational levels of employees. Recognition can be made explicit by providing awards like best employee of the month or punctuality award. Project based recognition also has great significance. The award can be in terms of gifts or money. 3. Career Development Program: Every individual is worried about his/her career. He is always keen to know his career path in the company. Organizations can offer various technical certification courses which will help employee in enhancing his knowledge. 4. Performance Based Bonus: A provision of performance linked bonus can be made wherein an employee is able to relate his performance with the company profits and hence will work hard. This bonus should strictly be productivity based. 5. Recreation facilities: Recreational facilities help in keeping employees away from stress factors. Various recreational programs should be arranged. They may include taking employees to trips annually or bi-annually, celebrating anniversaries, sports activities, et al. 1.6. Gifts at Some Occasions: Giving out some gifts at the time of one or two festivals to the employees making them feel good and understand that the management is concerned about them.
68
&
ATTRITION RATE IN THE ITes SECTOR AND BPO SECTOR
BPOs in India are expected to employ around one million people by 2008, but the challenger is to find quality human resources given the current attrition rate of around 35-40%. Currently it is about 35% in non-voice and 45% in voice call centers. However what the number don't show is that more than 60% of those who leave a particular BPO do not leave for a competitor, but leave the industry as a whole. Here lies the danger for this sector and the challenge for HR consultants. Agents want to become team leaders. Team leaders want to become supervisors. Supervisors wants the job of the CEO.
69
&
At an attrition rate of 40%, the cost of attrition in the industry is 1.5 times the annual salary. Some of the reasons could be
o
Many see this space to be an Internet sweatshop where all that the employees are required to do is just mechanically input numbers into excel sheets or, worse still, answer phone calls inthe same tone and repeat the same lines at least 100 times a day/night.
People who join a BPO usually do so to make a 'quick' buck. They are bound to quit because sooner or later they will find something more attractive in terms of the job profile and/or pay.
The industry has concentrated on hiring young, dynamic and these are looking for more than just a job.
Talent in this space is generally overlooked, which leaves the deserving few disgruntled with top management and hence fosters attrition.
To fix this problem BPO firms are trying to solve this big problem
o
By hiring mature talent [i.e. people over 35 years in age].
70
&
o
HR must realise that fatter pay cheques can never be a sure-shot way to retain employees. More important aspects like a secure career, benefits, perks and communication cannot be overlooked at any level.
Employee rentention must be the focus, which means that talent must be recognized and suitably rewarded.
Hire outstation candidates (from small towns) and provided them with shared accomodation.
o o
Offer management diplomas and MBA courses. Only 5 out of 150 employees become team leaders in a year, hence cash incentives is one way to keep the employees happy. Daksh shells out about Rs 4,000 bonus per onth to almost 85% of its workforce.
Use psychometric tests to get people who can work at night and handle the monotony.
BPO must concentrate on becoming an 'employer of choice'. A comprehensive process framework and access to proper infrastructure in the work place goes a long way in retaining employees, as a congenial work environment is critical.
71
&
STATISTICS THAT COMPARE ATTRITION RATES ACROSS INDUSTRIES?
% chang e from 2006 to 2007
Sr . N o
Sector
0-3 years
4-7 years
8-12 years
13+ years
Expecte d increase in 2008
1 2 3 4 5 6 7 8 9
Pharma & Chemicals
25.00 %
10.00 % 2.46% 20.00 % 25.00 % 35.00 % 30.00 % 3.00% 15.00 % 5.00%
5.00% 2.46% 20.00 % 20.00 % 20.00 % 20.00 % 2.00% 20.00 % 2.50%
2.00% 3.00% 20.00 % 7.50% 15.00 % 10.00 % 2.00% 12.00 % 2.50%
-5.00% 6.00% 5.00% -3.50%
Manufacturin 8.58% g Financial Services Hospitality Ad & Media BPO Automobile Auto Component Banking 20.00 % 35.00 % 40.00 % 40.00 % 7.00% 12.00 % 10.00 %
13.00 % 17.00 %
20.00% 22.00%
No visible 5.00% 2.00%
14.00% 6.00% 2.00%
72
&
10 11 Infrastructure IT & Telecom 16.00 % 32.00 % 11.00 % 25.00 % 7.00% 10.00 % 11.00 % 5.00% 9.00% 5.00% 20.00% 9.00%
Source: Emmay HR / BusinessWorld, 4 Feb 2008
FACTORS AFFECTING ATTRITION AND STRATEGIES OF RETENTION

Why Do People leave Jobs? There are various factors that affect an individuals decision to leave a job. While an employees leaving the job is considered attrition by one organization, it is looked at as talent acquisition by the new organization and to the individual it means a career move, economic growth and enhanced quality of life/convenience or closeness to family etc. Hence, what is a problem for one may be an opportunity for another. This short note examines the key reasons for attrition and explores what enhances retention as well as outlines some of the factors that can control attrition. It also touches up those factors that are beyond ones control.
Factors Affecting Attrition and Retention

There are various reasons why people leave their current job. These reasons may vary from individual to individual and when data are collected from a large number of individuals leaving or who have left an organization, some
73
&
consistencies may be observed-providing more insights as to why people leave in large numbers. If these are controllable-one attempts to control. If these are not within the control of the organization, the organization should prepare itself for managing attrition. Managing attrition does not mean reducing attrition only. It could also mean bringing down the negative affects of attrition and increasing the positive affects of attrition. To increase the positive effects of attrition and reduce the negative affects, appropriate retention and capacity utilization or talent utilization tactics should be used. In one of the organizations, attrition has been used as brand building opportunity. Thus an organization may say that we provide talent for other companies or they may say that if you join us your brand value goes up and you get good jobs etc. Today when a person leaves it causes a lot of disturbances in the organization. If it is a small organization the disturbance is even greater. Hence it is important to understand and manage attrition. There can be various reasons for people leaving their current jobs. Some of these include:
74
&
FACTORS AFFECTING ATTRITION
INDIVIDUAL
ORGANISATIONAL
OTHERS
Role Related Ambitions/Career aspirations Parental/Family mobility Personality factors No challenge No learning Style of boss Role clarity Role stress Culture Growth and career paths Pay packets
Peer pressure
Environment
Ambitions or Career Aspirations: It is but natural in a growing society and growing economy that employees at all levels aspire to build their career. There are economic aspirations, professional aspirations, family aspirations and all kinds of aspirations and ambitions that affect a persons desire to move. It is rare not to have such career aspirations. In the past, organizations grew at a pace and stability and individuals mostly saw their career in the current organization and stuck to the same. Now a days either organizations dont grow at the pace at which the individual career aspirations grow or other organizations grow at a pace that matches the individual causing
75
&
individuals to move. When you treat all the world as a large space for growth and building a career, it is futile for any organization to all the time compete with the rest of the world and try to provide careers for all the employees at the same pace at which the entire world or the best of the organizations in the world is moving. It is better to appreciate the growth and mobility and movement of the mind and take attrition as a natural phenomenon than to be agitated about it and have sleepless nights. However, if the organization can do something to create new opportunities, that meet the growing aspirations of competent people, it should certainly be attempted. However, such attempts require correct diagnosis of the situation. Comparisons and Equity Considerations: Comparisons with peers or classmates from the same college, batch, age group, organization, first job, city, etc. there are numerous dimensions on which similarities can be picked up and compared. Individuals today are flooded with such comparisons. Business magazines, compensation surveys by consultants and MNC companies have only aggravated this situation and enhanced comparisons. Organizations in their zeal to compete with one another in the market places commission such compensation surveys and further fuel the situation instead of controlling it. Unfortunately some of these organizations have to suffer the consequence of what they have created in their hay days. Parental and family mobility; Some times the desire to be with the closed ones also pushes the person to move. Although we have largely moved away from the joint family concept, there are still strong affiliations and affections. Need for being close with the family, spouse, children, parents etc. at different stages of ones life to fulfill different types of affiliation needs prompt a few people to leave their jobs and move from one city to another. Personality factors: Some people have a high need for variety. They get
76
&
bored and fatigued easily. They need to change their job or what they are doing at periodic intervals. Other wise they are restless and create morale problems with others working with them. They waste others time discussing organizational politics and polluting the atmosphere. Some people are constantly searching and seeking. They are highly ambitious and restless. They are highly achievement driven and want to achieve new heights in the shortest time. They have either been socialized so or fulfill their own power or other motives. Some may have a different motivation or value profile which may not be matched by the current job or the company and hence the decision to leave. Job related factors: The job related factors that cause the decision to leave are many these include the following: Inability to use ones competencies Lack of challenge Boss and his styles Lack of scope for growth in terms of position salary, status and other factors 5. Role clarity 6. Job Stress or role stress or role stagnation 7. Lack of independence or freedom and autonomy 8. Lack of learning opportunities 9. Lack of excitement and innovation, novelty etc. in the job These factors may be intrinsic and job related or extrinsic and job related or job chemistry related. Intrinsic factors are the factors related to the characteristic of the job. These are in plenty in BPOs where the work conditions (night work, work at odd hours, the nature of clients to deal with, etc) pose difficulties. Extrinsic factors are factors like role clarity, independence and autonomy, 1. 2. 3. 4.
77
&
bad boss, wrong chemistry of the team, work conditions that can be changed easily, lack of respect shown to the individuals, etc. A large number of the extrinsic factors can be controlled. Economic Factors: this deal with the aspirations in relation to salary and perks, housing, quality of living, need for savings etc. In addition to these there could be many other factors that affect decisions: Mobility of partner Fatigue Family reasons like having to look after old parents Closeness to kith and kin ROI in education Factors affecting Individual decision to leave: The factors can be classified as the following: Individual related factors Role or job related factors Organization related factors Professional factors Societal factors including Peer pressure factors and socio-economic environment related factors Some of the Potential methods of managing retention and employee engagement or skill utilization include the following: 1. 2. 3. 4. 5.
First Find the Source of Attrition- where and why?

Any method of controlling attrition or increasing retention should be based on a good understanding of the factors leading to attrition. The factors may be some times very simple and could be reveled by an examination of the statistical data. The statistical data could answer simple questions like the following:
78
&
Where is the attrition occurring? Is it more in males than females? What levels? Is there anything in common among those who leave? Is it related to some disciplines or people from a particular region or linguistic group? Is it more among candidates from certain colleges or institutions? Age groups? Etc. Simple demographic analysis among those who leave could reveal some insights. For example: in one oil Exploration Company such an analysis reveled that attrition is limited to those from the Drilling division and financial services division. Those who left the drilling division were found to be older in age and those who left Finance department younger in age. Those who left the Drilling department left with VRS and got good jobs elsewhere because experienced people are in demand. Those who left the finance department left because the demand for young CAs and financial managers had gone up in the outside environment. In both cases there were push as well as pull factors operating simultaneously. UPS found that they had a lot of attrition amongst its drivers who pick up and deliver the parcel services. They were a very critical part of the organization as they were most familiar with the routes and clients. They then discovered that the drivers job included loading and unloading which they hated. It then became easy for UPS to hire loaders and save the drivers from this work. It reduced the attrition rate remarkably. In one study by the author of an engineering services company the attrition was found to be more among certain section of engineers who faced the stress due to changing technologies and requirements of the company. Until the study was conducted it was assumed that people left because they did not like the style of their manager. The survey revealed that on the contrary
79
&
employees stayed longer because of the task centered but developmental style of their manager. In another study of a software services company the root cause for attrition was found to be the differential wage structure of the permanent employees as compared to the temporary employees. Temporary employees were paid on an hourly rate at double the amount of hourly rate calculated for permanent employees by dividing the cost to the company by 2000 hours. However they were not properly informed of the amounts spent by the company through various benefits and the outsourcing fee that was paid to the agency. Later the company had to undertake a program to change the CTC structure and also to educate the permanent employees. Once the source/cause of attrition is identified, solving the problem becomes relatively easy. At least the organization can then determine if any internal interventions will help reduce attrition. Some of the possible interventions that could help in enhancing retention are as follows: Compensation, Financial restructuring and New Incentive schemesincluding Salary and perks restructuring, ESOPs, PLPs, etc. ILFS introduced a new Performance Linked pay in mid nineties to manage retention at all levels. In this system all employees received a performance linked pay at the end of the year depending on the company performance (financial), departmental performance and individual performance. Combining all the three performance parameters it was possible to get as much as a years salary or more as PLP depending on the financial performance of the company. Introducing small recognition schemes may go a long way. Loyalty pay is a good mechanism of retaining the employee. In the loyalty pay the individual gets his share of the performance linked pay or enhanced incentive pay proportionate to his stay. For example in the ILFS case only a part of the PLP was given at the end of the first year and the remaining part
80
&
is given proportionately at the end of the second and third years. Organizations use most of the time compensation surveys and hike up the salaries. The tendency to use Golden handcuffs with deferred compensation, investment options etc. are useful. However in a competitive world often they artificially hike up the salaries as the recruiters also work out mechanisms of buying out such handcuffed people at any cost. Hot skills premium is paid by some companies for those who have crucial skills in short supply. They premium can be removed as the skill availability increases or the need goes down. ESS and OC interventions: Organizational climate and employee satisfaction surveys help in indicating the factors affecting attrition and help organizations take corrective action. In the case of one manufacturing company a climate survey revealed the lack of schooling facilities, commuting facilities to a nearby town; schooling facilities could improve the tenure of its employees. In another study the technological innovations were found to create tension and resulting is decisions to leave in fresh and junior levels of management. Such climate schemes may indicate small things like organizational communications, social get togethers and celebrations could inculcate a sense of identity and belonging ness and enhance the we feeling and thereby retention. Climate surveys also indicate those aspects of the personnel policies that need to be revamped for enhancing retention. In one company such a survey indicated that too much of differentiation and discrimination between the workmen and officers in terms of the canteen food, leave facilities and other work conditions reduced the resentment to management an enhanced commitment to the company. The attrition was more psychological than physical in this company. Psychological attrition and retirement are particular problems in Indian PSUs. In the development sector CARE India is one such agency that undertakes
81
&
periodic organizational climate surveys to keep in touch with the large number of employees engaged in development work and use it to restructure its processes and HR polices and retain people. It is interesting to have such a program in an organization where the jobs are contractual. In a development organization it is considered all the more essential to have motivated staff all the time. HRD Audit also gives insights in to the factors that may enhance retention. In one HRD audit it of an electronics company located in Bangalore where the salaries for found technicians was 20 % to 30% more than the market salaries, intention to leave the company were related to lack of career plans of the company. The company did not have any career plans as even the strategic plan was being determined by the Head Office in Europe and year to year targets came through the MD of the company. On the basis of the audit, the MD of the company was able to present his case to the Head office and get a strategic plan prepared and also institute career planning mechanisms. Audits and surveys by them selves are not solutions to the issue. Some times they could raise the hopes of an individual. In any case they are at best diagnostic tools and unless they are followed up in terms visible actions they may also set some amount of cynicism in motion. Celebrations and Social and cultural Networks: In some of the surveys and audits with which TVRLS is associated it has been found that employees get a sense of belongingness if the organization encourages some form of social networks, cultural programs, team celebrations. These can be done with very little investments. By encouraging employees to have picnics, social gatherings, celebrations and festivals etc. we encourage some amount of social networking and sense of belonging ness. Tata and Birla group of companies are known for doing these in their own ways. Some of
82
&
these organizations have created a sense of belongingness through their clubs, cultural forums and group celebrations and activities. When the person and is family feel at home with a company and have developed a social network retention goes up. Loyalty to colleagues can be thus made a significant retention force. New forums and methods need to be thought of to suit the requirements and chemistry of a given group. Thus in one case there may be an investment club, in another Golf Club, and a third cooperative society a fourth a charitable group to assist local community and so on. Assimilation and Integration Studies have linked the retention capacity of a firm to the induction and assimilation process. The new Economy industry and the need to be competitive require that the person needs to be indicted into the company even before he/she joins it. If the new employee joining at the top level joins the organization with full understanding of the culture, and the role he is supposed to handle a lot of employee turn over can be contained. According to studies in the US while firms go to great lengths to hire new employees, only 20% of them stay two years. Nearly 70% of the newly hired seniors leave within two years .There is only a 50% chance that when some one takes up a new job he will be with the company for more than two years. In a 3 month period in the year 2000 alone 350 CEOs in the US let their jobs. According to a HBR article (2000, issue 78) 80% of a pool of executives changed their jobs within two years. Another study reports that 47% of executives appointed as presidents left within four years. In a study of 359 positions listed in resumes it was found that 68% left their previous jobs within twelve months. (Smart, 1999) Bradford Smart (1999) estimates that the cost of mis-hires are perhaps.. 40 times base cost at top levels. When you consider recruiting, actual
83
&
compensation expenditures, severance, and additional cost of lost productivity, the time it takes for some one to become productive, business mistakes and missed opportunities etc. Research by Sibson & Co in four high turn over four high turn over industries found that replacement costs have reduced the earnings and stock process by an average of 38%. The estimated cost of replacement has to be multiplied at least three fold for every top leader who does not make it failed or left the origination) Effects of losing a leader ripple through out the organization. Loss affects the organization's competitive position due to leadership vacuum Triggers turnover at other levels Creates loss of developmental and intellectual resources Disrupts and weakens customer relationships Employee turnover has a significant effect on companies bottomline by inhibiting their ability to keep current customers, acquire new ones, increase productivity, and pursue growth opportunities People dont quit companies. They quit bosses. Numerous studies have indicated the correlation between job satisfaction and direct supervisors and managers. According to new study 41% of high value employees who intend to leave their jobs are dissatisfied with their managers or supervisors. Gallup of 2 million employees form 700 companies indicated that strong links between employee tenure and employee-supervisor relationships. When a new leader joins the team they join three types: Functional team they lead Executive team they collaborate with including the senior leaders Project related cross functional teams When leader turnover is high the working alliances across the organization are not in place long enough to embed any changes that
84
&
are introduced
The purpose of induction and assimilation therefore is to ensure that leaders will adapt and become full contributors in the new organization faster, better and with fewer destabilizing effects to the individual and the organization. A successful assimilation is one in which both the individual and the organization are transformed for the better and are able to leverage each others strengths to achieve mutually beneficial goals. The individual and the organization need to treat together for this purpose. Assimilation of new leaders occurs in four stages: It begins with point of hire and completes when the individual is a full contributor and no longer an outsider. The assimilation journey is a continuous negotiation between the two extremes and they need To be balanced. The balance needs to be between: Being patient and becoming productive Setting ones own pace versus following organizations pace Trusting intuition versus making data based decisions Pleasing various stake holders versus meeting ones own priorities Implementing change versus respecting the culture of the organization Demonstrating competence versus seeking advice when one needs it Building relationships based on trust versus testing assumptions about others Intervening appropriately versus waiting until you have all information Drawing on the past versus not letting the past bind you
85
&
Acting with authority versus staying in learning ode Not leading ego versus staying with confidence Making your position clear versus seeking feedback Affiliating with people versus maintaining boundaries The HR Departments as well as the top management and other line manager have a responsibility to ensure that the managers indicted at the top levels assimilate the culture, role and other things of the company fast and manages the contradictions mentioned above. This will only ensure that the retention is higher and top management recruited newly into the firm give their best and high ROI. Assimilation is both fluid and dynamic. It can be influenced by different factors at different points of time of the organizational life cycle. New leaders are most likely to leave when they lack support they need to their best work. Attrition is usually the result of not being able to contribute what they were hired to make. They are most likely to stay if they feel a deep commitment and affiliation to an organization. Effective assimilation strategy: Acknowledges difficulties of entry into a new organizations Legitimizes and individuals adjustment period Builds in multifaceted supporting mechanisms an institutional level (peer support, tips on bridging organizational knowledge, and learning gaps) to asset the new leader through the process Assimilation savvy organizations should: Focus on assimilation as a tool for retention and leaderships strategy Have a formal system and program of assimilation Use coaches for assimilation Use HR for assimilation process
86
&
People join an industry that is perceived as leader but stay only if they meet intellectual and emotional needs. Coaching services: With increased competition and scope for career enhancement the world of executives is becoming a busy world. It is a world of work pressures, competition. Organizations pay more and put pressures on employees to perform as they need to get their ROI on CTC. The young manager is busy proving to his company that he can make a difference and serves what he is being paid. There is no time for family and self. This is resulting in increased stress and frustration. The world is becoming some times and for some people most of the time lonely world. In such a situation making available mentors, coaches and guides will go a long way in helping the individuals get the right type of counseling and advice. Such advise with a group of mentors and experienced counselors could go a long way in helping employee get realistic picture of what he is likely to get or dont get from the change he makes. Employee Engagement: The best way to retain is to provide work motivation. Challenge, job satisfaction, treating the employee with significance, being sensitive to his needs, making the organization predictable with systems and practices that are not bent or changed to accommodate any individual at any time etc. may help retention. Using task forces could be constituted to examine the sources of attrition. When employees are adequately engaged and care is taken to see that they enjoy their job ad their families are taken good care of and adequate social and financial security is provided retention goes up on its own. There is no substitute for an engaging company with a secure and protective atmosphere. The engagement should come from challenge. There are many examples of HR practices that have been found to engage employees. Providing periodic training, learning opportunties, freedom and autonomy at the work place, recognition of contributions, supportive boss, recognition of contributions
87
&
etc. will make a lot of difference in enhancing retention rates. Market Driven Approach: Prudential introduced a building management capability program which integrates recruitment, retention and training efforts. The program is anchored by a sophisticated planning model that enables business managers to develop highly targeted retention programs that create cost-effective contingency plans for filling potential gaps in skills. Prudential has begun to assess how long the organization would like the employees to stay on board. They decide those whom the company wants to have indefinitely, those who should be there for a shorter period and those on whom retention investments dont make any sense. Then they use a number of mechanisms depending on the categories of employees. They tailor the programs for the retention requirements rather than employing them across the board (Cappelli, 2000) Job Design and OB Customization: This method involves assessment of which tasks to be included in what jobs. For example the united parcel service mentioned earlier redesigned the job of drivers by separating the loading job from that of the drivers. Though it increased the turnover of the loaders it decreased the turn over of drivers which are considered an important role. The loaders could be replaced with ease. Designing the jobs for specified periods of time is another way of managing retention. If a person is appointed for a period of three years and the organization is prepared for the same and the employee is also prepared part of the issues resolved. CARE India and many other international NGOs use this approach. In customization programs the employees are given scope to define their job after an assessment of their skills and interests. Key employees might undertake a formal self-assessment of their work and non-work goals and how those goals could best be achieved in the context of company; operations. The assessments would form the basis for individual
88
&
employment agreements, which might be created using cafeteria-style programs similar to those in allocating employee benefits (Cappelli, 2000 p 107). Change of Styles through 360 Degree Feedback and Internal Customer satisfaction Surveys: Some times the style of manager may be responsible for employees in certain departments to leave. With supportive managers and Head of departments employees think several times before they leave. Some managers may not realize that their coercive style, excessive task centeredness, and the way they assign tasks including the clarity with which they give instructions, respect etc to employees have tremendous impact on their staying with the company. By recognizing the roles they play and the styles they exhibit and seeing the impact they are making senior managers can at least reduce the push factors for attrition. There are several cases of Senior Managers realizing the impact of their style in the 360 degree Feedback programs conducted by TVRLS. Other Methods: Start with recruitment. Dont recruit those people who will be the most difficult to retain. Pay attention to this aspect from recruitment stage itself. Adapt to Attrition. Attrition is the order of the day. Market forces are too strong. Focus on what you can change. Dont focus on what you cant change and lose your sleep. Some times you dont have to recruit all high powered staff. In the olden days some of the business houses did not go to business schools where the graduates are expensive and are job-hoppers. These included a highly rated business schools. They recruited from the less popular business schools and found them to contribute a lot and stay loyal. Simplify and standardize jobs and use multi-skilling to help meet any
89
&
contingencies. Focus on retaining intellectual capital even when employees leave. Think of appropriate mechanisms and build organizational memories and knowledge systems to retain talent and intellectual capital. Teamwork task forces and standardized systems help. IT support helps. Electronic records of employee knowledge helps in many cases. Cooperate with competitors. Form clubs and associations. Work with local schools and communities and develop a large source of skill base by giving projects and grants to local colleges.
90
&
Few suggestion that would help in retaning Employees1- An Employee would work tirelessly for the company, if he is being made aware that he is an important part of the company. 2- Constant Constructive Feedback along with Appreciative Feedback to the employees. Be specific in your feedback. 3- Award them with Recognition if an employee has done something valuable. Dont wait for too long. 4- Be in touch with your employees and help them when they are in need. An Organisation should be aware about need of the employees before it can launch its retention plans for them.
91
&
Staff attrition (or turnover) and absenteeism represent significant costs to most organizations. It is odd, therefore, that many organizations neither measure such costs nor have targets or plans to reduce them. Many organizations appear to accept them as part of the cost of doing business - a sign of increasing job mobility and decreasing staff loyalty perhaps, a matter to be regretted but just 'one of those things.' They add a sum in their budgets for 'temp staff' and 'recruitment' and forget about it. However, it seems to be one of the areas in which HR can make a difference - and one that can be measured in quantifiable, financial terms against targets. An attrition rate in call (or contact) centres has become legendary. Indeed, the attrition rates in some Indian call centers now reach 80%. This is an extreme figure but the average attrition rates in Indian call centers are up around 30-40%. However, it is interesting to note that the attrition rates in India - and the costs associated - are so high that they can override the benefits of lower wage costs. While wages in call centres in Indian are less than one-eighth of those in Northern Europe, it has been reported that Hewlett-Packard have found the cost per 'ticket' (the cost of processing a query) has doubled "due to the inability of the staff to resolve customer queries efficiently because of language barriers and inexperience." It is said that this increased cost has made HP's move from Ireland to India "completely pointless," and that it can never recover the (substantial) costs of the move. It is further reported that GE Capital has moved a call centre back to Australia "after staff attrition rates of 70% wiped away any potential cost savings." The issue is not with the quality or education of the staff - and still less with the investment in technology. It is simply attrition - people do not stay long enough to be taught or to learn the job. The staff may be cheaper but if they cannot do the
92
&
job, what's the point? Managing attrition is not just a 'nice thing to do' in Indian call centers. It is the route to their survival. Far from accepting attrition rates as part of the cost of doing business, it is surely something that all organizations should address, and equally surely it is an area in which HR can take a lead - measure attrition, seek its causes, and set strategy to handle Attrition & Retention Process.
93
&
BOOKS REFFERED
HERMAN ROGER .E., KEEPING GOOD PEOPLE (2009), 13th edition, Page 91-105. PHILLIPS JACK J., MANAGING EMPLOYEE RETENTION- A STARTEGIC ACCOUNTABILITY APPROACH(2009), 2nd Edition, VishwaPrakashn New Delhi, 2nd edition, Page 72-95. GLANZ BARBARA A., HANDLE WITH CARE- MOTIVATING AND RETANING EMPLOYEES(2009), 2nd Edition, VishwaPrakashn New Delhi, 2nd edition, Page 90-135.
MAGAZINE AND JOURNALS

MAGAZINES PUBLISHED BY WPIRO MAGAZINES PUBLISHED BY T.C.S
WEBSITES REFERED
www.naukarihub.com www.citehr.com
94
&
Employees were asked the following important questions :

1) Are you satisfied with the handling of Attrition & Retention Process of this organization? [ ] YES [ ] NO
2) Are you satisfied with the facility provided for the employees? [ ] YES [ ] NO
3) Are you satisfied with the attitude of head of department? [ ] YES [ ] NO
4) Are you satisfied with the approach of HOD in case of mistakes? [ ] YES [ ] NO
5) Are you satisfied with the recruitment and selection procedure? [ ] YES [ ] NO
6) Are You Satisfied with the Leadership Quality of HR? [ ] YES [ ] NO
95
&
7) Are you satisfied with your job security? [ ] YES [ ] NO
8) Are you satisfied with training related to job? [ ] YES [ ] NO
9) Are you satisfied with the way with which performance is measured? [ ] YES 10) [ ] NO
Are you satisfied with the company? [ ] NO
[ ] YES 11)
Are you satisfied with the Product? [ ] NO
[ ] YES 12)
Are you satisfied with the Company Norms? [ ] NO
[ ] YES 13)
Are you satisfied with the External Environment Of Company? [ ] NO
[ ] YES 14)
Are you satisfied with the Internal Environment Of Company? [ ] NO
[ ] YES 15)
Are You Satisfied with the policies of the organization? [ ] NO
[ ] YES
96
&
16) Are You satisfied with the organization faith towards their employees? [ ] YES 17) [ ] NO
Are You Satisfied with the Growth opportunity by the organization
for the employee? [ ] YES 18) [ ] NO
Are You Satisfied with the working condition of the organisation? [ ] NO
[ ] YES 19)
Are You Satisfied with the Remuneration provided by the
organization according to the work of employee? [ ] YES 20) [ ] NO
Are You Satisfied with the Colleagues & Subordinates And their
working Style? [ ] YES [ ] NO
97

2 HONEY Introduction

Încărcat de

Informații document

Descriere originală:

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

2 HONEY Introduction

Încărcat de

Drepturi de autor:

Formate disponibile

&

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

What Wipro Does: transforming your business

Its Engineering College, Greater Noida

Wipro is the worlds largest independent R&D Services Provider

Wipro is the world's first PCMM Level 5 software company

World's first IT Services Company to use Six Sigma

Its Engineering College, Greater Noida

Wipro is the worlds first SEI CMM/CMMI Level 5 IT services company

Over 50 industry specific Centers of Excellence'

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Wipro Group Companies

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Tata Consultancy Services (TCS) Company Profile

Its Engineering College, Greater Noida

IT Infrastructure Services IT Service Desk

Its Engineering College, Greater Noida

Business Process Outsourcing

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Small and Medium Business TCS IT-as-a-Service Key Benefits

Its Engineering College, Greater Noida

TCS Technology Products

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

1-Non availability of some relevant data.

Its Engineering College, Greater Noida

INFORMATION ABOUT PRIMARY & SECONDARY DATA

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Training materials Technology Employee benefits Trainers Time

C. Administration cost They include:

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

*Source-Times News New York (2003)

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

It creates space for the entry of new talents

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

The Attrition Problem

Its Engineering College, Greater Noida

Its Engineering College, Greater Noida

Addressing the Problem

Its Engineering College, Greater Noida

Managing the problem