Exploring The Dimensions of Employee Retention in Bpo Industry

Asia Pacific Journal of Research
Vol: I Issue XIV, June 2014
ISSN: 2320-5504, E-ISSN-2347-4793
EXPLORING THE DIMENSIONS OF EMPLOYEE RETENTION IN BPO INDUSTRY

IN KERALA
Dr.G S Gireesh Kumar, Associate Professor, Department of Commerce,
Nirma College,Muvattupuzha, Kerala
Santhosh C, Assistant Professor, Department of Commerce, EKNM Government College,
Elerithattu, Kasaragod, Kerala
ABSTRACT
The Indian IT-BPO sector has remained as global powerhouse by exhibiting rapid evolution in
terms of expansion of vertical and geographic markets, attraction of new customer segments,
transformation from technology providers to strategic business partners and by offering a
considerably wider spectrum of services over the years. The aggregated revenue from the sector is
estimated at USD 95 billion in FY year 2013, growing at 10.2% over FY 2012 with the provision of
direct employment to about three million people. It is expected that the industry will reach USD 106
111 billion during FY 2014; a growth of about 13 15% over FY 2013 (NASSCOM 2013). Human
resources are the drivers and principal value-creators of the output of this industry. Therefore,
attracting, training, retaining and motivating employees are the critical success-determinants.
However, retaining talented employees is a serious concern in knowledge based organizations. When
employees leave an organization, they carry with them invaluable tacit knowledge which is often the
source of competitive advantage for the business. The present study aims at identifying the major
dimensions of retention in BPO industry in Kerala. A survey instrument was developed for the study to
gather information. The population for this study comprised of employees working in various BPOs in
Kerala. A sample size of 240 was chosen by simple random sampling method. Factor Analysis,
Correlation and Regression are used to extract dimensions of employee retention and to know the
influence of these dimensions on employees intention to stay. Out of the dimensions extracted, job
support, compensation and recognition are identified as major factors determining the stay of
employees in BPO industry in Kerala.
Key words: Business Process Outsourcing, verticals, retention, compensation, motivation.
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I. INTRODUCTION
The IT-BPO Industry is playing a vital role in Indias economic growth. It accounts nearly for
5.2 percent of the countrys GDP. Over the last 10 years, this industry has grown at an average annual
rate of 30 percent. The industry is estimated to aggregate revenues of USD 108 billion in FY2013,
with the IT software and services sector (excluding hardware) accounting for USD 95 billion of
revenues. During this period, direct employment is expected to reach nearly three million, an addition
of 188,300 employees, while indirect job creation is estimated at 9.5 million. As a proportion of
national GDP, the sector revenues have grown from 1.2 per cent in FY1998 to nearly 8 per cent in
FY2013. Its share of total Indian exports (merchandise plus services) increased from less than 4 per
cent in FY1998 to about 23-25 per cent in FY2013. Export revenues (excluding hardware) are
estimated to gross USD 75.8 billion in FY2013, growing by 10.2 per cent over FY2012, and
contributing nearly 80 per cent of the total IT-BPM revenues (excluding hardware), employing over
2.3 million employees (NASSCOM 2013). Key global megatrends around macroeconomics,
demographics, social, environmental, technology and business will present a new set of opportunities
in the form of largely untapped markets and customer segments, which can propel industry revenues to
USD 225 billion by 2020 (NASSCOM 2011). With the whirlpool of opportunities the Indian Business
Process Outsourcing sector seems to be on a happy ride.
India has the second largest English-speaking scientific professionals after the US. It is
considered as a knowledge economy with a highly talented technical workforce. Knowledge-workers
are the main resource in the ITES/BPO Industry. They add value to their organizations through their
communications skills, high level of education, and domain knowledge. High attrition rate is an
important issue in BPO industry. High attrition not only reduces the efficiency or customer
satisfaction, but is also expensive. When the employees move they not only take skills and knowledge
but also trade secrets with them as they typically moved to the competitors organization (Abassi and
Hollman, 2000). According to a recent survey conducted by All India Management association
(AIMA) on CEOs and HR managers of different IT organizations, attrition is the second important
issue related to HR department. A global call-centre report (Neale Helen 2004) state that Indian call
centers have the highest employee turnover of 40% against a global average of 20%. Another
benchmarking analysis (Scholl Rebecca 2003) reports that India had the greatest level of call centre
agent attrition (38%) and lowest average employee tenure (11 months) in the Asia Pacific Region. It is
very important to retain top talent to promote innovation and creativity which will help organization to
differentiate from its competitors (Peter Cappelli, 2008). .
II. REVIEW OF LITERATURE
There are a few significant studies conducted to analyse the effect of factors of employee
retention on employee intention to stay.
Abhoy (2000), opined that ensuring employee commitment and retaining best talent is the
major challenge in software firms. Agrawal et al (2003) suggested that the work place must be
conducive for learning and at the same time informal, full of fun, excitement and passion so that
employees can learn, experiment and relieve stress. Gwen et al (2003) concluded that changes that
could be made to make the workplace more challenging and rewarding includes having a more flexible
work environment, more effective communication and more career development and training.
Suryanarayana et al (2003) found that work environment is a significant factor that affect job
satisfaction and work commitment of software professionals. Deepak et al (2012) found that
employees in at a comparatively lower age have a higher propensity to leave the job and lack of safety
among female employees and availability of more career opportunities in the external labour market
are the most significant reasons for employees to leave the organizations. Muhammad Umer et al
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(2011), identified that the variables such as career development, job support, work environment and
work life balance have significant and positive impact on employee stay in BPO industry.
Monis et al (2011) reported that the employee growth and development activities such as
continued education courses, tuition reimbursement, career development skills training, opportunities
for promotion and internal career advancement, coaching, mentoring and leadership development
programmes have a positive impact on enhancing employee satisfaction and reducing the possibility of
employee leaving. Karthikeyan (2010) found that variables like sufficient financial resources,
encouragement by supervisors, effective leadership, efficient feedback system and good relationship
with colleagues play a significant role in improving organizational climate. Adhinarayanan et al
(2011) found that career growth and compensation are the important causes for increased employee
turnover in companies and employee, employer and supervisor all are responsible for the hike in the
rate of attrition. They strongly recommended for the conduct of an exit interview to realize actual
cause of leaving and to reduce the possibility of future employee turnover.
Shaveta et al (2011) found that as the total cost in association with hiring of employees to fill
the vacancy of the gone out employee is substantial, organizations have to build their own retention
strategies to ensure long-term stay of their best talent. Shefali et al(2012) recommended for the
adoption of certain techniques like Muscle Relaxation, Biofeed Back, Meditation, Cognitive
Restructuring, Time Management, Employee Assistance rogramme and Employee Wellness
Programme to minimize stress, enhance productivity and to reduce the employee dissatisfaction. A
study by Venugopal et al (2006) revealed that most of the organizational measures to retain talented
persons such as rewards, recognition and appreciation, better communication etc. are accepted by the
professionals. Gayathri et al (2012) said that frustration and constant friction with their superiors or
other team members are the real reasons of most employees leaving an organization and identified
mentoring, well equipped safety environment, potential and prospective roles, encouragement and
recognition and competitive compensation as the significant variables that influences employee
retention. Many other studies also supported the same findings [Srikanth et. al. (2006), Chandra
Mohan et. al. (2007), Latha et al (2007), Kanwar (2009), Misra (2007), Prakash (2013), Rakesh
(2011), Ramlall (2003), Shah et al (2007), Singh (2005)]
III. RESEARCH PROBLEM
IT-BPO sector has become one of the most significant growth catalysts for the Indian
economy. However, the sector is facing the challenge of shortage of sufficient competent middle and
top level managers and poor retention rates. Studies on various dimensions have been done in India
and abroad to address the issue pertaining to IT-BPO industry. But, most of the studies limited their
scope on HR practices, employee work-life balance and stress. Assurance of employee retention is a
crucial challenge to any manager. Kerala state is a growing BPO destination in India. The cities like
Thiruvananthapuram and Cochin are growing fastly, especially after the formation of Special
Economic Zones and development of Info Park and Techno Park. It is expected that both these cities
will become Tier II cities in terms of BPO development (at present they are included in the list of Tier
III Cities). As per a recent Nasscom estimation, about 120000 new job opportunities will be created in
IT and ITES sector in 2013. However, huge rate of brain drain and attrition in BPO industry in Kerala
badly affects its accelerated growth in our state. Therefore, it is necessary to identify the various
dimensions of employee retention in BPO industry in Kerala in order to ensure long stay of employees
in this sector. Since there are no remarkable studies on this aspect pertaining to Kerala, the present
study is significant to develop employee retention strategies in BPO sector.
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IV. RESEARCH OBJECTIVES

The present study is based on the following specific objectives:1. To identify various dimensions of employee retention in BPO industry in Kerala.
2. To study the interrelationship between dimensions of retention on employee intention to stay.
V. RESEARCH MODEL AND HYPOTHESES
Independent Variables
Figure 1 The Proposed Research Model

Dependent Variable
Job Support & Recognition
Compensation & Career

Growth
Organizational Culture
Intention To Stay
Work-Compatibility Factors
Autonomy & Independence
To have a disciplined guidance to the enquiry, the following hypotheses were formulated and
tested:
H1. The Job Support and Recognition dimension of employee retention has a positive effect on
employee intention to stay.
H2. The Compensation and Career Growth dimension of employee retention has a positive effect
on employee intention to stay.
H3. The Organizational Culture dimension of employee retention has a positive effect on
H4. The Work Compatibility Factor dimension of employee retention has a positive effect on
H5. The Autonomy and Independence dimension of employee retention has a positive effect on
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VI. RESEARCH METHODOLOGY

The study mainly depends on primary data which have been collected from a sample of 240
respondents in Kerala. The samples were identified randomly from the middle level and lower level
employees working in various BPOs in Kerala. The data are collected by using a pre-drafted and pretested Questionnaire. Pre-drafted questionnaire was tested among 60 respondents and necessary
modifications were made. The final questionnaire was delivered among 290 respondents and collected
240 partly/completely filled questionnaires. The data collected have been analyzed by using various
statistical and mathematical techniques. Descriptive statistical tools like mean, standard deviations,
correlations were applied for the study. Regression Analysis has been used to study the
interrelationship between variables.
VII. ANALYSIS AND INTERPRETATION OF DATA
A. Measures Chosen for the Study
On the basis of exhaustive literature and the pilot study done, total of 22 factors were chosen
for the study. The respondents were asked to rate these factors on a 5 point Likert scale ranging from 1
to 5, 5 being Strongly Agree and 1 being Strongly Disagree. Table 1 enlists all the 22 factors, the
codes assigned together with their mean and standard deviation.
Table: 1: Measures of Retention Chosen for the Study with Mean and SD
Sl.
No.
Code
No.
RT 1
I am satisfied with the level autonomy

associated with my position
240
2.85
1.016
RT 2
232
3.14
1.227
RT 3
240
3.48
1.074
RT 4
I have the freedom I need to do my job.

A good social environment is prevailing in my
organization.
All the departments in my organization are
working with harmony without conflicts.
240
3.05
1.178
RT 5
240
3.32
1.220
RT 6
232
3.27
1.080
RT 7
My boss congratulates me for doing a good job.

My boss ensures that people who do a good job
are recognized and appreciated.
My boss provided adequate amount coaching
and mentoring.
240
3.27
1.049
RT 8
240
3.05
1.009
RT 9
240
3.05
1.192
10
RT 10
240
3.27
1.198
11
RT 11
236
3.36
.990
12
RT 12
240
3.00
.993
13
RT 13
240
2.85
1.095
14
RT 14
My boss provides me with challenging work.

My boss give me feedback on regular basis on
my performance.
My boss involves me in decisions that affect my
job.
I am satisfied with the support I receive from
my boss.
My boss listens my personal and official
concerns.
My organization considers valuable suggestions
of the employees.
I am doing something that is considered really
worthwhile.
240
3.13
.765
Measures
Mean
S.D
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Management is genuinely interested in

employee ideas on how to improve our services.
job gives me a feeling of personal
16 RT 16 My
accomplishment and self-esteem.
My organization goes out of its way to make
17 RT 17 sure that employees enjoy their work as well as
their family.
at this organization are paid fairly
18 RT 18 People
according to their job performance.
feel that the existing system of granting
19 RT 19 Iincrement
is quite effective.
I
believe
my
career aspirations can achieved at
20 RT 20 this organization.
21 RT 21 The organization takes a supportive role in my
career development.
feel that I shall be able to continue and grow
22 RT 22 Iwith
this organization.
B. Descriptive Statistics
Table 2: Descriptive Statistics
15
RT 15
240
3.27
.930
240
3.20
.793
240
3.03
.950
240
2.55
1.299
240
2.98
1.399
240
2.72
1.144
240
3.13
.923
240
2.75
1.061
Job Support and Recognition
3.20
Std.
Deviation
1.084
Compensation and Career Growth
2.90
1.116
240
3.06
1.090
240
Work-Compatibility Factor
3.12
0.872
240
Autonomy and Independence
3.14
0.996
240
Sl. No.
Factor Name
Mean
N
240
It is clear from table 2 that job support and recognition has the highest mean of 3.20 stating that
most of the respondents consider this factor to be responsible for their stay.
C. KMO and Bartletts Test
The Kaiser-Meyer-Olkin test was done to measure the homogeneity of variables and Bartlett's
test of sphericity was done to test for the correlation among the variables used. Table 3 shows the
values.
Table 3: KMO and Bartletts Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy
Bartlett's Test of Sphericity
Approx. Chi-Square
.792
4416.268
df.
231
Sig
.000
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The KMO value for the instrument was 0.792 and hence the factor analysis is appropriate for
the given data set. Bartletts test of sphericity chi-square statistics is 4416.268, which shows the 22
statements are correlated and hence the instrument was accepted for further study.
D. Factor Analysis
Since the factors of retention were large in number and were inter-related, Factor Analysis was
done to extract and club the factors responsible for attrition. Principal Component Analysis was used
for extraction and Varimax for rotation. As per the Kaiser criterion, only factors with eigenvalues
greater than 1 were retained (Kaiser H. F 1960). Five factors in the initial solution have eigenvalues
greater than 1. Together, they account for almost 76% of the variability in the original variables. Table
4 shows initial eigenvalues of the factors and Table 5 shows the rotation matrix.
Table 4: Total Variance Explained
Compone
Extraction Sums of Squared Rotation Sums of Squared
nt
Initial Eigenvalues
Loadings
Loadings
% of
% of
Varianc Cumulativ
% of
Cumulati
Varianc Cumulati
Total
e
e%
Total Variance
ve %
Total
e
ve %
1
6.578 29.900
29.900 6.578
29.900
29.900 5.719 25.996
25.996
2
4.300 19.545
49.445 4.300
19.545
49.445 4.207 19.121
45.117
3
2.356 10.710
60.155 2.356
10.710
60.155 2.625 11.934
57.051
4
2.163
9.831
69.986 2.163
9.831
69.986 2.257 10.259
67.310
5
1.287
5.851
75.836 1.287
5.851
75.836 1.876
8.526
75.836
6
.790
3.590
79.426
7
.662
3.009
82.435
8
.587
2.670
85.105
9
.534
2.427
87.532
10
.482
2.193
89.725
dim 11
.457
2.076
91.801
ensi
.305
1.388
93.189
on0 12
13
.285
1.297
94.486
14
.249
1.131
95.617
15
.227
1.033
96.650
16
.200
.909
97.559
17
.158
.717
98.276
18
.128
.584
98.860
19
.095
.433
99.294
20
.058
.265
99.559
21
.055
.251
99.810
22
.042
.190
100.000
Extraction Method: Principal Component Analysis.
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Table 5: Rotated Component Matrix

Component
1
2
3
4
5
Rt 12
.151
-.114
.014
-.045
.870
Rt 9
-.053
.244
-.241
.148
.854
Rt 15
-.256
.113
.143
.097
.819
Rt 8
-.235
.276
-.131
.166
.819
Rt 10
.078
.111
-.435
-.004
.791
Rt 11
.138
.115
.248
.081
.789
Rt 13
-.067
-.058
.039
.345
.781
Rt 14
.177
.236
.168
.335
.662
Rt 26
.050
.123
.173
-.049
.905
Rt 25
.132
-.170
.044
-.153
.855
Rt 28
-.011
.220
-.023
.042
.844
Rt 19
-.162
-.049
-.088
.191
.809
Rt 27
-.217
-.263
-.112
.236
.763
Rt 24
.269
.014
.530
-.117
.649
Rt 1
.186
-.086
.145
-.189
.769
Rt 6
.102
.161
-.275
.336
.733
Rt 17
-.058
.045
.241
.248
.719
Rt 5
.421
-.156
-.076
.166
.687
Rt 23
.111
.041
-.072
-.064
.873
Rt 21
-.187
.000
.214
.089
.788
Rt 2
.326
-.052
.177
-.048
.774
Rt 18
.222
.130
.120
.031
.771
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
Rotation converged in 6 iterations.
The factors extracted for further study are shown in Table 6. These 5 factors that were
ultimately extracted included factors which have loadings more than .6. Such factors were referred to
as dimensions of retention in the further analysis. The table is followed by the explanation of all these
five dimensions.
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Table 6: Dimensions of Retention Extracted from Factor Analysis

Factor No.
Item Code
Loading
RT 5
RT 6
RT 7
RT 8
RT 9
RT 10
RT 11
RT 12
0.819
0.854
0.791
0.789
0.87
0.781
0.662
0.819
0.809
0.649
0.855
0.905
0.763
0.844
0.769
0.687
0.733
0.719
0.788
0.873
0.774
0.771
4
5
RT 15
RT 18
RT 19
RT 20
RT 21
RT 22
RT 1
RT 3
RT 4
RT 13
RT 16
RT 17
RT 2
RT 14
Factor Name

(JSR)
Compensation & Career Growth

(CCG)
(OC)
Work Compatibility Factor
(WCF)
Autonomy and Independence(AI)
The factor analysis has identified the following five dimensions of employee retention:
Factor 1: The name given to this factor is Job Support & Recognition. This factor consists of eight
variables which contribute 29.90 percent variation. The variables are: Congratulation by boss for
doing good work with factor loading of .819; recognition and appreciation of performance with factor
loading of .854; provision of good coaching and mentoring with factor loading of .791; challenging
work with factor loading of ..789; Performance feedback on regular basis with factor loading of .870;
involvement in decision making with factor loading of .781; support received from boss with factor
loading of .662 and caring on employee personal and official concerns with factor loading of .819. The
above are the most important factors which contribute to enhance internal motivation in employees
working BPO industry in Kerala. Many studies supported this finding. [Karthikeyan (2010), Bhaduri
(2008), Beardwell et al (2007), Gaiduk (2009), Budhwar (2006)].
Factor 2: This factor is named as Compensation & Career Growth. This factor includes six variables
which contribute 19.545 percent variation. The variables are: genuineness in managements interest in
employee ideas to improve service performance with factor loading of .809; payment according to job
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performance with factor loading of .649; effectiveness of existing system of granting increment with
factor loading of .855; belief in achievement of career aspirations with factor loading of .0.905;
organizations role to support career development with factor loading of .763; ability to continue and
grow with the organization with factor loading of .844. This result was substantiated by many previous
studies [Drucker, Anil Kumar (2007), Ryan et al. (2007), (Rosser, 2004)].
Factor 3: The name given to this factor is organizational culture. This factor consists of four
variables which contribute 10.71 percent variation. The variables are: autonomy associated with
position with factor loading of .769; prevalence of good social environment with factor loading of
.687; harmony between departments with factor loading of .733 and consideration of valuable
suggestions of employees feeling of respect in job with factor loading of .719. Many studies
substantiated this finding [(Grebner S (2003), Semmer (2007), Dormann (2002)].
Factor 4: The name given to this factor is work-compatibility factors. This factor consists of two
variables which contribute 9.831 percent variation. The variables are: jobs ability to create feeling of
accomplishment and self-esteem with factor loading of .788; and organization assuring work-life
balance of employees with factor loading of .873. This result was substantiated by many previous
studies [Wickramasinghe et al. (2010), Budhwar et al. (2006), Mehta et al. (2006), Greenhaus
(1974), Kohli (1978), Inkson (1985)].
Factor 5: The name given to this factor was autonomy & independence. This factor consists of two
variables which contribute 5.851 percent of variation. The variables are: availability of desired
freedom in doing the job with factor loading of .774 and enjoyment on doing work which is
worthwhile with factor loading of .771.
E. Multiple Regression Model
There are many reasons for the stay of employees in an organization. All these factors are
grouped and a five factor model is constructed. Employee intention to stay is determined by these
dimensions of retention. Multiple Regression Analysis has been carried out here to study the
association between employee intention to stay and dimensions of retention.
E.1. Dimensions of Retention Independent Variables
Independent variables for the analysis are various dimensions of retention extracted from the
factor analysis. These five dimensions are: job support & recognition, compensation & career growth,
organizational culture, work-compatibility factor and autonomy & independence. Employee intention
to stay is determined y these dimensions of retention.
E.2. Intention to Stay Dependent Variable
Employee intention to stay is determined by the dimensions extracted from factor analysis.
Four statements are included in the instrument to measure intention to stay and the respondents
responded to each statement on five point Likert Scale with Strongly Agree dictating the highest
level of satisfaction (Score of 5), Strongly Disagree as the highest level of dissatisfaction ( Score of
1). The actual scores are collected, summated, averaged and compared across different groups to draw
meaningful conclusions. The item code, item mean and standard deviation are presented in Table 7.
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Table 7: Measures of Intention to Stay Chosen for the Study with Mean and SD
Sl. No.
1
2
3
4
Item
Code
Stay
1
Stay
2
Stay
3
Stay
4
Std.
Mea
Deviatio
n
n
240 2.60
.972
Item
This company is able to retain quality employees.

I see myself working for this organization three
years from now.
Even I had another job offer that paid more than the
present one, Id stay here.
I am not bothered about alternative employment in
any other organization.
240 2.43
1.298
232 2.90
1.244
240 3.03
1.050
E.3. Validity and Reliability

The validity of the instrument and scales was assessed by face validity and content
validity. To ensure face validity, the research instrument was presented to experienced HR
professionals working in major BPOs in Kerala to comment up on the appropriateness of the
instrument and scales to achieve the proposed objectives. On the basis of feedback necessary
refinements were made in the questionnaire to make it ready for final research. The content validity
was examined through review of most relevant previous empirical and theoretical literatures in the
field of employee retention and a pilot study by presenting the questionnaire among 60 sample BPO
employees. The reliability of the redrafted research instrument was assessed on the basis of
Cronbachs alpha co-efficient [Sekaran, U.(2003)].
Table 8: Reliability - Co-efficient- Cronbachs alpha
Retention Dimensions
Growth
Work-Compatibility Factor
Autonomy & Independence
Overall Retention
Dimensions
Intention to Stay
(dependent)
E.4. Correlation Analysis
No. of
Items
8
6
Cronbachs
alpha
0.930
0.889
4
2
2
22
0.756
0.697
0.684
0.749
0.762
The next step involved is computing the correlations between the independent variables and the
dependent variable in order to find out the relationship between the two. There should be correlations
between the dependent variable and the independent variables to precede further analysis. Table 9
shows the correlations along with significant values.
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Table 9: Correlations
JSR
JSR
CCG
.019
OC
.361**
Pearson
1
Correlation
Sig. (2-tailed)
.781
.000
N
228
228
228
CCG
Pearson
.019
1
-.039
Correlation
Sig. (2-tailed)
.781
.546
N
228
240
240
OC
Pearson
.361**
-.039
1
Correlation
Sig. (2-tailed)
.000
.546
N
228
240
240
*
WCF
Pearson
.050
.127
.065
Correlation
Sig. (2-tailed)
.454
.049
.314
N
228
240
240
AI
Pearson
.471**
.043
.395**
Correlation
Sig. (2-tailed)
.000
.515
.000
N
228
232
232
STAY
Pearson
.210**
.510**
.145*
Correlation
Sig. (2-tailed)
.002
.000
.027
N
220
232
232
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).
WCF
-.050
AI
.471**
STAY
.210**
.454
228
.127*
.000
228
.043
.002
220
.510**
.049
240
.065
.515
232
.395**
.000
232
.145*
.314
240
1
.000
232
-.031
.027
232
.146*
240
-.031
.641
232
1
.026
232
.361
.641
232
.146*
232
-.361
.000
224
1
.026
232
.000
224
232
E.5. Regression Assumptions

The basic assumptions of parametric statistical tests such as regression should be carefully
followed for reliable findings. As per the methodologies recommended by well known researchers
(Hair et al (1998), the analysis of residuals provides the best information about regression models
errors which are used to examine the regression analysis assumptions. They are as follows: (1) The
assumption of Normal distribution -tested using Shapiro-Wilk which reveals that standardised errors
are normally distributed since all P values are above .05. (The null hypothesis is that errors are
normally distributed). (2) Multi collinearity assumption-tested using VIF (Variance Inflation Factor)
and tolerance. If VIF is more than 5 and tolerance less than .20, there is problem of Multi collinearity
[(Hair et al (1998)]. Here all variables pass this acid test. (3) The independent errors assumption
which is tested with Durbin Watson statistic. If the value of the test is between 1 and 3, this
assumption is met. The value for the present research is 1.897 which is ideal in all respects.
E.6. Regression Model
The regression model used for the present study is:
Y = a + b1 X1+ b2 X2+ b3 X3+ b4 X4 + b5 X5....................................................... (1)
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Where: Y= Intention to Stay (Dependent Variable),

a= Constant,
X1, X2, X5 = Dimensions of Retention (Independent Variables),
[X1 = Job support & Recognition, X2 = Compensation & Career Growth, X3 = Organizational
Culture, X4 = Work-compatibility Factor, X5 = Autonomy & Independence.]
b1, b2 b5= Beta values of independent variables.
The stepwise regression model is carried out which provided 3 models as shown in Table 10.
Table 10: Model Summary
Model
R
R Square
a
.464
.215
b
.523
.273
.536c
.288
Adjusted R Std. Error of

Square
the Estimate
.212
2.90527
.267
2.80202
.278
2.78087
DurbinWatson
d1
i2
m
3
1.897
e
n
s
i
o
n
0
a. Predictors: (Constant), CCG
b. Predictors: (Constant), CCG, JSR
c. Predictors: (Constant), CCG, JSR, WCF
d. Dependent Variable: STAY
The first model with compensation and career growth gave an r2 value of .215. In the second
model, by adding the dimension job support and recognition, the predictive power of the model (r2)
improved to .273. In the last model, by adding work-compatibility factor with the dimensions
compensation and career growth and job support and recognition the predictive power of the model
increased to .288. Therefore, the improved model explains 29 percent of the variation in the dependent
variable by the 3 independent variables.
Model
Sum of
Mean
Squares
df
Square
F
Sig.
1
Regression
504.390
1
504.390 59.758
.000a
Residual
1840.047
218
8.441
Total
2344.436
219
2
Regression
640.704
2
320.352 40.802
.000b
Residual
1703.732
217
7.851
Total
2344.436
219
3
Regression
674.056
3
224.685 29.054
.000c
Residual
1670.381
216
7.733
Total
2344.436
219
a. Predictors: (Constant), CCG, b. Predictors: (Constant),CCG, JSR, c.
Predictors: (Constant), CCG, JSR, WCF, d. Dependent Variable: STAY
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ANOVA table shows that all the 3 models are statistically significant at 99 percent confidence
level.
Model
Table 12: Coefficients

Standardize
Unstandardized
d
Coefficients
Coefficients
B
Std. Error
8.847
.654
(Constant
)
CCG
.280
2
(Constant
11.582
)
CCG
.290
JSR
.114
3
(Constant
10.137
)
CCG
.280
JSR
.113
WCF
.252
Dependent Variable: STAY
Beta
t
13.522
Sig.
.000
Collinearity
Statistics
Toleranc
e
VIF
.036
.910
.464
7.730
12.721
.000
.000
1.000
1.000
.035
.027
1.140
.480
.242
8.269
4.167
8.888
.000
.000
.000
.996
.996
1.004
1.004
.035
.027
.121
.464
.240
.120
7.996
4.172
2.077
.000
.000
.039
.979
.996
.983
1.021
1.004
1.017
The standardized Beta Coefficients of the 3 dimensions which are statistically significant is
shown in table 12. The strongest predictor is compensation and career growth since its beta value is
highest with .464 which is statistically significant at 1 percent level. The next predictor is job support
and recognition with the beta value of .242 which is also significant at 1 percent level. The dimension
work-compatibility factor has also significant relation with the dependent variable as the beta value
of .120 is also statistically significant at 5 percent level of significance.
Hypotheses (1), (2) and (4) are accepted since all of the three dimensions of retention have
positive effect on employee intention to stay. The other attributes such as organizational culture and
autonomy and independence have no positive effect on employee intention to stay and hence,
hypotheses (3), and (5) are rejected. BPOs should give due significance to compensation & career
growth, job support & recognition and work-compatibility factor to ensure the long stay of their
employees.
Therefore, the validated regression model is as follows:
Intention to Stay = 10.137 + .464 (CCG) + .240 (JSR) + .120 (WCF).
Thus, compensation and career growth, job support and recognition and work-compatibility
factor are the strongest predictors of variations of employee intention to stay in BPO industry in
Kerala.
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Figure 2: Relationship framework of the dimensions of attrition

Independent Variables
Growth
Dependent Variable
.464
.240
Intention to Stay (r2 = .29)

.120
Work-Compatibility Factors
VIII. CONCLUSION
The main aim of this research study was to identify the major dimensions of employee
retention in BPO industry in Kerala and also to study the interrelationship between these dimensions
and employee intention to stay. The essence of the proposed study was the identification of strongest
predictors of the dimensions of retention on employee intention to stay. The multiple regression
analyses findings indicate that there is a positive and significant relationship between compensation &
career growth, job support & recognition and work-compatibility factor and the employee intention to
stay in BPO organizations. The findings indicate that, based on beta values and significance,
compensation and career growth is the most influential dimension (predictor) of the BPO employee
intention to stay. The previous research and our research advocated that a BPO unit providing good
compensation package and career development opportunities, will able to retain its valuable
employees for a long period of time. Based on the beta values and significance, the second strongest
dimension of employee retention is job support and recognition. This finding provides a strong
support to the HR literature review that advocated that a BPO organization which gives recognition
and appreciation to the good work of their employees and extending support to them in work will gain
their faith and confidence and is able to retain them. Also, based on the beta values and significance,
the third strongest dimension of employee retention is work-compatibility factor. The finding
suggests that the organization should consider the personal feelings of the employees while designing
work schedules. The management has to develop sound human relations strategies to motivate their
employees to ensure their long stay in the organization. This is observed that the employees are ready
to stay in the organization if they are provided with fair pay, career advancement opportunities, job
support, recognition and appreciation on work and balancing of their work and life.
IX. RESEARCH CONTRIBUTION
This research is thought to have contributed to the BPO employee retention literature in three
aspects. First, from an academic standpoint, this research has fulfilled some gaps that emerged from
the literature that needed more empirical study especially in a state like Kerala. Secondly, this research
is the first empirical study that investigated the relationship between retention dimensions and
employee intention to stay in BPO industry in Kerala. Thirdly, the research findings can be utilized by
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the BPO professionals and management as valuable inputs to design effective HR policies and
strategies so that they can ensure the long stay of their talented, valuable employees.
X. LIMITATIONS AND FUTURE RESEARCH
Although this research achieved its objectives, limitations and future research are outlined. The
study is done on a general way without concentrating on specific BPO verticals. Future research can
be done on the employee retention dimensions on specific BPO verticals. Another limitation is that
this study includes only five dimensions of employee retention in BPO industry in Kerala. A good area
of research in the future is to find out if there are more dimensions of employee retention that
influence the stay of BPO employees. In this study only job related variables are considered for the
analysis. Future research can aim to find out the relationship between the demographic variables of the
respondents such as, age, sex, marital status, tenure, education etc. and employee intention to stay
along with job related variables. The present study is confined to lower and middle level BPO
professionals. Future research can study the influence of these dimensions on the stay of top level BPO
professionals.
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Asia Pacific Journal of Research

Vol: I Issue XIV, June 2014

ISSN: 2320-5504, E-ISSN-2347-4793