A STUDY ON EMPLOYEE ATTRITION AND RETENTION IN BPO SECTOR

SUBMITTED BY:Group no. 2(OXYGEN)GROUP MEMBERS:

Abhay SinghAmyn SayaniAnirban Das

Jasmeet KaurJnana Ranjan PatiPratibha Sharma

Vikash Verma

ACKNOWLEDGEMENT

We would like to acknowledge and extend our gratitude to the

following persons who have made the completion of this project

possible:

First of all we would like to thank our Faculty Coordinator

Prof. Mr. Abhay Anand Tiwari for his great help. Being our Project

Coordinator he provided us very necessary and important guidance and

support until the submission of our project.

Secondly, we would like to thank all our Seniors and Friends for giving

us proper guidance and support for preparing the Project.

Again we would also like to thank ourselves (all our group members)

for their dedicated effort to make this project a success.

Lastly, we would like to be very thankful to the all the employees of

IBM-Daksh for their good help to provide a better coordination and

control among all the activities related to completion of the project.

Therefore we are very much obliged to above people for their

continuous effort in making the whole Project Activity very much

learning and Interesting.

GROUP-2

(OXYGEN)

SECTION-I

PREFACE

This report provides an opportunity to students to learn and expand their

knowledge on employee attrition and retention in overall all organization

especially in BPO sector. They would be able to know the exact reason behind

this, methods taken to tackle it and hence take necessary steps for it. The report

also helps the student to devote his/her skill to analyze the problem to suggest

alternative solutions, to evaluate them and to provide feasible recommendations

on the provided data.

The research is on the topic “A STUDY ON ATTRITION AND RETENTION OF

EMPLOYEES IN BPO SECTOR”. Although we have tried our level best to prepare

this report an error free report, every effort has been made to offer the most

authenticate position with accuracy.

DECLARATION

We hereby declare that the following documented Project Report titled “A STUDY ON ATTRITION AND RETENTION OF EMPLOYEES IN BPO SECTOR” is an authentic work done by us.

The Study was undertaken as a part of the course curriculum of MBA Full Time

Program of IILM institute for Higher Education, GURGAON.

GROUP NO: 2

OXYGEN

SECTION-I

CONTENTS

Abstract…………………………………………………………………………………………………………………………………7

Introduction………………………………………………………………………………………………………………………….8

Purpose of the study……………………………………………………………………………………………………………..8

Employee Attrition………………………………………………………………………………………………………………..9

High attrition rate: A big challenge…………………………………………………………………………….9 Major worries for the industry……………………………………………………………………….11 Costs due to person leaving……………………………………………………………………………12 Benefits of attrition………………………………………………………………………………………..14 Analyzing the impact………………………………………………………………………………………16

Managing the problem………………………………………………………………………………………………17 The attrition problem…………………………………………………………………………………………………17 Addressing the problem…………………………………………………………………………………………….19 About the BPO industry……………………………………………………………………………………………..20 Causes……………………………………………………………………………………………………………………….21 Analyzing cause of attrition using a multilevel approach…………………………………………….22

Maslow’s hierarchy of needs………………………………………………………………………….22 Recommendations…………………………………………………………………………………………..25 The win-win model…………………………………………………………………………………………25

Reducing attrition………………………………………………………………………………………………………..28 The challenge of employee attrition-How bad is it? .......................................................28 Reducing end of career attrition………………………………………………………………………………….29 Reducing early career attrition…………………………………………………………………………………….29 Factors to consider in the cost of attrition……………………………………………………………………30 Is attrition important to your organization…………………………………………………………………..31 Is attrition always bad for an organization? .....................................................................34 Attrition in Indian BPO industry…………………………………………………………………………………..35 Tackling attrition head on…………………………………………………………………………………………….37 What is the attrition rate in the ITes sector………………………………………………………………….39 BPO attrition-The challenge of the year………………………………………………………………………40 Why is attrition impacting on market growth? ...............................................................41 Why are BPO providers experiencing higher attrition rates? ..........................................42 What can BPO providers do about it? .............................................................................43

Employee Retention…………………………………………………………………………………………………………..45

5 major things involved in retention Compensation…………………………………………………………………………………………………..46 Growth and career…………………………………………………………………………………………….47 Support……………………………………………………………………………………………………………..48 Importance of Relationship in employee……………………………………………………………..49 Organizational environment………………………………………………………………………………..50

Managing employee retention………………………………………………………………………………….51 How to increase employee retention………………………………………………………………………..52

Employers and their key drivers to attract and retain talent………………………………………54 Retention bonus……………………………………………………………………………………………………….54 Hire right talent…………………………………………………………………………………………………………56 Manager role in retention………………………………………………………………………………………….57 Importance of employee retention……………………………………………………………………………58 What makes employee leave? ......................................................................................59 Employee retention strategies………………………………………………………………………………….59 Innovative retention strategies for Indian BPO…………………………………………………………61 Retention myths……………………………………………………………………………………………………….66 Retention success mantras………………………………………………………………………………………..68 10 reasons why organizations are not able to retain employees…………………………………74

Research: The critical findings……………………………………………………………………………………………….75

Summary……………………………………………………………………………………………………………………………..79

Analysis of Data and Questionnaire………………………………………………………………………………………80

Limitations of the project……………………………………………………………………………………………………….88

Suggestions……………………………………………………………………………………………………………………………88

Conclusion………………………………………………………………………………………………………………………………89

Bibliography……………………………………………………………………………………………………………………………91

Appendix………………………………………………………………………………………………………………………………..92

ABSTRACT

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.

INTRODUCTION

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 today’s highly competitive world. With increasing attrition levels, it is necessary to have creative retention strategies.

PURPOSE OF THIS REPORT

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 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, set out solutions and target performance.

EMPLOYEE ATTRITION

Defining attrition: "A reduction in the number of employees through retirement, resignation or death"Defining Attrition rate: "The rate of shrinkage in size or number"

HIGH ATTRITION RATE: A Big Challenge

Introduction: In the best of worlds, employees would love their jobs, like their coworkers, work hard for their employers, get paid well for their work, have ample chances for advancement, and flexible schedules so they could attend to personal or family needs when necessary. And never leave. But then there's the real world. And in the real world, employees, do leave, either because they want more money, hate the working conditions, hate their coworkers, want a change, or because their spouse gets a dream job in another state. So, what does that entire turnover cost? And what employees are likely to have the highest turnover? Who is likely to stay the longest?

Background: The IT enabled services (BPO) industry is being looked upon as the next big employment generator. It is however no easy task for an HR manager in this sector to bridge the ever increasing demand and supply gap of professionals. Unlike his software industry counterpart, the BPO HR manager is not only required to fulfill this responsibility, but also find the right kind of people who can keep pace with the unique work patterns in this industry. Adding to this is the issue of maintaining consistency in performance and keeping the motivation levels high, despite the monotonous work. The toughest concern for an HR manager is however the high attrition rate.

In India, the average attrition rate in the BPO sector is approximately 30-35 percent. It is true that this is far less than the prevalent attrition rate in the US market (around 70 percent), but the challenge continues to be greater considering the recent growth of the industry in

the country. The US BPO sector is estimated to be somewhere around three decades old. Keeping low attrition levels is a major challenge as the demand outstrips the supply of good agents by a big margin. Further, the salary growth plan for each employee is not well defined. All this only encourages poaching by other companies who can offer a higher salary.

The much hyped "work for fun" tag normally associated with the industry has in fact backfired, as many individuals (mostly fresh graduates), take it as a pas-time job. Once they join the sector and understand its requirements, they are taken aback by the long working hours and later monotony of the job starts setting in. This is the reason for the high attrition rate as many individuals are not able to take the pressures of work.

The toughness of the job and timings is not adequately conveyed. Besides the induction and project training, not much investment has been done to evolve a "continuous training program" for the agents. Motivational training is still to evolve in this industry. But, in all this, it is the HR manager who is expected to straighten things out and help individuals adjust to the real world. I believe that the new entrant needs to be made aware of the realistic situation from day-one itself, with the training session conducted in the nights, so that they get accustomed to things right at the beginning.

The high percentage of females in the workforce (constituting 30-35 percent of the total), adds to the high attrition rate. Most women leave their job either after marriage or because of social pressures caused by irregular working hours in the industry. All this translates into huge losses for the company, which invests a lot of money in training them.

If a person leaves after the training it costs the company about Rs 60,000. For a 300-seater call centre facing the normal 30 percent attrition, this translates into Rs 60 lakh per annum. Many experts are of believe that all these challenges can turn out to be a real dampener in the growth of this industry. This only raises the responsibility of "finding the right candidate" and building a "conductive work environment", which will be beneficial for the organization. The need is for those individuals who can make a career out of this.

All this has induced the companies to take necessary steps, both internally and externally. Internally most HR managers are busy putting in efforts on the development of their employees, building innovative retention and motivational schemes (which was more money oriented so far) and making the environment livelier. Outside, the focus is on creating awareness through seminars and going to campuses for recruitment.

Major Worries for the Industry

Reckless Start-ups- a vast majority of the 310 start-ups are headed for a dead-end

(according to Nasscom). Their capacity utilization is less than one of the three shifts. Many of these companies that converted their empty basements and warehouses into BPO units or firms with $10 million-20 million VC funds that ran out of cash without creating anything more than white elephants. They have driven down prices to grab business, but have failed to deliver. They were always clueless about people, processes or technologies- the three key elements of the BPO business.

Poor Infrastructure- the industry has more to worry about than just reckless start-ups. Primary among those is infrastructure. While telecom networks are state of the art, getting a connection still takes up to three months. Unreliable power supply is forcing units to create their own back-ups. Roads are bad and airports are in dire need of repairs and upgrades.

High Attrition-another major problem is the high attrition and growth aspirations of the workforce. At least 60,000 of the 171,000 workforce change jobs every year. About 80% of them look for better leaders. Team leaders want to upgrade to supervisors, quality professionals or operations heads. The HR problem threatens to soon become grave. Good agents are becoming hard to find and with tardy infrastructure, big moves to the much talked about smaller towns will take longer. This means costs will rise making it difficult for small VC-funded companies to survive.

Attrition ratesUS 42%Australia 29%Europe 24%India 18%Global Average 24%

* Source-Times News New York

Components to be taken into consideration, while calculating attrition rate:

HR professionals are requested not to drive their own formulas to calculate attrition rate. In terms of numbers, attrition rate means:

Total Number of Resigns per month (Whether voluntary or forced) divided by (Total Number of employees at the beginning of the month plus total number of new joiners minus total number of resignations) multiplied by 100.

If calculating in monetary terms, it includes the following:

Costs Due to a Person Leaving

1. Calculate the cost of the person(s) who fills in while the position is vacant. Calculate the cost of lost productivity at a minimum of 50% of the person's compensation and benefits cost for each week the position is vacant, even if there are people performing the work. Calculate the lost productivity at 100% if the position is completely vacant for any period of time.

2. Calculate the cost of conducting an exit interview to include the time of the person conducting the interview, the time of the person leaving; the administrative costs of stopping payroll, benefit deductions, benefit enrollments.

3. Calculate the cost of the manager who has to understand what work remains, and how to cover that work until a replacement is found.

4. Calculate the cost of training your company has invested in this employee who is leaving.

5. Calculate the impact on departmental productivity because the person is leaving. Who will pick up the work, whose work will suffer, what departmental deadlines will not be met or delivered late.

6. Calculate the cost of lost knowledge, skills and contacts that the person who is leaving is taking with them out of your door. Use a formula of 50% of the person's annual salary for one year of service, increasing each year of service by 10%.

7. Subtract the cost of the person who is leaving for the amount of time the position is vacant.

Recruitment Costs

1. The cost of advertisements; agency costs; employee referral costs; internet posting costs.

2. The cost of the internal recruiter's time to understand the position requirements, develop and implement a sourcing strategy, review candidates backgrounds, prepare for interviews, conduct interviews, prepare candidate assessments, conduct reference checks, make the employment offer and notify unsuccessful candidates. This can range from a minimum of 30 hours to over 100 hours per position.

3. Calculate the cost of the various candidate pre-employment tests to help assess

candidates' skills, abilities, aptitude, attitude, values and behaviors.

Training Costs

1. Calculate the cost of orientation in terms of the new person's salary and the cost of the person who conducts the orientation. Also include the cost of orientation materials.

2. Calculate the cost of departmental training as the actual development and delivery cost plus the cost of the salary of the new employee. Note that the cost will be significantly higher for some positions such as sales representatives and call center agents who require 4 - 6 weeks or more of classroom training.

3. Calculate the cost of the person(s) who conduct the training.

4. Calculate the cost of various training materials needed including company or product manuals, computer or other technology equipment used in the delivery of training.

Lost Productivity Costs

As the new employee is learning the new job, the company policies and practices, etc. they are not fully productive. Use the following guidelines to calculate the cost of this lost productivity:

1. Upon completion of whatever training is provided, the employee is contributing at a 25% productivity level for the first 2 - 4 weeks. The cost therefore is 75% of the new employees’ full salary during that time period.

2. During weeks 5 - 12, the employee is contributing at a 50% productivity level. The cost is therefore 50% of full salary during that time period.

3. During weeks 13 - 20, the employee is contributing at a 75% productivity level. The cost is therefore 25% of full salary during that time period.

4. Calculate the cost of mistakes the new employee makes during this elongated indoctrination period.

New Hire Costs

1. Calculate the cost of bring the new person on board including the cost to put the person on the payroll, establish computer and security passwords and identification cards, telephone hookups, cost of establishing email accounts, or leasing other

equipment such as cell phones, automobiles.

2. Calculate the cost of a manager's time spent developing trust and building confidence in the new employee's work.

Lost Sales Costs

1. Calculate the revenue per employee by dividing total company revenue by the average number of employees in a given year. Whether an employee contributes directly or indirectly to the generation of revenue, their purpose is to provide some defined set of responsibilities that are necessary to the generation of revenue. Calculate the lost revenue by multiplying the number of weeks the position is vacant by the average weekly revenue per employee.

It is clear that there are massive costs associated with attrition or turnover and, while some of these are not visible to the management reporting or budget system, they are none the less real. The 'rule of thumb' appears to be very inaccurate indeed and, while it depends upon the category of staff, it is probably better to estimate around 80% of salary as a truer rule of thumb - and this will be on the conservative side. What does this mean? Well it means that if a company has 100 people doing a certain job paid 25,000 and that turnover or attrition is running at 10%, the cost of attrition is:

(Total staff x attrition rate %) x (annual salary x 80%)

100 staff at 10% attrition means 10 people leave and are replaced each year.

A replacement cost of 80% of a salary of 25,000 means the cost of each replacement is 20,000.

The cost of turnover is therefore 10 x 20,000 or 200,000 a year.

The on cost to the overall salary bill is 8%.

(Saving 8% of salary costs would make the average HR manager a hero.)

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.

There is also a flip side to the situation—the fact that good attrition is a pointer to the failure of the existing system and processes in the organization in hiring the right employee, grooming and training him to be a productive worker. NR Ganti, Chairman and Managing Director, SQL Star International, asserted that any attrition in any form is bad for an organization. “It means that a wrong choice was made at the beginning,” he pointed out. The only plus point is that the realization has initiated action that will lead to cutting loss.

Attrition rates are considered to be beneficial in some ways:

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 It creates space for the entry of new talents

o 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 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 company’s ability to set effective HR priorities. Clients and business get affected and the company’s 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 cycle—attrition brings decreased productivity, people leave causing others to work harder and this contributes to more attrition. All this has a significant impact on the company’s strength in managing their business in a competitive environment.

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.

Managing the problem

There is no sure-fire 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 are 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 up gradation 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 company’s 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.

The Attrition ProblemAccording to NASSCOM data, the attrition rate for voice-based BPO’s 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 unplanned or the undesired exists.

The top reasons for employees to leave a BPO company are:

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 company’s 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 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 ProblemAlthough a large number of youngsters are attracted to the BPO industry because of the high salary packages offered by the MNC’s to graduates and even the under-graduates; 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 India’s position as the low cost destination for business process outsourcing worldwide.

Attrition in the BPO industry is one of the biggest issues which the growing ITES industry in India is facing. The effects of attrition are wide varying and impacts the firms in terms of losses (due to training and administration cost, high recruitment cost), incompetent processes, inability to offer services for highly technical process

Attrition though a nuisance also has some associated benefits along with such as low cost of operation, knowledge sharing amongst the firms benefiting the overall industry in increasing its competencies. Attrition usually occurs on two fronts - people leaving the industry and people shifting jobs inside the industry. Both of them have separate causes which have been identified in this report.

The report attempts to understand the underlying reasons for attrition by analyzing the BPO industry through Maslow's Hierarchical model of Needs. The Maslow's framework helps in giving a better perception about the motivation of the employees in the BPO industry and

identifying gaps in their expectations which needs to be filled up.

Finally, the report concludes by recommending a Win-Win Model which endeavors to satisfy the needs of both the employer and employee. The model encloses the employee by 4 levels of strategies thus reducing the attrition rate as well as minimizing the impact whenever it occurs.

It is a 4 stage framework consisting of-

1. Short Term Mitigation Plan2. Short Term Contingency Plan3. Long Term Mitigation Plan4. Long Term Contingency Plan

Various measures have been identified within each level of strategy to help in managing attrition creating a win-win situation for the industry as well as its stakeholders.

ABOUT THE BPO INDUSTRY

Business Process Outsourcing (BPO) is the delegation of one or more IT-intensive business processes to an external provider that in turn owns administers and manages the selected process based on defined and measurable performance criteria. Business Process Outsourcing (BPO) is one of the fastest growing segments of the Information Technology Enabled Services (ITES) industry.

The Indian business process outsourcing industry, roughly around 4-5 years old, is growing at a phenomenal pace. The number of BPO companies in Indian cities has mushroomed from a handful a few years ago to about 500 in 2004. 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, Indian BPO industry report). For a fresh college graduate, a call centre job pays about 2.5 times as much as other job openings. And the boom shows all signs of continuing considering that the cost per transaction in India is estimated to be the lowest at 29 cents compared to 52 cents in China.

Even after displaying impressive statistics about the growth and future, the BPO industry in India is bleeding with heavy attrition. According to several recruitment firms in the country, attrition in the ITES (IT enabled services)-BPO industry is close to 35-40 %. The worse news is that, this is only the reported figures and the actual figures are much higher and can be as high as 80% annually. Nasscom in a report said the outsourcing industry was expected to face a shortage of 262,000 professionals by 2012. This impediment is likely to affect the industry severely in the long run by creating a man power shortage as well as bringing up the

cost arbitrage on which the Indian industry is playing at the moment.

Attrition cannot be blindly classified with a negative connotation. A healthy attrition rate in any industry is necessary for new ideas and innovation to flow in as well as to facilitate the overall growth of the industry in terms of knowledge sharing. But after a particular level the same boon becomes a bane.

Recruiters explain that the high attrition rates significantly increase the investments that are made on the employees. The problem of losing funds in employee acquisition is more prominent in the high-end BPO segment. Companies invest a lot of time and money in training a candidate for the first four months. But these investments do not always get converted into actual profits. In case of the BPO industry, each agent level recruitment roughly costs the company Rs. 5000/-. This is the amount which a company needs to pay the job recruitment agency. Other than the direct cost, an associated cost of training and administrative service is also involved. Each agent works is non-productive or partly productive in the organization for nearly the first 2-3 months. Hence an employee leaving the organization within the first 6 months is a bad investment for the company. Also, as stated earlier the cost of attrition in the industry is 1.5 times the annual salary.

However, there is another perspective for attrition which is specific to the BPO industry in India. India at the moment is working on low end Business Processes which do not require quite a lot of amount of high skills. The reason for India's success has been primarily the low cost, high quality labor which India provides. Compared to other competitors such as Philippines, South Africa, Ireland; India is the only country where we have a balance between the cost involved and the quality provided till now. For Indian companies to remain successful in future they would have to keep the cost low. Since the tasks performed by an agent are pretty standard and does not require added skills, there is no benefit in retaining a highly experienced employee. At the floor level operation, a non-experienced candidate could work with the same efficiency of a 2-3 year experienced employee after minimal training. Hence the industry players consider the present attrition as a positive attrition which is serving the industry by keeping the cost low

CAUSES

Attrition in the BPO industry is twofold. One part of the attrition is where the employee leaves the industry entirely. The other section of attrition is where the employee joins another firm in the industry. Both the sections have separate reasons which need to be identified.

The primary reason for people leaving the industry is due to the cause that the industry is

viewed as a gap filler occupation. There seems to be a flaw in the way the industry is structured. The industry has been mainly dependent on youngsters who are taking out time to work, making money in the process also while thinking of career alternatives. Hence for this group BPO is never a long term career but only as a part time job. The easy availability of BPO jobs is only a source of easy money till the time there is no other source of funding. Also the unfriendly working conditions, late night work shifts, high tension jobs acts as a deterrent for people to stick to this industry for long time. In addition, the BPO jobs are not being taken with a positive spirit by the society on a large. Research says that nearly 50 per cent of those who quit leave the industry.

Regarding the attrition between firms, the chief cause is the unavailability of resources in the job market causing a great demand compared to the supply available. Presently there is no certified institute providing BPO specific training and education. The scarce resource in the market leads to wide scale poaching and head hunting amongst the competitors for the common pool. Due to the immaturity prevalent in the industry, the industry also has not witnessed mature HR processes such as Work force planning being implemented by the firms. Usually new projects in the BPO industry, requires a transition stage to be implemented within a short time. The lack of preplanned recruitment leaves the firms with no option but to fulfill their immediate requirement by poaching resources working on similar projects in other firms.

ANALYZING CAUSES OF ATTRITION USING A MULTILEVEL APPROACH

Attrition in the BPO industry needs to be tackled using a multi-level approach. Maslow's Hierarchy of Needs is a multilevel model which primarily identifies the needs which are likely to act as factors of motivation for any human behavior. We now analyze the current circumstances in BPO using Maslow's Hierarchy of Needs to develop a better understanding of what are the expectations of any person from the industry at each level and how is it being fulfilled presently. During this process the framework would also be used to identify gaps which when handled appropriately can act as motivators for a person to carry on in this industry, thus bringing the present attrition rate under control.

Maslow's basic needs are as follows: -

Physiological Needs

These are biological needs. They are the strongest needs because if a person were deprived of all needs, the physiological ones would come first in the person's search for satisfaction.

For any person in the BPO industry, this basic need is satisfied by the compensation provided. Hence he looks forward to a sufficient compensation structure which would take

care of all of his basic physiological needs. This needs to be continuously updated with time such that it fulfills all the physiological need of the person and his family at every stage of his life. Presently the BPO industry has been providing a better than average salary in the entry level but there is a general perception that it does not provide a proportionate rise in salary as the experience increases.

GAP: The boom in the BPO sector has lead to exorbitant rise in salaries. Hence even after the high entry salary, the industry workforce look forward to opportunities for making easy money. An absence in such arbitrage opportunities leads to dissatisfaction of the physiological need.

Safety Needs

When all physiological needs are satisfied and are no longer controlling thoughts and behaviors, the needs for security becomes active. Adults have little awareness of their security needs except in times of emergency or periods of disorganization in the social structure (such as widespread rioting). Children often display the signs of insecurity and the need to be safe.

There are two aspects of the security which would concern a person in the BPO business. One is the physical security of the employee and their family. This need becomes particularly important for the weaker sex who sometimes avoids BPO jobs because of the late night timings. The other aspect is the psychological fear of job security. At the moment since the industry is growing and there is ample abundance of jobs, this is not an issue. Also the Indian laws are not favorable to retrenchment. Hence the later is not an issue although physical security is.

GAP: The companies presently provide the best of available security but with the industry growing rapidly there is a need to maintain the same standards if we don't want this need to be a cause of attrition.

Needs of Love, Affection and Belongingness

The next higher class of needs which emerge is the need for love, affection and belongingness. Maslow states that people seek to overcome feelings of loneliness and alienation. This involves both giving and receiving love, affection and the sense of belonging.

This need of an individual gets highly affected by the BPO industry predominantly for people working in the night shift. Night Shift causes separation from ones family, friends and relatives. Employees have been found complaining about not being able to spend ample time with their family after working in night shift. The BPO companies try to compensate for

this by creating a fun-filled working environment and much stress is laid down on developing friends and relationships inside the company. But there is a huge gap in expectation and fulfillment which needs to be satisfied.

GAP: Lack of family and social interactions is one of the major concerns for the employees which need to be dealt by the BPO companies. This issue needs to be dealt with the importance and sensitivity which it deserves.

Needs for Esteem

As per Maslow, after the first three classes of needs are satisfied, the need for esteem becomes dominant. These involve needs for both self-esteem and for the esteem a person gets from others. Humans have a need for a stable, firmly based, high level of self-respect, and respect from others. When these needs are satisfied, the person feels self-confident and valuable. When these needs are left unfulfilled, the person feels inferior, weak, helpless and worthless.

BPO industry unfortunately has been regarded by the Indian society as a low value industry with low end work and which does not need high educational qualification. Hence a person working in this industry is viewed as a person of less ability compared to others working in any other industry. This attitude has developed because of the mass recruitment undertaken by BPO firms during the initial days, where not much focus was laid on selecting highly capable person. This diminution in esteem sometimes leads to reasons for one to leave the industry. The industry presently requires an image makeover. Some of the present firms are focusing on creating a positive image of the industry by using the media in a positive manner, though much is yet to be done. Certain measure such as change in Job Title is a positive step in this direction. Providing great working environment in terms of infrastructure and facilities also acts as boost to ones esteem for the employees.

GAP: People working in this industry have an unsatisfied Esteem need because of the general perception about the industry. As the industry matures, the industry's positioning needs to change from being a mere money maker option to an industry which provides immense learning, high growth prospects and opportunities for foreign experience.

Needs for Self-Actualization

When all of the foregoing needs are satisfied, then the need for self-actualization gets activated. Maslow describes self-actualization as a person's need to be and do what the person was "born to do". These needs make themselves felt in signs of restlessness. The person feels on edge, tense, lacking something, in short, restless.

The BPO firms nowadays are trying to provide Career growth path and higher Educational Opportunities for employees as a measure of retaining them. These steps are strides in fulfilling the discontented Self Actualization needs of the employees. These are one of the few long term motivations provided by companies.

GAP: Though recently companies have been trying to cater to the self actualization needs of their employees, this has been one of the major reasons for attrition. Industry workers are not able to envision the BPO industry as a long term career option. They feel that a long term career in the BPO industry is not feasible.

RECOMMENDATIONS

Owning to the nature of the industry we can predict that the attrition problem will remain a hurdle for BPO industry in foreseeable future. The attrition in the BPO is consistent with what has been witnessed in any industry during its growth phase.

The IT industry, manufacturing industry had seen similar high attrition during their growth stage which later reduces as the industry matures. The need of the hour is not to be bogged down but to accept the problem and see what we can do best in given scenario to reduce the impact. A win-win model needs to be devised for this, satisfying the needs of both, the employer and the employee.

Needs of the employer: To get maximum returns from each employee, recover training and development costs, minimize cost in terms of time in training new workforce, ensure that adequate no of people are there to carry on the process (proper manpower planning)

Needs of the employee: Enriched job profile, better career path, challenging work environment, future prospects of the job; in a nut shell a job that satisfies his overall needs as discussed earlier.

THE WIN-WIN MODEL

The Win-Win model is conceptualized on the supposition that the employees need to be enclosed from the universe by strategies at each level such that the attrition and its impact can be reduced to the minimum. Plans differentiate on the basis of tenure into short and long term as well as on the basis of usage into mitigation and contingency.

Short Term Mitigation Plan

Break Even Period

One of the objectives at this level should be on retention for a specified period of time

(break even period) so as to recover the cost incurred on the employee. This should be formally included as a process such that the organizations include this in consideration while recruiting candidates. Here are few suggested steps to calculate the minimum time period to recover the cost of employee.

Small Tenure Bonds

Once this period is calculated, strict actions can be taken to ensure that employees do not leave the organization before completion of this min timeframe. One such measure is getting a bond signed between the employee and the employer.

80 - 20 Rule

The firms concentrate on 20 % of the roles/ employees who contribute to 80 % of the productivity. These identified employees/roles need to be retained by special attention from the management's side.

Short Term Contingency Plan

This plan will focus on the work environment that enhances employee motivation for the job. It includes work conducive and fun filled environment, informal work culture suiting to the needs of the young employees. This is essential for compensating the affected social life owning to the nature of the job. Certain measures that can be included-

Having crèche in workplace would also help for the same Flexible Salary Structure Variable pay package based on performance ‘Working from home' when required for a short term Added benefits like sponsored vacations Provide job rotation amongst department such as Quality, operation etc on a

periodic basis such that employees get bored with the same monotonous work

Long Term Mitigation Plan

The long term mitigation plans are steps taken by the management to minimize the impact of attrition such that the firm does not face losses on the long term basis.

Defining job roles would help in mitigating the effects of attrition. Clear documentation of the process and the jobs performed so that the process is

not dependent upon an employee. Succession planning for the critical positions in the organization for faster

replacement. An assessment and certification can also be helpful in creating an employable talent

pool with benchmarked-requisite skill for frontline management.

Long Term Contingency Plan

The long term contingency plans are attempts by the industry to reduce the attrition as a whole.

To minimize the training costs, 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.

To reduce poaching of employees within the industry bilateral agreements between companies should being signed. Basic norms are being put in place and code of ethics is being stressed upon by industry.

A Common Database should be maintained by all the players of the industry to ensure that they are not cannibalizing each other’s resources.

The industry should look at Tier II and Tier III cities, where it can move its operations. These would increase the resource pool as well as would minimize the attrition. Awareness needs to be spread in these cities about the industry through advertisements.

Focus should be on having education and ongoing learning for the workforce, sponsoring employees on post-graduate programs and treating applicants and employees in the same way as one treats customers.

The WIN-WIN MODEL

Reducing AttritionGiven the perceived weakness of our "case" for mentoring and induction, we need a different strategy to create and adequately sustain the new employee support programs we know we need. Just as in business and other non-educational sectors, in education we have begun to look for a clearer connection between our programs and the "bottom line". The goal has been to collect and present local data which clearly show a monetary value for better support of new employees. This is why the most recent strategy for gaining induction support has been to demonstrate the true cost of employee attrition, which is the negative "flip side" of the more positive retention factor. In other words, rather than trying to show the less tangible benefits of increased retention, we must show the cost-effectiveness of

decreased attrition.

The Challenge of Employee Attrition- How Bad Is It?National projections suggest that, during the decade of 2000-2010 about 1/2 of all teachers nationally will need to be replaced. While these national level data are alarming for educators, both educators and non-educators alike would rather know their own district's attrition rate AND the actual cost of that attrition to the district and its taxpayers. Clearly, locally specific staff and cost data are better for motivating local action.

All of this means that, for every local school district, the strategic starting point to increased new employee support is to be able to clearly show two factors: 1. The extent of your district's need to recruit and employ new staff during the next five to ten years. 2. The actual total and per employee costs of employee attrition in your own district.

Districts need to use two ways to establish the first set of data on employment needs:

End-of career attrition, largely a result of retirement , which is harder to control

Early career attrition which are typically a result of controllable factors

Reducing End-of Career AttritionUntil recently, district efforts has most often been to offer early retirement packages as incentives to cause attrition of the most senior staff members. The primary motivation has been to reduce the cost of these high salary employees by replacing them with less expensive younger educators. Now that the problems are the quality of teaching and having enough good teachers to staff our classrooms, the challenge has reversed to "how can we keep people who might want to retire?”

The starting point for addressing these concerns is the development of a profile of the age of current employees and extrapolating the numbers and dates for their eligibility for retirement. This is an important set of information to know, since you want to target them with retention efforts, or at least, you must be able to replace them. Improving the retention numbers at the end of the career requires a different set of strategies than does increasing retention early in the career. Efforts should primarily focus on increased employee earnings that will increase a pension later, affirmation of the value of elder staff contributions, and on providing new, invigorating leadership responsibilities. Among other possibilities, appointment as a mentor, serving in mentoring roles, and receiving a mentoring stipend fit these needs very well. However, it is incumbent that your district "sell" involvement in

mentoring as offering senior staff these benefits to make sure they are obvious to your target audience.

Reducing Early Career AttritionYou also need to know how many employees are leaving before retirement age. This is a more critical factor to quantify as it is one over which your district can assert considerable influence. Specifically, the district needs to determine the total rate of employee attrition less the number retiring. The goals are to define and target a specific group of people and to do so with a different set of strategies than the end-of-career people need. Since attrition is the "flip side" of retention, the retention strategies we have discussed are still relevant to address attrition. What is different here is the need to know the cost of attrition. These data can be quite powerful, for they are annually repeating costs which are assumed to be necessary. These costs are so accepted as to have become almost invisible expenses.

Your strategy should have three parts:

Find out how bad early career staff attrition really is.

Determine the total district and per employee cost of attrition.

Present in a compelling way, a comparison of the cost of attrition and the cost of effective induction and mentoring support for new employees.

If done carefully, you should be able to show that the district is spending MORE on attrition than the cost of a quality induction and mentoring program. In other words, it costs more to do it wrong than it does to do it right! This argument is all the more compelling because your district does not need new money to do an effective job of supporting and keeping new staff. Induction will reduce the amount of money the district is already spending and losing each year to attrition! Induction more than pays for itself every year. Further, while that cost savings alone is enough a reason to do a quality induction program, there are many other reasons as well, like the improving teaching and learning, saving supervisory time, and increasing school improvement momentum, all of which are significant nonfinancial benefits in their own right.

Factors to Consider in the Cost of Attrition

Here are some things to consider that demonstrate clear financial costs. Your basic need is to know the cost to the district when a new employee leaves teaching or is not rehired. What you want to identify are your district's costs for factors such as:

New employee recruitment, especially for recruiting the kind of diverse staff a great

district wants

Administrative time and costs for trips to job fairs & colleges, and time taken for screening applications, interviewing, and meetings to make decisions

Newspaper, journal, internet and other ads

Technology specialist time for placing recruitment and job info on the district web site

Brochure and flyer printing, folding, addressing, and mailing

Personnel staff time processing applications, answering phones, dealing with certifications, and other inquiries, etc.

Cost of background checks

New employee initial orientation

New employee training during the first year or two? (both that just for new employees and all other district training)

Reduced student learning during the year or two that a new employee is learning to teach

Reduced student learning when a first or second year employee leaves with what they have learned from trial and error, and a different new employee is hired without that hard won experience and starts over at the beginning again.

Loss of instructional continuity when new employees leave or are not rehired because they are not as successful as required

Administrator time spent orienting, evaluating, coaching, developing, and supporting new employees who are not retained

Employee attrition is a costly dilemma for all organizations.Control attrition with effective communication - build strong, high-performance teams.

Is ATTRITION important to your organization?

Employee attrition costs 12 to 18 months’ salary for each leaving manager or professional, and 4 to 6 months' pay for each leaving clerical or hourly employee. According to a study by Ipsos-Reid, 30% of employees plan to change jobs in the next two years. Do the math and

discover how much your company may pay for attrition.

Although employee turnover can help organizations evolve and change, an American Management Association survey showed that four out of five CEOs view employee retention as a serious issue for organizational success. If managers know the real causes of attrition, managers can control attrition and retain employees. Each retained employee can save money and lead to better opportunities.

Employee Orientation

New employees who attend a positive orientation program are 70% more likely to be with the company three years later (Corning Glass).

Mergers/Acquisitions

Lee Hecht Harrison, a HR consulting firm, advises, "Far more employees will leave following a restructuring than are laid-off or terminated as a result of downsizing. This lost talent and cost can be minimized through good communication."

Exit Interviews

Exit interviews provide an excellent source of information of internal problems, employees' perceptions of the organization, underlying workplace issues, and managers' leadership abilities.

Ineffective Managers

High employee turnover can be recognized and properly attributed to poor managerial performance, emotional intelligence and ineffective leadership. Poorly selected or improperly trained managers can be expensive...

A Workforce Magazine article, "Knowing how to keep your best and brightest," reported the results of interviews with 20,000 departing workers. The main reason that employees chose to leave was poor management. HR magazine found that 95 percent of exiting employees attributed their search for a new position to an ineffective manager.

Hire attitude; Train skills

We can help you hire and inspire appropriate employees ...

Build positive, friendly, teamwork attitudes and commitment to customer services

Help new employees feel comfortable as they participate as valued team members

Provide periodic refresher courses to maintain team purpose and functionality

Apply Expert Modeling to rapidly transfer expert skills within a workforce

Reduce Attrition: Managers and Professional Employees

We can help you adjust your company vision and manager's performance reviews to reflect employee turnover, and provide mentoring and interpersonal training to inexperienced managers.

Develop and communicate a strong strategic vision

Provide relationship coaching and help people develop to their potential

Reward managers for their relationship skills - not only on technical know-how and financial results

People don’t leave jobs, they leave managers! Replace managers who will not develop relationship skills

Reduce Attrition: Clerical and Hourly Employees

We can help you communicate. Most employees want to know more about their work. We can explain each process and help employees understand the importance of their work. Your employees will become more knowledgeable about their effectiveness. Here are a few ways ...

Compliments and thanks cost little and can bring great benefits

Let employees know that their opinions are valuable

Keep employees informed - don't let them hear important news through rumors

Update employees with technical information

Address staff by their first names

Publicly praise what the employee has accomplished and say why it was important

Criticize privately about what the employee can do better and explain how to do it better

Create community with activities such as informal meals or events outside work

Involve employees in organizational planning

Titles cost little and remind employees that they are valuable

Is attrition always bad for an organization?

While organizations lament the challenges that they have to constantly encounter as a consequence of employee turnover, the truth is that all attrition is actually not detrimental for an organization. It is in fact a myth that every time an employee walks out of the door, the organization suffers. Some attrition is desirable and necessary for organizational growth and development. The point is how to differentiate between what is commonly known as “good attrition” from “bad attrition”. It is a thin line, which is not always easy to understand.

It benefits an organization when certain employees leave, whose continuation of service would have negatively impacted productivity and profitability of the company. There are also some people who have a negative and demoralizing influence on the work culture and team spirit. This, in the long-term, is detrimental to organizational health. On the contrary, when the departure of certain employees creates a setback (most often temporary) in terms of work continuity and progress, is commonly considered bad attrition. The time and investment lost in hiring and developing these people along with the cost of finding a replacement and bringing him up to the productivity level, all come at a high price.

The term “healthy attrition” is used to signify the importance of less productive employees voluntarily leaving the organization. Vikram Bhardwaj, Managing Director, Redileon executive search believes that the criteria is performance. “In the performance analysis of the ones who have left, if the proportion of high performers leaving is higher, the attrition is not good or healthy. Plain numbers and attrition figures do not signify anything without a deeper analysis of the above,” said Bhardwaj.

"Any attrition in any form is bad for an organization. It means that a wrong choice was made at the beginning"

- NR GantiChairman and MDSQL Star International

"High attrition implies that certain necessary skills are vulnerable or are not present due to employees being lost"

- Vikram BhardwajManaging DirectorRedileon

"Good attrition minimizes the adverse impact on business while bad attrition accentuates the loss"

- Dr J K NairCOO and Executive VPCalifornia Software Company

"Typically when you walk out people, you are setting an example. Certain things cannot be compromised on"

- Arun RaoVP-HRAppLabs

Attrition in Indian BPO Industry

What is the biggest challenge for the BPO industry in India today? Well, it is a no brainer: Attrition!

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.

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.

Attrition rates %

US 42%

Australia 29%

Europe 24%

India 18%

Global Average 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 centers) 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 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 off shoring 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.

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, 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.

Update In November 2008

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 rates in few leading companies are,

Infosys BPO 28%

Wipro BPO 18%

TCS BPO 21-22%

Tesco HSC has seen a 6% drop in attrition

In 2007 the attrition rate was about 50-55%.

Do you have any statistics that compare Attrition Rates across industries?

Sr. No

Sector0-3 years

4-7 years

8-12 years

13+ years

% change from 2006 to 2007

Expected increase in 2008

1Pharma & Chemicals

25.00% 10.00% 5.00% 2.00% -5.00% 6.00%

2 Manufacturing 8.58% 2.46% 2.46% 3.00% 5.00% -3.50%

3Financial Services

20.00% 20.00% 20.00% 20.00%

4 Hospitality 35.00% 25.00% 20.00% 7.50% 13.00% 20.00%

5 Ad & Media 40.00% 35.00% 20.00% 15.00% 17.00% 22.00%

6 BPO 40.00% 30.00% 20.00% 10.00%

7 Automobile 7.00% 3.00% 2.00% 2.00% No visible 14.00%

8Auto Component

12.00% 15.00% 20.00% 12.00% 5.00% 6.00%

9 Banking 10.00% 5.00% 2.50% 2.50% 2.00% 2.00%

10 Infrastructure 16.00% 11.00% 7.00% 11.00% 9.00% 20.00%

11 IT & Telecom 32.00% 25.00% 10.00% 5.00% 5.00% 9.00%

Source: Emmay HR / BusinessWorld, 4 Feb 2008

What is the attrition rate in the ITeS 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 doesn’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 want the job of the CEO.

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

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 in the 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

By hiring mature talent [i.e. people over 35 years in age].

HR must realize 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 retention 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 accommodation.

Offer management diplomas and MBA courses.

Only 5 out of 150 employees become team leaders in a year, hence a cash incentive is one way to keep the employees happy. Daksh shells out about Rs 4,000 bonus per month 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.

BPO Attrition – The Challenge of the Year

“Attrition has been recognized as the key challenge in 2008. The focus would now be on improving HR practices to retain employees and promote loyalties.”

BPO Times.com

According to industry estimates, the attrition rates within the voice BPO sector are around 50% while the non-voice BPO sector ranges between 20% – 30%. Service providers are competing with each other in order to attract the best professionals on the market.

A study published in 2007 by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) reveals that the market growth may slow down to 25 percent annually if the high attrition rate of 40% is not curbed on time. Venugopal Dhoot, President, ASSOCHAM, says, "The impact of attrition would result in an increase in expenditure incurred for training and development, loss of clientele, failure to attract more business based on high output, inconsistent delivery and quality issues regarding loss of productivity, high turn-around-time, costly recruitment process etc.". The report predicts that there will be a gap of 300,000 professionals by 2009.

Why is attrition impacting on market growth?

In a fast growing and dynamic market, attrition rates play a key role affecting the sustainability and future of the market. But why does this happen? The high attrition rates lead to several direct and indirect costs which have a clear impact on the service provider business case leading to a less viable outsourcing proposition.

Since day one of knowledge transfer, the understanding of the process specificities and complexities increase over time, networks are established between the service provider staff and the client retained organization, the productivity and quality increases. When a resource leaves, the service provider loses the progressively built knowledge. Eventually someone new will come, the majority of times will be a poor hand over and the service provider needs to go through the cycle again. The productivity decreases, quality is affected and relationships are damaged.

Furthermore, the efforts of the service provider are aiming at recruiting the right skills from the market. This leads to headhunt from the competitors to get the best resources available. Time, effort and money are spent in order to find the right skills having a direct impact on the competitor’s attrition rates and leading to a snow ball effect. The employees feel attracted by the higher salaries being offered by the competition and keep changing job contributing for the increase of high attrition rates.

On the other hand, the department where the leaving employee worked is impacted. The

lack of an experienced resource results in an increased workload for the department which affects their own productivity. This has a negative effect on the department morale, which also needs to build trust and relations with the new employee. Some Indian players mitigate this risk by hiring a permanent bench, however in smaller players or in Eastern Europe, China or Latin America branches a bench is not feasible due to the lack of scale of FTE’s. A gap of 6-8 weeks until a new person was hired (with all the consequences this brings) is the typical timeline we are looking at.

As the productivity, quality and morale decreases the service provider is forced to focus their efforts on recruiting the right skills, providing the right training and achieving the minimum performance committed to the client with less resources, rather than establishing activities which will improve the processes leading to a higher satisfaction of the client. Eventually, an increase of scope or pursuit of new business and new clients will allow a growth of the market.

If we think about it, a company with 20,000 employees facing attrition rates of 25% means that needs to recruit about 5,000 new employees a year to face attrition! On the other hand, it is estimated that the market growth averages 20% meaning that in a year this company would need about 4,000 new employees to cope with the market trend. This means that in a year the 9,000 would need to be recruited.

Why are BPO providers experiencing higher attrition rates?

High competition within the market, routine work such as invoice processing or supplier payments, time shifts to address business hours in Western countries, mismatch of expectations whilst many MBA and PhD individuals are performing entry-level tasks or constant work pressure are some of the industry specificities which makes BPO sector a leader in terms of attrition rates.

It is estimated that 60% of the employees leave an organization because they are offered higher salaries elsewhere, while 40% leave due to stagnation in career graph, long duty hours, night shifts and non-conducive HR policies. The service providers are themselves one of the causes for the stated high attrition rates, by offering un-reasonably high pay packages in order to recruit the right talent.

In addition, the much hyped "work for fun" tag normally associated with the industry has in fact backfired, as many individuals (mostly fresh graduates), take it as a first job. Once they join the sector and understand its requirements, they are taken aback by the long working hours and later monotony of the job starts setting in. Many individuals are not able to take these pressures of work. This mismatch of expectations is also a consequence of attrition

rates impact in the team.

The under resourcing of the team, poor hand over, recruitment of inappropriate skills and poor productivity leads to increased volumes, long hours and dissatisfaction at work contributing again for further attrition.

What can BPO providers do about it?

While it is evident that the impact and costs of high attrition rates within the BPO industry are extremely high, there is a general feeling of the industry to fight and decrease this phenomenon.

BPO players are investing more in their strategies to recruit and retain the best staff in the market. From my point of view, there are a couple of fundamental initiatives which could reduce the high existent attrition rates:

Recruitment of the right skills

HR Departments should have a clear definition of the job position as well as identifying the right skills needed to perform the respective role. A clear expectations set should be established at the interviewing stage.

Developing right skills in house

In case the right skills are not available in the market, then an intensive training and development program should be established in accordance with each individual specific skill. This approach needs to take into consideration the time lapse which will evolves until those skills are assimilated.

Clear career development paths

Being part of a world known brand is something commonly empathized by the suppliers to attract the cream of the market. The mismatch of expectations leads individuals to believe reaching a high position within a short period of time. In practice this does not happen in such a straight forward manner and only a couple of individuals see themselves escalating the hierarchy.

Job rotation

This is a known practice among BPO. The suppliers provide very similar work for different clients. It is a common practice to rotate people across clients within the same horizontal (i.e. F&A; Insurance; CRM; HRO). Rotation across horizontals also happens. From my point of view, this is not as effective considering that the skills required for F&A processing are not

the same as the ones required for HRO and so forth. Rotation across delivery centre’s is something to be seen lately especially for global deals where the team is spread around the globe. Job rotation is meant to reduce monotony, introduce a new challenge to the individual, proportionate awareness of company dimension, and interact more effectively with colleagues physically distant.

Benefits – Reward and Recognition Schemes

High rewards and innovative recognition schemes are established in the market as key differentiators of the competition. Objective rewards (such as closing books on time; performing x number of invoices a day etc.) are common. Also benefits such as transportation, world class work infrastructures, canteens, child support and playgrounds, language courses and sport activities can be seen while visiting any facility of the main BPO players. The major suppliers offer world class facilities where more than 30,000 people work equivalent to a parallel city where everything can be found, from restaurants to swimming pools or even supermarkets.

Process Documentation

In order to address the lost of knowledge from a particular individual leaving the company it is best practice in the industry to have updated process documentation. The process and key stroke documentation is done during the knowledge transfer phase. After this a FAQ is maintained which captures all the specifics of the process which are not captured in the process documentation. This will then be included in the process documentation every 6 months. By having this approach suppliers try to capture all knowledge existent which can then be shared during hand over with the new comers.

Quality and Process Improvement Initiatives

The incentive for participating in quality and process improvement initiatives aims on the first hand at improving quality and performance offered to the client. The flipside of this is to give individuals extra responsibility which is often seen as a trust and role enhancement due to their high performance.

The above actions are crucial to fight the industry high attrition rates and ensure consistent service delivery quality to their clients. This is the way to face the challenge ahead.

EMPLOYEE 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.

Corporate is facing a lot of problems in employee retention these days. Hiring knowledgeable people for the job is essential for an employer. But retention is even more important than hiring. There is no dearth of opportunities for a talented person. There are many organizations which are looking for such employees. If a person is not satisfied by the job he’s doing, he may switch over to some other more suitable job. In today’s environment it becomes very important for organizations to retain their employees.

The top organizations are on the top because they value their employees and they know how to keep them glued to the organization. Employees stay and leave organizations for some reasons.

The picture states the latest statement that corporate believes in “Love them or Lose them”

The reason may be personal or professional. These reasons should be understood by the employer and should be taken care of. The organizations are becoming aware of these reasons and adopting many strategies for employee retention.

Employees today are different. They are not the ones who don’t 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 don’t, 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

Employee retention would require a lot of efforts, energy, and resources but the results are worth it.

CompensationCompensation 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

Basic wage House rent allowance Dearness allowance

City compensatory allowance

Salary and wages represent the level of skill and experience an individual has. Time to time increase in the salaries and wages of employees should be done. And this increase should be based on the employee’s performance and his contribution to the organization.

Bonus: Bonuses are usually given to the employees at the end of the year or on a festival.

Economic benefits: It includes paid holidays, leave travel concession, etc.

Long-term incentives: Long term incentives include stock options or stock grants. These incentives help retain employees in the organization's startup stage.

Health insurance: Health insurance is a great benefit to the employees. It saves employees money as well as gives them a peace of mind that they have somebody to take care of them in bad times. It also shows the employee that the organization cares about the employee and its family.

After retirement: It includes payments that an Employee gets after he retires like EPF (Employee Provident Fund) etc.

Miscellaneous compensation: It may include employee assistance programs (like psychological counseling, legal assistance etc), discounts on company products, use of a company cars, etc.

Growth and CareerGrowth and development are the integral part of every individual’s career. If an employee can not foresee his path of career development in his current organization, there are chances that he’ll leave the organization as soon as he gets an opportunity.

The important factors in employee growth that an employee looks for himself are:

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 he’s not satisfied with his growth, he’ll 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, they’ll leave the organization for better jobs. Organization should not limit the resources on which organization’s success depends. These trainings can be given to improve many skills like:

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.

SupportLack 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.

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

Importance of Relationship in Employee Retention ProgramSometimes 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 employee’s 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 organization.

Relationship with the immediate manager: A manger plays the role of a mentor and a coach. He designs and 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 he’ll 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 he’ll 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 employee’s 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.

Organization 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 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

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

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:

o Flexible hourso Telecommutingo Dependent careo Alternate work scheduleso Vacationso 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.In this section we are going to study about various topics related to employee

retention, why is it needed, basic practices, myths, etc. in detail.

Managing Employee Retention

The task of managing employees can be understood as a three stage process:

1. Identify the cost of employee turnover2. Understand why employee leave3. 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 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:

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 organization’s reward strategy reflects the employee drivers

The leaving process is managed effectively.

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:

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.

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.

Employers And Their Key Drivers To Attract And Retain Talent

The Following table describes the Key Drivers to Attract And Retain Talent.

Employers Key Drives To Attract And Retain Talent

Procter and Gamble India

o Early responsibilities in careero Flexible and transparent organizational

cultureo Global opportunities through a variety of

exposure and diverse experienceso Performance Recognition

American Express (India)

o Strong global brando Value-based environment

o Pioneer in many people practices

NTPC

o Learning and growth opportunitieso Competitive rewardso Opportunity to grow, learn and implemento Strong social security and employee welfare

performance- oriented culture

Johnson & Johnson

o Strong values of trust, caring fairness, and respect within the organization

o Freedom to operate at worko Early responsibility in careero Training and learning opportunitieso Visible, transparent and accessible leaderso Competitive rewardso Innovative HR programs and practices

Glaxo Smith Kline Consumer Healthcare

o Performance-driven Rewardso Its belief in “Growing our own timber”o Comprehensive development and learning

programso Flat organization, where performance could

lead to very quick progressiono Challenging work contexto Competitive rewardso Exhaustive induction and orientation

program

Tata Steel

o Organization philosophy and cultureo Job stabilityo Freedom to work and innovate

Colgate Palmolive India

o Company brando Open , transparent, and caring organizationo Management according to the managing

with respect to guiding principleso Training and development programso Structured career planning processo Global career opportunities

Wipro o Company’s brand as an employero Early opportunities for growtho High degree of autonomy

o Value compatibilityo Innovative people program

Indian Oil Corporation

o Company brand imageo Work ethicso Learning and growth opportunitieso Challenging work assignmentso Growing organization

TCS

o The group brand equityo Strong corporate governance and

citizenshipo Commitment to learning and developmento Best in people practiceso Challenging assignmentso Opportunity to work with fortune 500

clients

Retention Bonus

Higher attrition rates within a particular industry have forced companies to use some innovative strategies to retain employees. Retention Bonus is one of the important tools that are being used to retain employees. Retention bonus is an incentive paid to an employee to retain them through a critical business cycle. Retention bonuses are becoming more common in the corporate world because companies are going through more transitions like mergers and acquisitions. They need to give key people an attractive incentive to stay on through these transitions to ensure productivity.

Retention bonuses have proven to be a useful tool in persuading employees to stay.

A retention bonus plan is not a panacea. According to a survey, non-management employees generally receive about 10 percent of their annual salaries in bonuses, while management and top-level supervisors earn an additional 50 percent of their annual salaries. While bonuses based on salary percentages are the generally used, some companies choose to pay a flat figure. In some companies, bonuses range from 25 percent to 50 percent of annual salary, depending on position, tenure and other factors. Employees are chosen for retention bonuses based on their contributions to management and the generation of revenue. Retention bonuses are generally vary from position to position and are paid in one lump sum at the time of termination. However, some companies pay in installments as on when the business cycle completes. A retention period can run somewhere between six months to three

years. It can also run for a particular project. A project has its own life span. As long as the project gets completed, the employees who have worked hard on it are entitled to receive the retention bonus. For example, the implementation of a system may take 18 months, so a retention bonus will be offered after 20 months. Although retention bonuses are becoming more common everywhere, some industries are more likely than others to offer them. Retail/wholesale companies are the most appropriate to implement stay-pay bonuses, followed by financial service providers and manufacturing firms. Companies of all sizes use retention bonus plans to keep knowledge employees retained in the company. To retain its key senior employees post merger with EDS Corporation, Mphasis is providing cash component based retention bonus plan for its employees. This is mainly to retain good employees and provide them a cash incentive to keep them motivated.

Hire Right Talent

Employee retention starts with recruitment. Early departures arise from the wrong recruitment process. Here are a few ways to ensure how to hire the right talent for a particular job.

Hire appropriate candidates. Hire candidates who are actually suitable for the job. For this the employer should understand the job requirements clearly. Don’t hire under qualified or clearly overqualified candidates.

Provide realistic job preview at the time of hiring: Mostly employees leave an organization because they are given the real picture of their job responsibilities at the time of joining. Attrition rate can be reduced if a right person is hired for a right job.Realistic preview of the job responsibilities can be given to the employment seekers by various methods like discussions, trial periods, internships etc.

Clearly discuss what is expected from the employee: Before joining the organization, tell the candidate what is expected from him. Setting wrong expectations or hiding expectations will result in early leaving of employees.

Discuss what the expectations of the employees are: Ask employees what they expect from the organization. Be realistic. If their requirements can be fulfilled only then promise them. Or tell them beforehand that their requirements cannot be fulfilled. Don’t show them an unrealistic picture.

Culture fit: Try to judge individual’s capability to adapt to the organization’s culture. A drastic change in the culture may give a culture shock to the candidate.

Referrals: According to the research, referred candidates stay longer with the

organization. There is a fear of hampering the image and reputation of the person who referred the candidate.

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 don’t 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:

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 followed by monitoring performance and providing feedback on the same.

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 don’t 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.

Importance Of Employee RetentionNow 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. It’s 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 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.

What Makes Employee 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 responsibilities don’t 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 won’t be able to perform it well and will try to find out reasons to leave the job

No growth opportunities: No or less learning and growth opportunities in the current job will make candidate’s 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.

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.

These practices can be categorized in 3 levels: Low, medium and high level.

INNOVATIVE RETENTION STRATEGIES FOR INDIAN BPOs

Retention of key employees is critical to the long term health and success of any organization. It is a known fact that retaining your best employees ensures customer satisfaction, increased product sales, satisfied colleagues and reporting staff, effective succession planning and deeply embedded organizational knowledge and learning.

Employees’ retention matters as organizational issues such as training time and investment, lost knowledge, insecure employees and a costly candidate search are involved. Various estimates suggest that losing a middle manager in most organizations costs up to five times of his salary.

The BPOs in India face an enormous challenge in reducing attrition rate and this being a nascent industry needs to draw parallels, examples from other industry practices

and as well as develop innovative employee retention initiatives as highlighted below. This has been classified into 3 groups:

1. The corporate level2. Managerial/supervisory level3. Employee recognition initiatives

Corporate level retention strategies:

Relevance of retention strategies in the Indian BPO industry vis-à-vis critical to its existence for the following reasons.

1. To bring stability in business and increase customer service process2. NASSCOM has estimated that the Indian ites industry will gross over $5.7

billion by 2005 (based on a conservative year-on-year growth of 65% by NASSCOM)

3. Staff/employee satisfaction translates directly into money quite quickly in the BPO industry to other industries.

4. To reduce the pressure on the recruiting process5. Recent acquisition deals both domestic and overseas by BPOs makes it even

more critical to stabilize their back end operations to service new customersBefore we proceed it’s important to understand the underlying reasons for high attrition rates, which are pretty steep and are around 40-50%. Currently it is about 35% in non voice and 45% in voice call centers. About 80% of them look for better careers within the same industry. Agents want to become team leaders. Team leaders want to become supervisors. Supervisors want the job of CEO. Based on the experts view in the BPO industry, literature and data available, the following trends are seen as below.

There are varied reasons for the same the major reasons for attrition rate are:

- Money- 10%- Night shifts- 35%- Monotonous/boring job- 30%- Others- 25%

As seen above from the above data, hr strategies at the corporate level of the BPO industry indeed have a huge challenge before them and their approach has to be productive and they have to develop innovative employee retention initiatives as mentioned here on.

A satisfied employee knows clearly what is expected from the everyday at work. Changing expectations keeps people on the edge and creates unhealthy

stress. This creates insecurity and makes the employee feel unsuccessful. An employee’s deliverables at work must be continuous to him clearly and thoroughly.

The quality of supervision an employee receives is critical to employee retention. Frequent employee complaints center on these areas.

a. Lack of clarity about expectationsb. Lack of clarity about benefits pertaining to performance based

incentivesc. Lack of feedback about performanced. Failure to provide a framework within which the employee perceives

he can succeed. The ability of the employee to speak his or her mind freely within the

organization is another key factor. Have meetings or dinner once a month, to share the company’s vision, the industry growth and where they see themselves in this scheme of things.

The perception of fairness and equitable treatment is important. When an employee is failing at work, refer to W. Edward Deming’s question,

“what is about work system that is causing the person to fail?” Most frequently, if the employee knows that what they are supposed to do, then the answer is time, tools, training, treatment, or talent. The easiest to solve, and the ones most affecting employee retention, are tools, times, training. The employee must have tools, time and training necessary to do their job well – or they will move to an employer who provides them.

Another important factor is focus on the process than on the person especially when the employee is not failing at work.

A common complaint or lament during an exit interview is that the employee never felt senior managers knew he/she existed.

The senior managers to be involved in the recruitment process If the recruitment team has identified potential and cultural fit candidates.

Involve the advisors or team leaders in the interviewing panels. In company presentations to potential candidates, encourages the employees

to share their experiences. Your staff members must feel rewarded, recognized and appreciated.

Frequently saying thank you goes a long way. Monetary rewards, bonuses and gifts make the thank you even more appreciated. Understandable raises, tied to accomplishments and achievements help to retain stuff.

Select the right people in the first place through behavior-based testing and

competency screening. Draw lessons from the Indian army, for their command and control leadership

where the troops are highly skilled, motivated and morale is high. The comparisons as drawn as both (BPO and army) have large numbers of employees and army’s style of leadership may not relevant to BPOs but it must be understood and gathered that military organizations are team oriented with continuous training. Troops expand their skill and experience capabilities they never dreamed possible, produces a highly motivated and efficient organization. Learning opportunity and responsibility is the key.

Offer an attractive, competitive, benefits package. Provide opportunities for people to share their knowledge via training

sessions, presentations, mentoring others and team assignments. Demonstrated respect for employees at all the time. Treat the employees well

and provide dignity of job; follow the maxim of Mr. Marriott that “Ladies and Gentleman serve the Ladies and Gentleman”.

If a key employee resigns, it should be taken up on a priority basis and kept confidential as fas as possible and the senior management should meet the employee to discuss his reasons for leaving and evaluate if his issues bear merit and whether they can be resolved.

Exit interviews: outsource this process to external consultants to get a realistic and unbiased feedback. This can be a great source of information regarding the shortcomings in a management system.

People want to enjoy their work. Make work fun. Engage; employ the special talents to each individual.

BPOs should Endeavour to implement work-life balance initiatives to reinforce the retention strategies. Innovative and practical employee policies pertaining to flexible working schemes, granting compassionate and urgency leave, providing healthcare for self, family and dependents.

Work-life balance policies would have a positive impact on:a. Attractive high caliber recruitsb. Retaining skilled employeesc. Reduce recruitment costsd. Improve employee moralee. Maintaining a competitive edge.

Listen to the employee’s ideas, never ridicule them. Offer performance feedback and praise good efforts and results. Implement organizational culture measurement tools like adversity quotient

(aq).

Recognize and celebrate the success. Staff adequately so overtime is minimized for those who don’t want it and

people don’t wear themselves out. Get them involved in social causes and fund drives like tsunami, disaster

relief. Provide a meaning or a cause to their lives. Nurture and celebrate organization traditions like diwali, holi, Christmas. Communicate goals, roles and responsibilities so that people know what is

expected of them and feel a part of a crowd. According to research by the Gallup organization, encourage employees to

have good, even best, friends at work. Encourage humor and lighter in workplace deal with stress which will ensure

that the employees are happy which gets reflected in their services especially critical in voice based transaction.

Feeling valued by their manager in the work place is a key to high employee motivation and morale.

Reach out to the families of the potential candidates with sustained and focused messages in the media about the excellent prospects in the BPO industry. There is an example of this instances- Late Rai Bahadur Mohan Singh Oberoi, chairman of the Oberoi group in efforts to makes sure that many women joined his company went to educational institutions and elicited women’s parents to come to the hotel. He told them “I will walk you and show what your daughters will do with us, please help us to train them”.

Excellent career growth prospects:-Encourage and groom employees to take up higher positions/openings. If not fulfilled then they will look outside the organization.

Look for the talents within the organization and encourage them. For instance, if a person has the potential to be a trainer, groom and develop the employee.

Night shifts:a. Have people from other walks of life to talk about their experiences. Other

professions like Army, Medicine, and shop floor workers also have to work in night shifts.

b. Have doctor to advice and guide them about their biological clocks and ways and means to deal with them.

c. Dietary advice: do’s and don’tsd. Create the passion that they are doing a yeomen service to the nation by

bringing the much-required foreign exchange.e. They are helping people (clients) to make their life easier.f. Special lights in the office/workers to ensure their bodies get Sufficient

vitamin D.g. One distinct disadvantage of night shifts is the sense of disorientation with

friends and family members. Concentrate on this problem and develop innovative solutions and ways to deal with it.

Focused training and development programs- for associates and team leaders A session on transactional analysis during the induction period so that both

are made aware of the causes for communication breakdowns and conflicts which affect their mental behavior and stress which needs to be tackled at the earliest in the right manner.

Those who are working on services verticals – like banking and financial services to be imparted training/knowledge of Vedic math, which would help them, calculate the figures quickly without using calculators.

Creativity and innovation- It’s all about attitude. A job can be as monotonous or exiting as you think/believe it to be, as it is all a state of mind. Look for excitement in the job process as it is not just answering the queries or solving the problems of customers but learning more about the customer through his voice accent or visualizing his environment/culture.

Encourage the best performers to share their experiences with others and mentor others.

Meditation room or deep breath exercises for associates and team leaders – the emphasis is that they should never be in the stress mode or upset while attending calls of a customer.

Hire outstation candidates (from small towns like Amravati, Latur, Nasik etc) and provide them with shared accommodation.

It is HR’s job; though not HR’s job alone, to champion and shepherd effective human resource management practices at both the strategic and day-to-day levels. That is, to be effective, human resource management practices must be grounded in two ways. First, they must reflect companywide commitments as to how it will manage and relate to its employees. Secondly, HR must implement these commitments so that the ideals of the enterprise and deeds of its agents are congruent.

HR must play a key role in the development and execution of the business strategy of an organization. It should evolve from a transactional support role to

partnering in the organization’s business strategy.

Retention Myths

The process of retention is not as easy as 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 sometimes 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 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 it’s 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 individual’s 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 organization’s 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 can’t 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 need is an employer for whom they can be loyal. There is no reason for the employee to hop jobs if he’s satisfied with the employer.

5. Taking measures to increase employee satisfaction will be expensive for the organizations: The things actually required improving employee satisfaction like respect, career growth and development, appreciation, etc. can’t be bought. They are free of cost. An employer or management that reacts well to the employee’s ideas and suggestions is enough for the employees to be retained.

Retention success Mantras

Transparent Work Culture

In today’s fast paced business 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 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 individual’s 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.

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 a more 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 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:

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 following a road map which tells where to go as a brand.

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 organization’s 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 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 manager’s 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:

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. 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 manager’s side is necessary as it help employees to improve their performance and increase productivity.

Communication Between Employee and Employer

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.

There are 3 categories of employees:

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.

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

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

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.

10 reasons why organizations are not able to retain employees

1. People don't get integrated. Most organizations have an orientation program which is more of data-dump or focused on compliance trainings being completed. The focus should be more on enabling employees to form networks within themselves.

2. Performance goals are unclear. In a fast growing team or business the focus is on getting the thing done today, but rarely are performance goals thought through and employees told as to which resources to approach for help.

3. Development is always tomorrow's job. Culturally Indians are focused on learning. If learning adds value only to the job and not to the overall career goals of the individual then the organizations seems too transactional for the employee.

4. The personal touch is missing. How comfortable are managers building personal bonds with their subordinates? A lot of managers shy away fearing a bond will make delivering hard messages difficult. I would argue that it's the other way round! Knowing employees on personal level makes a manager know their strengths and weaknesses. Work allocation and employee development become easier.

5. Reward systems are not transparent. Most employees who get salary increases because they have a rare skill at a particular point of time think they got their raise for excellent performance. Can you share details about how they have been compensated?

6. Perceived equity of reward systems is low. Like it or not, employees discuss

salary details and if there is any perceived lack of equity then you have an issue!

7. Goal setting process is not scientific. Most organizations impose a normal curve fitment, but do not train managers to set realistic goals or goals that tie up with organizational or functional goals. This also leads to point number 6.

8. External equity is missing too. Don't do an annual compensation survey when the market moves every 3-4 months. If your practitioners feel that externally comparable professionals are being valued more, then they will leave.

9. No communication around total value. If you offer benefits apart from only monetary terms do you communicate that to employees too? Things like being a global or niche industry leader, value of the brand of the organization, should also be made explicit.

10. No career planning. Are people aware of the ways in which they can grow in the organization? Who are the role models within the organization? Do they know what they have to do to gain the competencies to move to various levels?

RESEARCH: The critical findings

The increase in defecting employees that plagues many organizations led Integral Training Systems, Inc., a national consulting and training firm, and Behavioral Technology, a company specializing in employee retention, development and selection to tackle the attrition dilemma. This aggressive project included attrition and retention research they substantiated with a review of industry practices and behavioral science literature. Seven of their many critical findings are outlined below:

1. THE COSTS OF ATTRITION CAN BE STAGGERING, BUT OFTEN UNSEEN-What does it cost when a talented employee defects to the competition? Some cost factors are obvious, such as productivity losses due to a vacant position. However, there are often unseen costs, such as reduced productivity from the departing employee—who is inevitably distracted and contributes less during his or her job search (sometimes called “short-timer’s disease”). Using conservative calculations, one technical company in California’s Silicon Valley estimates it costs them an average of $125,000 when just one employee leaves. Other companies estimate attrition costs them annual productivity losses of 65% to 75% for each vacated position. Another organization with a national sales force of hundreds estimates they have to scramble to make up for over $1

million in potentially lost sales when just one salesperson leaves. To add insult to injury, this figure does not even take into consideration departing employees’ attempts to woo past customers to their new employers. Multiply these costs by the number of employees who leave in one year, and the financial impact is dramatic.

2. THE REASONS EMPLOYEES STAY ARE NOT THE SAME AS WHY THEY LEAVE Most organizations do not have a handle on the actual reasons why employees stay—or the actual reasons why they leave. Although many organizations attempt to capture the causes of attrition through exit interviews, such interviews barely scratch the surface of the real reasons employees leave. They inevitably fail to differentiate between factors that make the new job attractive to the departing employee and the reasons why they were prompted to consider leaving in the first place. For example, many employees report “better compensation” as a primary reason for leaving. In many cases, however, the ITS and BT research revealed these same employees were not originally dissatisfied with their compensation. Instead, other reasons—such as the lack of professional development opportunities—prompted their job search. Truth is, departing employees often do not report negative reasons associated with their old job (possibly from fear of retribution), but instead report what is attractive in the new job. Because of this phenomenon, organizational data from typical exit interviews fails to surface the real causes of attrition. This is just as true when an employee is actively recruited by the competition. Our work in retention shows attractive candidates receive calls from recruiters all the time! What causes the sudden shift that makes an employee act on a recruiter’s call at a particular point in time? We consistently found that something deteriorated in their work situation that caused them to take the current recruiter’s call more seriously. When organizations unknowingly misdiagnose the situation and fail to surface the most critical factors contributing to attrition, their solutions obviously fall short. This bad diagnosis leads to improper prescriptions, no relief and certainly no cure.

3. THE MANAGER'S ROLE IN ATTRITON IS PARAMOUNT BUT UNDERPLAYED-Most managers we interviewed lamented the loss of talented contributors. However, when asked to diagnose the reasons why employees leave, the average manager pointed to a variety of external organizational factors—such as compensation—and failed to take any personal responsibility. They typically did not acknowledge any factors within their control that contribute to attrition. Certain factors that are the responsibility of “the overall corporation”—such as inequitable pay scales or excessively rigid policies that dilute employee autonomy—certainly can aggravate

attrition. However, we discovered a large number of factors that contribute to employee retention are within the manager’s circle of influence. The bottom line is, managers need to take personal accountability in retaining top talent. To do this, they need more awareness, more tools and more guidance than ever before. And because their widened span of control has decreased their “face time” with individual employees, each contact must maximize any opportunity to influence employee motivation and commitment.

4. PREVENTION IS THE BEST MEDECINE-Losing key employees, even in small numbers, can be devastating. That’s why it’s important to track not only overall attrition ratios, but also the level of performers who leave. When we set out to determine the degree to which managers rank retention as a high ongoing priority, we were not surprised to find that the only time many managers think about retention is when they receive a resignation. And although most managers attempt to talk departing employees out of leaving, we found most employees resist those attempts. And in the few instances when the manager is successful in persuading the employee to stay, he or she often leaves within six to nine months anyway. (The exception is when a clear salary inequity is remedied, and the employee is satisfied with everything else about the work situation.) Clearly, the solution lies in tying retention to critical business activities so that managers see it as integral to business success and survival. Treating retention as an ongoing priority enables managers to focus on proactive measures to sustain long-term employee commitment rather than on reactive attempts to reverse surprise resignations.

5. RETENTION HAS OFTEN UNRECOGNIZED IMPACT ON THE CUSTOMER-Managers are well aware of the impact on their function when a valued employee leaves. However, even managers of customer-contact functions, such as sales or customer service, often fail to demonstrate sensitivity to the impact attrition has on customers. When key employees leave customer-contact functions, customers often experience:

discontinuity in the relationship a negative impact on their own productivity time wasted reorienting the new employee to their operation and the way

they work

When the relationship represents a value-added partnership, the change in account managers or service providers can set the relationship back months—and gives competitors a weighty advantage. This is especially true if the transition to

new account personnel is not well managed. At a certain point, regular changes in account personnel show organizational instability and create the impression that the organization does not care about the account relationship. In the case of development or support functions, we also found managers generally lack an awareness of the negative impact departing employees have on internal customers. Truth is, a top performing employee’s departure can have a “ripple effect” on the organization and its clients that creates problems for months.

6. MISGUIDED THINKING: ATTRITION IS INEVITABLE-Some level of attrition is unavoidable; in fact, a certain degree of attrition is desirable to compensate for poor hiring decisions. However, human resource and senior line managers often question whether they can really increase retention ratios. The answer is a definitive yes, with evidence to support it. The attrition rate for one organization’s division was 18.5% overall and 25% in one of the most critical occupation groups. After working with us and making retention a priority for every manager, the attrition rate dropped to 11.7% overall and 15% in the critical group (even with a reduction in employee compensation happening at the same time!). Another organization looked at retention risk analysis and intervention in a critical technical division because they feared attrition would rise in the near future. Two interesting findings emerged from our research with this group. The first was that this division was already following a number of the retention prescriptions we provide our clients (one of the few divisions in the entire company to do so). More striking, however, was the fact that as a result of following these prescriptions, the group’s retention rates were more than 10% higher than the rest of the company's, thus validating the efficacy of our model. Another company in the Northwest1 began with an attrition rate of 17%. After following the same prescriptions, they reduced their attrition rate to 3%, bringing their retention rate up to 97%. As the evidence suggests, attrition is not an unbeatable foe. Instead, it is a challenge that can be overcome with the right strategies and tools.

7. WORLD-CLASS RETENTION REFLECTS A MULTI-FACTORED SOLUTION-The scenario in many organizations is the same. A senior line manager or HR professional raises the red flag of attrition, recognizing its potentially devastating impact on the company’s strategic position. Someone scrambles to pull some sort of training or tools together that focus on only a few of the factors required to reduce attrition. The result? The organization experiences mediocre results—or no results at all. This multi-factored retention solution is like the story of the blind men and the elephant. Never having seen an elephant, three blind men were brought over to a young elephant to let them experience it. Each man touched a

part of the elephant. The first one touched a leg and said; “Now I understand. An elephant is like a tree trunk.” The second man touched the tail and said, “No. You are wrong. An elephant is like a snake.” The third man touched an ear and said, “You are both quite mistaken. An elephant is like the leaf of a big palm tree.” None of the men were capable of controlling the elephant because their understanding was only partial. This also is true for many organizations that try to tackle only one factor of the attrition dilemma.

Some anecdotal evidence lies in a report from one of the nation’s leading financial services companies. In an attempt to stem the outflow of critical managers and individual contributors, they contracted with a reputable training firm they had worked with in the past. Although the firm admitted it didn’t have expertise in employee retention, it conducted sessions for senior managers, hoping to help them deal effectively with the problem. Unfortunately, but also predictably, the firm addressed only a fragment of the retention solution. The kickback from managers was strong, because they sensed it was only a partial solution that would not effectively address their issues. A litmus test for a retention solution is to assess its scope and depth. A one-dimensional solution is bound to fail.

SUMMARY

In this project report we have tried to define what exactly attrition and retention mean and what are its impact on organization. We have also analyzed its merits and demerits and steps to overcome the problem. Then we have discussed about its impact on market growth and should a HR manager do to retain its employee. We also came across various myths and success mantras which we have put in this report. We found out the reason behind the BPO providers experiencing high attrition rate and what they should do about it. Comparison between different sectors with attrition rate is also done before coming onto any sort of conclusion.

Finally we have analyzed the cause of attrition and the way to handle it by using a multilevel approach i.e. Maslow’s Hierarchy of needs.

ANALYSIS OF DATA AND QUESTIONNAIRE

We have assigned values for every scale respectively for simple calculation.

We have 6 scales of measurement i.e.

1) Strongly agree

2) Somewhat Agree

3) Neutral

4) Somewhat Disagree

5) Strongly disagree

6) Don’t know

We have given weight-age for every scale starting from 6 to 1 in descending

order i.e.

Strongly agree = 6, somewhat agree = 5, strongly disagree = 4, somewhat

disagree = 3, neutral= 2, and Don’t know = 1.

Then we count the total vote in each dimension and multiplied with the scale

value.

E.g. Let say for question no.1, we have following responses

STRONGLY AGREE = 46

SOMEWHAT AGREE = 38

NEUTRAL = 3

SOMEWHAT DISAGREE = 5

STRONGLY DISAGREE = 2

DON’T KNOW = 6

Hence, value of this dimension is:

(46*6)+ (38*5) + (3*2) + (5*3) + (2*4) + (6*1) = 501

Similarly, we plot graph of all the questions of these sectors according to their

dimensions:

1 2 3 4 5 6 7 8 9 100

100

200

300

400

500

600

DIMENSION VALUE

DIMENSION VALUE

We had earlier given the questionnaire to the employees working at IBM-Daksh present in Phase V, Udyog Vihar, Gurgaon. So after they filled up the questionnaire we grouped it under Microsoft excel and started to analyze them.

Now coming on to each question individually we have the following interpretations to be made:

Question-1

Employee turnover/Resign is a major concern for your organiza-tion.

0

5

10

15

20

25

30

35

40

45

50

Strongly Agree

Some what Agree

Neutral

Strongly Disagree

Disagree

Don't Know

INTERPRETATION: Most of the respondents at IBM-Daksh strongly agree (46%) to the fact that employee turnover is a major concern for their organization as it brings down the morale and confidence of the whole team.

Question-2

High percentage of females in the work force adds to the high at-trition rate

0

5

10

15

20

25

30

35

40

Strongly Agree

Some what Agree

Neutral

Strongly Disagree

Disagree

Don't Know

INTERPRETATION: Respondents at IBM somewhat believe that high percentage of females in the work force results in high attrition rate. This is because they feel that female employees could not adjust themselves to the timings of the job, leave their job soon after they get married or get any good job with good salary package.

Question-3

Some attrition is always desirable and necessary for organiza-tional growth and development

0

5

10

15

20

25

30

35

Strongly Agree

Some what Agree

Neutral

Strongly Disagree

Disagree

Don't Know

INTERPRETATION: 28% of the respondents feel that some attrition is always desirable and necessary for organizational growth and development because some of the employees are there in organization those are less productive and hence become liability for the organization. So by removing them organization won’t be in problem rather they would be benefitted as they need not to spend any more on them.

Question-4

BPO firms should provide career growth and higher educational opportunities for employees as measure of retaining them

0

5

10

15

20

25

30

35

40

Strongly Agree

Some what Agree

Neutral

Strongly Disagree

Disagree

Don't Know

INTERPRETATION: 34% of the respondents strongly feel that BPO firms should provide career growth and higher educational opportunities for their employees as a measure of retaining them. This would be a reason for the

employee to stay at the organization as it gives them the scope

Question-5

An employee gets sufficient promotional opportunities to enhance his position

0

5

10

15

20

25

30

35

Strongly Agree

Some what Agree

Neutral

Strongly Disagree

Disagree

Don't Know

INTERPRETATION: Most of the employees at IBM think that they get sufficient promotional opportunities to enhance their position at the work place. This in turn motivates them to work more and prove their talent to the higher authorities.

Question-6

The work schedule is exploitative0

10

20

30

40

50

60

Strongly Agree

Some what Agree

Neutral

Strongly Disagree

Disagree

Don't Know

INTERPRETATION: 49% of the respondents strongly agreed to the fact that the work schedule that they are into are very much exploitative which make them feel harassed and hence force them to quit the job.

Question-7

As job becomes repetitive, the employees find less challenge in it and hence seek for some other job

0

10

20

30

40

50

60

Strongly Agree

Some what Agree

Neutral

Strongly Disagree

Disagree

Don't Know

INTERPRETATION: 52% of the respondents feel that the employees leave the job and seek for other one after finding less challenge in the BPO jobs which is of more repetitive kind.

Question-8

The families of BPO employees are not fully supportive for this industry

0

5

10

15

20

25

30

35

40

45

50

Strongly Agree

Some what Agree

Neutral

Strongly Disagree

Disagree

Don't Know

INTERPRETATION: According to the respondents, families of BPO employees are not supportive of the fact that they work in BPO industry with late night shifts. They also feel that there is little respect and recognition present in their job as they have to listen abuses from different customers at work every day

and have very less scope of innovation.

Question-9

Training of employees lead to increase in attrition0

10

20

30

40

50

60

70

Strongly Agree

Somewhat agree

Neutral

Strongly Disagree

Disagree

Don't Know

INTERPRETATION: This is in fact true and we have already discussed earlier that training of employees lead to increase in attrition. Moreover 63% of respondents also agreed to this point. The reason that they gave is after completion of training process, employee gain some knowledge and become eligible for some other higher post and hence quit the organization.

Question-10

Bad Selection leads to high attrition.0

5

10

15

20

25

30

35

40

45

Strongly Agree

Somewhat agree

Neutral

Strongly Disagree

Disagree

Don't Know

INTERPRETATION: According to 39% of respondents, poor selection of candidates leads to high attrition because if you don’t select the right candidate for the given job then surely there would be a mismatch and he\she would finally leave the job. At the time of recruitment, the HR professionals should be very particular in choosing the right candidate.

Question-11

When asked about the reasons for an employee leaving an organization, the respondents ranked the parameters as per the following according to their preference:

1. Lack of respect2. No flexible work schedules3. Stress from overwork and work-life imbalance4. Lack of good working condition5. The mismatch between job and person6. Lack of challenges in job7. Monetary factors8. Organization is more concern towards business9. The job or workplace was not expected10. Lack of support11. Employee needs pride in where they work and what they

do12. Less frequency in giving rewards13. Very few supportive colleagues14. Increase in favoritisms15. Lack of appreciation16. Loss of trust and confidence in senior leaders17. Too little coaching and feedback

INTERPRETATION: By going through this rating we can learn that employees leave BPO sector for lack of respect both inside and outside the organization. Maximum of them also quit their job for absence of flexible work schedules and stress from overwork. Some of them also feel mismatch between the job as they find no challenges in it.

Question-12

When asked to rate on the factors on which the organization are most concerned when an employee quits, maximum respondents ranked the parameters as per the following according to their preference:

1. Cost of training the employee

2. Time spent in orientation

3. Replacing qualified employees

4. Loss of productivity

5. Poor retention creates a “revolving door” culture within the organization lowering morale and confidence.

6. Cost of overtime or temporary help

7. Recruiting costs

8. Interviewing costs

INTERPRETATION: According to respondents’ organization are more concerned about the cost and time that they have put in the employee on training. Then they would be more worried about replacing them with the right candidate which would prove asset to the organization.

LIMITATIONS OF THE PROJECT

1. The first and biggest limitation is that the sample size or the people that we have used could never be enough as it could never represent the full population. Because, the people who are very computer savvy would always support this kind of concept. Secondly, new or younger generation is much more supportive for these concepts. So, biasness could easily creep in.

2. It is difficult to use methods like ANOVAs test, chi test etc on this project because first of all these test are difficult to implement as they are purely numerical in nature. Secondly, it is not easy to convert theoretical questions into numerical questions.

3. The organizations are very reluctant to give us the internal data of their employees. So exact information could not be made out from them.

SUGGESTIONS

Few suggestions that would help in retaining employees-

1. An employee would work tirelessly for the company if he is being made aware that he is an important part of the team.

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. Don’t wait for too long.

4. Be in touch with your employees and help them when in need. Don’t wait till the last moment.

An organization should be aware of the needs of the employees before it can launch its retention plans for them.

CONCLUSION

Employee attrition is a very big problem not only in India but outside India too. Attrition rate is increasing day by day and it’s especially the software industry which is affected the most. Why an Employee leaves a company is the question asked by most of the employers. Companies even hire Private HR professionals to study the company's work and find out why an employee is dissatisfied.

HR department does the recruiting of new employees and then send them for training so that they can understand work and work culture and become better professionals. Each and every company faces employee turnover problem whether big or small. An employee leaves his present job for another job to get better pay package and good working conditions.Every Company calculates Employee attrition rate and takes measures to reduce it. The facts and figures are not made public as it may tarnish the image of the company in front of its own employees and its loyal customers.

A survey has found out that there are various reasons for Employee Attrition-

1. Higher Pay Package in another company2. Good working Conditions3. Opportunities for growth in new company4. Change of Place problem5. A better Boss in new company6. Brand Image of the new company

Employee attrition costs a lot to the company. There are various costs which are borne by the company at the start when the employee is under training period. Costs such as-

1. Conveyance Cost2. Cost of lodging of the new employee3. Trainers cost4. Cost of venue where training will be conducted5. Materials to be supplied during training process

A company has a training period of 3 to 6 months. During this time an employee is not fruitful for the company. If an employee leaves the company when he starts working, company suffers a big loss in terms of money as well as workforce. Every company takes measures to hold the talented workforce by means of perks, Increments, Bonus and extra facilities. No one wants to lose good brains to their competitors.

Now the question is how to reduce employee attrition. What should a company do to hold on the talent?There are various companies like TATA's and Reliance who do a lot to reduce attrition rate. Flexible working conditions have been given to employees who have problem working 10 – 5. Private hospitals for employees where they can get their regular health check up done without spending much money. Free overseas tour once in a year when a target is achieved. Few Companies are getting more and more work savvy and just want to get their work done by hook or by crook. The mentality needs to be changed. Target for completion of a work should be there but that should not hamper an employee’s personal life. Companies should conduct various seminars on how to balance personal and professional life. An employee can be productive if and only if his personal life is balanced. Make employees a part of your work culture family and see the difference. Attrition rate cannot become completely obsolete but it can surely be minimized.

BIBLIOGRAPHY

BOOKS REFERRED:

Keeping good people by Roger E. Herman

Managing employee retention: A strategic accountability approach by Jack J. Phillips

Recruiting and retaining call center employees by Jack J. Phillips, Natalie L. Petouhoff

Retaining your employees: using respect, recognition and rewards for positive results by Barb Wingfield

From turnover to teamwork by Bill Marvin

Handle with care: motivating and retaining employees by Barbara A. Glanz

WEBSITE REFERRED:

http://timesascent.in/index.aspx?page=article&sectid=64&contentid=20081015200811131346302515b929edd

http://www.palan.org/doc/freebies/Does%20Employee%20Training%20lead%20to%20attrition.pdf

http://www.chrmglobal.com/Articles/25/1/Innovative-Retention-Strategies-for-Indian-BPOs.html

http://www.recrion.co.uk/solutions/attrition/the-actual-cost-of-employee-attrition-rates/

http://www.fractalanalytics.com/newsletter/july/agent-retention-in-bpo-industry.html

APPENDIX

QUESTIONNAIRE

Dear respondents,

We the students of IILM, Gurgaon are working on a live project titled “EMPLOYEE ATTRITION AND RETENTION IN BPO SECTOR” for which we are conducting this questionnaire. This survey plays a very important role in making the project complete. So please try to fill up this questionnaire seriously.

Please tick which one is applicable for you:

1. Employee turnover/resign is a major concern for your organization. Strongly agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree Don’t know

2. High percentage of females in the workforce adds to the high attrition rate.

Strongly agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree Don’t know

3. Some attrition is always desirable and necessary for organizational growth and development.

Strongly agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree

Don’t know4. BPO firms should provide career growth and higher educational

opportunities for employees as measure of retaining them. Strongly agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree Don’t know

5. An employee gets sufficient promotional opportunities to enhance his position.

Strongly agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree Don’t know

6. The work schedule is exploitative. Strongly agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree Don’t know

7. As job becomes repetitive, the employees find less challenge in it and hence seek for some other job.

Strongly agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree Don’t know

8. The families of BPO employees are not fully supportive for this industry. Strongly agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree Don’t know

9. Training of employees lead to increase in attrition. Strongly agree Somewhat Agree Neutral Somewhat Disagree

Strongly Disagree Don’t know

10. Bad selection leads to attrition. Strongly agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree Don’t know

11. What do you think, the reasons for an employee leaving the organization?(Rate the following from 1 to 17; 1 being the top most priority and 17 being the least)

a) Monetary factorsb) Lack of good working conditionc) No flexible work schedulesd) Lack of respecte) Very few supportive colleaguesf) Organization is more concern towards businessg) Increase in favoritismsh) Employee needs pride in where they work and what they doi) Lack of appreciationj) Lack of challenges in jobk) The job or workplace was not expectedl) The mismatch between job and personm) Too little coaching and feedbackn) Lack of supporto) Stress from overwork and work-life imbalancep) Loss of trust and confidence in senior leadersq) Less frequency in giving rewards

12. What would be the major concerns for an organization after the employee quits.(Rate the following from 1 to 8; 1 being the top most priority and 8 being the least)

a) Loss of productivityb) Replacing qualified employeesc) Poor retention creates a “revolving door” culture within the

organization lowering morale and confidence. d) Cost of overtime or temporary helpe) Recruiting costsf) Interviewing costsg) Time spent in orientationh) Cost of training the employee

PERSONAL INFORMATION:

i. NAME:ii. AGE:

iii. SEX:iv. DESIGNATION:

Thank you for giving your valuable time for us which we really appreciate.