IA Final Draft 2

8/6/2019 IA Final Draft 2

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Business and Management IA

TO: Managing Director

TITLE: How can employees be retained in the BPO/KPO/RPO of an XYZ firm.

FROM: Aakanksha Khurana

DATE: JUNE 2011

CC: Board of Directors

Word Count:

Research Proposal: 335 words

Written Report: 1630 words

Executive Summary: 204 words

I confirm that this work is my own and that it is the final version. I have also acknowledged

the use of words or ideas of another person, whether written or oral.

Acknowledgements:

1



I would like to acknowledge and thank:

• Poonam Prakash – my Business and Management teacher for her support and assistance

in helping me with this report..

•

Paul Gaskin- HR Director of XYZ company- for his contribution to this report and hisvaluable time for my interview.

• Monika Khurana- Mother for her valuable support and information as and when needed

to complete this research.

• Sakshi Sharma- Employee of the Company for her valuable time and cooperation during

my Interview.

• Rajat Sood- Employee of the Company for his valuable time and cooperation during my

Interview.

Executive Summary

2



Management at XYZ Company has expressed concern regarding the high staff turnover rates1 of

the company. As such the paper analyses the question, “How to retain employees in the

BPO/KPO/RPO of an XYZ firm?”

Initially a research proposal provides the rationale, theoretical framework and methodologyutilized and possible constraints in answering the question along with the action plan. The

introduction provides a basic background information specific to the organization in relation to

the question with a brief historical background of the company.

Discussion/analysis is based on primary research consisting of interviews with the management

(Appendix 1 and 2) and appropriate secondary sources including financial reports of the

company and various internet sites and books that allowed both financial (Profit and Loss

Accounts and Balance Sheet) and non-financial analyses (Fishbone model and SWOT analysis).

The possible causes and effects of the problem have been discussed and appropriate

recommendations keeping in mind the needs of the employees have been made. But in this

research the problem has solely been looked through an HR point of view whereas in reality the

financial aspect needs to be considered before making any decision. Therefore further research is

essential in terms of the financial matters before taking any concrete decision.

Research Proposal

1 Refer to Appendix 1

3



Research Question:

How can the employees be retained in the BPO/KPO/RPO of an XYZ firm?

Rationale:

Majority of firms are facing the problem of retaining employees due to rising competition

amongst top players in the industry. The industries are offering handsome pay packs + perks to

attract/ tempt the youth to change jobs to lead a better life style.

Theoretical Framework :

I plan to analyze both the financial and non-financial aspects of the organization such as

remuneration being offered to the employees and in addition perks offered like medical

insurance for self and family, fuel re-imbursement/cab facility, etc.

Key areas of syllabus:

2.1 Human Resource Planning

2.2 Organizational Structure

2.5 Motivation (financial and non-financial aspects)

2.7 Employer and Employee Relations

Methodology

Primary Research:

• Interview the HR and Strategy Director of the XYZ firm to understand the possible

causes of unfullfillment of key reasons provoking people to fluctuate jobs.

• Interview some of the current employees of the firm to understand their views.

•Interview an ex-employee of the firm to understand his reason of leaving the job.

Secondary Research:

4



• Collate information from the HR Department on number of employees who have left the

company in few months of joining due to lucrative offers from other players in the

market.

• Review Annual Report section and graphically represent the highs and lows of the

company.

• Use the financial statements to understand the key reason of many job fluctuations i.e.

salaries.

Anticipated Difficulties

Possible Problems Solutions

Limitations to factual data Will be acknowledged in the conclusion

Biased responses from the current employees

of the firm.

If possible get in touch with some of the ex-

employees of the firm.

Interview questions too specific in nature

limiting the information available.

A variety of open and closed questions to

enable depth of information.

Action Plan

5



Dates Activities Modifications

February 2011 Topic Selection

9/3/2011-13/3/2011 Write Research Proposal Some research criteria were

added

23/3/2011 Write Interview Questions

15/4/2011-17/4/2011 Conduct the interviews

19/4/2011 Collect the secondary data

22/4/2011 Analyze secondary data

25/5/2011-15/6/2011 Complete first draft

13/7/2011-11/8/2011 Refine Draft

19/10/2011 Final Draft Submission

Contents Page

Acknowledgements………………………………………………………………………………

6



Executive Summary………………………………………………………………………………

Research Proposal………………………………………………………………………………...

Introduction………………………………………………………………………………………

Procedure/Methodology………………………………………………………………………….

Main results and findings………………………………………………………………………..

Current Market Position………………………………………………………………………….

Remuneration of Finance Director……………………………………………………………….

Analysis…………………………………………………………………………………………..

Balance Sheet……………………………………………………………………………………

Non-financial analysis…………………………………………………………………………...

Fishbone Model…………………………………………………………………………………

Conclusions and recommendations……………………………………………………………..

Bibliography…………………………………………………………………………………….

Appendix 1……………………………………………………………………………………...

Appendix 2………………………………………………………………………………………

Appendix 3………………………………………………………………………………………

Appendix 4…………………………………………………………………………………….

Introduction

XYZ Company, established in 1991, is a leading service provider in the international and

domestic BPO markets in India.

7





Retention of employees is one of the major concerns of corporate leaders due to the intense

amount of competition and the high financial costs incurred whenever an existing employee has

to be replaced. Hence, for me this research holds importance as it is of great importance in

today’s world.

The primary research consists of a detailed interview with various open and close questions with

Paul Gaskin, HR Director of XYZ Company. An additional interview was conducted with an

employee of the BPO sector of the Company to understand their views about the problem. The

interviews focused on the physical working environment, employer-employee quos, problems

likely to be the cause of job fluctuations and strategies being practiced to tackle this problem. A

former employee of the firm was also interviewed to understand his reasons for job fluctuation.

The secondary research which was undertaken consists of the reviewing of financial reports of

XYZ Company and its key competitors and analyzing their recruitment strategies and staff

turnover ratios. No. of employees who left the job within few months of joining and the reasons

they gave for job fluctuation is also analyzed for further research.

Final Accounts have been used and other non- financial tools like SWOT and fishbone model to

reach to a concrete conclusion. While the primary research was taking place some questions

were added on the spot to gather fruitful information.

Main results and findings:

For any research to be conducted on a company its financial performance has to be carefully

looked upon and appropriate results be deduced to reach on a concrete conclusion.

Figure 1: XYZ recent financial performance

9



2010 2009 2008 2007 2006 2005 2004

Revenue £m 4326.7 3970 3123.8 2810.7 2548.3 2260.3 1656.8

Gross Profit

£m

644.3 586.8 456.8 406.2 365.7 325 200

PBIT 213.9 177.1 136.1 114.6 107.4 77.9 57.4

PAT 156.8 130.2 99.7 82.4 79.5 54.4 36.0

Figure2: Operating Profit3 of XYZ in recent years

Analyzing the financial performance of XYZ between the years 2004 and 2010, one can clearly

see that until 2007 there has been a significant increase in the profits 4, but from 2007 onwards

the profits started declining steadily probably because the depression was at its peak. There were

profits but not with a great margin as before. So there has to be something which is hindering the

company from making enormous profits.

Current Market Position:

With a recent acquisition5 of the market leader of the domestic BPO, XYZ has emerged as the

single largest player in this field. It has made the largest acquisition in the Indian BPO space till

date6.

Figure 3: Remuneration for the company’s Chief Executive for the year 2010.

3 Operating Profit: Profit made by a business as a result of its ordinary trading activities.

4 Here we consider only revenues, gross profit and operating profit due to the differing taxrates every year.

5 About the acquisition refer to appendix 1

6 Featured articles from the Times of India.2011,viewed 13/6/11,<http://articles.timesofindia.indiatimes.com>

10



Figure4: Remuneration for the company’s Finance Director for the year 2010.

It can be evidently seen from these two pie diagrams that there is a huge amount of increase in

the annual salaries of the higher officials. But for those working at the base level there is minimal

done7. So clearly this is a case of a demotivated staff and thus people are left with no option

rather than change jobs and go to a company which is offering a higher pay package along with

meaningful perks. This eventually leads to a high staff turnover rate which proves to be

detrimental to the company’s profits.

Analysis/Evaluation

Both the primary and secondary data collected point to only one direction, the company is doing

well i.e. gaining profits but not “marginal profits” and the reason for this is a demotivated staff

7 Refer to Appendix 2.

11

41% 34%

25%

37%39%

24%



due to the pay packs offered to people at the executive and trainee levels who are unsatisfied 8.

The ever increasing rate of competition is giving rise to high job fluctuation rates especially after

the year 2007 particularly for XYZ.

Financial Analysis:

Profit and Loss Account for XYZ, for the year

ended 31st December 2010

PARTICULARS AMOUNT IN MILLION POUNDS

Sales Revenue 4326.7

Cost of Sales (3682.4)

Gross Profit 644.3

Less Expenses (413)

Less Depreciation of assets (17.4)

PBIT 213.9

Tax (57.1)

Profit after Tax 156.8

Balance Sheet9 of XYZ as on 31st December 2010


9 A balance sheet gives the financial position of a business at a particular point in time

12



Fixed assets

Intangible Assets 1044.5

Tangible Assets 135.4

Total Fixed Assets 1378.2

Current Assets

Stock 65.4

Cash at hand or in bank 279.3

Total Current Assets 344.7

Total Current Liabilities 1675.7

Net Assets 841.3

Loan Capital 262.9

Share Capital 9.9

Retained Profit 568.5

Capital Employed 841.3

There is sufficient amount of capital which is held by the company every year. This is proved by

the financial analysis. But most of this is distributed or spent on increasing the salaries of the topmost officials of the companies such as the Chief Executive or the Finance Director 10. The

salaries of such top officials includes transport allowance, children’s education allowance, bonus

amounts etc.11 In fact it’s not only this company, but “The rise in the pay for the board level

executives is seen to be more than twice the rate of inflation in the previous year. This also

seems to be quite a unique situation for the company as most of the companies were lowering

pays and slashing jobs to overcome recession.”12 In such a scenario when the higher officials are

being made much more than the people at the lower levels, they do not want to put any extra

10 Refer to Figure3 and Figure4


12 Article Basic salaries up by 10% despite bad economy , viewed 15/6/11<http://www.financialculture.com>

13

http://www.financialculture.com/why-should-recession-make-your-wedding-a-seasonal-affair/

http://www.financialculture.com/why-should-recession-make-your-wedding-a-seasonal-affair/



effort because they know their effort would not bore any fruitful results. Thus, the best option

they consider or rather are left with is to shift to a job which pays more than the current one and

offers better perks for them. This is the major factor which is proving to be detrimental for the

company’s growth and profits.

Concepts like profit-related pay or performance related pay can help motivate a dissatisfied

workforce. Performance bonuses, loyalty bonuses, pay rises and gratuity are some such

examples. These would create incentives for people to work and perform better. Workers can

also focus better if their targets are clearly set out.

Non-Financial Analysis

Though the financial problems faced by the people working in the BPO sector of the XYZ

company are the most important but there are factors other than these which are equally

important and should be taken care of for a healthy working environment and a motivated and

dedicated staff. To explain these the best way would be using Maslow’s13 “Hierarchy of needs”

Fishbone Model14

Lack of training Lack ambition

and development Lack training

programmes.

Dull working Insufficient motivational

13 American psychologist Abraham Maslow focused on the psychological needs of workerssince he believed that people are motivated by more than just money. He argued that theseneeds be met in order to motivate the employee.

14 Professor Kaoru Ishikawa’s fishbone model is a graphical representation of the most likelycauses and effects of a particular problem.

14

Demotivated

Staff

Polici People

Paraphernal



environment. techniques.

Clearly, the company needs to restructure its strategies and concentrate more on the most

important aspect of a business i.e. the people. Maintenance factors should be met to prevent

dissatisfaction. Motivators like job enlargement, job enrichment and job empowerment should be

implied to increase the psychological growth of workers and hence increase satisfaction and

performance at work. Appropriate training and development programs should be initiated for

employees so that they learn something new and face more challenges so that they enjoy what

they are doing. Another way to motivate workers could be making them participate in the

decision making of the business. The decisions which might affect them could be taken by taking

their suggestions and thoughts into consideration. In this way, workers feel that they are very

much a part of the business.

“There is no happiness except in the realization that we have accomplished something”.15

Recognition and praise of the workers for what they are doing can also be an encouraging factor.

A pleasant working environment helps boost the morale of workers. As the effect of recession is

now receding, slowly inflation is getting to its peak and with rising costs of living; people are

demanding better salaries and other perks. XYZ should do something about this and cater to the

needs of their workforce to reduce the level of staff turnover.

With rising competition valuable workforce has left from XYZ and shifted to companies which

are providing them with a higher pay and other factors such as suitable work hours16

. This is notonly increasing the company’s staff turnover figure but also the added costs of recruiting and

training new employees and starting the work from scratch with them.

15 Quote by Henry Ford


15

Procedure



Nevertheless, the recent acquisition by the company 17 can prove to be a boom for the firm and

provide more employment opportunities and if the factors that have led to the high staff turnover

figure are kept in mind and worked upon it can be a great success for the company.

Conclusion and Recommendations

The research has enabled a deeper understanding of the situation and has looked at the problem

of Employee Attrition from various views i.e. from an official’s view as well as an employee’s

view point. The company’s good employer-employee relations 18are a plus point. But the fact

that the workforce is not really satisfied with the training and development processes in the

company is a factor to be carefully considered. Workers in today’s world like challenges 19and

repetitive work every day becomes monotonous for them so the company can work towards that.

A healthy working environment and improved working space would also ensure workers serving

a longer tenure in the company.

Recommendations:

As such my recommendations would be:

17 Refer to Appendix 1



16



• Introduce better training and development programs along with better working hours if

possible20.

• Financial and non-financial motivation techniques such as bonuses and other perks can

help motivate people to serve in the company for longer.

• New and challenging work for employees can also help boost their morale.

• The company can try and take suggestions from employees when making decisions that

would affect them as well take time to time reviews from them.

However my research is limited: it has looked into the matter only from an HR point of view and

is a very HR oriented research. Factors such as bonuses, training and development programs

have to be looked into from the financial point of view. The feasibility of such options has to be

considered. Such decisions require careful and long term strategic planning for the betterment of

the business and the employees both. There can be minor differences in the financial data due to

confidentiality issues. But this is a serious problem and has to be looked into very carefully and

appropriate solutions be deduced because if not done so it can prove to be very harmful for the

business in the long run.

Bibliography:

Annual Reports of XYZ Company.

Articles from the Times of India 2011

<http://articles.timesofindia.indiatimes.com/2011-06-01/india-business/29607751_1>

Viewed on 13th June 2011 Time of access: 5:56PM

Article on rise in basic salary by 10%

<http://www.financialculture.com/basic-salaries-up-by-10-for-ftse-despite-bad-economy/>

Viewed on 15th June 2011 Time of access: 1:24 PM

Dictionary for Reference

<http://www.dictionary.com>


17

http://www.financialculture.com/basic-salaries-up-by-10-for-ftse-despite-bad-economy/

http://www.financialculture.com/basic-salaries-up-by-10-for-ftse-despite-bad-economy/




Hall, D, Jones, R, Raffo, C.2007. Business Studies (3rd Edition). Causeway Press Ltd.

Interview with Mr. Paul Gaskin HR Director of XYZ Company.

Interview with Mr. Rajat Sood BPO Employee of XYZ Company.

Interview with Ms. Sakshi Sharma BPO Employee of XYZ Company.

Interview with Ms. Sambhavna. Ex-employee of XYZ Company.

NASSCOM foundation

<www.naascomfoundation.org>


Outsourcing Blog

<theoutsourceblog.org>

Viewed on: 14th June 2011 Time of access: 3:29 PM

Paul Hoang, 2007. International Baccalaureate Business and Management. Edition. IBID

Press.

Quotes

<thinkexist.com › Authors › Jaz Jen>

Red mayne

<www.redmayne.co.uk>

Viewed on: 13th June 2011 Time of access: 5:56PM

Top 10 BPO Companies in India

18

http://www.google.co.in/url?url=http://thinkexist.com/authors/&rct=j&sa=X&ei=o9P4TfHkD8PprQfOzdmLCA&ved=0CCMQ6QUoADAB&q=profits+are+related+to+employee+retention&usg=AFQjCNFFCAdQqZkIZgyjR2QixclISRuAhA

http://www.google.co.in/url?url=http://thinkexist.com/quotesbyletter/jaz%20jen/&rct=j&sa=X&ei=o9P4TfHkD8PprQfOzdmLCA&ved=0CCQQ6QUoATAB&q=profits+are+related+to+employee+retention&usg=AFQjCNFpYI4iZQne_WRzOaSmbVENxFzL-Q

http://www.google.co.in/url?url=http://thinkexist.com/authors/&rct=j&sa=X&ei=o9P4TfHkD8PprQfOzdmLCA&ved=0CCMQ6QUoADAB&q=profits+are+related+to+employee+retention&usg=AFQjCNFFCAdQqZkIZgyjR2QixclISRuAhA

http://www.google.co.in/url?url=http://thinkexist.com/quotesbyletter/jaz%20jen/&rct=j&sa=X&ei=o9P4TfHkD8PprQfOzdmLCA&ved=0CCQQ6QUoATAB&q=profits+are+related+to+employee+retention&usg=AFQjCNFpYI4iZQne_WRzOaSmbVENxFzL-Q



< www.chillibreeze.com/articles/top-BPO-companies.asp>

Appendix 1: Interview with Mr. Paul Gaskin- HR Director of XYZ Company

1) SEEING THE PRESENT SCENARIO OF THE BPO SECTOR ACROSS THE

COUNTRY WHERE DO YOU SEE IT GOING?

Ans) There is a lot of competition currently floating in the Indian market as far as the BPO

sector is concerned. The market trend during the recession period has forced small Indian

BPO companies to shut down their firms as a result of which a lot of unemployment was

seen but as the recession period is fading we see opportunities and new firms coming up as

well as M&A of various BPO companies providing new opportunities for workers. A recent

acquisition of our firm has enabled us to become the largest domestic BPO sector in India in

addition to providing jobs for almost 5000 people henceforth.

2) WHAT ARE THE REMUNERATION PACKS YOU HAVE BEEN OFFERING TO

YOUR EMPLOYEES IN THE PAST THREE YEARS?

Ans) Remuneration packs depend upon the qualification and experience of the person hired.

Although once hired there has been a minimum increment between 10 to 20% for every

employee per annum.

19



3) HAVE THE PAY PACKS AND PERKS BEING OFFERED AT DIFFERENT JOBS

REMAINED CONSTANT IN THE PAST THREE YEARS?

Ans) At certain levels like managers and team leaders it will be a yes but at executive and

trainee levels the result has not been very satisfying and our staff turnover figures have

reached about 80 -100 people leaving jobs per year.

4) WHAT DO YOU THINK CAN BE THE POSSIBLE CAUSE OF EMPLOYEES

LEAVING THE FIRM?

Ans) A majority of employees choose to move from one firm to another basis higher

increments, better positions offered and locational issues.

5) WHAT WRE THE ALLOWANCES THAT ARE OFFERED TO YOUR TOPMOSTOFFICIALS?

Ans) Their allowances include medical benefits, bonus amounts, transport allowances,

children’s education allowances etc.

6) HOW ARE THE EMPLOYER- EMPLOYEE RELATIONS IN THE FIRM?

Ans) The XYZ firm is valued for its employee friendly relationship which is why today we

are the market leaders.

7) LASTLY WHAT ARE THE STRATEGIES YOU HAVE IN MIND TO FOLLOW OR

ARE FOLLOWING CURRENTLY TO RETAIN EMPLOYEES?

Ans) Currently to retain employees we are offering attractive salary packages with perks and

commuting facilities which makes their lives easier and ours too as the public transport

system especially for female workers is not very safe in India. Also, providing them with

international quality training for better prospects and formation of a strong and easily

approachable ER team to understand the needs and problems if any faced by an individual

employee.

20



Appendix 2: Interview with MS. Sakshi Sharma and MR. Rajat Sood combined together

with valuable information

1) SINCE HOW MANY YEARS HAVE YOU BEEN WORKING IN THE

ORGANIZATION?

Ans) 3 years

2) ARE YOU SATISFIED WITH WHAT THE COMPANY IS OFFERING YOU?

Ans) Yes it is a great company to work with which has taught me a lot of new chaptersenhancing my knowledge.

3) DO YOU PERSONALLY WANT ANY CHANGES IN THE ORGANIZATION

WHICH MIGHT HELP YOU AND OTHERS LIKE YOU ADAPT MORE

COMFORTABILY AND READILY TO THE WORKING ENVIRONMENT?

Ans) Personally I would want more training and development programs because I believe

training and development is a key source for growth for any individual employee to reach the

next level. Better training and development will result in better performance which in turn

will help the company grow which in turn will help the company profit so this basically a

cycle which helps in better performance of the company as well as the individual. Also

challenging and new work for employees is necessary to provoke a positive spirit in them.

4) WHAT DO YOU THINK COULD BE THE REASONS FOR THE EMPLOYEES

LEAVING THE ORGANIZATION SERVING A SHORT SPAN OF TIME?

Ans) Few reasons of employees leaving could be a) hasty decisions of not being comfortable

in the environment/set up, b) higher pay packages offered by competitors, c) preferential

21



location suitable to the employee, d) suitable working hours as per the individual’s

convenience eg an individual is more comfortable working during day shift timings so that he

is able to spend quality time with his family but if he is positioned for a night shift duty he

does not get time to spend with his family.

5) HOW ARE YOUR WORKING RELATIONS WITH YOUR EMPLOYERS?

Ans) This company is a very employee friendly firm and pays genuine heed to concerns

raised by its employees and tries its best to satisfy/amicably sort out issues in the best interest

of the employee as well as the employer.

6) HAVE YOU BEEN FACING ANY PROBLEM IN THE FIRM AS SUCH WHICH

YOU WOULD LIKE TO DISCLOSE?

Ans) NO

Appendix 3: Interview with MS Sambhavna

1) WERE YOU AN EMPLOYEE OF XYZ COMPANY?

Ans) Yes

2) FOR HOW MUCH TIME DID YOU WORK THERE?

Ans) I worked for a very short tenure. About 5 months.

3) WHAT WAS THE REASON THAT YOU LEFT THE JOB?

Ans) Well firstly I was not happy with working hours. A 9 to 5 job became a 9 to 8 job for

me. It was becoming really hectic for me and adversely started affecting my health also.

Moreover I could not spend quality time with my family who are my topmost priority. Also,

the pay package I’m getting here is far better than that provided by XYZ Company and added

to that are the benefits like medical insurance, transport allowance etc.

4) APART FROM THE SALARY AND WORKING HOURS WAS THERE ANY OTHER

PROBLEM WHICH YOU WERE FACING THERE?

Ans) Not really but yes I would like to say that the company definitely should introduce

better training and development programs.

5) HOW WAS THE WORKING ENVIRONMENT THERE?

22



Ans) Well I can say that the working environment was pretty much the same as in any MNC.

Except for the fact that the company maintains an excellent employer-employee quotient. It

is really commendable.

Appendix 4: XYZ Company SWOT Analysis

SWOT analysis consists of four categories, and is an analytical tool used to discover the current

situation of the business and prospects for its future. Includes the businesses internal strengths

and weaknesses and external opportunities and threats.

Strengths Weaknesses Opportunities Threats

-Is a market leader in

the BPO sector of the

country.

-Financial Status is

relatively good and

has a large amount of

profits every year.

- Maintains a good

employer-employee

relation.

-Concentrates on the

remuneration of

majorly the higher

officials.

-Lacks appropriate

training and

development

programs.

-The acquisition can

broaden the horizons

and can enable

employment of highly

efficient and valuable

staff.

-Big competitors in

the market and can

increase the level of

competition

tremendously.

23

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IA Final Draft 2