Professional Documents
Culture Documents
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Award of degree of
OF
By
Pallavi Visen
Farzana Bano
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I take the opportunity to express my sincere thanks and gratitude to all the people who have
helped me during the preparation of this report, without their help it would have not been
possible for me to reach such a juncture where a confluence of knowledge and experience
takes place.
First I would like to extend my sincere thanks to my faculty guide, Mrs. Farzana Bano whose
guiding hand has made this project possible. She has always been available to assist me
whenever I required her help. It was her providence of sound base fundamentals that made
Last but not least I would like to thank all software companies and their officials for helping
Chapter 1. Introduction
Chapter 5. Conclusion
Chapter 6. Summary
Chapter 7. Finding
Chapter 8. Suggestion
Bibliography
INTRODUCTION
INTRODUCTION
grown at the rate of about 50% in the domestic as well as the export market for the last 5
years. The phenomenal growth of IT industry in India has been possible due to the
availability of highly competent and cost competitive IT professionals. This unique advantage
has led to Indian IT industries becoming supplies are mushrooming at a very rapid rate. Thus,
creating the demand for it professionals far exceeding the supply become all the more crucial
All the above factors have made the task of managing and retaining IT professionals in India
very complex and demanding. This has as of now given a whole new focus to HR practices in
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#&*'c for the study involved the collection of secondary data. Secondary data
was collected by browsing through relevant books magazines and journals and through
internet.
The finding and analysis drawn after the study brought out some of the best practices for
attrition, retention and recruitment of IT professional. It also gave an insight into the unique,
innovative practices followed by some of the companies for attracting, retaining and
managing performance of its knowledge workers. A part from this study also brought out the
leverage that companies have on having a documented recruitment and HR/ retention policy.
It also brought into light the attrition trend, benchmarking followed, recruitment duration and
The conclusion thus drawn was if organizations have to survive and grow in the competitive
IT industry, it has to keep pace with the trends and adopt some of the best unique innovative
practices for attracting, retaining and managing the best of its knowledge workers.
OBJECTIVE
The main objective of the research is to determine the best and unique practices for attrition
Apart from the discussed objective the project will also help us in answering few of the
1.c To find out main reasons behind employee disengagement and quitting.
2.c To fine our options alternative that can motivate them to stay for long.
3.c To find that what do the companies do to make their employees stay.
4.c To know about different practices adopted by companies to attract the talent.
The top organizations are on the top because they value their employees and key know how
to keep them glued to the organization. Employees stay and leave organizations for some
reasons. The reason may be personal or professional. These reasons should be understood by
the employer and should be taken care of. The organizations are becoming aware of these
HR professional all over the word, working is Call-Center or Contact Center or BPO industry
are breaking their heads to formulate Retention Strategies but nothing is working in their
favor. The average attrition rate in this sector is still 35-40%. No perks, no rewards« just
nothing is working. Before proceeding further, let¶s see why people are leaving? Why there is
When there are so many benefits associated with BPO industry««..when there are so many
privileges for IT employees than what makes them to changes the company/industry?? Is it
only money that matters or anything else as well?? After taking exit-interviews and analyzing
the trend I am able to list out following reasons for IT professional to changes his/her job.
c No personal life
c Physical strains
Let¶s also see as what the various benefits«. Those have been extended to people working in
this sector.
EMPLOYEES BENEFITS PROVIDED BY MANY OF THE IT COMPANIES
employees. All employees and their dependent family members are eligible.
Dependent family members include spouse, non-earning parents and children above
three months.
facility to all the employees from home till office at subsidized rate. The lunch
accommodation for all the out station employees in fact some of the BPO companies
also undertakes to pay electricity/ water bills as well as the Society charges for the
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include pool tables, chess tables and coffee bars. Companies also have well equipped
6.c
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timely and efficient payment of official expenses which the employees undertake for
purposes such as travel related expenses like Hostel bills, Air tickets etc.
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. Cellular phones and/ or Laptop are provided to the
employees on the basis of business need. The employee is responsible for the
the facility for extensive health check-ups. For employees with above 40 years of age,
9.c .cMany companies provide loan facility on threecdifferent occasions employees
are provided with financial assistance in case of a medical emergency. Employees are
also provided with financial assistance at the time of their wedding. And, the new
recruits are provided with interest free loans to assist them in their initial settlement at
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. Many BPO companies have this policy to develop the
personality and knowledge level of their employees and hence reimburse the expenses
incurred towards tuition fees, examination fees, and purchase of books subject, for
pursuing MBA, and/ or other management qualification at India¶s top most Business
Schools.
performance based incentive scheme. The parameters for calculation are process
performance i.e. speed, accuracy and productivity of each process. The pay for
12.c&6
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employees to work with flexible work schedules and set out conditions for availing
this provision. Flexible work schedule are initiated by employees and approved by
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.cIts main objective is to provide flexibility to the employees
yearly benefits and income tax payable. It is applicable of all the employees of the
Flexible benefit plan consists of: House Rent Allowance, Leave Travel Assistance
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cultural program as and when possible but most of the times, once in a quarter, in
which all the employees are given an opportunity to display their talents in dramatics,
(IT) industry has become of the most robust industries in the word. IT, more than any other
world, and therefore is a key driver of global economic growth, Economic of scale and
insatiable demand from both consumers and enterprises characterize this rapidly growing
sector.
Both software development and the hardware involved in the IT industry include everything
from computer system, to the design, implementation, study and development of IT and
management systems.
Owing to its easy accessibility and the wide range of IT products available, the demand for IT
services has increased substantially over the years. The IT sector has emerged as a major
The Indian software industry is remarkable is a number of respects. It is service rather than
product oriented; heavily export oriented, and is largely managed by professional and
entrepreneurial management. Also, domestic market experience and expertise appears to have
very little benefits for successful importees. Although the industry has grown is spectacular
fashion, sustaining this performance will pose a number of challenges. In order to counteract
the widely reported shortages of skilled software professional and the possible competition
from other low wage, human capital rich countries, Indian firms are trying to move up the
value chain by acquiring deeper knowledge of business domains and management capability,
and to reduce costs by developing superior methodology and tools. Whether firms will
succeed will depend critically on their management skills and willingness to invest along a
number of dimensions. From a social perspective, the disconnect between domestic and
export markets is a major challenge, but one that the growing diffusion of computers and the
improvement of the communication infrastructure should make easier to confront. In the end,
the greatest impact the software industry is likely to have on the Indian economy is indirect,
in its role as an exemplar of the new business organizational from and as an inspiration to
other entrepreneurs.
relative laggard among developing countries in terms of economic growth, seems to have
customized software development. India¶s success at software has led to speculation about
whether other developing countries can emulate its example, as well as weather this
The Indian software industry has attracted a disproportionate amount of interest as a source of
software. Its $4 billion software revenues in 1998-99 are just a tiny fraction of the estimated
world software market of over $300-500 billion. Most of impressive of all, the industry has
grown at over 50% per year over the last five or six years, and if current trends persist,
software exports may account for a full quarter of Indian exports within the next five years.
Software development can be broadly categorized into custom developed software and
concentrate on particular vertical market segments or domain areas, like retail, banking and
manufacturing. Software products may be targeted to a vertical segment or may cut across
segments, but rarely to a specific user. Information technology consultants, such as Anderson
Consulting, provide ³Solutions´, which may involve some combination of custom developed
software and commercial off- the- shelf software and hardware products.
The Indian software industry consists of a large and growing number of firms: Using
NASSCOM membership as a measure, the number of Indian software firms has grown from
around 430 in 1996-97 to over 620 in 1997-98. Many of these firms entered the industry
during or just before the economic liberalization, computer hardware. Tata Consultancy
Services, (TCS) was the first firm to agree to export software in return for being able to
import hardware, in 1974. TCS currently the largest Indian software firm employs around
10,000 people. Entry barriers were low because firms could start small, since initial
investments required were fairly small, little more than office space and communication
facilities. With the growing need for maintenance services many firms began by providing
these services, often by sending software programmers to the client on a temporary basis.
The domestic market has a higher proportion of revenues from the sale of software packages
and products. Whereas product accounted for nearly 40% of the domestic market 5, they
account a little fewer than 10% of exports. Over 80% of exports are software services
including custom software development, consultancy and professional services. The second
difference between the domestic and export sectors relate to the stages of software
development as described earlier. Indian firms usually provide low-level design, coding and
some types of testing services for export. For domestic clients the industry provides a wider
range of services that usually spans the entire lifecycle of software development. Some of the
domestic projects are much larger and more challenging than export projects, with the screen
based trading system for the Bombay stock Exchange and the Reservation System for
Railways, both by executed by CMC, an experienced public sector firm, being two recent
examples. Information Technology is one of the most important industries in the Indian
economy. The IT industry of India has registered huge growth in recent years. India¶s IT
Dollars in 2006-07. In the last ten years the information Technology industry in India has
The liberalization of the Indian economy in the early nineties has played a major role in the
growth of the IT industry of India. Deregulation policies adopted by the Government of India
have led to substantial domestic investment and inflow of foreign capital to this industry. In
1970, high import duties had forced IBM to leave India. However, after the early nineties,
many multinational IT companies, including IBM, have set up their operations in India.
During the ten year period 1992-2002, the Indian software industry grew at double the rate as
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A large fraction of the domestic software industry consists of resale of software packages
developed by foreign, principally US, firms, thus overstating the extent of software written
for the domestic market. On the other hand, there is a great deal of in-house software written
by users, especially large Indian firms that not being captured by these figures. A number of
Indian software firms have also developed software firms have also developed packages
aimed at the domestic market. However, with very few exceptions, these packages have not
been very successful is tempting to point to weak intellectual property rights as a culprit for
the failure of Indian firms to develop successful packages, our interviews suggest that at least
as important, if not more, has been the experience, especially design and marketing
Firms that had domestic experience with consulting do not appear to device any advantage
from it in the export market. Given the simpler and more routine tasks involved in current
software exports, the sophisticated capabilities and expertise that firms had developed from
serving domestic customers have not been of great value to them in the export market.
÷
In just about decade and a half, India has emerged as a major exporter of software service of
international economy. This remarkable feat has been accomplished through the
extraordinary growth of Indian software: between 1995 and 2000 also sales grew at a
compound rate of over 50%. Despite all the fears that market for Indian software would
surely collapse with the recession in the US software growth held on at slower rate of growth
and the industries diversified into other geographical and related markets. In the last two
years the most phenomenal boom in the growth has come from the IT enabled services
(ITES) sector which grew at 70% in 2001-2002. This sector was estimated to employ about 2,
00.000 persons at the end of March 2005. As we have seen, Indian software consists
primarily of software services. The activities carried out by most firms in India are essentially
maintenance tasks for application on legacy systems, such as IBM mainframe computers,
results from our survey, shows that application solutions are that most common type of
export followed by reengineering (also called porting) and conversion projects, such as Y2K
projects. Although Y2K projects were an important source of revenue, most of the leading
Indian software firms have limited their dependence on such projects. Table-6 shows that the
US accounts for over half of all export revenues (58% in 1997-98), compared with 21% for
Europe and 4% for Japan. Managers at most of the US firms we interviewed agreed that the
type of work outsourced was neither technologically very sophisticated nor critical to their
business. Requirement analysis and high- level design is typically done either in house or by
US based consultants.
Although competition from other countries such as Philippines and Europe cited in the press,
as Table -6 shows, most software exporters indicate that their main competitions are located
Many MNCs have set up liaison offices and subsidiaries as well. Increasingly, however, the
objective is to use India as a place for software development as well, rather than merely as a
place to sell. Some companies have established, or are in the process of doing so, software
development centers in India, and are exporting packages or components of systems to other
countries from India. The work being done at these development centers is fairly
sophisticated.
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It is widely believed that the key to the success of the Indian software exports in the supply
trained, low cost software professionals. Table-7 shows that estimated wage costs in India
were about 1/3rd to 1/5 th of the corresponding US levels for comparable work. The size of
In 1997, the total number of software professionals in India was estimated to be about
160,000 compared with 140,000 in the previous year. Most of the leading firms recruit either
engineers or students with degrees in mathematics or science. Many also have in-house
testing and training program. Responses to our questionnaire survey indicate that 80% of the
software professionals employed had engineering degrees, while 12% had diplomas from
private training institutes. India graduates about 155,000 engineers of various sorts, and
another 200,000 diploma holders per year. About 60,000 of these enter the IT sector. Despite
the apparently large stock of human capital in India, NASSCOM claims that by year 2008,
Despite paying substantially above Indian standards, virtually all firms find in difficult to
retain talented professionals. A very large fraction of the over one hundred firms I surveyed
There are a number of public sector and industry initiatives to increases the supply of
information technology and, in some cases, have started IT management programs. A number
of private sectors, for profit, institutes providing graduate level education, such as joint
venture between the Mahindra Group and British Telecom to teach methods and techniques
This phenomenal growth in IT industry in India has been possible due to availability of
highly competent and qualified and cost competitive professionals. There unique advantages
have led to Indian IT industry becoming suppliers of software to a large no. of fortune 500
companies. Moreover, the Indian IT professionals have been getting opportunities to work on
site with a no. of those to graded companies. By working with the best of the companies in
different parts of the world, Indian IT professionals have learnt a lot and in terms of
professional capabilities are on the par with IT professionals anywhere in the world. This has
created a massive demand for Indian IT professionals far exceed the demand. All this has
#c#%#!* operation for Indian IT companies. This task has as of now become a major
consulting, services and business process outsourcing organization that envisioned and
pioneered the adoption of the flexible global business practices that today enable companies
services across diverse industries, we are one of the world¶s leading Information Technology
companies Seven of the Fortune Top 10 companies are among our valued customers.
We are part of one of Asia¶s largest conglomerates ± the Tata Group- which, with its interests
companies.
HCL Enterprise is a leading Global Technology and IT enterprises that comprises two
companies listed in India ± HCL technologies & HCL info systems. The 3- decade-old
enterprise, founded in 1976, is one of India¶s original IT garage start-ups. Its range of
The HCL team comprise approximately 42,000 professionals of drivers nationalities, who
operate from 16 countries including 300 points of presence in India. HCL has global
partnerships with several leading Fortune 1000 firms, including leading IT and Technology
firms.
HCL Technology is one of India¶s leading global IT services companies, providing software
IT solutions, remote infrastructure management services and BPO. Having made a foray into
the global IT landscape in 1999 after its IPO, HCL Technologies focuses on transformational
Outsourcing, working with clients in areas that impact and re-define the core of their
business. The company leverages an extensive global offshore infrastructure and its global
Semiconductors, Telecom and MPE (Media Publishing & Entertainment). For the quarter
ending 31 st December 2006, HCL Technologies, along with its subsidiaries had revenue
(TTM) of US $ 1.155 billion (Rs. 5220 cores) and employed 38,317 professionals.
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Quark was founded in Denver, Colorado in 1981. Named after the particle proposed as the
building block for all matter, the goal was to create software that would be the platform for
publishing. Quark Xpress made an immediate impact when it was released in 1987. Desktop
publishing was in its infancy, and most publications were produced mechanically. Quark X
press introduced precision typography, layout, and color control to the desktop computer, and
systems. There are now more than three million Quark X press users worldwide. In 1988,
Quark began international operations with the establishment of offices across Europe and the
Far East. Quark maintains service, support and development offices in France, Germany,
India, Japan, Switzerland, the United Kingdom and the United States, Customers in more
than 100 countries worldwide rely on Quark product to create, design and manage their
documents ± from newspapers, magazines and books to catalogs, brochures, packaging and
online material.
Today, Quark maintains its industry leadership with a product line that ties together
traditional print publishing with enterprise content management, personalization, and tools
suite of enterprise publishing software ± Quark Publishing System, Quark Content manager,
and Quark Dynamic Document Server ± Quark is paving the way for custom publishing in a
Personalization and content management software let publishing efficiently create content
once and deliver it anywhere, now. Quark is headquartered in Denver, Colorado. The
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NIIT, the global IT learning Solutions Corporation, is known for its pioneering work in the
field of IT education and training. Our strong research orientation has helped us continuously
innovate in the areas of instructional design methodologies and curricula development that is
cutting edge. NIIT¶s vast education delivery network spread over 30 countries in the
America, Europe, Asia, and Middle East Africa and Australia/ Oceania, blends classroom and
individuals and enterprises offerings training that is the varied needs of audiences with
diverse backgrounds.
RESEARCH
METHODOLOGY
RESEARCH METHDOLOGY
can be defined as the search for knowledge or any systematic investigation to
establish facts. The primary purpose for applied research as opposed to basic research is
discovering, interpreting and the development of methods and systems for the advancement
of human knowledge on a wide variety of scientific matters of our world and the universe.
Research can use the scientific method, but need not do so.
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!$!c c relies on the application of the scientific method, a harnessing of
curiosity. This research provides scientific information and theories for the explanation of the
nature and the properties of the world around us. It makes practical applications possible,
groups, including many companies, Scientific research can be subdivided into different
3!
!&ccis embodied in the scientific method.
The goal of the research process is to produce new knowledge, which takes three main forms
c Empirical research, which tests the feasibility of a solution using empirical evidence \
the research room at the New York Public Library, an example of secondary research
in progress.
Research can also fall into two distinct types:
c Primary research
c Secondary research
In social sciences and later in other disciplines, the following two research methods can be
applied, depending on the properties of the subject matter and on the objective of research:
c Qualitative research
c Quantitative research
#&*'ccan be:
1.c ³The analysis of the principals of methods, rules and postulates employed by a
discipline ³the systematic study of methods that are, can be or have been applied
within a discipline´.
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discipline on field of inquiry methodology may refer to nothing more than a simple set of
methods or procedures, or it may refer to the rationale and the philosophical assumptions that
underline a particular study relative to the scientific method. For example, Scholarly literature
Collect the data through the secondary research. Secondary research through magazines,
Secondary research occurs when a project requires a summary or collection of existing data.
As opposed to data collected directly from respondents or ³research subjects´ for the express
already exist.
These secondary sources could include previous research reports, newspaper, magazine and
journal content and government and NGO statistics, Sometimes secondary research is
required in the preliminary stages of research to determine what is known and what new data
is required, or to inform research design. At other times, it may make be the only research
technique used.
A key performance area in secondary research is the full citation of original sources, usually
Secondary research is research already published, and is the cheapest from of research
because the data already exists for your acquisition. Secondary research can be split into
Internally an organizational has access to a wealth of information, which can be a useful tool
for decision making for managers. Information available may assist the organization in
discovering why sales are decreasing why customers are not satisfied, customer usage rate
Clearly as this information can be generated internally the only cost implication will be of
Industry magazines
Chamber of commerce
Government statistics.
Internet.
Statistics agencies
Trade associations
Annual reports
Academic publications
Library source
The two major advantages of using secondary data in market research are time and cost
savings.
>c The secondary research process can be completed rapidly ± generally in 2 to 3 week.
analysis.
>c When secondary data is available, the researcher need only locate the source of the
secondary research data gathering does not require the use of expensive, specialized,
>c Secondary research expenses are incurred by the originator of the information.
It is easy to find and collect secondary data, however, you need to be aware of the limitations
the data may have and the problems that could arise if these limitations are ignored.
1.c Secondary data can be general and vague and may not really help companies with
decision making.
2.c The information and data may not be accurate. The source of the data must always be
checked.
4.c The sample used to generate the secondary data maybe small.
EMPLOYEES ATTRITION
&
RETENTION
c
Talking about the problem of attrition in India, Pramod Bhasin, CEO, Genpact said ³Attrition
is like a disease in the country, where the employees are always leaving for something better
Today in the voice segment for BPOs we are seeing attrition rate as high as 30 percent.´
In the 1970 & early µ90s¶, people still talked about ³lifetime employment´ and a career within
a company. Starting in late 90s, the pendulum started swinging. The unspoken employee &
employer contract was broken, as companies across industries restricted operations and
reduced headcount. People then started talking about ³Owning their own careers´, collecting
experiences and skills in various jobs at various companies to enhance their ongoing
employability.
By the year 2000, due to a growing imbalance between an expanding demand or talent and
limited supply, we reached other extreme in the pendulum¶s swing. Employees became ³free
agents´, more concerned, some would argue, with their own employability and personal gain
IT is well known the world over that India¶s main competitive advantage is software and
services are its abundant, high quality and cost effective pool of skilled knowledge workers.
Today, India is a magnet for software client because of its vast resource of skilled manpower.
The most immediate concern facing the industry is the increasing levels of attrition. Other
than the natural rate of the attrition, ³poaching of employees´, ³burn out ´ and high stress
environments are causing an increasing churn rate. Managing attrition is becoming
increasingly important, not only because knowledge professionals are the lifeline of a service
oriented industry, but also staffing costs are one of the largest expenses regularly charged
To the budget of a company in the IT/ITES sector. When one counts salaries, benefits,
bonuses, training and other personal costs, companies invest a great deal of resource in their
employee.
Thus, attrition becomes a two-fold issue, one that¶s cost related and the second, retaining
Now the solution lies with another shift. The pendulum is to make settle into a new
equilibrium as companies and the people who for them enter into a new partnership based on
mutual benefits. As companies recognize the role & importance of their people assets, they
are getting creative about how they attract and retain those assets.
In this cut throat completion it¶s the HR greatest challenge for retaining employees. Attrition
is one time considered to be a business cost but it¶s actually a loss when it comes in terms of
revenue.
New motivational theories need to be established on the part of the Retention Strategy. Apart
from psychological & safety needs, the generation X and Y needs more emphasis on other
needs. More organization HR creates portraits their organization as heaven to the new joiners
and when it comes in front it is not less than hell. Motivational training is still to evolve in
this industry. Today¶s outlook of an employee towards the organization is ³If you are looking
For all this a much more work to done by all HR managers. As the challenges are growing
the treats of loosing business is increasing. And without proper, effective and efficient
workforce no organization can achieves that. Needs innovative approaches and thinking
³If you are going to have ideas ahead of the times (i.e., creative), you will have to get used to
living with the fact that most people are going to believe you are in the wrong´ Bruce Lloyd.
The cost advantage in India is getting the challenge due to this cost attrition. Thus managing
attrition is not just a nice thing to do in Indian call centre it¶s a route to their SURVIVAL.
HR is hence the mirror of the company¶s both industry & financial/ business prospective.
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Attrition = 100* (total resigns per month)/ (Total no+ New Joiners- Total Resigns) It is
difficult to control the attrition rate because this depends on many factors. If one employee
gets job elsewhere with high pay the present employer will not agree to this. There is a
³mindset´ that will be prevailing against each employee by the management and they will not
budge and blue eyed boys alone will be rewarded. Not all will have the red carpet treatment.
Hence people need to quit. Some are always considered for US and UK travel where others
are neglected and not considered. Thus the employee feels frustrated and leaves.
The management should be open and promote open culture in letter and sprit. It is not just
HR department but they should practice in it day to day and ensure that cause of attrition is
addressed.
Companies don¶t care and they always want to have their say in any aspect without
considering the employee¶s views and this definitely increase the attrition. Senior
management should bring in HR professionals who are seasoned and not with mere MBA
degree since people should understand the perceptions of employees in-depth before decision
making. This onus is definitely on the senior management and unless the CEO brings proper
HR person this problem is like a virus and bound to continue and spread.
Reminder to CEO to have a good HR team and have a pragmatic approach the case analyzes
the management of human resource in the IT industry with a special emphasis on the factors
responsible for the high rate of employee turnover in the industry. The IT industry, being
knowledge ±based sector, requires a workforce that is highly competent. Also, the demanding
nature of work in the industry requires effective strategies to retain its workforce. With
growing demand for Indian IT professionals overseas and with multinational IT companies
establishing their offices in India, retention becomes very difficult. To handle the challenge,
companies have started using a variety of retention tools such as ESOPs and RSUs. They
have also taken other initiative like improving the work ±life balance of their employees,
retain their employees. The case examines the retention tools used by Indian IT companies to
combat attrition. It ends with the discussion on the challenges the Indian IT industry faces in
the future in view of the growing need to retain its talent pool.
c
c
Strategic Business Futurists who speak on workforce and workplace trends, The Herman
Group focuses on issues related to employee Retention and Future Trends. Founded in 1980,
These efforts range from re ±recruiting interviews to family activities and individualized
compensation packages. People need to feel wanted, valued, appreciated. They want to do
meaningful work and have some say in how their jobs are designed, managed and measured.
Today¶s employees want to be stable, but are often ³chased out´ by those who are more
concerned with power and position than with caring for people.
Today¶s labor force is different. Supervisors must take responsibility for their own employee
repetition. If they don¶t they could be left without enough good employees. A wise employer
will learn how to attract and keep good employees, because in the long run, this workforce
people. The old style of ³my ± way ± or- the - highway´ stale of management is a thing of the
past. Most new supervisors need training understand what it really takes to retain employees.
Employee retention involves being sensitive to people¶s needs and demonstrating the various
strategies in the five families detailed in Roger Herman¶s classic book on employee retention,
1.c Environmental
2.c Relationship
3.c Support
4.c Growth
5.c Compensation
Employee retention takes effort, energy and resources«and the results are worth it.
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As we have seen, while the annual turnover rate can be a useful statistic it doesn¶t tell you
that much. Combining it with the retention rate gives you more insight into what is really
happening in the organization. Retention rate is always based on a fixed period of time. For
instance, a one year retention rate calculates the percentage of individuals who are still with
One year retention rate = Number of specific people hired in previous year (x - 1) still
employed in current year (x) + people hired in previous year (x -1)* 100
For example:
Based on this information, we see that the organization lost four people the first year, two
more the second year, and two more the third year. However, even though the organization
lost half as many people in year three as it did in year one, the three ± year retention rate is
This apparent contradiction points out an important characteristic of retention rates. The
retention rate for a particular time period (for example, three years) can never be higher than
it was the previous year. It could be the if no one same if no one left between years two and
three, but it cannot be higher. In other words, organizations can¶t¶s make up for what¶s
initially lost; it will always trend down. Therefore a low one ±year retention rate creates
Retaining employees and developing a stable work force involves a two ± step process ±
Understanding why employees leave in the first place, and developing and implementing
Overcoming these reasons requires the implementation of five distinct categories of retention
strategies.
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strategies create and maintain a workplace that attracts retains and
1.c
Strategies focus on how you treat the people and how they treat each
other.
Strategies involve givingpeople the tools, equipment and information to get
Strategies deal with personal and professional growth.
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Strategies cover the board spectrum of total compensation, not just base
Selecting and retaining top notch staff is the key for business success. Talented people
continue to develop skills and increase their value to organization and to the customers are
the company¶s most important resource. How do you select and retain talented people? How
do you create an environment in which talented people continue to grow and contribute? The
primary elements of any plan to improve the quality of the staff you employ include
improving the quality of new hires, identifying and retaining superior employees and
developing employees (especially those with high potential for growth). A performance
development approach to providing job expectations and feedback will assist with this
process. At the same time you need to take hard look at underperforming staff members. Ask
whether each individual is in the wrong job. Determine whether you have provided specific
and clear requirements so the individual knows what you expect from him. Make sure you
have provided feedback against measurable goals and objectives so the person knows he is
not meeting expectation. Decide if a performance improvement plan will help the individual
contribute within the organization. If you have done your part to create an environment in
which an individual can succeed ± and the person is not succeeding - let the person go. Your
organization will be better off for his absence and the individual will have opportunity to
competency screening. The right person, in the right seat, on the right bus is
8. Demonstrate respect for employees at all times. Listen to them deeply; use
People want to enjoy their work. Make work fun. Engage and employ the
10. Enable employees to balance work and life. Allow flexible starting times, core
11. Involve employees in decisions that affect their jobs and the overall direction
13. Base the upside of bonus potential on the success of both the employee and the
14. Recognize and celebrate success. Mark their passage as important goals are
achieved.
15. Staff adequately so overtime is minimized for those who don¶t want it and
16. Nature and celebrate organization traditions. Have a costume party every
17. Provide opportunities within the company for cross- training and career
progression. People like to know that they have room for career movement.
18. Provide the opportunities for career and personal growth through training and
19. Communicate goals, role and responsibilities so people know what is expected
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Every day, new hires enter organizations with a wide range of illusions and unrealistic
expectations. Some stay and adapt, some disengage and stay and many disengage and leave.
At the root of their disenchantment is an expectation that was not met. In some cases, the
employee¶s expectations may have been unrealistic and in some cases, they were not. When
all is said and done, it doesn¶t matter. Quite simply, unmet and unrealistic expectations both
cost a business untold millions of dollars. You, may never see an exit survey with a checklist
of reasons for leaving that includes the choice ³unmet expectations´ but it many well be the
number one reason employees leave. The more clearly an employee understands his or her
own expectations, the higher the probability of a match in expectations. Many new
employees fresh out of collage, however, are only dimly aware of their needs and desires.
That problem is compounded when the organization is also not clear about what it expects,
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Research over the last 25 years has shown that 80 percent of workers feel they are not using
their strengths on a daily basis. When you consider it closely, though it¶s almost supervising
that 20 percent of the working population does get to use their strengths daily. The key
missing ingredient in so many companies is management¶s lack of passion for getting the
right people in the right jobs. Why is this so? While many obstacles come to mind, the
greatest of them all is a basic lack of understanding about the nature of human talent. Some
managers believe employees are interchangeable parts to be moved into whatever slots most
need to be filled. Others believe skills and knowledge are more important than talent. Those
two Misconceptions often lead to short ±term solutions that ignore the long ± term success
that can result from focusing on properly matching employee talent with appropriate jobs.
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The answers to these questions constitute much of what gives meaning to an employee¶s
efforts. Companies need to give feedback and coaching to make sure that employee¶ efforts
stay aligned with organizational goals and the expectationals of direct supervisors. This
Everyone wants to feel important, yet many organizations manage to make their people feel
quite the opposite. It could be seen as a lack of simple appreciation, or a greater focus put on
making numbers and not valuing employees might feel like a mere number ± that no one in
scenarios, with a good faith effort and the right approach to coaching employees can be re-
engaged
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c;: Get the employees agreement that a problem exists.
c=: Mutually discuss alternative solutions.
c>: Mutually agree on action to be taken to solve the problem.
c?: Follow up to measure results
c @: Reinforce any achievement when it occurs. This process is focused on producing
positive behavior going forward, not for assigning blame or motives for past behavior.
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So much has changed in the world wide business climate and in the way business now
operate that the impact of those changes on the careers of individuals working in
between employee and employer and it has also heightened the level of stress over job
security. Focusing on short term bottom line results has created pressure on management to
reduce costs and push workers to do more with less. Productivity gains have come at cost ± in
reduced job satisfaction stalled job creation and stagnant careers contract has not materialized
in most organizations particularly ones that value control over autonomy and self ± direction.
Most employers of choice, however, communicate clearly that employees must take the
initiative in their own career development. They also give their people the tools and training
needed to accomplish this, enabling them to be the best they possibly can be.
Above them listens to them or even knows they exist, much less work there. Managers who
do show some appreciation might not show it in a timely manner or the rewards given might
have little if anything to do with what the employees truly find valuable.
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It is sobering to consider all the things there are to be stressed about in the workplace
harassment, prejudice and so many others. Workers get stressed when they must sacrifice
family time to work extra hours, when they must deal with the insensitivity of some co ±
workers and when they really need a personal day but cannot take one because their company
does not offer them. These are the people who consistently work late, work through lunch,
work through sickness, take work home and express frustration in myriad unhealthy ways,
Company leaders must determine whether their organization¶s culture is unhealthy, or even
toxic. When you force workers into choosing between having a life and a career, your
organization has a toxic culture. Workers are not merely resources: They are people. You
should be empowering them, not attempting to control them, Address these things, this
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Senior leaders are challenged with creating a culture of trust and integrity that strengthens the
bonds of employee engagement. While this challenge is shared by all managers and
employees, it is incumbent on take the opportunity to engage and inspire your people by
enacting policies that show you trust them. If you have an authoritarian, micromanaging
style, get rid of it. When you give that kind of power away, you increase the collective power
of the organization to innovate and meet new challenges thus enhancing your own power in
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1.c Calculate the cost of person who fills in while the position is vacant. Calculate the
benefits cost for each week the position is vacant, even if there are people performing
the work. Calculate the lost productivity at 100% if the position is completely vacant
2.c Calculate the cost of conducting an exit interview to include the time of the person
conducting the interview, the time of the person leaving the administrative costs of
3.c Calculate the cost of manager who has to understand what work remains and how to
4.c Calculate the cost of training your company has invested in this employee who is
leaving.
5.c Calculate the impact on departmental productivity because the person is leaving. Who
will pick up the work whose work will suffer what departmental deadlines will not be
leaving is taking with them out of your door, Use a formula of 50% of the person¶s
annual salary for one year of service, increasing each year of service by 10%.
7.c Subtract the cost of the person who is leaving for the amount of time the position is
vacant.
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1.c The cost of advertisements, agency costs; employee referral costs; internet posting
costs.
2.c The cost of the internet recruiter¶s time to understand the position requirements,
checks, make the employment offer and notify unsuccessful candidates. This can
3.c Calculate the cost of the various candidate pre-employment tests to help assess a
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1.c Calculate the cost of orientation in terns of the new person¶s salary and the cost of the
person who conducts the orientation. Also include the cost of orientation materials.
2.c Calculate 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
3.c Calculate the cost of the person who conducts the training.
4.c Calculate the cost of various training materials needed including company or product
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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.
25% productivity level for the first 2 -4 weeks. The cost therefore is 75% of the new
2.c During weeks 5 -12 the employee in contributing at 50% productivity level. The cost
3.c During weeks 13- 20 the employee is contributing at 75% productivity level. The cost
4.c Calculate the cost of mistake the new employee makes during this elongated
indoctrination.
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1.c Calculate 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
2.c Calculate the cost of a manager¶s time spent developing trust and building confidence
1.c Calculate the revenue per employee by dividing total company revenue by the average
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
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There are three main components associated with the cost of turnover.
Oc Staffing: In addition to the cost of recruiting and hiring the person initially the
Oc Vacancy: The period of time where that person isn¶t working in the company results
Oc Training: Employees aren¶t 100 percent productive from the moment they start. So
it¶s necessary to invest time and resources for training orientation and development.
It¶s important to realize how much money is associated with these factors. And because these
isn¶t much that can be done to reduce the costs associated with these factors dramatically, the
Pure replacement cost estimates fail to cover the total impact of turnover on an organization.
For instance, factors such as lower morale, errors made by overburdened workers and the
inefficiencies of both the departing and replacement employees are hard to quantify and need
to be added into the total cost of turnover. High turnover can also spill over into other areas,
such as safety. In the manufacturing industry, high turnover often results in employees
without sufficient experience being used to train others. This may have an impact not only on
the quality of work but also on accident rates due to insufficient training and experience. This
inadequate training then snowballs, affecting all of those trained down the line.
Once you take all of these factors into consideration, the true cost of turnover is much larger
than the simple replacement cost described earlier. The Saratoga Institute, for instance,
estimates that when all of the direct and indirect costs are taken into consideration the
Calculating turnover rates is straight forward. However, looking at turnover by itself does not
provide the most meaningful information. The following describes some additional measures
that add insight into what is really going on with regard to turnover and retention of
employees.
Turnover rate = Number of terminations per year + average active employees same year* 100
For example an organization that currently employees 100 employees hire 10 new employees
Four employees leave during the year, regardless of when they were hired. The turnover rate
While turnover rate is useful index to compare to an industry benchmark, it fails to capture a
lot of information about the health of an organization. If in the example above the four people
who left the organization had been working there for 10 years, it¶s quite different than if the
Perhaps a more telling calculation is the new hire turnover rate. This index focuses on how
many people were hired in one year and how many of those people left in subsequent year.
When employee leave within a short period of being hired, organization don¶t have enough
time to recoup their investment. The employees didn¶t provide enough output to make up for
the investment the organization put into them in terms of staffing, compensation and training.
A high new hire turnover rate is usually rated to issues with the selection process, such as
choosing candidates that aren¶t qualified or are a poor cultural or motivational fit. New hire
turnover rate = number of terminations within first year + Number of new hires* 100
For example, an organization that currently employs 100 employees hires 10 employees
during the year. Four employees leave during the year, with one of them being one of the 10
new hires. The turnover rate for the organization would be the same as before: (4 + 110) =3.6
percent. However, the new hire turnover rate would be (1 + 10) * 100 =10 percent.
In this example, we can say that new hire turnover rate is almost three times as high as the
standard turnover rate. While the sample size is very small, it may indicate problems in the
&(!c.c It is clear that there are massive costs associated with attrition or turnover and
while some of these are not visible to the management reporting or budget system, they are
none the less real. The µrule of thumb¶ appears to be very inaccurate indeed and, while it
depends upon the category of staff, it is probably better to estimate around 80% of salary as a
What does this mean? Well it means that if a company has 100 people doing a certain job
paid 25,000 and that turnover or attrition is running at 10% the cost of attrition is:
. A replacement cost of 80% of salary of 25,000 means the cost of each replacement is
20,000.
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Up to this point we have looked at measure of how many people are leaving (turnover), how
many are leaving within the first 12 months (new hire turnover), and how long people are
staying (retention rates). It¶s also important to look at who is leaving. If the majority of
turnover is among the better performing employees, that is a problem that needs to be
addressed quickly. If on the other hand, it¶s mostly the lower performers who are leaving, that
may not necessarily be a serious problem. In fact, according to author B.D. Smart, during the
1990s, a popular practice in many organizations was ³top grading´ a process by which they
routinely tried to eliminate the lowest 10 percent of performers to improve the quality of the
organization as a whole.
Focusing on the quality of those that are leaving vs simply the frequency with which they
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!cC (Number of poor performers who leave ± Number of good performers
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The ratio is designed such that if the ratio is positive (organization A), then more poor
performers are leaving; if the ratio is negative (Organization B), then more good performers
are leaving; and if the ratio is zero, them an equal number of good and poor performers are
leaving.
As a general rule, if the ratio is positive, then turnover is not a problem in the organization. In
fact to the extent that the organization is able to replace the poor ± performing employees
with higher ±performing employees, it may be positive thing for the organization. On the
other hand, negative ratios; indicate potentially more serious problems that might be related
to systemic, cultural problems in the organization. Simply put, a negative ratio means that
better ±performing employees are leaving while poorer performers are staying.
Turnover costs for many organizations are very high and can significantly affect the financial
new people. Much time and expense go into this process. Indirect costs include such things as
increased workloads and overtime expenses for coworkers, as well as reduced productivity
associated with low employee morale. Estimated costs vary from organization to
organization, some as low as a few hundred dollars to as high as four times the annual salary
of the employee.
It has been estimated that, on average, it costs a company one ± third of new hire¶s annual
salary to replace an employee. Therefore, at minimum wage, the cost to replace an employee
is estimated at $ 3,700.
As we have seen, while the annual turnover rate can be a useful statistic, it doesn¶t tell you
that much. Combining it with the retention rate gives you more insight into what is really
happening in the organization. Retention rate always based on fixed period of time. For
instance , a one year retention rate calculated the percentage of individuals who are still with
One year retention rate = Number of specific people hired in previous year (x -1) still
employed in current year (x) + people hired in previous year (x 1)* 100
For example:
Based on this information, we see that the organization lost four people the first year, two
more the second year and two more the third year. However, even though the organization
lost half as many people in year three as it did in year one, the three ±year retention rate is
This apparent contradiction points out an important characteristic of retention rates. The
retention rate for a particular time period (for example, three years) can never be higher than
it was previous year. It could be the same if no one left between years two and three, but it
cannot be higher. In other words, organization can¶t make up for what¶s initially lost; it will
always trend down. Therefore a low one ± year retention rate creates problems that last well
There are many potential causes for turnover. Area economic conditions and labor market
conditions affect general turnover rates and can be very difficult manage. However, certain
causes associated with turnover in any specific job or organization can be managed. These
include such things as non- competitive compensation, high stress, working conditions,
monotony, poor supervision, poor fit between the employee and the job, inadequate training
There are a number of factors that contribute to employee turnover. We explore some of these
1.c c%'c8 in exit interviews one of the most common reasons given for leaving
is availability of higher paying jobs. Some minimum wage workers report leaving one
job for another that pays only 50 cents an hour more. Obviously, in a better economy
the availability of alternative jobs plays a role in turnover, but this tends to be
difficulty will also raise the specter of impending layoffs; workers believe that it is
is sufficient to note here that the reward system, the strength of leadership, the ability
of the organizations to elicit a sense of commitment on the part of workers and its
development of sense of shared goals among other factors, will influence such indices
5.c &!
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!c8cAnother factor is the unrealistic expectations and general
lack of knowledge that many job applicants has about the job at the time that they
receive an offer. When these unrealistic expectations are not realized the worker
But to use lifestyle factors (e.g. smoking) or past employment history (e.g. many job
changes) as an explicit basis for screening applicants, it is important for legality and
7.c c c 8c In addition to the factors listed above, there are also specific to the
individual that can influence turnover rates. These include both personal and trait
based factors. Personal factors include things such as changes in family situation, a
desire to learn a new skill or trade, or an unsolicited job offer. In addition to these
personal factors, there are also traits ± based or personality features that are associated
with turnover. These traits are some of the same characteristics that predict job
These traits can be measured and used in employee screening to identify showing
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c ;.c Determine what motivates your individual employees. For most employees
money is not the key issue; relationship, fulfillment and recognition are.c
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c =.c Notice how much recognition an employee needs. Some employees can go
years without praise, whereas others will leave after six months.c
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c >.c Understand that many employees are motivated by their social network at
work. Encourage activities that make your employees feel like valued members of a
team.c
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c ?.c Realize that incentives don¶t have to be huge. A surprise gift certificate for
the local ice cream parlor in the weekly paycheck will generate positive feeling.c
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c @.c Make benefits more accessible. If your company reimburses tuition for
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c A.c Consider telecommunicating job sharing and other flexible working
arrangements.c
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c:.cOffer profit sharing incentives to encourage longevity.c
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cD.cCreate clear career paths at the company.c
For a company to develop a retention strategy, several steps must be taken. First they must
assess the current situation and measure the turnover rate in their company. Turnover is
calculated simply by dividing the number of annual terminations by the average number of
some expected turnover and a changing workforce culture. Employers must recognize that
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company can make when looking at long ±term growth. Hiring the people that are a good
³fit´ with the culture of the organization ± meaning that their values, principles and clearly
match those of the company ± and then training as necessary will go a long way toward
solicit input and involvement from all employees and maintain a true ³open-door´ policy that
avoids closed ± door meeting. Employees are given an opportunity for advancement and are
not micromanaged. Intrinsic rewards are critical. Employees must believe they have a voice
and are recognized for their contribution. Remember that ³trust´ and ³loyalty´ is a two ± way
street. Does your company¶s culture encourage open communication and employee input?
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variable pay scales, but long ±term incentive compensation, bonus and gain ± sharing plans
benefits plan to address the health and welfare issues of the employees and non ± cash
rewards and perks as well. To be competitive in today¶s labor market, most companies find it
necessary and leave policies and investment and retirement plans. But what more could be
done that would be cost effective toward creating an employee ± oriented work environment?
Creativity in compensation and benefits can make quite a difference to the welfare of the
employee. A company should asses overall employee needs when addressing retention issues.
If employee welfare is a genuine concern what about child care? How much employee
absenteeism is attributable to not having a dependable babysitter? Although the costs and
liabilities involved in providing onsite day care can be prohibitive, perhaps a company could
subsidize childcare is some manner. Sometimes, just negotiating rates for your employees
with area childcare providers could be very helpful. Maybe some kind of a company match
would be possible. Household chore assistance is another possibility that is being used by
some companies.
Consider other options ± such as alternative work schedules or flexi time, or perhaps
preventative health care and wellnessc programs such as fitness center memberships ± as
possible cost effective benefits. Don¶t forget that perks or non ±cash rewards to recognize
exceptional performance can be critical. Service recognition, event tickets, trips and public
recognition can send strong messages to the public regarding company culture and values.
Simply examine the issue and needs of your employees and try to develop creative programs
Although many costs associated with these suggestions may seem prohibitive, as well they
may be the company must evaluate the costs of current turnover, analyze the reasons for the
individual organization and develop strategies that in the long term are less costly than
Just a word of caution: Be fair and consistent in establishing compensation. Promote from
within if possible. Attempt to avoid bringing new people on board at a higher rate than
current employees. Policies to prevent discussion of wages simply do not work. Furthermore,
Although many companies use contract employees to address flections in business, working
side by side with someone who is making twice the rate of pay without any commitment or
loyalty to the company can be a real morale killer. Avoid this if at all possible!
If a company follows these steps and shows a genuine concern for the well being of your
employees, you may not have to pay the highest wages n town to have the lowest employee
turnover.
The following seven steps suggest the major areas of intervention through which turnover can
be further reduced.
Let¶s now touch briefly on each area in order to understand the theory and practical aspect
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The fact that large number of employees turnover in the first few months of
employment suggest that this is a critical time for helping people to adjust to their
employment. Realistic job preview can help ensure that employees walk into their
jobs with their eyes wide open. Orientation program should not be a one day event,
they should at least span for first 2 months employment. A good orientation program
providing just ± in time information and training the training efforts will yield better
results.
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development and which in turn help them in retaining their key employees. In fact, the
top rated companies have a lot in common. They spend considerable time in training
their people, they have low turnover rates and they have an impressive number of
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coaching and positive feedback and interacting in fair and continuous manner are all
things that good leaders do to help new employees. To impact turnover, make sure
Communication can be greatly help in reducing the employee turnover. Following are
1.c Hold open forums: Set up monthly or at least quarterly forums in which
employees can talk with top management and decision makers on issues important
to them.
2.c Improve Credibility: Do what you say what are going to do or offer a good reason
bad.
Money can talk volumes, but the creative use of money is the key to retention.
Various kinds of contingent bonus strategies can be used be used to help with
retention. Deferred bonuses are paid out incrementally with a significant back ± end
payoff for a combination of performance and retention. This type of a bonus system
can help an employee reach high levels of income, provided they consistently
demonstrate superior levels of performance. A third option besides the use of bonus is
to regularly make salary adjustments with the star performers or the individuals with
key skill sets so that they are not tempted to go elsewhere for bigger paybacks.
Increasing the job satisfaction of the high turnover jobs can reduce turnover.For
individual who have a need for groth,the following job design strategies are associated
2.c Provide greater ownership and dicision making on how the job is performed and hold
With today¶s baby boomer generation beginning to retire from the labor market, many
culture is changing as well. It is now relatively common to change jobs every few
years, rather than grow with one company throughout the employment life as was
Simply improving the selection process is not a cure-all for reducing turnover.
Turnover is a process, not an event that is related to factors such as role ambiguity,
potential employees into a bad environment may actually increase turnover. At the
same time, there are tools that can be used in the hiring process that can significantly
improve overall turnover, new hire turnover and retention rates. The following
!4c $
c Certain applicants have a higher propensity for turnover, and those
characteristics can often be identified prior to hire. Research has shown that the way
increased like hood for turnover. Research has cited, for examples that new hires are less
likely to leave the company if they are referred by a current employee; have friend and
relative working in the organization and have longer tenure in their previous job. These
factors make intuitive sense since people with more contact in the organization are apt to
understand better the nature of the job and the organization. It may act as a vaccination effect
that reduces job are likely to repeat their past behavior and are therefore more prone to
An organization can dramatically reduce the turnover rate by including a turnover risk index
in the hiring process to filter out applicants with higher turnover risks. As an example, figure
2 shows a simple and straight forward point system. A candidate with six years of
manufacturing experience who felt that three unexcused absences per year was fine, had no
significant gaps in employment history in the last five years and had only one job in the past
five years would get three points (1+0+1+1=3) on the sample turnover risk index. The
candidate must then meet a present cutoff score to move on or be screened out.
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c Another approach to reducing turnover is to target the compatibility or
motivational fit between the individual and the work environment. Organizations have
learned that finding qualified individuals may not be enough. Having both able and motivated
employees is the only way to ensure a productive and stable work force. The focus, therefore,
must go beyond the question of if a candidate can do the job well to if the candidate can do
characterized as person- job fit, such as the fit between the individual¶s preferences for the
type of work and the actual job requirements, or person organization fit. Which is the
congruence between the person¶s preferences and the organizational culture? As one expect,
research consistently shows that fit does matter. Higher levels of motivational fit are
associated with greater job satisfaction organizational commitment, and lower turnover.
There is large and growing body of evidence showing that job fit, when evaluated objectively
in the hiring process, can predict future turnover behavior and job performance. For instance,
in the same large manufacturing company, we also found that level of job fit was related to
both voluntary and involuntary turnover. Essentially, employees with a higher fit were less
likely to be terminated or leave the company. In fact, candidates who passed the fit index
were less likely to stay with the job than candidates who didn¶t. Moreover, the combination
of motivational fit and turnover risk indices as pre-screening tools led to a 63 percent
reduction in the overall turnover. Considering the high cost of turnover a reduction of 50
percent to 60 percent in turnover within the first two to three years is a huge cost savings. The
costs associated with designing and implementing such up ± front screening were a fraction
of the long term cost saving and productivity improvements. The evidence is clear that
putting in the effort during the hiring process pays significant dividends in the future.
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To make the most effective use of these selection tools in reducing turnover, organizations
turnover risk as early in the selection process as possible. Often, this is the first part of the
hiring process and can be conducted over the phone or the internet and second automatically.
* Before spending time on an interview, organizations could follow up the initial screening
with a validated assessment to measure the ³can- do´ aspects. This may include web ± based
interview conduct by a trained interviewer could assist in selecting the best qualified
candidates who have the right kind of key competencies for success and motivational fit to
As a whole, this process should ensure fairness, accuracy and effective resource utilization. In
addition, by following such and time spent on interviewing unqualified candidates, training
people who are not likely to stay with the organization, and disciplining and ultimately
releasing employees who do not meet organizational standards of performance. The bottom
line: Assessing candidates for job fit and skill fit is your best defense against costly turnover
supervisors and managers have proper skills, training and understanding of turnover cause
and cost. Effective orientation and training processes are crucial to keeping talent. If those
processes aren¶t exceptional, new hires will frequently leave within a short period of time for
1.c Generally employees do not take a quick a decision of quitting their job, first they
weigh all their alternatives and at the same time they also give their organization
chance to make them stay in the organization and if the organization fail to do that
2.c The working environment plays a very critical role in making an employee leave their
job.
3.c Performance appraisals are not given at regular intervals in order to keep employees
4.c The companies are required to be more vocal and communicative in showing the
5.c In order to attract the best talent the companies are required to provide them better job
6.c It is the responsibility of HR manager to keep a check on the morale in the employees
important in developed as well as developing economies. In India the IT industry has grown
at the rate of about 50% in the domestic as well as the export market for the last 5 years. The
phenomenal growth of IT industry in India has been possible due to the availability of highly
competent and cost competitive IT professionals. This unique advantage has led to Indian IT
country IT companies are mushrooming at a very rapid rate. Thus, creating the demand for IT
professionals far exceeding the supply become all the more crucial and difficult task.
All the above factors have made the task of managing and retaining IT professionals in India
very complex and demanding. This has as on now given a whole new focus to HR practices
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#&*'c for the study involved the collection of both primary and secondary data.
Secondary data was collected by browsing through relevant books, magazines and journals
and through internet. The primary data was collected by administrating the questionnaire
method of research, which was then supported by a discussion. The collection of data was
attrition, retention and recruitment of IT professional. It also gave an insight into the unique
innovative practices followed by some of the companies for attracting, retaining and
managing performance of its knowledge workers. A part from this study also brought out the
leverage that companies have on having a documented recruitment and HR/ retention policy.
It also brought into light the attrition trend, benchmarking followed, recruitment duration and
The conclusion thus drawn was if organizational have to survive and grow in the competitive
IT industry it has to keep pace with the trends and adopt some of the best unique innovative
practices for attracting, retaining and managing the best of its knowledge worker, the
Employee retention is a persistent problem that plagues the industries today. There are plenty
of opportunities for talent. Top talent is always in demand and loyalty is not seen as that big a
virtue, so poaching is thriving and headhunters are having a field day. What exactly can you
Top performers always want to work with top companies that have good practices,
impressive branding and excellent management. You need to have a vision for the company
and you need to work towards it. If you work at making your company one of the bests, you
distress signals. If any distress signals are found the fire fighting mode should be on.
Recognizing talent and then rewarding it ± it is a nice mantra for employee retention. The
rewards can be in many forms ± flexi timings exciting opportunities, time of etc.
Top performs constantly need challenges. If they feel stuck in a situation which they feel is
going nowhere, they will start looking. They are motivated and are lifelong learners. These
pointers can be woven into the employee retention policy of the company. Seminars,
trainings, workshops should ensure that the employee has plenty of opportunities available to
him to upgrade his skill Taking them for granted is not a very wise move.
In this age of instant gratification, it isn¶t too wise to expect your employees to put on
blinders. They are aware of the exponential salary increases and perks available outside. You
capabilities. It certainly pays to pay a little attention to the informal communication, to that
Instead of searching for talent outside, it would be wise to nurture talent in your own
basically needs to know him. Find out the things that really bother him. Find out what drives
him. What motivates him and this aspect in missed by the industry.
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The best attraction practices for fresh graduates which companies use are:
The best practices for work experienced people which companies use are:
c The 7 Hidden Reasons Employees Leave: How to recognize the Subtle Signs and act
c www.Niit.com
c www.tcs.com
c www.birlasoft.com
c www.google.com
c www.hcltechnologies.com
c