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STRATEGIES TO IMPROVE VOLUNTARY ATTRITION RATE

Project submitted to Karnataka State Open University in partial

fulfillment for the award of MASTER OF BUSINESS ADMINISTRATION

IN HUMAN RESOURCE MANAGEMENT

By:

Saurabh Sankar Sengupta

Reg: 111262MBA0028

Under the guidance of

Dr. Dhirendra Joshi

Department of Management

KARNATAKA STATE OPEN UNIVERSITY

MYSORE

JANUARY 2014
https://www.linkedin.com/pulse/20140715055540-87868010-strategies-to-improve-voluntary-attrition-rate#comments-8851411650061133837


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The Project may contain the following information

CERTIFICATE

This is to certify that the STRATEGIES TO IMPROVEVOLUNTARY

TTRITION RATEIs a bonafide record of independent research work done

by MR.Saurabh Sankar Sengupta(Reg: 111262MBA0028) under

my(Dhirendra Joshi) supervision, submittedto Karnataka State Open

University in partial fulfillment for the award of the MASTER OF BUSINESS

DMINISTRATION IN HUMAN RESOURCE MANAGEMENTand that the

project has not previously formed the basis for the award of any other degree,

Diploma, Associate ship, Fellowship or other title.

Signature of the Supervisor

DECLARATION


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I Saurabh Sankar Sengupta hereby declare that the dissertation

entitled STRATEGIES TO IMPROVEVOLUNTARY ATTRITION

RATEsubmitted toKarnataka State Open Universityin partial fulfillment for

the award of the MASTER OF BUSINESS ADMINISTRATION IN HUMAN

RESOURCE MANAGEMENT and that the project has not previously formed the

basis for the award of any other degree, Diploma, Associate ship, Fellowship or other

title.

Place:

Date: Signature of the candidate

FORMAT FOR EVALUATION OF PROJECT

1. Name of the Candidate : Saurabh Sankar Sengupta

2. Registration Number : 111262MBA0028

3. Name of the subject : Master of Business Administration in Human

Resource Management

4. Name of the Study Centre and Code : IT.COM College, AGRA , KSOU/AUT/394

5. Title of the Project : Strategies to Improve Voluntary Attrition Rate

Evaluation for DissertationMaximum 100 Marks


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Awarded

6.

7. Name and Address of the supervisor: (With Seal)

(Supervisor)

CONTENTS

Student Declaration

Acknowledgement

Preface

Page No.

F Chapter I 8 -12

Introduction

Need of study

Objective of Study

Methodology


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Scope of study

Limitation of study

Chapter Arrangement

F Chapter II 13 -56

F Discussion

F Chapter III 56 - 61

Findings

Suggestions & Recommendation `

Conclusion

F Bibliography 62

PREFACE

As the part of the M.B.A curriculum I have made my winter project on attrition rate.The topic of my project is Strategies to improve voluntary attrition rate

This project provide me with an opportunity to understand what in an attrition rate

,why do employees leaves voluntary and various strategies to improve voluntary

attrition rate in any organization which help to enriched the environment of


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organization by satisfying employees and help them to achieve maximum growth and

development.

Voluntary attrition is more common in BPOs today. By the project I came to know

about what is the attrition rate in Indian BPOs, with strategies how we overcome by

this problem. Also the project gives an idea about affect of recession on attrition rate

in BPOs.

(Saurabh Sankar Sengupta)

CHAPTER I

INTRODUCTION

The old adage people are your most important asset is wrong. The right

eople are your most important asset. -Jim Collins.

HRM is concerned with the development of human resources, i.e., knowledge,

capability, skill, potentialities and attaining and achieving employee goals, including

ob satisfaction. It has been viewed that human resource occupies a central role in an

organization and there is no limit to the potential of an organization that recruits

good people, raises them up and continually develops them. Of late, it is widelyaccepted that human resource builds the distinctive competitive advantage of an

organization. It is particularly true in case of service- oriented industries like

software, pharmaceutical, and biotechnology etc. The success of these firms mostly

depends on people- embodied know-how that includes skills and abilities

embedded in an organizations workforce.


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Attrition rate is the rate by which employees leave from the organisation. There are

some employees that voluntary leaves the organisation as they do not find

organisation system according to them etc and other types of employees whom

organisation do not found according to it. There are various reasons why the

employees leave the organisation and how effective the organisation is to overcome

the high attrition rate strategically.

Fundamental changes are taking place in the work force and the workplace that

promise to radically alter the way companies relate to their employees. Hiring and

retaining good employees have become the chief concerns of nearly every company in

every industry. Companies that understand what their employees want and need inthe workplace and make a strategic decision to proactively fulfill those needs will

become the dominant players in their respective markets.

NEED OF THE STUDY

Todays most of the organizations facing the problem of Attrition, so this encouragedme to study this topic which will help find solution to the problem that arouse

because of attrition.

OBJECTIVE OF THE STUDY

The objectives of this study were to:


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METHODOLOGY FOLLOWED

There are two types of data that can be collected i.e., Primary Data and Secondary

Data.

Secondary data was collected through:

SCOPE OF THE STUDY


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LIMITATION OF THE STUDY

CHAPTER ARRANGEMENT

CHAPTER-I

This chapter of the project report includes the introduction, objective, scope,methodology, and limitation of the study.

CHAPTER-II

This chapter deals with the discussion of the subject and concept of Attrition rate in

BPOs.

CHAPTER-III

Findings, suggestion and recommendations and final conclusion are given in chapter

3.


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CHAPTER II

TTRITION

Companies are facing different problems to sustain their business in the market and

one of the most important HR problems that companies are coming across

is attrition or turnover.In a broad sense,Attrition refers to the movement

of workforce into and out ofan organization. It implies reduction in the

number of employees through retirement,resignation or death. This

movement is an index of stability of that workforce. Attrition is a universal

phenomenon and no industry is devoid of it, but the degree fluctuates from industryto industry.Attrition not only affects the quality of service, but also leads to

increased expenditure on training and development, thereby affecting

the overall organizational performance.An excessive movement of employees

is therefore considered undesirable and expensive. Labour market assumes immense

importance in the context of software industry on account of acute global shortage of

skilled software professionals in India as well as abroad. On account of availability oflarge number of jobs in the market, the extrinsic satisfaction perceived by these

professionals is less which leads to high turnover. Companies are finding it difficult

to satisfy and retain the employees who are the contributors to their top line and

bottom line. This problem has further intensified because of workforce diversity

where companies have to devise different strategies for different types of employees.

To combat this problem innovative practices are used by companies to satisfyemployees and improve retention. Companies are trying out their ways to manage

lower rate of attrition by creating a healthy work environment, work-life balance,

corporate brand building and so on. The need of the time is to have properly

harnessed and devoted team of employees.


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An understanding of work and human behavior based on experiential and empirical

evidences point out, that the human system is not static. It is being continuously

influenced by the ever changing subsystems in the environment. Managing attrition

should thus be viewed as a dynamic process which needs to be kept aligned with the

changing realities in the environment. The nature of work, workplace and

psychological environment in organizations have undergone and will continue to

undergo enormous changes, bringing both opportunities and challenges to those

involved in organizational behavior and organizational development.

Global outsourcing and the astounding amount of foreign direct investment pouring

into India has created tremendous opportunities and competition for talented ITprofessionals. The downside of this increased competition is a rising rate of attrition,

particularly in India. The costs incurred in recruitment, training and orientation are

suddenly lost when the employee decides to move. Greater appreciation of the

significance of these costs has stimulated considerable managerial interest in the

problem of attrition. Several companies are trying out different ways to manage

attrition rate but it is a costly dilemma for all organizations. In todays taxingbusiness climate, managing companys competent and skilled human capital is vital

for success. The exodus of employees working in Software industry is much faster

than any other conventional industry. This exodus can be voluntary or

involuntary in nature.

TTRITION RATE

"The rate of shrinkage in size or number of employees is the attrition

rate"

An attrition rate, measure of how many employees leave over a certain period of


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time. The attrition rate has always been a sensitive issue for all organizations.

Calculating employee turnover rate is not that simple as it seems to be. No common

formula can be used by all the organizations. A formula had to be devised keeping in

view the nature of the business and different job functions. Moreover, calculating

attrition rate is not only about devising a mathematical formula. It also has to take

into account the root of the problem by going back to the hiring stage.

There is no standard formula to calculate the attrition rate of a company. This is

because of certain factors as:

The employee base changes each month. So if a company has 1,000 employees inApril 2004 and 2,000 in March 2005, then they may take their base as 2,000 or as

1,500 (average for the year). If the number of employees who left is 300, then the

attrition figure could be 15 percent or 20 percent depending on what base you take.

Besides this, there are various other types of attrition that should be taken into

account while calculating attrition rate. These are:


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CALCULATING RATE OF ATTRITION

Organizations use different methodologies for calculating their turnover rate. It is a

known fact that attrition rate calculation is a grey area which does not always depict

the true picture. While a few techniques are common, there are no proven theories.

Further, the approach to this calculation might vary from organization to

organization. Disclosure of the figure not only has a direct impact on the business but

also affects employee morale and productivity. Significantly, it might also trigger a

chain reactiona high attrition rate will lead to more people leaving the

organisation, while a lower rate will act as a retention strategy. It is therefore not

surprising that most industry observers are sceptical when organisations disclosetheir employee turnover.

Step 1. Calculate the average number of employeesThe number of employees

is calculated by adding the number at the start of the period, to the number at the

end of the period. Then dividing by 2 to arrive at the average number of employees.

For example: At the start of the year the firm employed 1000 people. At the end of

the year the firm employed 1200. To arrive at the average we add together 1000 +

1200 = 2200. Then divide by 2 to get our answer 2200/2 = 1100. This figure is the

average number of people employed during the period.

Step 2. Calculate the number of departures during the periodThe key hereis to make sure that we only include those departures that are actually relevant. That

means those that come within the definition we are using. So for the definitions we

are using in this example the relevant figures are: Total number of exits = 220

Voluntary = 110 Early = 55


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Step 3. Divide departures by number of employeesTo arrive at our final

figures, we divide the number of relevant departures by the average number of

employees. Then multiply by 100 to get the percentage rate. For total turnover we

have: 220 / 1100 (x 100) = 20% for voluntary turnover we have: 110/1100 (x100) =

10% for early turnover we have: 55/1100 (x100) = 5% Calculating Employee

Turnover.

Calculating employee turnover is not a matter of simple mathematical methods. It is

necessary to take into account the root of the problem by going back to the hiring

stage.

TTRITION COSTS

One of the best methods for calculating the cost of turnover takes into account

expenses involved to replace an employee leaving an organization. These expenses

are:


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C. Administration cost:

They include:

TYPES OF ATTRITION

OLUNTARY ATTRITION


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oluntary Attritionis a decision made by the employee to leave the job. Such a

decision is commonly known as "resignation," "quitting," "leavingor

givingnotice."

Some common reasons for voluntary termination include:

Depending on the employee's reason, comfort with the employer, and dedication to

the job, voluntary termination may be sudden and abrupt without warning to the

employer, or with a certain amount of notice given. Generally, employers prefer that

a departing employee provide at least some notice to the employer, often at least two

weeks, this often called aTwo weeks notice. Those in compliance with this

requirement are more likely to be rehired by the same employer in the future, to


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receive their full benefits from the employer, and to get a better reference for future

employers.

Annualized voluntary attrition measured by number of voluntary leavers as a

percentage of the total employee population. There will always be a natural level of

voluntary attrition due to people retiring, decisions to change careers and a

competitive marketplace.

Companies are generally more concerned about regretted voluntary attrition. These

are people who leave on their own will and those whom the organization would have

loved to retain.

Organizations aim to reduce voluntary attrition of productive employees and

encourage unproductive staff to leave its fold. It makes way for career progression,

new thinking and innovation. However, what that number should be again differs

from industry to industry and from country to country as economies vary. The

demand vs. supply of talent/resources plays a critical role too.

Involuntary Attrition

Involuntary Attritionis the employee's departure at the hands of the employer.

There are two basic types of involuntary termination, known often as being "fired"

and "laid off." To be fired, as opposed to being laid off, is generally thought of to bethe employee's fault, and therefore is considered in most cases to be dishonorable

and a sign of failure. Often, it may hinder the new job-seeker's chances of finding

new employment, particularly if he/she has been fired from earlier jobs. Job-seekers

sometimes do not mention jobs which they were fired from on their rsums.


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Dismissalis the employer's choice to let the employee leave, generally for a reason

which is the fault of the employee. The most common colloquial term for dismissal in

America is being fired whereas in Britain the term 'getting the sack' is used.

Layoff:A less severe form of involuntary termination is often referred to as a layoff.

A layoff is usually not strictly related to personal performance, but instead due to

economic cycles or the company's need to restructure itself, the firm itself is going

out of business, or due to a change in the function of the employer (for example, a

certain type of product or service is no longer offered by the company, and therefore

obs related to that product or service are no longer needed). One type of layoff is theaggressive layoff. In such a situation, the employee is laid off for a just cause, but not

replaced as the job is eliminated.

Often, layoffs occur as a result of "downsizing", "reduction in force" or "redundancy".

These are not technically classified as firings laid-off employees jobs are terminated

and not re-filled, because either the company wishes to reduce its size or operations,or otherwise lacks the economic stability to retain the position.

Some companies resort to attritionas a means to reduce their workforce. Under

such a plan, no employees are forced to leave their jobs. Employees are given the

option to resign in exchange for a fixed amount of money, frequently a few years of

their salary.

REASONS RESPONSIBLE FOR VOLUNTARY ATTRITION

The most common reasons can be:


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HR should continually train managers in handling employee expectations and

provide them with tools to manage tasks related to their teams. An online Manager

Services solution allows a manager to constantly counsel employees, manage their

career growth and aspirations and track their achievements.

HR should also be able to track changes in employee performance rating, gaps

between employee and manager performance, sudden increase in paid-time-off and

should be prepared to act quickly if any visible trends are evident.

The responsibility for compensation policy and enriching the job profile lies on the

senior management. However, balancing P&L and employee compensation shall

always be a nightmare for them given the high cost of talented employees.

When all employees work on goals that are aligned to the company objectives and

there is a fair and transparent system to capture employee performance, the

likelihood of a satisfied and motivated workforce increases and Compensation or Job

Profile become manageable causes.


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STRATEGIES ADOPTED TO COMBAT VOLUNTARY ATTRITION

The focus of organizations should not be on managing retention but on managing

people. If an organization manages people well, employee attritionwill come down

itself. Organizations should emphasize on managing the work environment to makebetter use of the available human assets. Companies are aiming to provide a

pragmatic and lithe framework for the efficient management of knowledge workers

in the volatile economy. People want to work for an organization which provides,

Appreciation for the work done, Ample opportunities to grow, A friendly and

cooperative environment The most successful companies have been using most

innovative practices in managing the problem of attrition. Reducing turnover takesan investment in coaching, developing, motivating, mentoring & listening to people.

There should be universal acceptance of the goal of reducing turnover along with top

management commitment and dedication. These companies are stepping up their

attention to employee quality-of-life issues. The tools used by Indian companies to

combat attrition are as:

Flexi hours:

Flexible hour options used by companies provide benefits to both employee and

employer. The flexible options offered by an employer will depend on the type of

business they are running. Implementing an option of flexible hours invariably

means providing alternatives to the standard 9 to 5, 5 days per week model. The mostcommon options for non-standard or flexible hours arrangements are: Flexi- time,

Part-time working, Job sharing, Annualized hours, Compressed working hours, Shift

work, Staggered hours, Term- time working, Voluntary reduced working hour or V-

time, Time accounts/ flexi- days
http://retention.naukrihub.com/


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For the employee the major benefits include:

For the employer the major benefits include:

From employers perspective some of the major issues involved are trust and

supervision, communication between staff working at varying times, optimizing the

use of buildings and facilities, integrating part-time, non- permanent and home

working staff, achieving fairness in benefits for all staff Flexi-timing helps in

balancing work and personal life during any crucial phase.

For Instance- When Rajashree Natarajan Director (Process and Quality group),

Cognizant, was offered a flexible work hours option after she delivered her second

child she readily went for it.

ppropriate leadership:


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Appropriate leadership drives people to go extra mile and deliver beyond set targets.

An emotional pull can inspire excellence even from otherwise mediocre performers.

Such attachment sensitizes workers to the need for continuous betterment and

reaching beyond the ordinary. They find themselves effortlessly putting in those

extra hours and actually enjoying it. This also keeps the workers charged upcontinuously. An effective leader connects with the subordinates. Such a manager

knows exactly when he needs to give them that little pat on the back and when he

needs to be firm. This perfect balance stems from a deep understanding of what

makes each individual in his team tick, allowing the leader to accordingly tailor his

approach to each of his employee and optimize performance. Though the current

environment presents enough opportunities for people with relevant skill sets andenough manpower for organizations to choose from, the turnover without doubt

bleeds value out of an IT organization, both in terms of time and money. The only

key to solving this problem is to improve the leadership abilities of IT managers, to

learn how to manage differences in thinking of employees and aligning employee

talents to work roles.

An organization, by focusing on the above, can save up to 25 percent of its annual

revenues, which it loses as a result of attrition.

Contract work or temping:

Job contracts- IT companies are offering job contracts that bar employees fromoining rivals vendors or partners .several IT players use these bonds. T.V Mohandas

Pai,director HR,Infosys says, Infosys does not have a generic bond in place

preventing techies from moving to competitors the existing version bars employees

from working on projects of its clients at another company for a period of six months

Perhaps HR consultants and legal experts say that there are ways around these


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stumbling blocks if someone is really keen to change jobs these bonds are legally not

enforceable, companies use these measures only to try and scare or intimidate

employees and to try to keep their

attrition rates low.

ppropriate HR professionals:

Desikamani.Gis Chief Mentor of Mentor Consulting, Chennai. E-mail:

[email protected], one of the main reasons why employees leave

companies is because of problems with their managers. An HR professional can betermed an employees advocate and a bridge between top management and

employees at all levels. There is often a huge gap between HR professionals and

employees in terms of understanding challenges and delivering requirements. HR

sometimes does not really understand the problems associated with employees

careers and jobs. The companys overall plans and strategies also depend on HR

professionals as they voice employees problems and requirements. The HRdepartment 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

companys business targets.

Quality of work life:

The success of any organization depends on how it attracts, recruits, motivates, and

retains its workforce. Organizations need to be more flexible so that they develop

their talented workforce and gain their commitment. Thus, organizations are

required to retain employees by addressing their work life issues.


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The elements that are relevant to an individuals quality of work life include the task,

the physical work environment, social environment within the organization,

administrative system and relationship between life on and off the job.

The basic objectives of a QWL program are improved working conditions for theemployee and increase organizational effectiveness.

Providing quality work life involves taking care of the following aspects:

Suitable working time: Organizations are offering flexible work options

to their employees wherein employees enjoy flexi-timings for dedicatingtheir efforts at work.

QWL consists of opportunities for active involvement in group working

arrangements or problem solving that are of mutual benefit to employees or

employers, based on labor management cooperation. People also conceive of QWL as

a set of methods, such as autonomous work groups, job enrichment, and high-

involvement aimed at boosting the satisfaction and productivity of workers. Itrequires employee commitment to the organization and an environment in which

this commitment can flourish.

Providing quality at work not only reduces attrition but also helps in reduced

absenteeism and improved job satisfaction. Not only does QWL contribute to a

company's ability to recruit quality people, but also it enhances a company'scompetitiveness. Common beliefs support the contention that QWL will positively

nurture amore flexible, loyal, and motivated workforce, which are essential in

determining the company's competitiveness

Exit interviews and satisfaction surveys:


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Exit surveys & Exit Interviewsare a highly effective way for business owners and

managers to learn firsthand from those who have chosen to work elsewhere just

exactly what the organization could have done better that may have increased the

chances of retaining the employee. By tracking the factors that influence an employee

to leave, employers can take the necessary steps to improve organizational processesto minimize future loss of key employees.

Exit surveys & Exit Interviews are an excellent way to attract and retain the best of

the bestand a necessary tool to help decrease the loss of valuable human capital

within an organization.

Top Five Benefits to Employee Exit Surveys and Exit Interviews

Developing a positive or conducive organization culture (identifying

office jerks and sanities offices from resident jerks)

The rapid globalization of business means that managers are increasingly working

with people from different cultures and backgrounds as colleagues, managers or as


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clients. As a result, organizations are often keenly aware that cultural differences and

culture building needs to be understood and appreciated if the potential benefits of

national and international working are to realized. Satyam for instance, has its own

commandments for employees called the satyam way. These are the guidelines that

list out the practices, behavior and conduct that the organization encourages anddiscourages. Every month, Infogain organizes soft skills workshops and sessions for

stress and conflict management. If a company fosters a supportive, inclusive work

environment, it will increase its talent pool, tap and attract high quality talent and

retain people with a progressive set of values.

Providing new perks to women workforce:

Industry requirements have also evolved over time, prompting IT companies to

devise innovative strategies to retain women. The IT industry in India is trying to

charm and catch the fancy of women workers which includes flexi-hours to provide

work life balance, sabbaticals and most important career growth. Companies have

realized the fact that gender diversity is a key to creating a culture of innovationwithin an organization. realizing that women have to manage both home and work

and need to judiciously juggle the time different companies have come up with

strategies like:

ccenture: incentives include cash for referring women

IBM: breaks to meet family commitments

Infosys: flexi work hours, satellite office for pregnant women and young mothers

Sapient: spouse referral programme, work from home


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Microsoft:flexi work hours, child-centric events

HP: self defence classes, mentoring programmes and flexible work hours

Perot: work from home long leave, shorter work leaves

Transparent Work Culture:

In todays fast paced business environments where employees are constantly striving

to achieve business goals under time restrictions open minded and transparent work

culture plays a vital role in employee retentionMore and more companies have now

realized the importance of a healthy work culture and have a gamut of people

management good practices for employees to have that ideal fresh work-life. Closed

doors work culture can serve as a deterrent to communication and trust within

employees which are potential causes for work-related apathy and frenzy.

A transparent work environment can serve as one of the primary triggers to facilitate

accountability, trust, communication, responsibility, pride and so on. It is believed

that in a transparent work culture employees rigorously communicate with their

peers and exchange ideas and thoughts before they are finally matured in to full-

blown concepts. It induces responsibility among employees and accountability

towards other peers, which gradually builds up trust and pride. More importantly,

transparency in work environment discourages work-politics which often hinders

company goals as employees start to advance their personal objectives at the expense

of development of the company as a single entity.

Employees comprise the most vital assets of the company. In a work place where

employees are not able to use their full potential and not heard and valued, they are
http://retention.naukrihub.com/


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likely to leave because of stress and frustration. In a transparent environment while

employees get a sense of achievement and belongingness from a healthy work

environment, the company is benefited with a stronger, reliable work-force

harboring bright new ideas for its growth.

Retention bonus:

Higher attrition rates within a particular industry have forced companies to use some

innovative strategies to retain employees. Retention Bonus is one of the important

tools that are being used to retain employees. Retention bonus is an incentive paid to

an employee to retain them through a critical business cycle. Retention bonuses are

becoming more common in the corporate world because companies are going

through more transitions like mergers and acquisitions. They need to give key people

an attractive incentive to stay on through these transitions to ensure productivity

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

A retention bonus plan is not a panacea. According to a survey, non-management

employees generally receive about 10 percent of their annual salaries in bonuses,

while management and top-level supervisors earn an additional 50 percent of their

annual salaries. While bonuses based on salary percentages are the generally used,

some companies choose to pay a flat figure. In some companies, bonuses range from

25 percent to 50 percent of annual salary, depending on position, tenure and other

factors. Employees are chosen for retention bonuses based on their contributions to

management and the generation of revenue. Retention bonuses are generally vary

from position to position and are paid in one lump sum at the time of termination.

However, some companies pay in installments as on when the business cycle

completes. A retention period can run somewhere between six months to three years.


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It can also run for a particular project. A project has its own life span. As long as the

project gets completed, the employees who have worked hard on it are entitled to

receive the retention bonus. For example, the implementation of a system may take

18 months, so a retention bonus will be offered after 20 months.

Although retention bonuses are becoming more common everywhere, some

industries are more likely than others to offer them. Retail/wholesale companies are

the most appropriate to implement stay-pay bonuses, followed by financial service

providers and manufacturing firms. Companies of all sizes use retention bonus plans

to keep knowledge employees retained in the company. To retain its key senior

employees post merger with EDS Corporation, Mphasis is providing cash componentbased retention bonus plan for its employees. This is mainly to retain good

employees and provide them a cash incentive to keep them motivated.

Impounding the educational certificates and the passport of the

employees:

In an attempt to tackle the problem of high attrition levels prevalent in this sector,

some of the employers are impounding the educational certificates and the passport

of the employees. Employees generally complain for such negative practice of holding

employees in the organisation.Creating opportunities to work abroad, Indian

software companies are seeking to counter this problem by creating opportunities for

young software engineers to work abroad, and by wooing middle-aged technicalmanagers who may want to return to India to raise their children. Nevertheless, this

brain drain is so severe that several of the firms .

The purpose of this service was to help employees chose their life partners within

Wipro in the hope that if employees picked spouses from the same company, they


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could spend more time together, say while traveling/dining etc. thereby improving

the work-life balance.

Employee engagement has become the need of the hour in most

organizations today.

An organisation cannot grow without the commitment and engagement of its

employees. Employee engagement is the level of commitment and involvement an

employee has towards the organisation and its values. An engaged employee is aware

of business needs, and works as a team to get the job done. It shows the positive

attitude of the employees towards the organisation and its values.

Engaged employees are more willing to put in extra effort when the organisation

needs it. Employee engagement is thus a partnership between a company and its

employees where everyone works together to achieve the business objectives of the

company and the personal aspirations of the employees. It is thus an organizations

responsibility to create a healthy environment for its employees and achieve a win-win situation.

An engaged workforce results in lower levels of attrition which assists in

ensuring talent retention. Also, an engaged workforce is more effective

and efficient and works towards continuous improvement, says Vinit

Durve, Vice President - Corporate Human Resources, Zicom ElectronicSecurity Systems Ltd.

Employee engagement is highly important in the IT industry, especially where

everything revolves around employee skills and knowledge. When employees are

committed and positively engaged with the organisation, their attitude and


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commitment towards the companys clients also grows, and thus directly impacts the

customer service level and satisfaction. Thus, a successful employee engagement

helps to create and polish the building blocks at the workplace and not just a

workforce. Engaged employees provide the following advantages: a) Lowers attrition

rate, b) Boosts business growth, c) Spreads positive information about theorganisation and keeps up the companys image, d) Creates healthy work

environment in peer groups, e) Builds employee commitment, trust towards the

organization and help achieve the organizations goals, f) Attracts more people to join

the organisation and builds trust and g) Increases productivity and leads towards

organizational growth,.

It also believes in sharing information with our employees. Information about

management decisions, signing new clients etc. helps to establish a trust between

both the parties and also helps to work towards the a common goal. Open

discussions and brainstorming sessions create a healthy work environment.

Employee suggestions and ideas are equally evaluated and appraised.

Only a satisfied employee can become an engaged employee. It is therefore essential

for an organisation to see to it that the job given to the employee matches his/her

career goals which will make them enjoy their work and lift their spirits high.

Compensation:

Compensation constitutes the largest part to reduce the employees attrition rate.

The employees always have high expectations regarding their compensation

packages. Compensation packages vary from industry to industry. So an attractive

compensation package plays a critical role in retaining the employees.


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Compensation includes salary and wages, bonuses, benefits, prerequisites, stock

options, bonuses, vacations, etc. While setting up the packages, the following

components should be kept in mind:

Salary and monthly wage: It is the biggest component of the compensationpackage. It is also the most common factor of comparison among employees. It

includes

Salary and wages represent the level of skill and experience an individual has. Time

to time increase in the salaries and wages of employees should be done. And this

increase should be based on the employees performance and his contribution to the

organization.

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

festival.

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

Long-term incentives:Long term incentives include stock options or stock grants

These incentives help retain employees in the organization's startup stage.

Health insurance:Health insurance is a great benefit to the employees. It saves


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employees money as well as gives them a peace of mind that they have somebody to

take care of them in bad times. It also shows the employee that the organization cares

about the employee and its family.

fter retirement:It includes payments that an Employee gets after he retires likeEPF (Employee Provident Fund) etc.

Miscellaneous compensation:It may include employee assistance programs

(like psychological counseling, legal assistance etc), discounts on company products,

use of a company cars, etc.

Organization Environment:

It is not about managing retention. It is about managing people. If an organization

manages people well, employee will take care of itself. Organizations should focus on

managing the work environment to make better use of the available human assets.

People want to work for an organization which provides:

Organization environment includes:


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Types of environment the employee needs in an organization


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Lack or absence of such environment pushes employees to look for new

opportunities. The environment should be such that the employee feels connected to

the organization in every respect.

Growth and Career:

Growth and development are the integral part of every individuals career. If an

employee can not foresee his path of career development in his current organization,

there are chances that hell leave the organization as soon as he gets an opportunity.

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

Work profile:The work profile on which the employee is working should be in sync

with his capabilities. The profile should not be too low or too high.

Personal growth and dreams:Employees responsibilities in the organization

should help him achieve his personal goals also. Organizations can not keep aside the

individual goals of employees and foster organizations goals. Employees priority is

to work for themselves and later on comes the organization. If hes not satisfied with

his growth, hell not be able to contribute in organization growth.

Training and development:Employees should be trained and given chance to

improve and enhance their skills. Many employers fear that if the employees are well

rained, theyll leave the organization for better jobs. Organization should not limit

the resources on which organizations success depends. These trainings can be given

to improve many skills like:


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Need for such trainings can be recognized from individual performance reviews,

individual meetings, employee satisfaction surveys and by being in constant touch

with the employees.

Importance of Relationship in Employee Attrition Program:

Relationship

Sometimes the relationship with the management and the peers becomes the reason

for an employee to leave the organization. The management is sometimes not able to

provide an employee a supportive work culture and environment in terms of

personal or professional relationships. There are times when an employee starts

feeling bitterness towards the management or peers. This bitterness could be due to

many reasons. This decreases employees interest and he becomes de-motivated. It

leads to less satisfaction and eventually attrition.

A supportive work culture helps grow employee professionally and boosts employee

satisfaction. To enhance good professional relationships at work, the management

should keep the following points in mind:


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Supporting Employees

Organizations these days want to protect their biggest and most valuable asset andthey want to do this in a way that best suits their organizational culture. Retaining

employees is a difficult task. Providing support to the employees acts as a mantra for

retraining them. Employers can also support their employees by creating an

environment of trust and inculcating the organizational values into employees.

The management can support employees directly or indirectly. Directly, they providesupport in terms of personal crises, managing stress and personal development.

Management can support employees, indirectly, in a number of ways as follows:


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Feedback

Feedback acts as a channel of communication between the employee and his

manager. The amount of information employees receive about how well or how

poorly they have performed is what we call feedback. It is a dialog between a

manager and an employee which acts as a way of sharing information about the

performance. It suggests where the employee performance is effective and where

performance has to improve.

Managers can provide either positive feedback or negative feedback to employees.

This feedback helps the employee assess his performance and identify the

improvement areas.


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Positive feedbackcommunicates managerial satisfaction. Positive recognition for

good performance boosts up morale of employees and results in performance

improvement to a higher productivity level. It is believed that positive feedback is the

only type of feedback that generates performance above the minimum acceptable

level.

Negative feedbackobviously communicates managers dissatisfaction. However,

negative feedback sometimes make employee to put more efforts to improve his

performance. But such times are very rare. Moreover this improvement is short

term.

Some managers do not provide any kind of feedback to their employees. Due to no

feedback, employees may assume that they are performing productively or they may

feel that the manager is satisfied with their performance. Studies reveal the

performance tends be same or even decreases if no feedback is provided.

Thus, feedback is necessary because:


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Managers have tendency to ignore good performances of their employees. Providing

no feedback may demotivate employees and may lead to employee absenteeism.

Input from managers side is necessary as it help employees to improve their

performance and increase productivity.

Communication Between Employee and Employer

Communication is a process in which a message is conveyed to the receiver by the

sender. The message may be or may not be in a common format or language that

both the sender and receiver understand. So there is a need to encode and decode the

message in the process. Encoding and decoding also helps in the security of the

message. The process of communication is incomplete without the feedback.

Communication is the solution to almost everything in this world. Same applies to

employee retention also Straight-from-the-shoulder communication is what the

employees need from their employers. Employees look for organizations where

communication and process are transparent. Nothing is hidden and shared with the

employees.

There are 3 categories of employees:


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Category A:These are the employees who lack communication with their

employers.

Category C:These are the employees who have proper, well structured

communication with their employers.

Communication is also the way to win the employees trust in the organization.

Employees trust the employers who are friendly and open to them. This trust leads to

employee loyalty and finally retention. Employers also feel that the immediate

supervisors are the most authenticated and trusted source of information for them.

So the organizations should hire managers who are active communicator.

Communication mediums

So there should be effective communication across the organization and thiscommunication should be two-way. Communication alone can lead to unimaginable

heights of employee retention.

Hire Right Talent


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Employee retention starts with recruitment. Early departures arise from the wrong

recruitment process. Here are a few ways to ensure how to hire the right talent for a

particular job.

Hire appropriate candidates.Hire candidates who are actually suitable for theob. For this the employer should understand the job requirements clearly. Dont 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 rightob.

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 theorganization, 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 befulfilled. Dont show them an unrealistic picture.

Culture fit:Try to judge individuals capability to adapt to the organizations

culture. A drastic change in the culture may give a culture shock to the candidate.


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

organization.

IMPORTANCE OF LOW RATE OF ATTRITION

It will benefit an organization in the following ways:

The Cost of Turnover: The cost of employee turnover adds hundreds of thousands

of money to a company's expenses. While it is difficult to fully calculate the cost of

turnover (including hiring costs, training costs and productivity loss), industry

experts often quote 25% of the average employee salary as a conservative estimate.

Loss of Company Knowledge: When an employee leaves, he takes with him

valuable knowledge about the company, customers, current projects and past history

(sometimes to competitors). Often much time and money has been spent on the

employee in expectation of a future return. When the employee leaves, the

investment is not realized.

Interruption of Customer Service: Customers and clients do business with a

company in part because of the people. Relationships are developed that encourage

continued sponsorship of the business. When an employee leaves, the relationships

that employee built for the company are severed, which could lead to potential

customer loss.

Turnover leads to more turnovers: When an employee terminates, the effect is

felt throughout the organization. Co-workers are often required to pick up the slack.

The unspoken negativity often intensifies for the remaining staff.


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Goodwill of the company: The goodwill of a company is maintained when the

attrition rates are low. Higher retention rates motivate potential employees to join

the organization.

Regaining efficiency: If an employee resigns, then good amount of time is lost inhiring a new employee and then training him/her and this goes to the loss of the

company directly which many a times goes unnoticed. And even after this you cannot

assure us of the same efficiency from the new employee.

TTRITION IN BPO

BPO industry in India is growing at a very rapid pace of 40-50% growth rate

annually. This sector is said to be poised to generate one million jobs by the year

2008. But, this industry faces a very acute problem of attrition rate which is as high

as 30-40%.

To compel this, there is another problem of poaching, which increases the attritionrate. All this leads to higher costs to the company. BPOs need to hire right kind of

people give more to the employees not only in terms of salaries and perks but also in

terms of experience. For good performing employees, the company needs to have a

good career growth plan. Companies need to build a long lasting relationship with

the employees.

Introduction

BPO industry in India is one of the fastest growing industries in the country. It

creates a large chunk of jobs in the country. However, as with the growth come the

deterrents. One of the most critical problems faced by this industry is that of


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attrition. Attrition arises with employees leave the company for one of the three

reasons:

i)Death of employee

ii) Retirement, or

iii) Better opportunity in some other company.

Attrition causes huge loss to the company, not only in terms of manpower but also in

monetary terms.

BPO Industry in India

India has remained one of the most favorite offshore destinations for BPO/ITES

activities. One of the most prominent reasons for the same is cheap labor. Over the

past five years, the Indian BPO/ITES has been growing at a rate of about 50-60%. Asper NASSCOM, the Indian BPO/ITES registered a growth rate of 46% and clocked a

revenue of UD$ 3.6 billion in 2003-04 up from UD$ 2.5 billion in 2002-03.

Source: NASSCOM Review 2004 & Press Release June 2004

This industry has contributed a great deal to the export revenues of the country andis expected to do that in future too.

This industry is expected to generate one million jobs by 2008. HR management is

one of the most critical areas in this industry, so important that it can be referred to

as HR-enabled services rather than IT-enabled services. The reason for the same is


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that this industry is facing a very high rate of attrition of around 30-40%. Though

this rate is not very high as compared to US which faces an attrition rate of around

70% though, our next main competitor in this area, China, is facing the attrition rate

as low as 12-15%. The consequence of the same is that this results in higher costs to

the company and so the companies may loose its main competitive edge which islower costs. This means that there is a very high need to control the attrition rate in

the industry.

Attrition rates in IT-enabled business process outsourcing sector have come down

from the 30-33 per cent being witnessed of late to about 25 per cent now, according

to statistics compiled by the National Human Resource Development Network.

ttrition rates %

US 42%

ustralia 29%

Europe 24%

India 18%

Global Average24%

Cost of Attrition

There are a number of costs which are incurred by a BPO when they hire any new


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employee. These costs can be in terms of monetary or can be in terms of time wasted

or any other intangible things. Some of these costs can be as stated below: -

1. Hiring or Recruitment Costs:Costs of advertisement, agency costs, employee

referral costs, internet posting costs, etc.

2. Training Costs:Induction program costs, lodging costs during that period,

orientation material costs and cost of person who conducts orientation.

3. Low Productivity Costs:As new employee is learning new job, company

policies, etc., they are not fully productive.

4. New Hiring Costs:Cost of bringing new person aboard, time taken in

understanding the job of the employee who left and other perks given.

5. Low Sales Cost:Experience and the contacts that were lost, time for which the

position was vacant and other such things which result in either loss of customers orlower sales.

What all this means is that there are huge costs associated with an employee leaving.

In monetary term, it means that for one person leaving a company, the cost can be

close to Rs. 60,000 or approximately equal to 2 months salary. For a 300-seater call-

center with an attrition rate of 30%, it can be as large as Rs. 60 lakh per annum.

Reasons for voluntary attrition

A question which arises now is that why to employees leave and what is the reason

that the BPOs are not able to hold them back. The BPO industry hires a large


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number of graduates who are bright and ambitious. The overall compensation

structure design is not competitive when compared to general market practices. This

means that BPO employees do not receive as much cash-in-hand as their peers in

other industries. When an organization add unattractive remuneration to working

shifts, lack of career development, and monotonous tasks, it is not surprising thatemployees leave when offered a small salary increase, states Oscar De Mello,

Country Head of Hay Groups Reward Information Services in India.

Well, the most obvious reason that comes to mind is higher pay. Most employees in

BPO are approached with two or three job offers every week, and sometimes it gets

very tempting to resist. The deterring factor for this would be moving from onelocation to another with the family as housing and relocation are two major concerns

of the employees. Though this problem is being taken care to a certain extent by a

salary rise of 10-15% annually on an average basis, but still it prevails.

Another factor which can be a big deterrent is thework timings. The work timings

in BPO are very odd. This affects the family life of the employee. Moreover, the maleto female ratio in BPO is quiet low. The number of females in BPO can be as large as

35%.

This means that working hour problem is quiet acute in their case especially after

they get married, as after marriage comes social and family pressure to adjust work

timings and take care of families.

Though the above two reasons are quiet prevalent, another reason which is becoming

quiet frequent is career growth. Only 2 out of 10 employees on an average go on to

be at the senior level. This means that other employees look forward to change their

ob at other places where they can get better opportunities to progress. Also, another

problem arises with the mis-match of expectations and qualifications of the


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employees. Along with that, some employees see no career growthin this sector,

so they move on to other companies in search of changing the sector.

One more reason for employees leaving the firm is higher education. This is a

problem as most of the employees in this sector are pretty young and aspiring. Theyoin the firm because of lucrative salary. But with time, they try to move on to other

sectors or top management and one of the ways to do this is higher education.

The Road Ahead Strategies to improve voluntary attrition rate

The road ahead for the BPO firms is very important because if they are not able tocontrol the attrition rate they will loose their competitive edge in the global market.

For this certain, strategies and certain improvements are needed to be made in the

processes followed.

Providing Something Extra

Its always about providing something extra to employees. Good salary is something

which is a standard in the industry. So what needs to be done is to give some perks to

the employees. They need to be given perks like rewards for their good performances

Owing to the odd working hours, the employees have very tattered personal lives. So

perks like foreign tours or company sponsored vacations are always a welcome gift.

Honoring Performers

Performance based incentives is a must in the BPO companies as these are generally

the employees who gets picked up by the placement hunters most often. These

employees are also among the most aspiring ones in the company so there is a need


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to give them ample opportunity to rise and progress in the organization.

Building Relationship

Relationship is something which lasts over time. So, if a company needs to hold on toits employees, it needs to build a strong bonding with the employees. There is a need

to instill pride in the employees. They need to be shown that the work done by them

is important. Also, work needs to be shown in the form of challenge to the employee

rather than just a monotonous routine work. Provide employee with ESOPs, which

would give them a feeling that they are working for themselves and that they are an

inseparable part of the company.

The EEE-Model

Exposure, Experience and Education are three things which are vital to any employee

in any sector or industry. These needs of the employees are needed to be taken care

of for an employee to feel motivated.

An employee expects the company to give him good exposure in the kind of work he

is doing. Not only this, he needs to get a good experience working in the company

from its top management and colleagues. Monthly dinner with CEO of bonding

programs with the other employees of the BPO would be a good idea. Also, some

employees aspire for higher education to increase their knowledge base. Somepartnership with management institutes for short courses needs to be provided.

Alternatively, company can bear all the cost of further education for its good

performing employees.

Poaching


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This is something which has become a very big issue in recent times. Poaching means

that one company tries to get experienced employees from other BPOs so as to save

on the training costs and some other associated costs. Companies here need to

understand that poaching affects the industry on the whole and not only themselves.

It raises the costs to the companies on the whole, and thus, can loose theircompetitive advantage of cheaper services if this continues. Some companies have

already understood this and have gone into an anti-poaching agreement. Others need

to follow the same. If needs arise to hire at lateral position from the industry, then

the company should incoming employee to complete his statutory notice period.

HR Practices

HR is the most critical department in any BPO. While conducting the recruitment, it

is in the hands of HR to bring the right kind of people. HR needs to identify the

employees who would stick with the company and not get the employees solely based

on the qualifications and communication skills. Moreover, more diversity in the kind

of companies need to look to hire from non metro cities as the employees from thesecities are more likely to stay with the company than those from metros. Also, they

need to keep an eye on good performing employees and have a career plan in mind.

Not only this, they need to discuss it with these employees on a regular basis and take

feedback from them. They also need to give their employees personal space to grow

and adjust with social life. Moreover, in case of employees leaving a good exit-

feedback system should be in place so as to cover the reason for which the employeesleave.

Office-Tiger: A Role Model BPO to Follow

In a sector which boasts of an attrition rate of 30%, if a company claims of an


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attrition rate of 9%, well, it certainly makes one raise his eyebrows. This company is

Office-Tiger. What the Office-Tiger tries is to instill a sense of pride in its employees.

They make the employees feel proud of doing the work they do. Every project given

to them is converted to a challenge which drives away the monotony that creeps into

the job. Every employee is given a feel that the work given to him or her is veryimportant. Moreover, there is a rigorous recruitment process. After that the

employees undergo an induction program where they hone their various skills.

Employees work on live projects and if, during their project work, they feel that some

improvement is needed, they can go back to that stage of training. This helps the

employee continuously improve himself. Also, employees are given encouragement

to become Financial Analysts or Research Analysts.

Impact of Recession on attrition rates in BPO industry

BPO industry sees dip in attrition rates due to the impact of Recession.

Fewer employees are jumping jobs in the BPO industry, courtesy the ongoing global

recession. As a result, attrition rates (the number of people quitting per 100employees) for several listed BPO firms have come down by 5-13 percentage points

on a sequential basis.

Genpact's employeeattrition rate for the quarter, measured from day one of

employment was down by 5 percentage points to 21 per cent from 26 per cent in the

preceding quarter and 24 per cent for January-March 2008. If the attrition rate, wereto be measured after employees completing six months of employment Genpact's

attrition rate would be 18 per cent.

EXL reported a record 12.8 percentage points dip in attrition for billable employees

at 21 per cent from 33.8 per cent reported in the previous sequential quarter.


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"Operationally, our attrition management and employee engagement programme, in

combination with the weaker economy, has resulted in record low attrition levels,"

the company said in its earnings statement.

WNStoo posted a reduction in its attrition numbers this quarter. Attrition declinedby 7 percentage points to 22 per cent, down from 29 per cent last quarter and 38 per

cent in quarter ended March 2008. "The employment market in India is softer

compared with this time last year," WNS said.

For First source, the offshore attrition (India, Argentina and the Philippines)

remained unchanged at 35.8 per cent during the just ended quarter. The onshore(the US and the UK) attrition was 38.4 per cent compared with 38.8 per cent in third

quarter.

ForWipro BPO, the quarterly attrition has come down by 500 basis points to 13 per

cent from 18 per cent in the previous sequential quarter.

With the global financial meltdown it appears employees prefer to stick to their

current jobs as much as possible. In November 2008 BPO attrition fell to 30%. The

attrition rate in few leading companies is,

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


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Headcount

BPO firms seem to be hiring in smaller numbers as they prefer to work with on-

board employees in a bid to cut costs.

WNS ended the quarter with an employee base of 21,356, higher only by some 28

employees over the quarter ended December 2008. WNS' smaller rival EXL posted a

net increment of 32 employees during January-March quarter. "We continue to hire

about 200-300 employees each month spread across India and the Philippines," a

company spokesperson said.

EXL, which runs a January-December fiscal, had 9,563 employees on its rolls against

9,531 in the previous quarter.

An HR head of a large BPO player pointed out that while the industry was hiring

fewer numbers, companies were also cleaning up their bench. "Companies are not

retaining non-performers. Also, one has to see the employee count in the backdrop ofgrowth of these companies," the official said.

Mumbai-based First source saw a net reduction of 950 employees in the just-ended

quarter compared with net addition of 2,944 employees in the preceding quarter

(October-December), and a net addition of 279 in the year-ago period.

"Reduction in headcount in the fourth quarter is due to large ramp up in previous

quarter getting in to production mode and headcount stabilizing," its CEO, Ananda

Mukerji, said in a recent interaction with analysts.

The quarterly gross hiring numbers for both WNS and First source for the fourth


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quarter were not available. The sole exception to this pack was Genpact, where

growth remained more or less intact on a sequential basis. The company's net

addition stood at 300 employees against 200 employees in the last quarter.

However, the gross addition for January-March quarter stood at 2,200 employees,with hiring largely focused on BFSI and India-to-India business, sources said.

In fact its gross hiring in the first quarter of 2009 is a tad higher than the gross hiring

in the fourth quarter of 2008 at 2,100 employees.

Genpact had about 36,500 employees globally, as on March 31, 2009.

Earlier this month, the association that supports and promotes Indias business

process outsourcing predicted a bright future for the sector. While the past year has

presented challenges, there is undoubtedly strong growth ahead, NASSCOM said at

the CEO Summit 2009.

In fact, Som Mittal, the president of NASSCOM, forecast that outsourcing to India is

likely to increase threefold by 2020, earning aggregate revenues of $225 billion.

"While the short-term challenges exist, the potential for this industry is tremendous

and the industry will not be demand constrained," he said.

These are optimistic words for a sector that is accustomed to robust growth, withmany graduates aspiring to work for one of the countrys top outsourcing companies.

In recent years, salaries in the sector have grown in the double digits on an annual

basis, while employees have had their pick of open positions. However, the recession

has changed "business as usual" at Indias top BPO firms.


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Less employee turnover

The downturn has also had an effect on the level of worker turnover experienced at

BPO firms. In November, LiveMint.com reported that in pre-recessionary days,

employees stayed with the same company for an average of 11 months. But concernsabout job security have prompted people to stay in the same role for longer. The

churn rate in the BPO sector fell from 35 percent in 2007 to under 20 percent in the

third quarter of 2008, according to Live Mint. And Business Week says that current

attrition rates are close to 15 percent. This trend may benefit the industry in the long

term, as workers gain more expertise by working for longer at the same job. Samir

Chopra, president of the Business Process Industry Association of India, toldLiveMint.com that "there are fewer jobs on the job market, but there is also more

maturity in the job market."

CHAPTER III

FINDINGS

Following are the findings on the basis of the project report:-.


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The attrition rate for this industry has come down by an average of 300 500 basis

points (bps).

Before the recession actually started the reasons for high attrition rate were-

But now hell with the pay and hell with the boss, I want money (thats the sole

mantra during recession).

Quarterly attrition


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The salary structure is not competitive in BPO firms as compared to the rest of the

Indian market.

-- The short-term variable component was just 4% last year while the rest of India's

workers enjoyed 10%. Such a low figure does not give any scope in creating incentive

programs to encourage employees to work harder or stay at the organization.

-- The attrition rate at BPOs last year was 23.5% compared to 15% in the general

market.

Employees will stay longer when they see that they can move up to a better job at the

same company.

Other findings of the study were:

-- Many BPO workers use the money they earn to fund a post-graduate degree.

-- The BPO work is attractive to younger workers giving them a new-found freedom

and a unique lifestyle.

-- Many of the jobs are monotonous.

F Retentions policies followed provides the employees both monetary and non-

monetary benefits.


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F The exit interviews were conducted as and when required by the company.

SUGGESTIONS AND RECOMMENDATIONS

Conclusion


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