final hard copy dated 23.08.08
TRANSCRIPT
CHAPTER 1
1.1 INTRODUCTION
High employee turnover is the biggest worries for human resources (HR) in the
information technology (IT) industry. Employee turn over has been defined as a permanent
movement of employee beyond the boundary of the organization. If an employer is said to
have a high turnover, it most often means that employees of that company have a shorter
tenure than those of other companies in that same industry. Similarly, if the average tenure of
employees in a particular sector is lower than that in other sectors, that sector can be said to
have a relatively high turnover.
A recent study revealed that employees leave either because of compensation reasons
or due to better growth opportunities. According to NASSCOM, Indian IT-ITES industry
recorded US$ 39.6 billion in revenues in 2006-07. The revenue of US$ 49-50 billion has been
projected in 2007-08 at a growth rate of 24-27 per cent. The IT industry's contribution to
GDP was 4.8 per cent in 2005-06. Though the IT/ITES sector is booming, it is constantly
facing high attrition rates of 25% - 30%. Even the big brands are also facing the same
problem.
According to the Strategic Review 2008 of NASSCOM (The National Association of
Software and Services Companies) - India is a core component of global sourcing strategies,
and the service sector will continue to grow in the future. Direct employment in the IT sector
will touch 2 million this year, and will add about 4% net value to the economy, the review
predicts.
However, beneath the glowing facade of IT growth in India lurks the attrition issue -
that has become a cause of major concern for the IT industry. Consequently, IT firms are
being forced to incorporate a retention clause in their HR policies to stem employee switch
over.
It is however no easy task for a 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 TURN OVER of employee which is otherwise called as ATTRITION.
INFORMATION TECHNOLOGY INDUSTRY
Information technology, and the hardware and software associated with the IT
industry, are an integral part of nearly every major global industry.
The information technology (IT) industry has become of the most robust industries in
the world. IT, more than any other industry or economic facet, has an increased productivity,
particularly in the developed world, and therefore is a key driver of global economic growth.
Economies of scale and insatiable demand from both consumers and enterprises characterize
this rapidly growing sector.
The Information Technology Association of America (ITAA) explains the
“information technology” as encompassing all possible aspects of information systems based
on computers.
Both software development and the hardware involved in the IT industry include
everything from computer systems, to the design, implementation, study and development of
IT and management system.
Owing to its easy accessibility and the wide range of IT products available, the demand for IT
services has increased substantially over the years. The IT sector has emerged as a major
global source of both growth and employment.
1.2.1 Features of the IT Industry at a Glance
Economies of scale for the information technology industry are high. The marginal
cost of each unit of additional software or hardware is insignificant compared to the
value addition that results from it.
Unlike other common industries, the IT industry is knowledge-based.
Efficient utilization of skilled labor forces in the IT sector can help an economy
achieve a rapid pace of economic growth.
The IT industry helps many other sectors in the growth process of the economy
including the services and manufacturing sectors.
1.2.2 The role of the IT Industry
The IT industry can serve as a medium of e-governance, as it assures easy
accessibility to information. The use of information technology in the service sector improves
operational efficiency and adds to transparency. It also serves as a medium of skill formation.
Domain of the IT Industry
A wide variety of services come under the domain of the information technology
industry. Some of these services are as follows:
Systems architecture
Database design and development
Networking
Application development
Testing
Documentation
Maintenance and hosting
Operational support
Security services
1.3 THE INDIAN IT INDUSTRY
The Information Technology (IT) sector in India holds the distinction of advancing
the country into the new-age economy. The growth momentum attained by the overall
economy since the late 1990s to a great extent can be owed to the IT sector, well supported
by a liberalised policy regime with reduction in telecommunication cost and import duties on
hardware and software. Perceptible is the transformation since liberalisation – India today is
the world leader in information technology and business outsourcing. Correspondingly, the
industry’s contribution to India’s GDP has grown significantly from 1.2% in 1999-2000 to
around 4.8% in FY06, and has been estimated to cross 5% in FY07. The sector has been
growing at an annual rate of 28% per annum since FY01.
Indian IT companies have globally established their superiority in terms of cost
advantage, availability of skilled manpower and the quality of services. They have been
enhancing their global service delivery capabilities through a combination of organic and
inorganic growth initiatives. Global giants like Microsoft, SAP, Oracle, Lenovo have already
established their captive centres in India. These companies recognise the advantage India
offers and the fact that it is among the fastest growing IT markets in the Asia-Pacific region.
1.3.1 The NASSCOM - McKinsey report on India's IT industry
OVERVIEW ON INDIAN IT INDUSTRY(Information Technology Industry)
According to a NASSCOM-McKinsey report, annual revenue projections for India’s
IT industry in 2008 are US $ 87 billion and market openings are emerging across four broad
sectors, IT services, software products, IT enabled services, and e-businesses thus creating a
number of opportunities for Indian companies. In addition to the export market, all of these
segments have a domestic market component as well.
Other key findings of this report (2008) are:
Software & Services will contribute over 7.5 % of the overall GDP growth of India
IT Exports will account for 35% of the total exports from India
Potential for 2.2 million jobs in IT by 2008
IT industry will attract Foreign Direct Investment (FDI) of U.S. $ 4-5 billion
Market capitalization of IT shares will be around U.S. $ 225 billion
1.3.2 Industry Structure
The size of the Indian IT industry, according to NASSCOM, has been estimated to be
around US$ 47.8 bn. The Indian IT industry can be broadly divided into two markets:
domestic market and exports market. The exports market constitutes the largest segment
accounting for 75% of the total revenue generated by the Indian software industry.
The domestic IT market is broadly divided into the following four segments: IT
Services, software segment which includes engineering and Research & Development (R&D)
services, IT-enabled Services and Business Process Outsourcing (ITeS-BPO), and Hardware.
While IT Services accounted for 34% of the total revenue generated by the domestic market
in FY06, the Engineering Services, R&D and Software Products segments together accounted
for 10% of the revenue. The ITeS-BPO segment, on the other hand, contributed 7%.
Hardware is the dominant segment with a share of about 49%.
India’s IT Industry (US$ bn)
Particulars FY2004 FY2005 FY2006 FY2007E
IT Services 10.4 13.5 17.8 23.7
-Exports 7.3 10.0 13.3 18.1
-Domestic 3.1 3.5 4.5 5.6
ITES-BPO 3.4 5.2 7.2 9.5
-Exports 3.1 4.6 6.3 8.3
-Domestic 0.3 0.6 0.9 1.2
Engineering Services,
R&D &Software
Products
2.9 3.9 5.3 6.5
-Exports 2.5 3.1 4.0 4.9
-Domestic 0.4 0.7 1.3 1.6
Hardware 5.0 5.9 7.0 8.2
Total IT Industy
(including
Hardware)
21.6 28.4 37.4 47.8
-Exports 13.4 18.2 24.1 31.9
-Domestic 8.3 10.2 13.2 15.9
Source: NASSCOM
1.4 HUMAN RESOURCE MANAGEMENT (HRM)
It is an administrative activities associated with human resources planning,
recruitment, selection, orientation, training, appraisal, motivation, remuneration, etc.
HRM aims at developing people through work.
A philosophy of people management based on the belief that human resources are
uniquely important to sustained business success. An organization gains competitive
advantage by using its people effectively, drawing on their expertise and ingenuity to meet
clearly defined objectives. HRM is aimed at recruiting capable, flexible and committed
people, managing and rewarding their performance and developing key competencies.
Human resource management is a relatively modern label for the range of themes and
practices involved in managing people.
1.4.1 Purpose
The function of Human Resources departments is generally administrative and
common to all organizations. Organizations may have formalized selection, evaluation, and
payroll processes. Efficient and effective management of "Human Capital" has progressed to
an increasingly imperative and complex process. The HR function consists of tracking
existing employee data which traditionally includes personal histories, skills, capabilities,
accomplishments and salary. To reduce the manual workload of these administrative
activities, organizations began to electronically automate many of these processes by
introducing specialized Human Resource Management Systems. Due HR executives rely on
internal or external IT professionals to develop and maintain an integrated HRMS. Before the
"client-server" architecture evolved in the late 1980s, many HR automation processes were
relegated to mainframe computers that could handle large amounts of data transactions. In
consequence of the high capital investment necessary to purchase or program proprietary
software, these internally-developed HRMS were limited to organizations that possessed a
large amount of capital. The advent of client-server, Application Service Provider, and
Software as a Service or SaaS Human Resource Management Systems enabled take
increasingly higher administrative control of such systems. Currently
Human Resource Management Systems encompass:
1. Payrolls
2. Work Time
3. Benefits Administration
4. HR management Information system
5. Recruiting
6. Training/ Learning Management System LMS
Online Recruiting has become one of the primary methods employed by HR
departments to garner potential candidates for available positions within an organization.
1.4.2 HRM Functions
Recruitment
Employee Relations and Communications
Faculty and Professional Staff Contract Administration
Personnel, Payroll and Benefits Records Administration
Employment
Classification and Compensation
Payroll
Benefits
Worker’s Compensation
Human Resource Information Systems
Organizational Learning and Development
Employee Recognition
Performance Management
Employee Events
Workforce Planning
Attrition and retention
Therefore HRM looks upon the following:
Administration: Strategic planning, organizational evaluation, County Board
relations, policy recommendations, supervision of department staff
Compensation: Salary and benefit surveys, job evaluation, job descriptions.
Employee relations: Disciplinary processes, incident investigations,
labormanagement relations and complaint/grievance procedures.
Employee services: Educational assistance, employee service awards.
Fiscal: Staffing budgets, departmental budget, accounts payable, total package
costing.
Health and safety: Employee assistance, workers compensation claims, OSHA-
related compliance, drug testing, safety compliance and training.
Labor relations: Contract administration, collective bargaining, grievances.
Leaves of absence: State and/or Federal Family and Medical Leave rights, County
approved leaves of absence, rights upon return to work, light duty assignments for
temporary periods.
Performance appraisal: Computer-based or manual evaluation systems, supervisory
training, compliance with timeliness standards.
Record-keeping: Employee files, litigation files, safety records and other
administrative files.
Recruitment: Job posting, advertising, testing administration, employment interviews,
background investigations, post-offer employment testing.
Separations and terminations: Rights upon termination of employment, severance
benefits, unemployment compensation, exit interviews.
Training and development: County-wide needs assessment, development of
supervisory and management skills, employee training and workshops. Benefits
orientation for new and transferring employees. Supervisory newsletter.
Wages and benefits: Salary/wage plans should be framed as per the needs and wants
of individual employee
1.4.3 Recruitment Process Outsourcing (RPO):
Recruitment Process Outsourcing is a form of business process outsourcing (BPO)
where an employer outsources or transfers all or part of its recruitment activities to an
external service provider.
To quote the Recruitment Process Outsourcing Association, "Recruitment Process
Outsourcing is when a provider acts as a company's internal recruitment function for a
portion or all of its jobs. RPO providers manage the entire recruiting/hiring process from job
profiling through the on-boarding of the new hire, including staff, technology, method and
reporting. A properly managed RPO will improve a company's time to hire, increase the
quality of the candidate pool, provide verifiable metrics, reduce cost and improve
governmental compliance."
On the other hand, occasional recruitment support, for example temporary,
contingency and executive search services are more analogous to out-tasking, co-sourcing or
just sourcing. In this example the service provider is "a" source for certain types of
recruitment activity. The biggest distinction between RPO and other types of staffing is
Process. In RPO the service provider assumes ownership of the process, while in other types
of staffing the service provider is part of a process controlled by the organization buying their
services.
1.4.4 History
While temporary, contingency and executive search firms have provided staffing
services for many decades, the concept of an employer outsourcing the management and
ownership of part or all of their recruiting process wasn't first realized on a consistent basis
until the 1970s in Silicon Valley's highly competitive high tech labor market. Fast-growing
high tech companies were hard-pressed to locate and hire the technical specialists they
required, and so had little choice but to pay large fees to highly specialized external recruiters
in order to staff their projects. Over time, companies began to examine how they might
reduce the growing expenses of recruitment fees while still hiring hard-to-find technical
specialists. Toward this end, companies began to examine the various steps in the recruiting
process with an eye toward outsourcing only those portions that they had the greatest
difficulty with and that added the greatest value to them. Initial RPO programs typically
consisted of companies purchasing lists of potential candidates from RPO vendors. This
"search/research" function, as it was called, generated names of competitors' employees for a
company and served to augment the pool of potential candidates from which that company
could hire.
Over time, as business in general embraced the concept of outsourcing more and
more, RPO gained favor among Human Resource management: not only did RPO reduce
overhead costs from their budgets but it also helped improve the company's competitive
advantage in the labor market. As labor markets became more and more competitive, RPO
became more of an acceptable option. Furthermore, through the advent in the 1980's and
1990's of human resources outsourcing (HRO) companies that began taking on the processes
associated with benefits, taxes, and payroll, companies began recognizing that recruiting--a
significant cost of HR--should also be considered for outsourcing. In the early 2000's more
companies began considering the outsourcing of recruitment for major portions of their
recruiting need.
There have been fundamental changes in the US labor market that serve to reinforce
the use of RPO as well. The labor market has become increasingly dynamic: workers today
change employers more often than in previous generations. De-regulated labor markets have
also created a shift towards contract and part-time labor and shorter work tenures. These
trends increase recruitment activity and may encourage the use of RPO. It should also be
noted that even in slower economic times or higher unemployment, RPO is still considered
by companies to assist in an increasing need to screen through a larger candidate pool.
1.5 INTERNET BASED IT RECRUITMENT
INFORMATION Technology is perhaps the only industry in which the number of job
opportunities is far greater than the number of skilled professionals available. Traditionally,
Head- hunters and internal Human Resources (HR) departments have been the main sources
of recruitment for IT companies. These modes of recruitment are used even today. However,
given the quick turnover and rapidly changing skills, IT companies today prefer web-enabled
recruitment.
There are over 40 job sites on the Internet today, and the numbers are on the rise.
Most of them are general job sites like Naukri.dot.com and alltimejobs.com. Ranging from
beauticians and nurses to lawyers and engineers, anybody can look for a job on these sites.
Several horizontal portals like rediff.com, yahoo.com, financialexpress.com and IT specific
web sites - and ITspace.com have job sections as well.
We also have IT specific recruitment sites like winjobs.com computerjobs.com,
netpilgrim.com, careermosaicindia.com and jobcurry.com.
The shortage of skilled IT professionals with the need for quick deployment of
projects and the anonymity offered by the web are major factors that have contributed to the
growing popularity of web-based recruitment. Modern day professionals have dismissed the
postal service as `snail mail' and do not have the time to depend on the transactions carried
out through this mode of communication. For instance, a project slated to begin in four to six
weeks, needs to have a task force of 150 in place within a month. Using age old and long
drawn recruitment procedures in this situation is meaningless.
A job seeker's resume is their identity on the web site. Similarly, employers post their
job requirements on the web site. Resumes and jobs are matched using basic criteria like skill
sets and job location. Once candidates post their resume, they can run a search and view jobs
that match their profile. An employer can do the same, search for candidates he requires for a
particular job requirement. Sites like careermosaicindia.com and jobcurry.com also have the
added facility of an e-mail notification service to keep employers and jobseekers updated
about their status. A job seeker is informed immediately if an employer displays an interest in
his resume or if a job that suits his profile is posted on the site. An employer is informed if a
job seeker applies for his job or if a resume suitable to his requirements is posted on the site.
Despite the speed and efficiency offered by net-based transactions, one must
understand that the `virtual candidate' must ultimately translate into a real world person who
will ultimately work with the organization. If a personal interview is not possible, a
telephonic interview or video conferencing can be conducted. These are important aspects of
recruitment, for the employer needs to know about the candidate he will hire. Apart from
matching resumes and jobs, sites like careeermosaicindia.com and jobcurry.com take care of
the `real world' processes in the form of White Glove services. If an employer opts for these
White Glove services, these sites conduct all the stages of the recruitment cycle.
This includes screening of resumes, short listing candidates, setting up and conducting
interviews, document completion and visa processing in case of overseas employers.
Job seekers and employers are both equally important for a recruitment site. It is only
because there is a large number of quality ``resumes on the site, that employers post jobs and
vice versa. Features like an opinion poll or chat are available on almost all web sites. There
are sites that provide information on career building and self-development. Utilitarian
features like a Time Converter and a Currency Converter are quite popular.
Technical tests devised by leading web-based certifier Brain bench are available on
jobcurry.com. A jobseeker can appear for a test sitting at home in India and the results can
directly be conveyed to his prospective employer in another part of the world! Similarly,
career mosaic India offers tests from its associated site that are a useful way of validating
ones own preparedness for a career.
Any new technology brings with it, certain doubts and fears about its usage.
Jobseekers are usually worried about goof ups like resumes landing on the current employer's
desk.
1.5.1 Hire Right Talent
Employee retention starts with recruitment. Early departures arise from the wrong
recruitment process.
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 before hand that their requirements can not 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.
1.6 PROBLEM STATEMENT
1.6.1 Employee Turnover
Employee turnover is a ratio comparison of the number of employees a company must
replace in a given time period to the average number of total employees.
Turnover is becoming a serious problem in today's corporate environment. The
employment culture is changing as well. It is now relatively common to change jobs every
few years, rather than grow with one company throughout the employment life as was once
commonplace. In addition, employees are increasingly demanding a balance between work
and family life. This is reason behind the choosing of this topic
Attrition: "A reduction in the number of employees through retirement, resignation
or death"
Attrition is beginning to significantly affect offshore ROI. Just as businesses faced a
scarcity of talented IT resources during the dotcom era, organizations in offshore countries
such as India are experiencing similar pains. Skilled employees are hopping from job to job
and taking with them the customer knowledge and technical expertise that any company
needs. Their salaries are increasing, along with their perks, benefits, and bonuses.
1.6.2 No slowdown in attrition yet for IT sector
ATTRITION RATE
QUARTER ENDED
2008-March 2007-
December
2007-March
TCS 12.6 12.2 11.3
Insfosys# 13.4 13.7 13.7
Wipro* 18.3 18.2 NA
Cognizant* 12.5 12.5 15
Satyam 13.09 13.11 15.7
HCL Tech# 15.2 15.5 17.4
Polaris* 16.05 16.19 14.52
MindTree 15.8 16 15.7
Patni
Computers#
23 25.1 29.2
*Annualised, for the quarter
# Excluding subsidiaries or divisions, such as BPO
Attrition rate, in percentage, is the number of employees per 100 leaving a company.
Some companies give out annualized numbers for the quarter while others give out rates for
the trailing 12 months. The purpose of comparison now is not necessarily to pit one
company’s attritions rate against another’s but to compare each company’s March 2008
quarter numbers against its own earlier performance.
Among the top six, only Satyam and HCL Technologies have seen declining attrition
rates. For Cognizant, rates have remained stable between the December 2007 and March
2008 quarters but improved significantly compared to March 2007. TCS, Infosys and
Wipro’s rates have either remained stable or shown a rise.
Among smaller companies too, there is no clear signal. Patni has reported consistently
falling numbers while Polaris has shown the opposite trend. Mindtree’s numbers have
remained stable.
Therefore the question arises that, what causes this turnover problem? To get
the perfect answer for this question it is well and good to ask for the employees who feel
to leave their current organization. Hence the study aims to find out the reasons from
the employees, who are willing to join other company with the help of Trial Blazer
recruiting consultancy.
1.2 RESEARCH DESIGN
Overall Objective:
The overall objective is to study the employees’ turn over in IT companies with
reference to IT Trial Blazers Bangalore
Specific Objective:
1. To determine the turn over rate of employees in IT companies for the year
2007-08
2. To identify the factors that causes the turn over of employees in IT companies
3. To analyze the key factors for excessive employee turn over
4. To give suggestions to IT companies regarding employee retention
Scope of the Study:
The study clearly depicts the turnover of employees in IT sector and point out various
reasons for which an employee leave an organization.
To identify and analyze the factors that causes the turn over of
employees in IT companies
The study was conducted for a period of two months and the data was
collected using telephonic and scheduled method
Research study was concerned only on the IT employees who have
been shortlisted by IT Trial Blazers consultancy.
Limitations of the study:
Direct interaction with the employee is not possible.
The extend of asking questions to the employees are limited due to
time and cost consumption since we use telephone for interaction.
The study is limited to job seekers who post their resumes to Trial
Blazer consultancy.
Sampling unit
In this study sampling unit is the IT employees who have been shortlisted by IT Trial
Blazers consultancy.
Sample Size:
The sample size is 50 employees who have been placed by our consultancy and this
selection is made under convenience sampling method.
Method of data collection:
The primary data is collected using a direct conversation with the employees that is by
using Telephonic and Scheduling method.
Sources of collection of data:
In order to collect the primary data there will be telephonic conversation conducted
with the employees and secondary data will be collected from various journals, books and
web sites.
Tools used for Analysis:
The research uses the primary data is analyzed using frequency distribution table,
BAR chart and PIE diagram.
CHAPTER 2
2.1 REVIEW OF LITERATURE
Handling the menace of employee turnover was therefore very important to IT
companies. Attrition affected the quality of service and also led to higher Training &
Development expenditure, affecting the overall performance of the organization. IT
companies in India were taking steps to counter the rising levels of attrition.
“OUR ASSEST WALK OUT OF THE DOOR EACH EVENING.WE HAVE TO
MAKE SURE THAT THEY COME BACK THE NEXT MORNING “
- NARAYAN A MURTHY (INFOSYS)
Companies were beginning to realize the importance of factors other than salary with
which to motivate their employees to stay. A healthy work environment, continuous
employee learning, work-life balance, recognition and corporate brand building were some of
the key initiatives taken up by IT companies in recent years to manage attrition.
2.1.1 Attrition drops at IT firms
Attrition has lately become less of a headache for human resources (HR) managers at
the information technology companies as jobs in the sector lose their sheen in the wake of a
slump in the business of outsourcing. The United States, the biggest source of outsourcing
orders for Indian IT companies, has been hit by a financial crisis that slowed its economy and
forced its companies to cut back on spending, including those on IT. As a result, IT
companies back home are looking to protect their margins by going slow on hiring and salary
hikes.
They are also changing their hiring mix in favor of fresh graduates. That means few
jobs for lateral hires and consequently a drop in people changing jobs within the industry.
"Our attrition levels have reduced from 13.9 last year to 13.6 this year as hiring has
slowed down across laterals and people are watching a wait and watch strategy," said Nandita
Gurjar, HR head, Infosys Technologies. "A slowdown is something an HR person would
love.
" The attrition rate at Infosys BPO was about 35 per cent last year and has reduced to
about 28 per cent this year. SV Krishnan, the global HR head, Satyam Computer Services
Ltd, said the attrition was about 12.5 per cent last year is bound to be lower this year, as
hiring slows down across the industry.
Satyam Computers hired about 16,000 people last year of which about 35 per cent
were campus recruits. But this year, it plans to hire much less, about 10,000, of which fresh
graduate will account for 45 per cent, Krishnan said.
Infosys plans to add about 25,000 people this year, down from about 35,000 that it
had planned last year. About 18,000 of the total hires would be campus recruits, while the
remaining will be laterals or direct hires.
Tata Consultancy Services will be adding about 30,000-35,000 people in 2008-2009
and plans to reverse its hiring mix. "At least 60 per cent of our recruitment would be trainees
and this will help us optimise our talent acquisition cost," said Ajoyendra Mukherjee, HR
head, TCS.
2.1.3 Age group and needs of the employees (in relation to Maslow’s theory)
Employee turn over in ITes industry is high as compared with the Banking and other
sectors. To find the reason behind it, one must thoroughly understand IT Sector well.
Employee Profile in IT sector:
Age factor: 22 – 28 years
Sex: Male / Female
Experience: 2 – 6 years
Maslow’s Theory:
Where does the employee in the ITeS sector fall in the above mentioned need
pyramid? We can forget the Self actualization and Self esteem levels for now. We are now
left with three levels as per the Maslow’s need theory. They are the Physiological, Safety and
Social needs.
If we look closely at the employee profile with respect to AGE and EXPERIENCE
factors, an Indian youth at large would not worry about the physiological or safety needs as
he is still dependent on his/her parents for both the needs. The parents would be there to
support him/her as they feel that their children have not attained maturity. We are talking
about a crowd which is just a pass-out from a college, or has worked very little in the
corporate world. Therefore where do the IT employees fall in the Maslow’s pyramid?
The Social need.
Generally we find the latest gadgets viz; Mobile phones, Digital cameras etc, i-pod, i-
phone, laptop, the most talked about brands like Lee, Levis, Wrangler, Reebok, Addidas,
Nike etc., with the employees of the IT. They would hangout in the most happening Pubs,
Discos, Cinemas, Malls and Restaurants. We can’t categorize a pizza from dominos to fall
into the physiological needs (food). We can’t categorize the Levis or Nike to fall into
physiological needs (clothing). Therefore all these fall into the Social needs.
2.1.4 Study on Turn Over
A study suggest that nature of work is a strong determinant of intentions to stay for
organization 2. Hence, poor nature of work in terms of being routinized, not result oriented,
low on skill enhancement and low on stimulation results in dissatisfaction with the job,
thereby causing turnover. The finding is in agreement with Markey & Parks (1989) study of
occupational change where results indicated that workers switched jobs because of better
working conditions and advancement opportunities. A number of researchers have focused on
the relationship between job characteristics and turnover intentions. Mobley (1977) identified
job satisfaction as the primary variable among the chain of variables that determine turnover.
Hackman & Sulltle (1977) with the help of job characteristics model specified how job
characteristics and individual differences interact to affect satisfaction and productivity of
individuals in the organization. Age appears to be a predictor of intention to stay in
organization 2. Werbel & Bedeian (1989) investigated the influence of age as an antecedent
of intentions to quit and found age to be a significant moderator of performance and
intentions to quit. However, another study found a small and near zero relationship between
age and turnover (Healy et al., 1995). It is possible that in the present case, age and tenure
being very closely correlated, age comes to acquire similar significance as that of length of
service. Longer the stay with an organization, narrower becomes the focus for an individual.
Hence to have intentions of quitting, one needs to overcome a number of constraints like
acquiring new skills. T test result for demographic characteristics of marital status and
designation may be discussed in this context. Married and unmarried individuals were found
to be significantly different in age. Similarly middle and lower level professionals were
significantly different in age. It may be inferred that the married, middle level professionals
who fall in the higher age bracket have greater intentions to stay. Viewing age within the
context of marital status and designation offers more plausible explanation for senior
employees having greater intentions to stay. It is possible that family commitments have a
strong influence on the occupational mobility of an employee.
Turnover perception, was the only common predictor variable between the two
organizations. Employee`s perception of workforce stability in the organization is a strong
predictor of employees intention to stay. Individuals in an organization are not independent
actors. They influence each other, and in turn are influenced by other`s decision making. It
can be said that keeping all other factors aside, `group think` implicitly influences an
individuals decision to stay on with the organization. Peer comparison negatively influences
intention to stay for employees of organization 2. The higher the individual rates himself in
comparison to his peer group lesser would be his intention to stay.
The study Implications
With the advent of a work scenario where more and more companies have to concede
that their valued employees are leaving them, a new concept of career planning is bound to
emerge. The focus of this new paradigm should be not only how to motivate and retain key
knowledge workers, but also how to reinvent careers when the loyalty of an employee is to
his/her `brainware` rather than to the organization. Career development has to take into
account the changing world of employment. With lifetime employment in one company not
on the agenda of most employees, jobs will have to become short term. The present
generation wants work to be exciting and entertaining. This suggests designing work systems
that leverage the thinking of all employees. Opportunities for continuous up gradation of
skills must be provided. The organization must commit to lifelong learning. As employees
gain greater expertise and control over their careers, they will reinvest their gain back into
their work.
2.1.5 Human resources challenges in Indian software industry
The factors that cause this "high turn over" and the ways to deal with them were the
subject of a study by Nandkishore S. Rathi, placements officer of the Indian Institute of
Technology (IIT), Bombay.
His study, "Human resources challenges in Indian software industry", won him the
Mercer Award for 2003 for innovative HR research.
"When I started out with the IIT in 1995, it was a boom time for the industry. After
two years of slowdown, things are picking up again and HR managers really have to try hard
to retain their best talent,'' Dr. Rathi told presspersons here on Tuesday.
10 challenges
His study identified the top 10 HR challenges for software firms.
They are:
1. finding new ways to retain and motivate staff;
2. attracting the best talent;
3. developing new systems of compensation and reward;
4. making the company a better place to work in;
5. coping with shortage of highly skilled IT professionals;
6. integrating HR with business strategy, recruiting people most unlikely
to stray and not just the hottest talent;
7. encouraging commitment to quality and customer focus;
8. upgrading skills through retraining;
9. emphasizing on creativity and innovation through training.
Dr. Rathi's surveys covered 1,028 persons in 14 software development firms in
Bangalore, Mumbai and Pune. Altogether 716 software professionals filled the main
questionnaire, 76 participated in interviews and 61 in discussions.
"The analysed results show the person-company culture fit are positively correlated to
the overall satisfaction.
The availability of jobs in the market is not related to overall job satisfaction but has a
negative impact with regard to satisfaction with pay, promotion and company policies," Dr.
Rathi said.
The number of years in a job did not make much difference in satisfaction either
because software companies kept changing. Smaller firms provided better job satisfaction
that declined as the company grew larger.
The overall satisfaction factor that retained an employee resulted from a combination
of career satisfaction and expectations met.
Why do employees leave a job and seek another? "Money may be a factor for the first
job change but not for the second or the third, unlike what most HR managers think,'' says Dr.
Rathi.
Being in a small firm, being saddled with low-end work, location, technology and the
desire to be with a non-IT business may be among reasons for subsequent job changes.
There are also differences in career satisfaction among employees in application and
service firms, systems companies and product companies.
HR managers need to understand the "person-organization fit", understand the special
features of the software industry, make HR a part of the company's strategic core and
understand turnover issues beyond exit interviews and satisfaction surveys, his study reveals.
CHAPTER 3
3.1 COMPANY PROFILE
IT Trailblazers is a leading IT Staffing and Consulting Organization providing
consulting resources and services in various technologies for clients in USA, Europe and
India. Established in 1999, IT Trailblazers LLC, with its (1) Process oriented approach to
technical recruiting, (2) A Recruiting Center of excellence in Bangalore and Chennai, India;
and (3) Low overheads resulting in aggressive pricing, has succeeded in establishing close
and enduring associations with large IT solutions providers like IBM, Accenture, Capgemini,
Bank of America, Tata Consulting Services, Johnson&Johnson, EDS, Patni Computer
Systems, Perot Systems and several end clients.
IT Trailblazers provides consulting services and resources in SAP, Oracle
Applications, People Soft, Java, .NET, Embedded and many other technologies. Their long
term association with clients like Capgemini and TCS, has resulted in us developing
significant capabilities in consulting & staffing, and domain expertise in several industry
verticals. They work as an extended arm of their clients, who are usually large IT solutions
providers, who rely on us to provide consulting resources in a timely manner and to manage
all the back end work like employability, benefits, payroll, immigration, training, mobility,
and performance. This extends to demonstrated experience in putting together and/or
managing a team of professionals responsible for project deliverables.
IT Trailblazers recorded annual revenue of $12 million in 2006. With targeted
revenue of $18 million for 2007, the company presently has over 120 consultants and
associates. Their recruiting centers in India staffed with a pool of more than thirty trained
recruiters combined with their capability of sourcing when required via their proprietary
database; head-hunting; and job postings on major recruiting websites, gives us a cutting edge
to handle large volume work expeditiously and effectively.
IT Trailblazers integrate people, process and technology to increase the competitive
advantage of their clients. Their areas of expertise include IT Staff Augmentation and
consulting in the areas of Enterprise and Web Applications, Database technologies,
Networking and Systems Integration, IT Infrastructure for medium size organizations, and
Financial/Manufacturing Modeling . The synergy between their Functional and Technical
expertise guarantees reliable and cost effective solutions.
Business processes refined over many years, dedication to customer wants and needs,
cost competitiveness, and a pool of talented technology professionals defines us and
guarantees reliable and cost effective solutions for their clients.
3.1.1 SERVICES
Staffing Services
IT Trailblazers excels in the Technology Staffing arena. A process oriented approach
fine tuned over many years, combined with staff experience of many more years has resulted
in a system that is result oriented, dependable, fast and very cost effective for their clients. IT
Trailblazers launched IT Trailblazers India to meet the growing demands of their customers.
IT Trailblazers India specializes in Technical Recruiting and facilitates quick, efficient, and
cost effective response to client needs.
ITTB differences
Their Difference Their strength lies in the recruitment of qualified candidates that
meet their client's needs in a timely manner. Their business processes are designed around the
following Critical Success
Factors:
1. Quality – In sourcing and screening.
2. Speed – They recognize that for their clients’ to be successful, they
have to respond quickly. Their response time is typically in hours.
3. Volume – With more than 20 dedicated recruiting personnel, they have
the capacity to take on high volume requirements for IT staffing.
4. Cost – Back office integration with IT Trailblazers in India, and a
focus on low cost of operation ensures that their clients cannot get a better deal
elsewhere
Their strong knowledge of the global hi-technology marketplace provides greater
scope and diversity with candidate selection. Consequently, they can offer clients a wider
range of overseas candidates. There are many staffing companies, but few who understand
the IT industry, and know how to assess a client’s needs, qualify a job and find the right
talent. They do not look for consultants based on keyword searches! They have developed a
candidate qualification process over the past 5 years that focuses on matching actual skills to
the specific needs of each client. At IT Trailblazers, they know that an excellent candidate is
more than what appears on the resume or the job requirement. It’s what works for your
culture and your team.
Their Resources Their resume database is much more than names. It’s over five
meticulous years of relationships with consultants who have worked for us around the
country. They have ongoing interaction even with consultants who no longer work for us to
ensure that the information in their database is up to date. Their network has proven to be an
excellent source for finding hard to find skill sets
ITTB Track record:
They take pride in the service completed and in the relationships formed, and
providing the most professional service in the industry. That’s why they consistently emerge
from being one of many vendors to one of a few prime vendors.
Professional Standards
The mission of IT Trailblazers is to set the standard for the professional staffing
industry. They are not in the business of making placements. They are in the business of
helping companies hire the best people and helping people make the best career decisions.
They are a high performance staffing community, dedicated to service and committed to
accomplishment.
3.1.2 Consulting Services
Consulting Services are tailored to meet the ever changing needs of their customers.
The ability to bring together diverse skill sets for specific needs enhances the value of their
services. Complex database and enterprise technology trouble shooting, detail software
development blue prints and coding, offshore/onsite software development, and providing
service for Microsoft products in NJ – are all handled efficiently by their diverse team.
Enterprise Applications
ERP
Lotus Notes
Content Management
Microsoft Exchange
Microsoft Solutions
Centrally located in New Jersey, they offer architecture, installation, trouble shooting,
and maintenance services for all Microsoft products and technologies for small and medium
size businesses.
Oracle Consulting Practice
Data Architecture
Datawarehousing
Database Administration
Troubleshooting
Development
Web Technologies
Java Development
.Net Development
Website Design
Applications
3.1.6 CLIENTS
Working as an extended arm of their clients is a reality at IT Trailblazers. Their long
term client relationships are built on the promise and delivery of high quality at low cost.
Recently they have implemented a CRM solution with the objective of providing superior
customer service.
CLIENTS (USA)
CLIENTS (INDIA)
1 Tata Consultancy Services
2 Capgemini
3 Patni
4 Covansys
5 Syntel
1.Solutions Providers Client Accounts2. TCS America Verizon
3. Capgemini America Visteon, Astellas, Prosource
4. BearingPoint Motorola
5. Johnson & Johnson Johnson & Johnson
6. Zensar Technologies Applied Materials
7. TMP Worldwide Cisco
8. Perot Systems Multiple Accounts
9. Alphasoft Pfizer
10.EDS Multiple Accounts
11.Business Edge Solutions Toyota Motor Corporation
12.Patni Computer Systems Proctor & Gamble
13.Lehman Brothers
6 Hexaware
7 Cambridge Solutions
8 Lehman Brothers
9 IBM
10 Accenture
COMPETITORS
TalentAhead Consulting Pvt. Ltd
MassAccess Consultancy
Ray Consultants
Brain Management Consultants
3.1.7 MANAGEMENT TEAM OF ITTB
CEO &President : Nani Ramanujam
Vice President : Sudhakar Raman
CTO : Hari Srikanth Narayanan
Business Development
Manager : Kannan Sampath kumar, Prady Dongoankar
General Manager : Siva Shankar
3.1.8 CAREER
Working with ITTB:
They have often heard it said that most open jobs are not advertised. It’s true.
Openings occur too quickly and needs may be too immediate. With IT trailblazers, you have
professionals on your team who nurture ongoing relationships with top employers – the ones
whose projects and technologies will put your skills to the test. When openings occur, the
clients depend on them to fill them up quickly.
Employees with challenging opportunities:
ITTB connects you directly to the manager who is making the hiring decisions.
Less Downtime Between engagement
Because employers rely on us to fill their most challenging positions, they always
have a wealth of opportunities available. Their full-time account management staff will
quickly go to work to understand your needs and identify challenging, high profile
assignments.
Time savings
You do not have the time, or perhaps the contacts, to market yourself. With ITTB,
you reap the benefits of their already cultivated relationships with top companies.
Flexibility
They offer contract, contract to hire, or permanent placement. They can meet your
needs for any position you seek. Attractive locations. Why make commuting the most
challenging part of your workday? ITTB will find you great engagements close to where you
live.
Satisfaction
As an ITTB associate, you will work with a company that is dedicated to your
professional achievement and satisfaction.
Marketability
Hot skills, depth of expertise, range of platforms, products and vertical markets, as
well as project performance. They can assess your current standing and recommend ways to
boost your candidacy for the best jobs.
Market trends:
What positions are in demand? What skills will be the Next big thing? Which
industries are hiring? They watch for trends and connect with industry leaders.
Resume Review
Does your resume emphasize what potential employers want to know? Find out what
employers scan for and how your resume can best demonstrate your skills.
One-to-one service:
They will identify jobs and organization that fit your professional goals and your
lifestyle needs then represent you accurately and enthusiastically to potential employers.
3.1.8 BRANCHES OF ITTB
IT Trial Blazers – India
IT Trailblazers Consulting(P) Ltd
1190/18, First Floor, 26th Main
Jayanagar 9th Block
Bangalore
India 560069
IT Trial Blazers – USA
100 Jersey Ave Suite B201 Box B10
New Brunswick
NJ- 08901
3.2 The E-Recruitment Process of IT TRIAL BLAZERS
These are the main recruiting stages.
Sourcing
Sourcing involves 1) advertising, a common part of the recruiting process, often
encompassing multiple media, such as the Internet, general newspapers, job ad newspapers,
professional publications, window advertisements, job centers, and campus graduate
recruitment programs; and 2) recruiting research, which is the proactive identification of
relevant talent who may not respond to job postings and other recruitment advertising
methods done in #1. This initial research for so-called passive prospects, also called name-
generation, results in a list of prospects who can then be contacted to solicit interest, obtain a
resume/CV, and be screened
Screening & selection
Suitability for a job is typically assessed by looking for skills, e.g. communication,
typing, and computer skills. Qualifications may be shown through résumés, job applications,
interviews, educational or professional experience, the testimony of references, or in-house
testing, such as for software knowledge, typing skills, numeracy, and literacy, through
psychological tests or employment testing. In some countries, employers are legally
mandated to provide equal opportunity in hiring.
Therefore an online recruiter will work as a full-time virtual employee, completing all
the tasks for which the client expect a recruiter to be responsible
These are the steps followed when recruiting a person through online:
1. Search: Search for résumés matching the open positions.
2. Source: Source passive candidates matching the positions.
3. Filter : Go through every résumé carefully and pick the most suitable
4. candidates.
5. Interview: Call all the short-listed candidates to find out their
availability and
6. discuss the open position(s) with them.
7. Tech Check : Most of our recruiters have formal training in a variety
of technical skills. They are more than capable of conducting a preliminary technical
interview.
8. Reference check : Perform through reference check as needed.
9. Coordinate: Coordinate interview schedules between your
Recruiting/Hiring Team and candidates.
10. Offer Management : Will be involved in negotiations, extending
offer, and finally, closing the deal
CHAPTER 4
4.1 DATA ANALYSIS AND INTERPRETATION
The primary data is collected from the respondents and therefore it is analyzed using
frequency distribution table. Here the reasons for the turn over are given as the question for
which the respondents answered according to their perception of the factors given. Based on
the responses of the employees the frequency table has been developed and graphical
representation has been drawn.
On the whole the main reason of the employee turn over according to the perception
of employee is given using PIE chart.
HEAVY WORK LOAD
TABLE 4.1
S.No Responses Respondents Frequency
1 Yes 36 72
2 No 14 28
Total 50 100
Inference:
The table indicates that out of 50 employees, 36% of them says that the work
load given by the organization is very heavy that it plays a vital role for them to move from
their organization and the remaining 14% of the employees says that the work load is not so
heavy.
CHART 4.1
Source: Primary data
ORGANIZATION’S APPRAISAL SYSTEM
TABLE 4.2
S.No Responses Respondents Frequency
1 Strongly Agree 0 0
2 Agree 11 22
3 Neutral 20 40
4 Disagree 16 32
5 Strongly
Disagree
3 6
Total 50 100
CHART 4.2
Source: Primary data
Inference:
From the above table, it’s clear that none of them strongly agree with the
Appraisal system carried out by the organization. Out of 50 employees 22% of them
are satisfied with the appraisal system, 32% of the employees feels that the appraisal
system is not so good, 6% of them feels that its handled very badly. The appraisal
system is unbiased for the remaining 40 % of the employees.
1. CONFLICT MANAGEMENT OF ORGANIZATION
TABLE 4.3
S
.No
respons
es
Resp
ondents
Freq
uency
1 Strongl 0 0
y Agree
2 Agree 15 30
3 Neutral 10 20
4 Disagre
e
20 40
5 Strongl
y Disagree
5 10
Total 50 100
CHART 4.3
Source: Primary data
Inference:
From the above table, it is inferred that only 30% of the employees expressed
that the Conflicts are better handled, 20% of the employees got unbiased opinion
whereas 40% of them express that the conflict mechanism is not better handled. The
remaining 10% strongly disagree with the conflict management.
2. CAREER GROWTH OPPORTUNITY
TABLE 4.4
S
.No
respo
nses
Resp
ondents
Fre
quency
1 Yes 13 26
2 No 37 74
Total 50 10
0
CHART 4.4
Source: Primary data
Inference:
The above graphical representation depicts, out of 50 employees 26% of the
employees feels that the Organization provides Career Growth Opportunities. The
remaining 74% feels there is no room for growth in the organization.
3. FAIR COMPENSATION & BENEFITS
TABLE 4.5
S
.No
respo
nses
Respo
ndents
Fre
quency
1 Yes 18 36
2 No 32 64
Total 50 10
0
CHART 4.5
Source: Primary data
Inference:
From the above representation it is clear that out of 50 employees 36% of
them express their opinion that the compensation and the benefits provided by the
organization is satisfiable and for the remaining 64% it is not so.
4. TRANSFER PREFERENCE TOWARDS EMPLOYEES
TABLE 4.6
S
.No
re
sponses
Resp
ondents
Fre
quency
1 Y
es
22 44
2 N
o
28 56
T
otal
50 10
0
CHART 4.6
Source: Primary data
Inference:
The above table shows that out of 50 employees 44% of them have the opinion
that the management consult with them in case of transfer and the remaining 56%
express that the management’s preference towards transfer is not appreciable.
5. REWARDS & RECOGNITION
TABLE 4.7
S
.No
responses Respond
ents
Fre
quency
1 Strongly
Agree
0 0
2 Agree 11 22
3 Neutral 14 28
4 Disagree 18 36
5 Strongly
Disagree
7 14
Total 50 100
CHART 4.7
Source: Primary data
Inference:
The above table gives the depiction that out of 50 employees 22% of them are
quite satisfied with the recognition offered by the management regarding their
contribution, 28% of them got the unbiased opinion, 36% of them are not agreeable
with the recognition, 14% of them strongly dissatisfied with the recognition offered
by the management in case of their contribution towards their job.
6. JOB SECURITY
TABLE 4.8
S
.No
re
sponses
Respo
ndents
Fre
quency
1 Y
es
10 20
2 N
o
40 80
T
otal
50 100
CHART 4.8
Source: Primary data
Inference:
The above graphical interpretation interprets clearly that out of 50 employees
20% of them got a strong determination about the job security provided by the
organization whereas 80% of them were unhappy with the job security provided by
the organization.
7. RELATIONSHIP WITHIN ORGANIZATION
TABLE 4.9
S
.No
re
sponses
Resp
ondents
Fre
quency
1 Y
es
19 38
2 N
o
31 62
T
otal
50 10
0
CHART 4.9
Source: Primary data
Inference:
From the above graphical representation, it is clear that out of 50 employees
36% of them got the opinion that the organization promotes smooth relationship
among the employees irrespective of the levels of management but the remaining 64%
of them have strong feeling that the organization does not promote a smooth
relationship among the employees.
8. WORK LIFE BALANCE
TABLE 4.10
S
.No
re
sponses
Resp
ondents
Fre
quency
1 Y
es
10 20
2 N
o
40 80
T
otal
50 10
0
CHART 4.10
Source: Primary data
Inference:
From the above table it is clear that out of 50 employees 20% of the
employees have the opinion that the work life balance is achieved. But 80% of them
don’t have a good opinion about the work life balance.
9. FAIR TREATMENT OF BOSS
TABLE 4.11
S
.No
respon
ses
Resp
ondents
Fre
quency
1 Strongl
y Agree
0 0
2 Agree 2 4
3 Neutral 8 16
4 Disagr
ee
14 28
5 Strongl
y Disagree
26 52
Total 50 100
CHART 4.11
Source: Primary data
Inference:
The above table depicts that out of 50 employees none of them have a good
opinion about their boss’s treatment. Only 4% of them got a good opinion regarding
the treatment of their boss, while 16% of them have unbiased opinion about their boss
treatment, 28% of them have a negative opinion about the treatment of their boss and
52% of strongly express their negative feeling towards their boss’s treatment.
10. SALARY
TABLE 4.12
S
. No
re
sponses
Resp
ondents
Freq
uency
1 Y
es
14 28
2 N
o
36 72
T
otal
50 100
CHART 4.12
Source: Primary data
Inference:
It is viewed from the table that out of 50 employees 20% of them are satisfied
with the salary provided by the organization whereas 80% of highly dissatisfied with
the salary provided by the organization.
11. Main reason for the TURNOVER
TABLE 4.13
S
.No
Reason Resp
ondents
per
centage
1 Job
Security
18 36
2 Work life 20 40
balance
3 Better
Prospects
12 24
Total 50 100
CHART 4.13
Source: Primary data
Inference:
Out of 50 employees when asked about the main reason for the turn over, 40%
were not satisfied with the work life balance, while 36% of them feel there is no job
security of their job, and the rest 24% seeks for better prospects.
CHAPTER 5
5.1 FINDINGS, SUGGESTIONS AND CONCLUSION
5.1.1 FINDINGS
It is not easy to find out as to who contributes and who has the control on the attrition
of employees. Various studies/survey conducted indicates that every one is contributing to
the prevailing attrition. Attrition does not happen for one or two reasons. The way the
industry is projected and speed at which the companies are expanding has a major part in
attrition.
5.1.2 Attrition Rates in IT Sector
Almost every sector in India is facing high rates of attrition these days. A recent study
revealed that employees leave either because of compensation reasons or due to better growth
opportunities. According to NASSCOM, Indian IT-ITES industry recorded US$ 39.6 billion
in revenues in 2006-07. The revenue of US$ 49-50 billion has been projected in 2007-08 at a
growth rate of 24-27 per cent. The IT industry's contribution to GDP was 4.8 per cent in
2005-06.
Though the IT/ITES sector is booming, it is constantly facing high attrition rates of
25% - 30%. Even the big brands are also facing the same problem. Below are the details of
attrition rates of various players in IT sector. According to the survey conducted by BES and
Data Quest, Sierra Atlantic recorded highest attrition rate (29%) followed by Kanbay with
25% and Accel Frontline with 20 per cent.
5.1.3 THE CAUSES OF TURNOVER
There are a number of factors that contribute to employee turnover. The study thus
identifies the following factors:
Workload:
Job stress can lead to work life imbalance which ultimately many times lead to
employee leaving the organization. This is one of the main reasons why an employee leaves a
company. From the primary data, it is clear that out of 50 employees, 36% of them say that
the work load given by the organization is very heavy that it plays a vital role for them to
move from their organization and the remaining 14% of the employees says that the work
load is not so heavy. (Refer table 4.1)
Career Growth Opportunity
The dynamic nature of technology requires the IT industry to upgrade its operations
frequently. So, another way to retain employees is to help them update their knowledge from
time to time through training programs. Therefore No or less learning and growth
opportunities in the current job will make candidate’s job and career stagnant. From the
primary data out of 50 employees 26% of the employees feel that the Organization provides
Career Growth Opportunities. The remaining 74% feels there is no room for growth in the
organization.
Compensation:
Incentives to employees play a vital role in motivating and retaining them in the
organization. Compensation and rewards in the IT industry have long included a basic
pay component along with a bonus pay when the company made higher profits. Later
firms initiated performance based pay that rewarded the employee based on his
contribution to the overall company profits
Better compensation packages being offered by other companies may attract
employees towards themselves.
From the primary data, out of 50 employees 36% of them express their opinion that the
compensation and the benefits provided by the organization is satisfiable and for the
remaining 64% it is not so.
Recognition:
If the work is not appreciated by the supervisor, the employee feels de-motivated and
loses interest in job. 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.
From the primary data, out of 50 employees 22% of them are quite satisfied with the
recognition offered by the management regarding their contribution, 28% of them got the
unbiased opinion, 36% of them are not agreeable with the recognition, 14% of them strongly
dissatisfied with the recognition offered by the management in case of their contribution
towards their job.
Work Life Balance:
Employees differentiate a good employer from any other employer through the
feeling of ‘wellbeing' that is generated at the workplace. A balance between work and the
personal goals and wants of an employee contributes positively to the retention of employees.
From the primary data, out of 50 employees 20% of the employees have the opinion
that the work life balance is achieved. But 80% of them don’t have a good opinion about the
work life balance.
Salary:
Moving from one job to another for higher salary, better positions and better benefits
are the most important reasons for attrition. The salary and offered from MNC companies in
Bangalore, Delhi and Mumbai have gone up very high (Rs 15000 to Rs 18000 per month)
and it is highly impossible for Indian companies to meet the expectation of the employees.
The employees expect salary revision once in 4-6 months and if not they move to other
organizations.
From the primary data, out of 50 employees 20% of them are satisfied with the salary
provided by the organization whereas 80% of highly dissatisfied with the salary provided by
the organization.
Job security
Assurance (or lack of it) an employee has about the continuity of gainful employment
for his or her worklife. Job security usually arises from the terms of the contract of
employment, collective bargaining agreement, or labor legislation that prevents arbitrary
termination, layoffs, and lockouts.
From the primary data it is clear that out of 50 employees 20% of them got a strong
determination about the job security provided by the organization whereas 80% of them were
unhappy with the job security provided by the organization.
Bossy:
One of the main reasons why employees leave companies is because of problems with
their managers. An HR professional can be termed an employee’s advocate and a bridge
between top management and employees at all levels. There is a huge gap between HR
professionals and employees in terms of understanding challenges and delivering
requirements. HR has not really understood the problems associated with employees’ careers
and jobs. The company’s overall plans and strategies also depend on HR professionals as
they voice employees’ problems and requirements. The HR department should have genuine
interest in the employees’ welfare…it is responsible for making sure that their expectations
are met. By doing this it is easier to meet the company’s business targets.
A bad boss can have a long-lasting negative impact on the image and reputation of a
company. I'd advise any employee at any organization to speak up about a bad boss. In the
long run, it's better for the employee, better for the boss and better for the organization.
From the primary data, out of 50 employees none of them have a good opinion about
their boss’s treatment. Only 4% of them got a good opinion regarding the treatment of their
boss, while 16% of them have unbiased opinion about their boss treatment, 28% of them have
a negative opinion about the treatment of their boss and 52% of strongly express their
negative feeling towards their boss’s treatment.
5.1.4 THE COMMON REASONS
The economy - in exit interviews one of the most common reasons given for leaving
is the availability of higher paying jobs. Some minimum wage workers report leaving
one job for another that pays only 50 cents an hour more. Obviously, in a better
economy the availability of alternative jobs plays a role in turnover, but this tends to
be overstated in exit interviews.
The performance of the organization - an organization perceived to be in economic
difficulty will also raise the specter of impending layoffs. Workers believe that it is
rational to seek other employment.
The organizational culture - much has been written about organizational culture. It
is sufficient to note here that the reward system, the strength of leadership, the ability
of the organizations to elicit a sense of commitment on the part of workers, and its
development of a sense of shared goals, among other factors, will influence such
indices of job satisfaction as turnover intentions and turnover rate.
The characteristics of the job - some jobs are intrinsically more attractive than
others. A job's attractiveness will be affected by many characteristics, including its
repetitiveness, challenge, danger, perceived importance, and capacity to elicit a sense
of accomplishment. A job's status is also important, as are many other factors.
Unrealistic expectations - Another factor is the unrealistic expectations and general
lack of knowledge that many job applicants have about the job at the time that they
receive an offer. When these unrealistic expectations are not realized, the worker
becomes disillusioned and decides to quit.
Demographics - empirical studies have demonstrated that turnover is associated in
particular situations with demographic and biographical characteristics of workers.
But to use lifestyle factors (e.g. smoking) or past employment history (e.g. many job
changes) as an explicit basis for screening applicants, it is important for legality and
fairness to job applicants to verify such bio data empirically.
The person - In addition to the factors listed above, there are also factors specific to
the individual that can influence turnover rates. These include both personal and trait-
based factors. Personal factors include things such as changes in family situation, a
desire to learn a new skill or trade, or an unsolicited job offer. In addition to these
personal factors, there are also trait-based or personality features that are associated
with turnover. These traits are some of the same characteristics that predict job
performance and counterproductive behaviors such as loafing, absenteeism, theft,
substance abuse on the job, and sabotage of employer's equipment or production.
These traits can be measured and used in employee screening to identify individuals
showing lower probability of turnover.
5.1.5 Other reasons:
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:
Working environment:
Working environment is the most important cause of attrition. Employees expect very
professional approach and international working environment. They expect very friendly and
learning environment. It means bossism; rigid rules and stick approach will not suit the call
center. Employees look for freedom, good treatment from the superiors, good
encouragement, friendly approach from one and all, and good motivation.
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.
Better Prospects:
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.
Recruitment
Effective recruitment strategies can help organizations in employee retention.
Companies following the traditional methods of recruitment observed that a major drawback
of the traditional selection processes was either a poor response or a mismatch between
company goals and individuals' expectations
Organization Culture
Studies and surveys analyzing the psyche of the employee have found that the work
environment has a major impact on the behavior of an employee. An effective retention
strategy would involve acknowledging the employee as the internal customer and aligning the
organizational strategies with employee needs and wants
Leadership
Surveys also identified poor leadership as one of the reasons for employee attrition. It
was observed that leaders incapable of motivating and guiding employees pushed employees
to change jobs frequently.
It is important to note that the factors we've listed above can be classified as being
within or beyond the control of the employing organization. In order to actively participate in
reducing costs associated with turnover, organizations need to identify those factors over
which they do have some control and initiate necessary changes to reduce turnover
attributable to these "controllable" factors.
5.2 SUGGESTIONS
5.2.1 Ways To Reduce Employee Turnover
Hire the best candidate.
Welcome new employees. Customize your induction program for new employees
according to the requirements. Same induction program can not be applied to all the
candidates. Make them feel welcomed.
Produce quality managers who can really manage employees well.
Provide employees with work schedules that are flexible enough to suit their needs.
Don’t be too demanding. You re hiring human beings who have their own life and
family commitments. Respect them.
Provide career counseling and development.
Discuss your future plans regarding the candidate with the candidate. Let them know
that the management is interested in retaining them and cares for them.
Take proper feedback from employees regarding their grievances.
Remember your ex-employees. They can be of help in future. It is also a part of
employee retention.
5.2.2 Employee Retention Tips
In today’s competitive hiring market, employee retention has become an important
issue for all employers. As a small business owner, you are aware that it’s harder than ever to
find and keep good people. You also understand that your ability to retain quality workers
can make or break your business.
Fortunately, there are many ways to keep your prized employees happily on board.
Here are some tips to help improve employee relations and ensure that your company keeps
the best of the best:
1. Compensate fairly. Money isn’t the only reason people stay, but it does play a
significant role in job satisfaction. You must offer your employees a competitive
salary and honor their service and tenure with raises, bonuses, and other monetary
rewards. Fair pay shows that you respect them. In addition, offer a good benefits
package, which can induce employees to stay committed to your business.
2. Be open to their ideas. In a high-performance workplace, some of the best ideas
come from the employees themselves. Make sure to keep the lines of communication
open. Good leaders listen to their employees and treat them as valuable team
members.
3. Treat people as equals. If you really want employees to feel a sense of loyalty and
commitment, treat them as partners, not hired hands. Give your employees a sense of
ownership, and keep them engaged.
4. Provide growth opportunities. It’s estimated that 50 percent of an employee’s skill
set becomes outdated in just two years, so make sure you provide your staff with
opportunities for personal and professional growth. Allow your employees to take
classes and attend professional development seminars. Challenge them with new
responsibilities that help them acquire new skills.
5. Say thanks. Just taking the time to say "thank you" is a simple yet effective way to
show employees that they're valued and appreciated.
6. Make time. Make an effort to spend one-on-one time with individual employees.
Take them to lunch. Show each person that you’re personally committed to keeping
and growing his or her talent by inquiring what other positions the employee might be
interested in as their career develops.
7. Be flexible. It’s important to help each employee achieve a balance between their
work life and personal life. Allow them to attend their children’s activities or tend to
sick relatives when necessary.
8. Encourage creativity. Employees need to enjoy the work they do, and you need to
provide a creative and challenging work environment, or all the other great things the
company does won’t matter. If you micromanage and stifle creativity, don’t expect to
keep good people.
9. Keep them healthy and happy. Encourage good health and wellness of body, mind,
and spirit. You can be creative. Bring in a yoga instructor for morning meditation, or
give gift certificates for massages. Allow for restful breaks. Learn about your
employee’s outside interests. Feed their minds with books, magazine subscriptions,
and concert or theater tickets.
10. Lead with the heart. Win your employees over. Excellence is impossible without
their affection and respect. Whether it’s through sharing a compelling vision with
them, paying attention to work/life balance, or simply providing a positive, uplifting
work environment, if you want to keep great employees, find some way to tap into
their hearts. The positive word-of-mouth about your company’s culture will go a long
way in both retaining good workers and attracting new ones.
5.2.3 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.
5.3 CONCLUSION:
Thus if an organisation wants to retain the employees it should redesign its culture. A
culture, which shows, conflict, mistrust, insensitivity towards the emotions, where the value
system supports excessive control, punitive steps for failures and mistakes, where there is low
preference towards human sentiments and relations. What is needed today, therefore, is that
organisation provides a culture which is emotionally sensitive i.e. it caters to the emotional
needs of the employees, where failures and mistakes are dealt with emotional maturity and
which provides emotional support in times of their crises be it personal or professional. In
short, a culture which should leave the employees with a feeling of happiness, contentment,
being valued and respected. Employees need much more than what is obvious. A long term
relationship needs to be established with its employees. Moreover, employees in this sector
need a lot of personal space and a well thought-out career growth plan. Also, HR practices
are needed to be fine-tuned so as to get the right kind of employees.
And the organization must also be focused on Creating and delivering a great
employee value proposition which is clearly the best way to retain the people. This would
encompass building and sustaining a compelling brand image with an appealing culture and
inspiring values, tailored to the talent segment that one seeks to attract and retain, offering
great jobs and career opportunities, building an effective learning framework, investing in
work place infrastructure, moving on poor performers, instituting effective reward and
recognition programs, putting in place innovative compensation schemes.
When the organization is successfully able to convey the message that it cares for
employees, retention works best