REASONS AND WAYS TO

CONTROL
ATTRITION

1
 ACKNOWLEDGEMENT
We would like to thank Mrs. Netra Ray HR executive at HCL Pvt.Ltd. (BPO) sector 16,
Noida for providing us with information about the reasons for attrition and the steps that
are being followed by them and for bearing with our endless questions.

We are grateful to Professor J.R Sharma for his support and guidance and for giving us
an opportunity to work on this report.

We also thank our librarian for providing us with necessary material.

At last we would like to thank our family and friends for their encouragement, motivation
and support.

2
 CONTENTS
S.NO PARTICULARS PAGE NO

1). Objective and purpose 4

2). Executive summary 5

3). Introduction 6

3.1) meaning of attrition 7

3.2) BPO industry in India 10

3.3) pharmaceutical industry in India 11

4). Cost of attrition 13

5). Factors 15

6). Ways to control attrition 18

7). Initiatives taken by other companies. 24

8). Interpretation and analysis 26

9). Conclusion 28

10). Recommendations 29

11). Bibliography 32

3
 OBJECTIVE

To find out the rate of attrition and what are the reasons for the same and how to cope
up with it.

PURPOSE

The purpose of the report is to understand the reasons of attrition in BPO and
pharmaceutical industry and what measures can be taken up by the organization to
bring the rate of attrition up to 25%. And to see as what the other companies are doing
in order to tackle this universal phenomenon.

4
 EXECUTIVE SUMMARY
In the current scenario of high economic growth and rapid globalization, the fight for
talent is becoming increasingly intense. Talent or human resource is a major asset for
any company. Company Invest high amount of money for their recruitment, selection &
training and what happens to company if these Talents or Employees leave the
organization in short while seeking new opportunities. Plagued by erratic attrition
trends and cutthroat global competition, organizations are now realizing the need to
understand the supply-demand equation better in order to garner strong mechanisms
to attract and retain top talent.

Employee retention is critical to the long-term health and success of any organization;
however it is becoming increasingly difficult for companies across the globe to attract,
motivate and retain key talent. Attrition rates are still on the rise and as the war for
talent becomes more intense each year it is becoming increasingly important for
companies to ensure they have the right people in place to guide future business
success.

Overall attrition rates are continuing to rise in Asia. The aggregate rate across all
markets reached 18 percent in 2007, marking a two percent increase on 2006.
Meanwhile budgeted attrition, which remained lower than actual attrition, rose slightly
from 10 to 11 percent year on year.

At 39 percent, overall employee turnover was highest at the professional /supervisor/

technical level. Unsurprisingly, attrition was lowest among senior/top management at
just 0.5 percent. The Banking and Finance sector saw the greatest employee turnover at
25 percent, while the lowest turnover was recorded in the manufacturing industry at 11
percent.

The facts revealed that external inequity of compensation was the main reason for
employees leaving their organization; however other causes include limited growth
opportunities and role stagnation.

Retention also remains a key challenge in BPO and pharmaceutical industry. More than
half of the employees in this sector have a retention bonus plan or are in discussions to
create one. The top three retention measures suggested are: pay above the market;
provide the opportunity to learn new skills; and encourage a favorable work/life
balance. An overwhelming majority of companies said they house an exit-interview
policy to learn more about why employees are leaving.

5
Introduction
In an environment of rapid growth, globalization and expansion, the pressure to attract
and retain outstanding employees has become a scary reality for most organizations.
The new-age economies, with their attendant paradigm shifts in human capital
management, have placed a heavy demand on today’s organizations and Attrition is
emerging as a key business concern for organizations. It is turning into a bigger issue
than attracting talent. The annual attrition rate is 20-30 per cent (reduction in the
number of employees through retirement, resignation or death) across industries in
India. It is as high as 44 per cent in BFSI (banking, financial services and insurance)
vertical and 35 per cent in BPO (business process outsourcing). Attracting and retaining
key talent has become one of the key drivers of overall business performance in
organizations and companies have been utilizing a diverse range of methods to draw in
new hires and ensure they stay as Attrition is an expensive phenomenon, potentially
impacting the bottom line of businesses.

The cost of attrition is not just the loss of that employee but it includes an array of
hidden costs such as recruitment costs, selection costs, training costs, cost of covering
during the period and opportunity costs.

The organizational costs associated with the turnover in terms of hiring, training and
productivity loss costs can add up to more than five per cent of an organization’s
operating costs.

As far as India is concerned, attrition is a serious trend, especially in today’s knowledge-

driven marketplace where people are the most important assets. While organizations
cope with attrition by devising compelling retention strategies, it is imperative for
organizations to predict attrition early in the recruitment process to curtail loss of time,
cost and effort.

6
BACKGROUND
First of all we need to know what attrition exactly is. Attrition is the rate of shrinkage in
the size or a gradual, natural reduction in membership or personnel, as through
retirement, resignation, or death. It is Normal and uncontrollable reduction of a work
force because of retirement, death, sickness, and relocation. It is one method of
reducing the size of a work force without management taking any overt actions. The
drawback to reduction by attrition is that reductions are often unpredictable and can
leave gaps in an organization.

The formula for calculating attrition rate is;-

Attrition Rate% =

Total no of resignation per month

(Whether voluntary or compulsory) x 100
Total no of employee in the beginning of the month + total
No of new joinees ₋ total no of resignation.

Attrition causes huge loss to the company, not only in terms of manpower but also in
monetary terms. The cost of attrition would be explained in details later in this report.
Moreover, this report will also cover the reasons why the employees leave a company.
Attrition is a universal phenomenon and no industry is devoid of it, but the degree
fluctuates from industry to industry and at different levels. Attrition by Employee Group

According to the study, the overall employee turnover rate was highest at the
professional/supervisor/technical staff level, recording total and voluntary attrition at a
very high 39 percent and 33 percent respectively. (See Figure 1)

The professional/supervisor/technical group constitutes a high percentage of the total

employee base in all organizations and high attrition at this level impacts the business
adversely. At 0.5 percent, attrition was lowest at the senior/top management level.
Employees at this level tend to be nearing the end of their careers, which means they
are more averse to risk and more likely to move to opportunities that are substantially
better. Hence attrition is considerably low at this level.

7
 1) Employee attrition by group

45%
40%
35%
30%
25%
20%
15%
total attrition
10% voluntaryattrition
5%
0%
t r l t l
en age nica po
r
nua
em an h p a
ag m ec l/s
u m
an la /t
m n ir ca
p io cle
/to ess
or of
ni pr
se

We have examined two important sectors in which the attrition rate is high i.e. BPO/IT
industry and pharmaceutical industry, and we have focused basically at middle level of
employees where the rate is highest. Lastly, this report will explain what can be done to
control the attrition in both these sectors. And what are the measures that are taken up
by other companies.

8
2).

9
BPO Industry in India
It is said that the Indian BPO Industry has come of age. This is very true if we analyze
both the past and present scenarios. Defying all the permutations and combinations, the
Indian outsourcing industry has registered a massive growth over the years. 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%. As per NASSCOM, the
Indian BPO/ITES registered a growth rate of 46% and clocked revenue of UD$ 3.6 billion
in 2003-04 up from UD$ 2.5 billion in 2002-03.This industry has contributed a great deal
to the export revenues of the country and is expected to do that in future too.

This industry is expected to generate one million jobs by 2009. 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 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 lose its main competitive edge which is lower costs. Later on, we
have explained why the cost of attrition is so high. This means that there is a very high
need to control the attrition rate in the industry.

10
Pharmaceutical industry in India
The Indian Pharmaceutical Industry today is in the front rank of India’s science-based
industries with wide ranging capabilities in the complex field of drug manufacture and
technology. A highly organized sector, the Indian Pharma Industry is estimated to be
worth $ 4.5 billion, growing at about 8 to 9 percent annually. It ranks very high in the
third world, in terms of technology, quality and range of medicines manufactured. From
simple headache pills to sophisticated antibiotics and complex cardiac compounds,
almost every type of medicine is now made indigenously.

According to the Economic Survey (2006-07), the pharmaceuticals industry had

achieved a turnover of about US$ 12 billion in 2005-06, and is expected to grow by
13% in 2007. Its pharma export value reached about US$ 4.7 billion during 2005-
06.Pharmaceutical industry accounts for about 2.91% of total FDI into the country.
The FDI in pharmaceutical sector is estimated to have touched US$ 172 million,
thereby showing a compounded annual growth rate of about 62.6%. Drugs and
pharmaceuticals sector is at 8th rank in India's top 10 FDI attracting sectors.
According to the Economic Survey for the year 2006-07, the value of pharma output
has increased ten times over the last 15 years.

From Rs. 50 billion in 1990 it has grown to Rs.550 billion (US$ 12 billion) in 2005-06.
Driven by growing number of pharmaceutical units, increased knowledge skills,
improved quality and increasing national as well as international demand, India is now
recognized as a leading global pharma player.

WHY BOTH THE SECTORS ARE GROWING AT A FAST PACE

1
Facts and figures taken from www.pharmainfo.net.

11
a) Competent workforce: India has a pool of personnel with high managerial
and technical competence as also skilled workforce. It has an educated
work force and English is commonly used. Professional services are easily
available.

b) Cost-effective chemical synthesis: Its track record of development,

particularly in the area of improved cost-beneficial chemical synthesis for
various drug molecules is excellent. It provides a wide variety of bulk drugs
and exports sophisticated bulk drugs.

c) Legal & Financial Framework: India has a 58 year old democracy and
hence has a solid legal framework and strong financial markets. There is
already an established international industry and business community.

d) Information & Technology: It has a good network of world-class

educational institutions and established strengths in Information
Technology.

e) Globalization: The country is committed to a free market economy and

globalization. Above all, it has a 70 million middle class market, which is
continuously growing.

f) Consolidation: For the first time in many years, the international

pharmaceutical and outsourcing industry is finding great opportunities in
India. The process of consolidation, which has become a generalized
phenomenon in the world pharmaceutical industry, has started taking
place in India.

12
COST OF ATTRITION
There are a number of costs which are incurred by a BPO when they hire any new
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: -

Costs Due to a Person Leaving

I. Recruitment Costs

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

posting costs.
2. The cost of the internal recruiter's time to understand the position requirements,
develop and implement a sourcing strategy, review candidates backgrounds,
prepare for interviews, conduct interviews, prepare candidate assessments,
conduct reference checks, make the employment offer and notify unsuccessful
candidates. This can range from a minimum of 30 hours to over 100 hours per
position.
3. Calculate the cost of the various candidate pre-employment tests to help assess
candidates' skills, abilities, aptitude, attitude, values and behaviors.

II. Training Costs

1. The cost of orientation in terms of the new person's salary and the cost of the
person who conducts the orientation. Also include the cost of orientation
materials.
2. The cost of departmental training as the actual development and delivery cost
plus the cost of the salary of the new employee. Note that the cost will be
significantly higher for some positions such as sales representatives and call
center agents who require 4 - 6 weeks or more of classroom training.
3. The cost of the person(s) who conduct the training.
4. The cost of various training materials needed including company or product
manuals, computer or other technology equipment used in the delivery of
training.

13
III. Lost Productivity Costs

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

1. Upon completion of whatever training is provided, the employee is contributing

at a 25% productivity level for the first 2 - 4 weeks. The cost therefore is 75% of
the new employee’s full salary during that time period.
2. During weeks 5 - 12, the employee is contributing at a 50% productivity level. The
cost is therefore 50% of full salary during that time period.
3. During weeks 13 - 20, the employee is contributing at a 75% productivity level.
The cost is therefore 25% of full salary during that time period.
4. Calculate the cost of mistakes the new employee makes during this elongated
indoctrination period.

IV. New Hire Costs

1. The cost of bring the new person on board including the cost to put the person
on the payroll, establish computer and security passwords and identification
cards, telephone hookups, cost of establishing email accounts, or leasing other
equipment such as cell phones, automobiles.
2. The cost of a manager's time spent developing trust and building confidence in
the new employee's work.

V. Lost Sales Costs

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

Thus we can say that if a person leaves a job company has to suffer losses as it involves
many costs.

14
FACTORS
The main factors of attrition in both sectors are as follows:

1) External inequity of compensation

External inequity arises when an employee realizes that some other employee from a
different organization puts in much less efforts than he does, but receives a much higher
compensation than him. This could cause an employee to feel that maybe he is not
getting compensated fairly and can cause him to quit the job

2) Work Timings

The work timings in BPO are very odd. This affects the family life of the employee.
Moreover, the male to 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.

3) 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 job 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 employees. Along with that, some employees see
no career growth in this sector, so they move on to other companies in search of
changing the sector.

4) Higher Education

This is a problem as most of the employees in this sector are pretty young and aspiring.
They join 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

15
 5) Role stagnation

Attrition rate is higher at knowledge level (middle level) in which the employee has to
do the same work again and again, which makes his work monotonous and due to lack
of responsibility and authority his growth is restricted to a particular role, so they move
to other companies where they can play different roles and handle responsibility.

6) Work life imbalance

The scientific approach towards management and organization resulted in a rigid

structural hierarchy, exhaustive specialization of jobs, deployment of unskilled
employees and an unfavorable work environment. This led to high employee turnover,
decline in productivity, absenteeism.

7) Lack of recognition

When an employee feels that he is not getting due recognition for his achievement, a
feeling of demotivation creeps into him, and this can cause him to consider leaving the
organization. Employees have an expectation that when they work well, they will get
some recognition from their managers in the form of a personal appreciation or an
award etc.

8) Under-utilization of skills

Proper utilization of skills has a tremendous impact on the satisfaction of employees. If a

work is given to an employee it must be supported by adequate powers and
responsibilities which enable them to move up the career ladder and when their skills
and potential is being overlooked they end up with leaving the job.

9) Performance assessment

An employee may feel disappointed by the performance appraisal report and feel that
he has not been appraised in an unbiased manner. It may happen that he feels that the
appraisal process itself is flawed and the appraisers are biased. This can cause the
employee to put in his papers and leave the organization.

16
 10)Internal inequity of compensation

Internal inequity occurs when the employee feels that the amount of efforts he puts in
to do his job are much more than what rewards he gets in return for them. This can
cause him to feel de-motivated and nurture feelings of dissatisfaction and eventually
resign from his post.

11)Business instability

Many a times, when the organization faces some kind of instability or uncertainty with
regards to operations, an employee might quit his job before he is asked to leave. Many
a times when employees get a whim that the organization is going to down-size or is
going to be taken over by another company, they tend to feel safer quitting the job than
worrying about whether the organization will retain them.

17
WAYS TO CONTROL ATTRITION

In an environment of rapid growth, globalization and expansion, the pressure to

attract and retain outstanding employees has become a scary reality for most
organizations. The new-age economies, with their attendant paradigm shifts in human
capital management, have placed a heavy demand on today’s organizations. Keeping in
mind that overall turnover levels in Asia are high (this includes those who are not only
moving jobs but also shifting careers), attracting and retaining employees becomes one
of the more strategic plans an organization can develop.

The Road Ahead

The road ahead for the BPO and pharmaceutical firms is very important because if they
are not able to control the attrition rate they will lose their competitive edge in the
global market. For these certain, strategies and certain improvements are needed to be
made in the processes followed in order to bring down the rate of attrition to 25%

i. Providing Something Extra

It’s always about providing something extra to your 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.

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

iii. Building Relationship

18
Relationship is something which lasts over time. So, if a company needs to hold on to its
employees, it needs to build a strong bonding with the employees. As we will see in the
case of Office-Tiger discussed below, 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.

iv. 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
employee hired needs to be brought so there is a diversified culture within the
company. Companies need to look to hire from non metro cities as the employees from
these cities 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 employees leave.

v. Consider feed back

It is important to take feedback from employees through different means and work with
the HR department to iron out differences. Feedback can be got in two ways—during
the employee’s tenure, and through exit interviews. Inputs can be secured from existing
employees through various employee relationship management tools. Exit interviews
help management learn the reasons why employees leave the company; based on their
revelations, the organization can address the problems of existing employees, thereby
curb attrition.

vi. 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.

19
The elements that are relevant to an individual’s quality of work life include the task,
the physical work environment, social environment within the organization,
administrative system and relationship between life on and off the job.

The basic objectives of a QWL program are improved working conditions for the
employee and increase organizational effectiveness.
Providing quality work life involves taking care of the following aspects:

a) Occupational health care: The safe work environment provides the basis for the
person to enjoy working. The work should not pose a health hazard for the person.
The employer and employee, aware of their risks and rights, could achieve a lot in
their mutually beneficial dialogue.

b) Suitable working time: Organizations are offering flexible work options to their
employees wherein employees enjoy flexi-timings for dedicating their efforts at
work.

c) Appropriate salary: The appropriate as well as attractive salary has always been
an important factor in retaining employees. Providing employees salary at par with
the other counterparts of above that what competitors are paying motivates them
to stick with the company for long.

QWL consists of opportunities for active involvement in group working

arrangements or problem solving that are of mutual benefit to employees or
employers, based on labor management cooperation. People also conceive of QWL
as a set of methods, such as autonomous work groups, job enrichment, and high-
involvement aimed at boosting the satisfaction and productivity of workers. It
requires employee commitment to the organization and an environment in which
this commitment can flourish.

Providing quality at work not only reduces attrition but also helps in reduced
absenteeism and improved job satisfaction. Not only does QWL contribute to a
company's ability to recruit quality people, but also it enhances a company's
competitiveness. Common beliefs support the contention that QWL will positively
nurture a more flexible, loyal, and motivated workforce, which are essential in
determining the company's competitiveness.

20
9). Transparent work culture

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

facilitate accountability, trust, communication, responsibility, pride and so on. It is
believed that in a transparent work culture employees rigorously communicate
with their peers and exchange ideas and thoughts before they are finally matured
in to full-blown concepts. It induces responsibility among employees and
accountability towards other peers, which gradually builds up trust and pride. More
importantly, transparency in work environment discourages work-politics which
often hinders company goals as employees start to advance their personal
objectives at the expense of development of the company as a single entity.

Employees comprise the most vital assets of the company. In a work place where
employees are not able to use their full potential and not heard and valued, they
are likely to leave because of stress and frustration. In a transparent environment
while employees get a sense of achievement and belongingness from a healthy
work environment, the company is benefited with a stronger, reliable work-force
harboring bright new ideas for its growth.

10). Office-Tiger: A Role Model BPO to Follow

According to Office-Tiger model it tries is to instill a sense of pride in its employees.

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 very
important. Moreover, there should be 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.

11) Communication
21
 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
.

3). FEED BACK SYSTEM

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

22
 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.

Communication mediums

 Open door policy: Organizations should support open door policies so

that the employees feel comfortable and are able to express their doubts
and feeling to their employers.

 Frequent meetings and Social gatherings

 Emails, Newsletters, Intranet and many more

So there should be effective communication across the organization and this

communication should be two-way. Communication alone can lead to
unimaginable heights of employee retention.

23
INITIATIVES TAKEN BY OTHER COMPANIES TO REDUCE ATTRITION

 ICICI OneSource has introduced a career diversification programme whereby

employees who have been with the company for more than 18 months can
switch to positions in the ICICI group after passing internal tests. Company
officials point out that the objective of this policy is to ensure that future growth
of employees is getting due consideration from the senior management. Also it
highlights that skills learnt in the BPO industry such as customer friendliness and
rapid response to customer problems have wider applications in today's
competitive markets.

 Neil soft, they have crèche facilities within the company premises, and they have
trained teachers to look after young children. Company officials highlight that
women in the age group 28-35 are increasingly selecting the BPO industry as a
preferred career choice and as these employees have young children it becomes
necessary for companies to provide adequate facilities

 Wipro's Spectra mind has introduced medical insurance for their employees and
they also provide 24-hour medical facilities for employees.

 Tran works Information Services and Zenta Technologies which are already
providing accommodation to their senior staff are contemplating this for lower
level staff. It could also include paying the entire deposit amount for flats or a
certain percentage of the registration fees. Apart from improving long-term work
prospects, HR managers are providing life enhancers in the form of community or
sporting activities in a bid to improve staff morale.

 E-Funds International the company is focusing on social and sporting events such
as organizing six-a-side soccer games and cricket matches.

 Federal Express in India believes in spotting talent early and investing in it.
Employees with leadership or management potential are identified and training
programmes are held to improve their skills. They are then assigned senior
management positions. Rewarding merit in this way improves the image of the
24
 workplace among the employees. Also in place at FedEx are online platforms for
employees to raise issues or complaints. This ensures no issue takes an
unpleasant shape or is blown out of proportion.

 Intel Technology has a direct communication programme running, wherein the

president, Intel Technology India, is meeting all the employees face to face in
small groups. The CEO also maintains accessibility through blogging. They have an
internal committee to ensure retention of highly qualified employees by offering
them alternative groups to work in. Also, consultants were hired to find jobs in
other organizations for the employees who were made to leave the company.  
 Adobe India promotes the spirit of research by giving moral and financial support
to employees who have business ideas. The company then decides whether or
not to approve the idea. If the idea is successful, the company absorbs it into its
business; else the employee goes back to the usual job. The programme is
extremely popular among the employees, and fresh ideas come in daily

 IBM executive MBA programmes and Web based learning tools help in training
the employees to be better managers. Also the company sends the senior level
employees to Wharton, Stanford and Harvard. It also has an anonymous
feedback programme (one of the first of its kind in the country), through which
the employees can give feedback freely. 

25
 INTERPRETATION AND ANALYSIS

Reason 1: Demand is more than supply: there is no dearth of graduates and plus two
pass but the supply of people with English speaking ability in this category is not
adequate.

Strategy: Constantly identify talent, recruit and train either in-house if scale of
operations permit that or through an outsourced training agency in case of smaller
operations.

Reason 2: People are joining with a short-term view and as a stepping stone to
something else.

Strategy: Create a culture and work environment that encourages people to think of a
call center job as a long-term career option. Use counseling by HR and line
management. This has to be backed up by demonstrated and perceived efforts by the
management to move up the value chain so that employees can clearly see that the
management is making efforts to create opportunities for upward mobility among
employees.

Reason 3: A lot of young people are taking up call center jobs just to earn some money
on the side and not as a serious and long-term career option.

Strategy: Create a culture and work environment that encourages people to think of a
call center job as a long-term career option. Use counseling by HR and line
management. Again this has to be backed up management efforts to move up the
knowledge continuum in terms of the processes handled.

Reason 4: Long-term or intangible or contingency benefits such as PF or medical

coverage do not have much attraction for call center employees as they want everything
in cash.

Strategy: Redesign the compensation package for call center employees and try to pay

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as much as possible in hard cash. Work out if necessary a new pay structure highly
skewed towards cash benefits.

Reason 5: Call center employees have an average age profile of 20-24 years, so they are
highly emotional, impulsive and immature when taking career decisions.

Strategy: Constant counseling.

Reason 6: low company morale.

Strategy: following steps can be taken up by the HR department in order to satisfy their
employees.

4). MOTIVATING EMPLOYEES

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 Conclusion

With the strong growth expected in the Indian economy going ahead, it is clear that
human resources will be the key competitive advantage if the country has to sustain this
robust growth. Tackling attrition is not an easy task and the strategies suggested in the
report are not exhaustive to retain the human capital of BPOs. These are just the basics
and if implemented in a proper way can give good Results, but it can only become
effective when both employee & employer understand the importance of these
precautionary measures & continuously follow them   only then this emerging &
growing sector will give its proper results.

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 Recommendations

After a detailed analysis of both the industries we find that a key step in designing an
effective retention strategy is to ensure you have the right tools to gauge employee
engagement. Investing in the measurement of employee engagement is a key element
of building the type of high-performance culture that drives business. According to the
study, regular or formal employee interaction with managers and interaction with
human resources are the two most common ways of gauging engagement levels in
organizations. We recommend the following points to be followed:

 Good organizational behavior

Recognizing the contribution of outstanding achievers also inspires others to try hard
and put in their best. A good organizational behavior also focuses on areas like training,
career development and believe in equipping workforce better on the professional
front. Good organizational behavior is instrumental in extending the tenure of
employees in the organization as it increases their self-esteem, confidence, morale and
motivation. A substantial growth of employee's self-esteem is as important as the
concept of learning in the industry. Otherwise, pharmaceutical organizations will meet a
sorry fate as far as retention policies are concerned.

 Salary structure

 Basic (54%),

 HRA (26%),

 Medical Reimbursement (8%),

 Management Supplement (12%),

 PF Contribution (actual),

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  Tiffin Allowance (Rs 25-30 per day of attendance),

 Attendance Bonus (Rs 500-1000 per month),

 Loyalty Bonus (1 months’ salary after completion of each year in the company),

 Performance Incentives (linked to specific performance criteria),

 Referral Allowance (Rs 2000-3000 per candidate referred and recruited).

 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.
Some partnership 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.

5). EEE MODEL

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 EDUCATION

 Methods to relieve stress

Stress is important from the point of view of retention and productivity.

Consequently, company can:

 Organize events such as picnics, dance parties, get-togethers, cultural

evenings, quizzes and games and outdoor sports and games.

 Appoint professional agencies to organize regular stints of aerobic

exercises and dancing sessions for employees as part of stress
management.

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 BIBLIOGRAPHY

 www.citeman.com

 www.naukrihub.com

 www.pharmainfo.net

 www.pharmaceutical-drug-manufacturer.com

 www.investopedia.com
 The Hindu 14 July 2008, Monday, business (newspaper).
 Hewitt’s attrition and retention report 2006...
 Stephens Robbins, Organizational behavior, Pearson education ( 2008) ,page 234.

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