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Executive summary An alarmingly high attrition level is hurting the India based business process outsourcing (BPO) industry

and is negatively impacting both its demand (buyers/ clients) and supply (service provider) sides. The topic of attrition and strategies to retain employees is receiving daily media attention, and the complexity of the issue can be confusing to businesses that are interested in investigating off shoring work to India. The Attrition and retention is not only affecting the businesses who are interested in investing in India, but also specifically the industry. This study is an attempt made to study the attrition and retention strategies of a Specific company, HTMT Bangalore (a BPO company).The study is done to identify the causes of attrition in HTMT, this was done through the questionnaire provided to employees covering the areas which are most likely to cause the employee turn over. And has reveled that the main cause of employee turn over is the salary, and the improper performance appraisal system prevailing in the company. The retention strategies of the company has to some extend helped in retaining the employees, in terms of the policies like career growth and scope for higher education .But few of the policies have failed to address the problem in the company. Finally in an effort to identify the causes and possible ways to handle it. There are few suggestions given to the company, to quantify the attrition level and effective implementation of their policies. Few of the suggestion given are as follows: 1. Providing and facilitating the right working environment is critical to retaining employees given the nature of the work. This includes providing a safe and secure workplace to all employees and transparency and objectivity in performance management, compensation and promotion policies to build and maintain confidence. MBO system( management by objective) could be adopted. 2. 3. Timely appraisal of the salary Many employees are not enjoying their job , so it is suggested that company should go for job rotation for the employees so that they are not bored of their routine work

Chapter-1-Introduction

1.1-Background of the study The IT enabled services (BPO) industry is being looked upon as the next big employment generator (Nasscom predicts 1.1 million job requirement by the year 2008). It is however no easy task for an HR manager in this sector to bridge the ever increasing demand and supply gap of professionals. Unlike the software industry counterpart, the BPO HR manager is not only required to fulfill this responsibility, but also find the right kind of people who can keep pace with the unique work patterns in this industry. Adding to this is the issue of maintaining consistency in performance and keeping the motivation levels high, despite the monotonous work. The toughest concern for an HR manager is however the high attrition rate and retaining the talent pool. In India, the average attrition rate in the BPO sector is approximately 30-35 percent. It is true that this is far less than the prevalent attrition rate in the US market (around 70 percent), but the challenge continues to be greater considering the recent growth of the industry in the country1. The US BPO sector is estimated to be somewhere around three decades old. Keeping low attrition levels is a major challenge as the demand outstrips the supply of good agents by a big margin. Further, the salary growth plan for each employee is not well defined. All this only encourages poaching by other companies who can offer a higher salary. The much hyped "work for fun" tag normally associated with the industry has in fact backfired, as many individuals (mostly fresh graduates), take it as a pas-time job. Once they join the sector and understand its requirements, they are taken aback by the long working hours and later monotony of the job starts setting in. This is the reason for the high attrition rate as many individuals are not able to take the pressures of work. The toughness of the job and timings is not adequately conveyed. Besides the induction and project training, not much investment has been done to evolve a "continuous training program" for the agents. Motivational training is still to evolve in this industry. But, in all this, it is the HR manager who is expected to straighten things out and help individuals adjust to the real world

1- Source: National Association of Software and Service Companies (NASSCOM)

If a person leaves after the training it costs the company about Rs 60,000. For a 300-seater call centre facing the normal 30 percent attrition, this translates into Rs 60 lakh per annum2.. Many experts are of believe that all these challenges can turn out to be a real dampener in the growth of this industry. This only raises the responsibility of "finding the right candidate" and building a "conducive work environment", which will be beneficial for the organization. The need is for those individuals who can make a career out of this. All this has induced the companies to take necessary steps, both internally and externally. Internally most HR managers are busy putting in efforts on the development of their employees, building innovative retention and motivational schemes (which was more money oriented so far) and making the environment livelier. Outside, the focus is on creating awareness through seminars and going to campuses for recruitment.

2-source-www.bpoindia.org

1.2- INTRODUCTION TO THE TOPIC India is considered to be one of the worlds largest emerging economies the World Bank forecasts that India could become the worlds 4th largest economy by 2020. It is a young, vigorous country 60 per cent of its population is under 32, it has an emerging, increasingly affluent middle class of 300 million and its GDP increased 8.2 per cent in 2004, with seven per cent expected during 2005. As a result, it is a prime target for international investment3. Nowhere is this more vital than in IT and ITES industries. Despite the fact that India has the largest pool of scientific and technical personnel in the world, NASSCOM predicts a need for 1.1 million employees for the industry by 2008. Liberalization of the Indian economy and extra competition from overseas firms is putting pressure on the HR function of Indian domestic companies to prepare and develop employees. With the additional requirement for excellent English language skills, this requirement is seen by many to be more and more unattainable. The prize for developing sufficient employees with the right skills is significant. The potential for growth is enormous - Indias share in global software and services industry is a mere 3 percent. Other estimates from McKinsey indicate that 4.5 million IT jobs will come from the US by 2008, and other sources estimate the number of jobs in the sector at 15 million by 2015. Employee satisfaction is a challenge in the IT industry. And the challenge simply doubles when you talk about the ITeS industry, commonly referred to as BPO. The manpower base of the BPO industry has increased multiple times over the last five years. The segment is currently a $5.2 bn industry, with exports constituting more than 88% of the revenue generated. ITeS is a growing contributor to the Indian GDP, and its growth is projected at greater than 38% for FY 20062.

3-source- DATAQUEST, November 30, 2006, dqindia.com

Table-1-showing potential shortage in the talent pool

The ITES/BPO industry is expected to require an additional 93,000 people in the next year, showing an increase in labor demand by 29%4. Put simply, it has been a problem of plenty for the industry which is trying to cope with high attrition, high stress and job satisfaction. In the here and now however, Indian HR needs to cope with the challenges and opportunities provided by liberalization, explosive growth and demand, as well as the increasing competition from other developing economies. The retention of key and valued employees and reducing the attrition rates heads the list of tasks. Attrition. It is the singlelargest challenge for BPOs, in light of the innumerable causative variablesbehavioral, organizational and industrial. Indias competitive advantage as compared to other countries has made it a target destination of multinationals for their back-end operations. Several Fortune 500 companies have opened centers here, to benefit from the technologically skilled, highly educated, motivated workforce.

4-source- DATAQUEST, November 30 2006, dqindia.com

These companies have now graduated and expanded their service offerings from simple processes to providing higher value knowledge-based processes. India does a lot of

analytical work and has a vast pool of PhDs, MBAs, statisticians and economic graduates India ranks high in areas such as capabilities, quality of work, linguistic capabilities and work ethics, and thus is ahead of competitors such as China, Philippines, Ireland, Australia, Canada etc. Indian companies also have unique capabilities and systems to set, measure and monitor quality targets. Also, India is able to offer a 24x7 services and reduction in turnaround times by leveraging time zone differences. Many state governments in India are offering incentives and infrastructure to set up IT-enabled services. Industry experts feel that Indian BPOs will continue to show a cost savings of 40-50 percent for client organizations. This can be attributed to declining telecom costs, increasing productivity gains and improved economies of scale in operations.

To top all this, Indian BPO is cashing in on level-2 services such as outsourcing product development. This leaves no room at all for doubt that India will lead the way, as far as this particular sector is concerned.

1.3-A Brief Background of ITES/BPO in India

BPO in India has grown rapidly as compared to software services as the advantages offered by the country (low cost and abundant talent pool) were well known and tested in IT outsourcing. Most of the infrastructure required was already in place and companies needed to set the processes right to get BPO going in India. Business process outsourcing otherwise know as BPO is the process of leveraging technology vendors in various third world or developing nations for doing a job which was once the responsibility of the enterprise. Or simply put, it is the process of shifting an internal job process to an outside/external company which might have a completely different geographical location. Generally the processes being outsourcing as part of BPO are backend jobs like call/help centers, medical transcription, billing, payroll processing, data entry and the like. Most of these jobs are outsourcing by first world nations like USA and UK to third world nations like India, Philippines, China, Malaysia and some eastern European countries. India is one of the hottest destinations for Business process outsourcing and has to its name a host of fortune 500 and fortune 1000 companies that have set up their BPO units here. India BPO outsourcing is at present seeing a huge expansion with many companies moving up the value chain to provide low end as well as high end BPO services that include Knowledge services. Most BPO vendors in India are now in a position to handle an entire BPO process on their own. Indias offshore services industry is the largest in the world; types of IT services now located in India include back office, remote support, medical transcription, customer call centers, database services and content development. Business Process Outsourcing (BPO) is the delegation of one or more IT-intensive business processes to an external provider that in turn owns administers and manages the selected process based on defined and measurable performance criteria. Business Process Outsourcing (BPO) is one of the fastest growing segments of the Information Technology Enabled Services (ITES) industry. Business process outsourcing (BPO) is a broad term referring to outsourcing in all fields. A BPO differentiates itself by either putting in new technology or applying existing technology in a new way to improve a process. Few of the motivation factors as to why BPO is gaining ground are:

Factor Cost Advantage

Economy of Scale Business Risk Mitigation Superior Competency Utilization Improvement

Generally outsourcing can be defined as - An organization entering into a contract with another organization to operate and manage one or more of its business processes. 1.4-The growth of BPO in India can be classified into four distinct phases: The First Wave: Company Owned Units Pioneered BPO in India Company owned units such as American Express, General Electric (GE), Citibank, and AOL etc. triggered the trend of outsourcing back office operations and call centre services to India. Since then several banks, insurance companies, airlines and manufacturing Companies have set up back office service centers in India. The Second Wave: Venture Funded New Companies Over the last few years, a number of experienced professionals have set upstart-up operations in India. Generally such start-ups have been funded by venture capital funds. The Third Wave: Leading IT Services Companies enter BPO given the magnitude of such opportunity, natural synergies with the software services business and the ability to leverage their high-end physical infrastructure and management band-width, most large IT services companies have ventured into ITES. Consolidation of the market with the smaller players merging with each other/ larger companies for economies of scale

The Fourth Wave: Domain / Industry Specialized BPOs

Niche players in industry verticals or specific business processes have setup BPO businesses. Many of these players have had vast experience in the domestic market and are now offering offshore BPO services Generalized large BPO players are now focusing on verticalizing their competencies and structures A majority of the key players in the BPO industry in India are captive units of MNCs and international BPO companies desiring to take advantage of the cost arbitrage offered by India. For the Indian ventures of these MNCs the risks are limited since they are captive units and volumes are assured. Many of the BPO ventures of MNCs are now trying to offer their services to other companies. Several ventures have been hived off into independent companies to attract other customers and become profit centers as opposed to the cost centers they used to be earlier. Examples include eServe International, World Network Services (British Airways) and GECIS.

OVERVIEW OF ITES IN INDIA: STRUCTURE: The industry has three broad categories of companies: 1. Indian IT and ITeS companies ranging from large companies (Tata Consultancy Services, Infosys, Wipro, HCL) to small niche companies 2. Global IT companies such as IBM, Dell, Microsoft, HP, etc. all of whom have set up development centres in India 3. Captive back office operations of large global corporations like JP Morgan, American Express, GE, Citigroup, HSBC, British Airways, etc. 4. Indian companies account for over 69% of the industry revenues. International companies account for the rest

5. About 45% of Fortune 500 corporations source software from India Table-2-showing major IT & ITes companies in India

POLICY (Of Indian Government) 1. 100% FDI is permitted in this sector under the automatic route 2. SEZs, EOUs and Software Technology Parks have been set up across India income tax exemptions are available for units in these designated areas/zones
3. IT Act, 2000 legalizes the acceptance of electronic records and digital signatures

providing a legal backbone to e-commerce OUTLOOK 1. The Indian IT and ITeS industry is expected to grow to $148 billion by 2012
2. Over 25% p.a. CAGR expected over the next seven years

3. India aims to achieve a 50% share in the global off-shored IT and BPO services by 2008

Graph-1-showing the Expected growth in global BPO and KPO markets (2003-10)

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POTENTIAL 1. Recognition of Indias strengths internationally 2. Increasing awareness among global companies about Indias capabilities in higher, value added activities and in the Global Delivery Model 3. Leading international companies have identified custom application development and maintenance as priority areas due to high off-shoreable component 4. High growth of domestic IT & ITeS market due to several regulatory and technological factors 5. Opportunity to supply to the global market in addition to serving the growing domestic demand

1.4-THE EVOLUTION OF BPO IN INDIA

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Amex and GE pioneered the trend of outsourcing to India by setting up facilities in Gurgaon, near Delhi, in the early 1990s. Some of the other early birds were companies such as British Airways who have also been operating their back office in India since the mid1990s. The early reasons for considering off shoring to India were centered around reducing costs and minimizing the effort spent on non-core activities. With increasing confidence of the companies in the capabilities of Indian operations, higher value added activities such as processing of HR, accounting and other non-core functions is reaching the Indian shores.

(Source: pricewaterhousecoopers Pvt ltd, April 2005)

The following figure depicts the evolution and Phases of ITES/BPO in India

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Table-3-BPO MARKET SEGMENTATION

Table-4-Top 15 BPOs in India

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1.5-GROWTH OF ITES IN INDIA

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"In addition, the BPO industry has significant headroom to grow, with the offshorable potential being 12 times current revenues. The industry is likely to continue to witness an increase in M&A activity which could lead to a significant consolidation in the BPO industry, in the process creating world scale players," stated by Kiran Karnik NASSCOM president.5 In FY 2005-06, the Indian ITES-BPO segment grew by 37 per cent contributing $6.3 billion to the total software and services exports of $23.6 billion6. Graph-2- showing IT/ITES Exports and staff strength growth

Table-5-Key highlights of the Indian ITES-BPO sector( source-nasscom.com) ITES-BPO 2003-04 Exports ($ billion) 3.1 Employment (No. of 253 people in 000s)

2004-05 4.6 316

2005-06 6.3 415

The ITES-BPO employee base has grown to 415,000 in FY 06 from 316,000 in FY05. The domestic market for ITES-BPO also witnessed a significant increase in demand with the estimated value of work outsourced (by domestic clients) growing by over 55% to $860 million in FY 2005-06.

5-source - www.rediffnews.com.June 05, 2006 6-source - nasscom.com

According to NASSCOM Steady growth is observed across the following key service categories

Finance and Accounting.

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Customer Interaction. Human Resource Administration.

These three segments accounted for an estimated 89 per cent of the industry revenues in FY 2004-05. With steady demand observed across these key segments, it is estimated that the segment composition will not change significantly in the current fiscal (FY 2005-06). Graph-3-REVENUE GENERATION OF ITES

Source: National Association of Software and Service Companies (NASSCOM)

Graph-4- Segment wise revenue trend in IT-ITES

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Let us look at some advantages of India BPO outsourcing; 1. India has a relatively cheaper workforce as compared to any other nation Indian workforce is well educated, computer savvy and has good English Speaking skills 2. India has a good communications and internet infrastructure. 3. The Indian Government is very supportive of foreign investments and has devised many investment friendly laws and taxes. 4. Individual State Governments in India are constantly developing their IT and networking infrastructure in order to attract more BPO investment.

Outsourcing in India

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The evolution of the BPO industry can be traced back to the following significant events in the macroeconomic policy: .The liberalization of the Telecom sector in 1994 which encouraged private participation. The New Telecom Policy of 1999 introduced IP telephony and ended state monopoly on international calling facilities This brought about a drastic reduction in international calling rates and served as vanguard for the emergence of the industry. The services which were outsourced initially include medical transcription, data processing, billing and customer support. Some of the earliest players include American Express, GE Capital and British Airways. India is considered one of the hottest destinations for outsourcing given the numerous advantages it has to offer Some of them include: Head start in the global IT revolution Indias history and the expertise it has been able to develop Moving up the value chain in terms of greater breadth of services being offered Stable Macroeconomic conditions Number of companies offering ITES services. A friendly tax structure Fast Turn around times Offering 24*7 services based on geographical location Proactive policy environment.

Graph-5- shows the attractiveness of India vis--vis other countries in the world that are offering Outsourcing services.

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Source: BPO and Call Center Outsourcing: An Industry Overview(InterGlobe Technologies) Some interesting figures: (Source: www.out2sourceindia.com) On an average, 40 companies continue to set up operations in India every month "Bangalore, considered the Mecca of "domestic and overseas IT firms in the last few years accounts for 36 percent of India's software exports that touched $12.5 billion According to STPI (Software Technology Parks of India), in Mumbai, one company sets up operations every 3 days. India is already emerging as a leading ITES- BPO hub with one of every four global giants, outsourcing their software requirements to India

Graph-6-COMPARISION BETWEEN INDIA AND THE WORLD

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Total value of IT-ITES sourced from India in 2004 estimated at USD 17.2bn; 44% of the worldwide total Consistently ranked as the preferred sourcing destination (AT Kearney, EIU, etc.)

1.6-Key players in The Indian Outsourcing Industry

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The top players in Indias Outsourcing story include Wipro Spectramind, IBM Daksh, Progeon, Convergys, Genpact, 24/7 customer care and ICICI One source. Claiming top spot in the BPO sector is Convergys.Convergys attributes this to continuous investment in technology and people. Convergys has so far not expanded its operations in India through acquisitions. It has instead chosen to focus on upgrading work. Employee churn remains an important issue with the organization and the company is investing heavily in technology and training. Wipro BPO is working hard to overcome the perception loss caused by the departure of Raman Roy, the poster boy of the Indian BPO industry. T.K. Kurien, the present CEO, wants to take the company to another level by integrating BPO services with Wipros IT services. Progeon, the BPO arm of Infosys, has done well in spite of being a late entrant. Progeon has topped the poll on the global competitiveness yardstick and finished second behind Convergys on quality of products or services. But it has not done too well on innovativeness and transparency. 24/7 Customer focused largely on the insurance sector and expanded its operations to the UK and Canada.

Chapter-2Research Methodology

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2.1-Statement of the problem: ITES/BPO Companies are facing a major challenge of controlling the high attrition rate, and retaining the employees, The purpose of the study is to find out the reasons as to why the employees are leaving the company ,and it also aims to find out the ways by which the company could retain the employees. 2.2-Objective of the study:

To identify the challenges being faced by HTMT in terms of Attrition and retention by the company and the strategies framed by the company. To identify the issues related to compensational and non-compensational factors of attrition and which of these needs greater attention in retention strategies. To identify the inherent nature of the job causing attrition in HTMT, then what should be done by the company to reduce attrition.

2.3-Methodology of the Study The information and data collected both through introduction of questionnaire and informal interviews held with the employees of the company. Additionally, the research is also done on some related publicly available documents and reports of the companies. Some articles were studied in depth and detail to get insights on the Attrition and retention in ITES/BPO sector. 2.4- Sampling Design Sampling design involves identifying the target population, and selecting the sample if census is not desired. The sampling design involves determining who and how many people to interview, what and how many events to observe, etc. The type of sampling design considered was convenient sampling. Sample description: The study of the attrition and retention is done on the basic level of employees i.e the customer support executives, because it is found by the company that the attrition level is high in this level. The samples have being collected across all the process handled by the company. Sample size: In this project work the sample size take is 60 respondent employees working as customer support executives, across all the process .

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Tools used for data collection Primary data collection is done through the questionnaire, provided to the employees, the questionnaire covered the reaction towards the following areas: 1. pay and benefits 2. working environment 3. Communication and planning 4. Career advancement 5. Training programmes For analyzing the data the following method was used: No: of respondents * 100 Sample size Secondary data source: Secondary data is collected trough related websites, information provided by the company, magazines, and journals. 2.5-Scope of the Study: The study finds out Practices and strategies pertaining to attrition and retention which is a part of border area of Human resource management. So a relatively small area of knowledge is depicted here. The study is company based i.e. considering a single company. (HTMT Global solutions), an ITES/BPO company. The study may not depict the same trend or the causes in other similar industry based companies. The study has not done the comparison of the attrition percentage of HTMT with other companies, so the scope is their to do this study and give clear input to company with comparative study. 2.6-Limitations of the study: Time was the main constraint. The sample size considered was limited and the study was limited to the Customer relation officers only, across all the process and could not do the study for different level like managers and other levels, some of the respondents were reluctant to fill the questionnaire and many could not understand the concepts. The data analysis and interpretation is done straight way , rather than considering the relation with other questions. CHAPTER-3

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Conceptual Background 3.1- Introduction to Attrition and Retention Employment in most of the sectors is on the rise. New age industries and new markets are creating a gamut of employment options. With the advancement in telecom and infrastructure, companies are inviting eligible personnel to join their team and build business. So why is there a problem of attrition? Why do employees leave their companies? Where do they go? Who is hiring them? Are there any retention strategies that may help salvage the situation? Look around you. Opportunities are knocking doors more than once a day. Despite this fact, we talk of unemployment problems, high attrition rates and failing retention strategies. Employers go all out wooing employees to stay on. HR is using all known tricks to keep the employees happy. Sounds like a familiar situation? If you have been driven at your wits' end trying to keep employees happy, then you need to reanalyze the situation. Let's go back to the facts stated earlier in this article. Attrition levels could be high due to several reasons. Better facilities, greater career opportunities and personal comfort level are the commonly cited reasons. Retention strategies can work only when they are targeted to meet the core needs of employees. Very often employers try to satisfy superficial needs, which employees don't perceive the value addition.What is the biggest challenge for the BPO industry in India today? Well, it is a no brainier: Attrition! The biggest challenge facing the BPO industry today is to manage the ambitious and transient workforce. Moreover, since the industry is predominantly service-oriented, the importance of attracting and retaining talent has become very critical. In India, the average attrition rate in the BPO sector is approximately 30-35 percent. It is true that this is far less than the prevalent attrition rate in the US market (around 70 percent), but the figure is way above the figure for China, of around 15%. Most interestingly, in an increasing number of cases, when an employee leaves a BPO job, he also leaves the industry. This is a disturbing trend, which needs to be addressed at the earliest.

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The business process outsourcing industry in India is growing at a phenomenal pace. Exports were worth $ 5.2 billion in 2004-05, growing at 44.5 per cent, and are projected to have 41 per cent growth in 2005-06 to $ 7.3 billion. (Source: NASSCOM) With 245,100 people employed at the end of March 31, 2004, against 171,100 last year, the industry witnessed a hiring growth rate of about 40-42 percent. On the hiring front, the industry absorbed about 74,000 people in 2003 despite the attrition rate of 45-50 percent being a matter of concern. The size of the Indian BPO market is likely to be around $ 9-12 billion by 2006, and will employ around 400,000 people7. (Source: ICRA)Business process outsourcing (BPO) has been basically facing two significant issues of late. One is the growing number of employees in its rolls (as discussed above). And second, the abnormally high attrition rate. The attrition rate, which hovers around 40% now, is unlikely to come down in near future. For a fresh college graduate, a call centre job pays about 2.5 times as much as other job openings. And the boom shows all signs of continuing considering that the cost per transaction in India is estimated to be the lowest at 29 cents compared to 52 cents in China. Nevertheless in ITES, the proportion of persons employed in BPO industry are over 50 % as shown in the table below: FY2001 23,600 21,400 45,000 FY2002 35,000 35,000 70,000 FY2003 68,000 38,000 106,200 FY2008E 570,000 530,000 1,100,000

BPO Other IT-enabled Total

Table-6- Employment in the IT-enabled Services Sector in India8

8-Source: IDC, NASSCOM 7-Source: ICRA

It is interesting to note that the attrition rates in Indian BPO industry - and the costs associated - are so high that they can override the benefits of lower wage costs. According to NASSCOM, the outsourcing industry was expected to face a shortage of 262,000 professionals by 2012.

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In fact GE Capital has moved a call centre from India back to Australia "after staff attrition rates of 70% wiped away any potential cost savings". 3.2-Why Do Employees Leave? Graph-7-showing why employees leave the company

(Source: Cover story 2006,E-SAT2006,November 30 2006, DATAQUEST Magazine) A question which arises now is that why to employees leave and what is the reason that the BPOs are not able to hold them back. Well, the most obvious reason that comes to mind is higher pay. Most employees in BPO are approached with two or three job offers every week, and sometimes it gets very tempting to resist. The deterring factor for this would be

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moving from one location to another with the family as housing and relocation are two major concerns of the employees. Though this problem is being taken care to a certain extent by a salary rise of 10-15% annually on an average basis, but still it prevails. Another factor which can be a big deterrent is the 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. Though the above two reasons are quiet prevalent, another reason which is becoming quiet frequent is career growth. Only 2 out of 10 employees on an average go on to be at the senior level. This means that other employees look forward to change their job at other places where they can get better opportunities to progress. Also, another problem arises with the miss-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. One more reason for employees leaving the firm is higher education. This is a problem as most of the employees in this sector are pretty young and aspiring. 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.

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3.3 Reasons for Attrition (or causes of Attrition) Causes of Attrition The issue of attrition can be best seen in perspective of the age profile of this industry's employees - about 87% of them are less than 30 years old. And only about 9% of them are between 30 and 40 years old, compared to 22% in the IT industry9. This has been a deliberate hiring strategy in the industry. The companies lure young, justout-of-college graduates with a triplet of opportunities: high growth, great salaries and a good work environment. This may be a difficult group from which to build a stable, lowattrition HR environment. They join with enthusiasm but are also quickly disillusioned. The specific reasons for attrition are varied in nature. A list of issues, some very prominent and some even trivial, are identified below: 1. No growth opportunity / lack of promotion: Only one in 10 people will ever make consultant; one in 100 will make it to line / practice manager. 2. Organizational matters: The knowledge employees always assess the management values, work culture, work practices and credibility of the organization. The Indian BPOs do have difficulties in getting the businesses and retain it for a long time. When there is no focus, and in the absence of business plans, non-availability of the campaigns make people to quickly move out of the organization. 3. Work environment: In the Indian BPO industry, rigid rules and strict monitoring are the norm. Employees often feel that they are being constantly spied upon. Sometimes, it even infringes on the employee's private space, thereby forcing them to look for other opportunities

9-source-www.indiabpo. org/knowledgebase

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4. Job matters: A number of job related reasons contribute to the high attrition levels in this industry. These are given below: (a). Stress Levels: These jobs bring lots of pressure and the stress levels are high. Hence, employees leaving the job due to too much pressure on performance or any work related pressure are quite common. (b). Adjustment problems: Often employees are moved from one process to another. They take time to get adjusted with the new campaigns, and few employees find it difficult to get adjusted and they leave immediately. Many a time, the employees move out if there are strained relations with the superiors or with the subordinates or any slightest discontent. (c). Nature of the job: Monotony sets in very quickly and this is one of the main reasons for attrition. Besides the induction and project training, not much investment has been done to evolve a "continuous training program" for the employees. (d). Attitude of employees: Youngsters look at call center jobs as temporary and they quickly change the job once they get in to their own field. 5. Salary and other benefits: Moving from one job to another for higher salary, better positions and better benefits are among the most important reasons for attrition. 6. Personal reasons: The personal reasons are many and only few are visible to us. The foremost personal reasons are getting married or change of place. The next important personal reason is going for higher education. Health is another aspect, which contributes to attrition. Employees do get affected with health problems like sleep disturbances, indigestion, headache, and throat infection and lose interest in work. 7. Poaching: Poaching of trained and competent manpower from rival companies is very high. Most of the BPO organizations have employee referral schemes and this makes people spread message and refer known candidates from their previous companies, and earn too in the bargain. It is not easy to find out as to who contributes and who has the control on the attrition of employees. A pin-pointing of the prominent causes is the first step towards addressing the issue of attrition. Two studies in this regard are worth mentioning.

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According to NASSCOM, the cost of attrition in the Indian BPO industry is 1.5 times the annual salary. So it becomes all the more necessary for BPO industry to explore into the reasons for this high attrition rate. The main reasons which have led to this problem are: Improper Work Timings Family Pressure Health problems due to imbalance in work-life pattern Peer Pressure Lack of growth options within the company Other Career options like pursuing further education, joining other sectors. Salary (at lower levels)

Keeping low attrition levels is a major challenge as the demand outstrips the supply of good agents by a big margin. Further, the salary growth plan for each employee is not welldefined. All this only encourages poaching by other companies who can offer a higher salary The business process outsourcing (BPO) industry in the country which is expected to employ around one million people by 2008 is facing the challenge of finding quality human resources given the current attrition rate of around 50 percent. Analysts say attrition rates vary by 20%-40% in some firms, while the top ones averages at least 15%. Nasscom in a report said the outsourcing industry was expected to face a shortage of 262,000 professionals by 2012. . Attrition rates in IT-enabled business process outsourcing sector have come down from the 30-33 per cent being witnessed of late to about 25 per cent now, according to statistics compiled by the National Human Resource Development Network.

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Graph-8-showing key Attrition Triggers

(Source;www.employee-retention .com.) If you compare attrition rates for a Voice and Non-voice process, then attrition rates are significantly lower in a non-voice process. As the industry moves up the value chain and becomes a full-scale BPO player, attrition rates will further decrease. For BPO service providers, moving up the value chain is critical, given the attrition rates in the industry, which are on an average higher in low value-added segments (in call centres) as compared to higher value-added segments like engineering. Tackling Attrition Head-On Industry experts feel, as the industry was still in its nascent strategy there was lot of strategies available to reverse this trend and make it an attractive employer. NASSCOM ITES-BPO forum has identified HR as one of the key challenges of the ITESBPO industry and has formed a special task force to address short-term challenges such as Attrition and also long-term challenges such as ensuring availability of a skilled talent pool. To arrest this trend, companies can look into various options like good rewards, bonding programme, flexible working hours and stronger career path. With attrition rates ranging

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between 30-60 percent in the BPO industry, HR specialists feel that a scientific and analytical approach should be implemented. The tremendous turnover rate is undeniably one of the main problems faced by the BPO industry globally. HR specialists at the Nasscom 2004 summit brainstormed on various approaches to handle this bugbear- either declare war on attrition and tackle it head on, or adopt a more scientific analytical approach. Pay cheques alone are not enough to retain employees. Management also needs to consider other aspects like secure career, benefits, perks and communication. The attrition battle could be won by focusing on retention, making work a fun place, having education and ongoing learning for the workforce and treating applicants and employees in the same way as one treats customers. Companies need to go in for a diverse workforce, which does not only mean race, gender diversity, but also include age, experience and perspectives. Diversity in turn results in innovation and success. The 80:20 rule also applies to recruitment, she quipped, since studies showed that 80 percent of the company's profit comes from the efforts of 20 percent of the employees. So BPOs need to focus on roles, which have the most important impact. Table-7-showing Causes for Employee Turnover Independent Variables Supervisor relations Pay & benefits Work environment Corporate communications Performance Management System Communication System Centralization of Power And Authority Job Description Politicization Performance Of Organization Organisation Policies and Strategies Working Hours 1. Supervisor relations: The quality of the supervision an employee receives is critical to employee retention. People leave managers and supervisors more often than they leave companies or jobs. It is not enough that the supervisor is well-liked or a nice person, starting with Dependent Variables Overall satisfaction Likelihood to recommend Likelihood to stay Employee loyalty Motivation Stress Opportunity Recognition Interest in the Job Biased Behaviour Learning Organisation Loyalty

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clear expectations of the employee, the supervisor has a critical role to play in retention. Anything the supervisor does to make an employee feel unvalued will contribute to turnover. Frequent employee complaints center on these areas.

--Lack of clarity about expectations, --Lack of clarity about earning potential, --Lack of feedback about performance, --Failure to hold scheduled meetings, and --Failure to provide a framework within which the employee perceives he can succeed. 2. Pay & benefits Over half made changes based on exit interview information, and these included reviewing salary structures, forming employee retention committees, establishing alternative work schedules, and introducing bonus plans. Traditional benefits apparently work the best. The respondents ranked health care benefits as the most effective retention tool, followed by competitive salaries, competitive salary increases, and competitive vacation and holiday benefits. Interestingly, some of the newer and trendier benefits did not fare as well. Based on the survey findings, the best action for employers trying to boost their retention rates is to analyze salary and benefits packages to determine if they measure up to the competition. Policies and Benefits Can Reduce Turnover.

3. Corporate communications The ability of the employee to speak his or her mind freely within the organization is another key factor in employee retention. Does your organization solicit ideas and provide an environment in which people are comfortable providing

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feedback? If so, employees offer ideas, feel free to criticize and commit to continuous improvement. If not, they bite their tongues or find themselves constantly "in trouble" - until they leave 4. Performance Management System There may be very few performance appraisal exercises that are devoid of criticism of bias any subjectivity however, most of the efforts to dispel the bias and subjectivity are restricted to changing appraisal formats & systems that include switching over to techniques like 360 Degree Appraisal & Team Assessment using MBO criteria or modern approach Balanced Scorecard. 5. Organization Policies and Strategies No matter the circumstances, never, never, ever threaten an employee's job or income. Even if you know layoffs loom if you fail to meet production or sales goals, it is a mistake to foreshadow this information with employees. It makes them nervous; no matter how you phrase the information; no matter how you explain the information, even if you're absolutely correct, your best staff members will update their resumes. I'm not advocating keeping solid information away from people, however, think before you say anything that makes people feel they need to search for another job 6. Likelihood to stay Your staff members must feel rewarded, recognized and appreciated. Frequently saying thank you goes a long way. Monetary rewards, bonuses and gifts make the thank you even more appreciated. Understandable raises, tied to accomplishments and achievement, help retain staff.

7. Opportunity Talent and skill utilization is another environmental factor your key employees seek in your workplace. A motivated employee wants to contribute to work areas

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outside of his specific job description. How many people could contribute far more than they currently do? You just need to know their skills, talent and experience, and take the time to tap into it. As an example, in a small company, a manager pursued a new marketing plan and logo with the help of external consultants. An internal sales rep, with seven years of ad agency and logo development experience, repeatedly offered to help. His offer was ignored and he cited this as one reason why he quit his job. In fact, the recognition that the company didn't want to take advantage of his knowledge and capabilities helped precipitate his job search 7. Recognition A common place complaint or lament we hear during an exit interview is that the employee never felt senior managers knew he existed. By senior managers refer to the president of a small company or a department or division head in a larger company. Take time to meet with new employees to learn about their talents, abilities and skills. Meet with each employee periodically. You'll have more useful information and keep your fingers on the pulse of your organization. It's a critical tool to help employees feel welcomed, acknowledged and loyal. . 8. Learning Organization Your best employees, those employees you want to retain, seek frequent opportunities to learn and grow in their careers, knowledge and skill. Without the opportunity to try new opportunities, sit on challenging committees, attend seminars and read and discuss books, they feel they will stagnate. A career-oriented, valued employee must experience growth opportunities within your organization. The easiest to solve, and the ones most affecting employee retention, are tools, time and training. The employee must have the tools, time and training necessary to do their job well or they will move to an employer who provides them. Causes of attrition can also be categorized in to Internal and external

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Internal Factors Service providers face an array of career-related, work environment and cultural concerns that are attributable to increased attrition levels: Monetary considerations. The expectations of employees in this industry have grown exponentially due to the strong demand in the marketplace. A number of people who leave do so because they have been offered a higher salary. In the current BPO climate, it is easy for employees to find positions that leverage their experience and pay better. Slow career growth for internal talent. Employees with prior relevant experience are a precious commodity in todays fast growing market. Therefore, it is not unusual for fastgrowing companies to fill new jobs with external applicants who have prior relevant experience with other companies, bringing them in at one level higher than their current level or providing them a new role with greater responsibilities. This contributes to the perception by passed over internal talent that career growth is slow in the current Organization, which results in further attrition. Monotony. In general, BPO work (especially work that has been offshore) has been repetitive, mechanical, Service-level-driven and involves high transaction volumes. Younger recruits find it monotonous once they have mastered the process. Shift timings. The majority of the work offshore to India has typically been from the United States (though share from Europe is growing) necessitating Night-shift work due to time

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zone differentials. The proportion of employees who can work during the Indian work-day is low. Continuous night shifts affect the health of some, while others just cannot adjust to them. As a result of cultural and social factors, some women employees leave because they are not able to convince their families of the need to work nights. Working environment. Attrition due to the work environment is typically due to a lack of trust in the fairness of the system, issues around safety and care of employees, effectiveness of the channels to address employee grievances, accessibility of the senior management team and other related environmental Issues. Limited training and development opportunities. Though not one of the top reasons for attrition increases, the lack of ample opportunities to learn new skills or undergo training or further education is occasionally cited as a reason for leaving. Deficiencies in the recruitment process. To ensure that they rapidly meet high demand levels, service providers are not always able to hire resources with the right skills and experience when and where the are needed. Mismatched resources. Resources who are put on assignments that are not in line with their skills or career aspirations may leave if they are not rotated to a favorable assignment soon enough. External factors There are several environmental factors outside the immediate control of service providers and clients that also must be considered and strategically addressed to reverse attrition: Concentration of demand for talent. Most service providers are located in five to six large Indian cities (known as Tier 1 cities), which has led to excessive concentration of demand and competition for resources in these geographies. Limited talent pool supply. While there is an abundant supply of educated people, the supply of an employable pool is less so. Basic minimum skills required by the BPO sector to service developed markets include the ability to speak and write English fluently and to understand the processes and domain of the client. The quality of education in smaller towns and cities is not of the required standard, rendering even some educated people unemployable. Shortage of management pool. The supply of supervisory and management talent is relatively limited because it requires prior experience. Given the pace at which jobs are created in this market, it is difficult to find management staff with the optimal experience levels.

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Career outlook. The workforce entering the BPO sector is very young and sometimes immature (entry-level graduates with a three-year college degree are only 21 or 22 years old). Many of this younger population are not sure what they want to achieve in their careers and represent flight risks. 3.4 Attrition - The Financial Aspect Apart from the inherent need for companies to retain experienced and talented employees, who form the lifeline of the company, there is a cost aspect to attrition too. A company invests a great deal of its resources in its employees in the form of salaries, benefits, bonuses, training and other personnel costs. When an employee leaves a job, there is a cost incurred for the person who temporarily replaces him, as also the cost due to loss in productivity. Administrative expenses of conducting an exit interview, the cost of lost knowledge and the cost of training invested in the person leaving the company are substantial. It is interesting to note that the attrition rates in India - and the costs associated - are so high that they can override the benefits of lower wage costs. A Nasscom-Hewitt Associates Survey says that the cost of attrition in the industry is 1.5 times the annual salary. On an average, companies today lose 25% of their annual revenue as a result of attrition. Thus, even an 8-10% decrease in the attrition rate can have a major spin-off effect on the bottom line of a company9.

9- Nasscom-Hewitt associates survey

The Cost of Attrition

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What does attrition cost a company? This is a question which has been of immense interest to all the multinationals. It has been researched and found that the cost of attrition is 1.5 times the annual salary. BPO employees changing jobs cost the industry an estimated Rs 350 crore in recruitment and training costs in the fiscal year 2004. The rate of attrition in some companies can be as high as 60% per annum. Companies also run the risk of inefficiency, impacting client agreements and business development efforts. Various Costs Associated With Employee Attrition There are various costs associated with employee attrition. For example, if a new hire leaves after the training, it costs the company about Rs. 60,000. For a 300-seater call centre facing the normal 30 percent attrition, this translates into Rs. 60 lakh per annum. Many experts are of the belief that all these challenges can turn out to be a real dampener in the growth of this industry. BPO employees' changing jobs costs the industry millions of dollars in recruitment and training. Moreover, companies run the risk of inefficiency, impacting client agreements and business development efforts. These costs can be classified as the following: Recruitment Costs These include: The cost of advertisements; agency costs; employee referral costs; Internet posting costs. 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.

Training Costs

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These include: The cost of orientation in terms of the new person's salary and the cost of the person who conducts the orientation. The cost of various training materials needed including company or product manuals, computer or other technology equipment used in the delivery of training. Lost Productivity Costs As the new employee is learning the new job, the company policies and practices, etc., they are not fully productive. It includes the costs associated with the low productivity of the new employee. Lost Sales Costs These costs are the lost revenue which occurred as a result of project loss due to key employee attrition. Given the alarming rate of attrition and its consequences, service providers are taking individual and collective steps to counter the trend. There is a need to take a comprehensive look at what may be done in the short- and long-term. Attrition may be addressed by service providers in two principal ways: 1) Actions to control attrition 2) Actions to manage impact Further, while the primary responsibility lies with the service provider, clients may also help stabilize the situation by taking the initiative to enhance the environment at offshore centers.

3.5-Attrition management

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(source:www.tpi.net,Jan 2007 INDIA-An Attractive Destination Marred Attrition ) Short-term actions

by alarming

Pay for complexity: The current standard practice is to pay associates based on vintage, tenure, (length of service), organization level and/or shift timings. Most work is treated at par for determining compensation, meaning that all job profiles of the same level whether Human Resources, Finance & Accounting or any other process work are compensated at same level. The only compensation differentiation most companies make is between voice and nonvoice work (voice work, which is more stressful, pays better because attrition in this area is relatively higher). To stem the tide of attrition, an important measure for overcoming the issues of compensation and work related stress is to institute the concept of pay for complexity, which recognizes that functions and processes vary in complexity and hence should be compensated differently. Such a system would place different processes/functions in buckets based on complexity, with extra allowances offered for more complex work. This helps in two ways by ensuring that personnel facing more stress get more compensation and by allowing them to decide whether they would like to stay in that role or transfer to a less challenging environment. Though a seemingly viable concept, the challenge lies in implementing this horses for courses approach in a fair and objective manner.

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Competitive compensation. The overall compensation and benefits package should be competitive at all levels for the service provider to maintain its declared market positioning. Technique includes setting a compensation positioning for the company and clear and rigorous communication of the same to employees to keep them informed. Using deferred income or bonuses that are payable at the end of the year aids in employee retention. Career opportunities. Service providers should establish career paths and maintain standard guidelines for promotions and growth. Posting job openings internally provides employees opportunities for job rotation instead of looking outside the company for new and different roles. Training and development. Employers should provide sufficient and meaningful training and development opportunities and link attendance at such programs to the performance management system. Further, it is helpful to provide advanced education opportunities (subsidized or free) to those aspiring to study further without having to lose their gainful employment. Working environment. Providing and facilitating the right working environment is critical to retaining employees given the nature of the work. This includes providing a safe and secure workplace to all employees and transparency and objectivity in performance management, compensation and promotion policies to build and maintain confidence. Communication. Service providers have learned the importance of implementing a strong and effective communication program with employees. Nothing can substitute for frequent communications from top management on the state of the business, future business plans, promotion policies, fun in workplace programs and such. Experience has proven that thereis no risk of over communicating. Occasional faceto- face meetings combined with other methods of employee contact work well to keep employees connected to the organization and go a long way in building loyalty to the business. Employee satisfaction. Employers should conduct employee feedback surveys periodically and should take the feedback from these surveys seriously. They should act on the feedback and demonstrate commitment by tracking initiatives for improvement through to completion. Internal process (hire-to-retire). With improvements to recruitment and deployment, not only will the right skills be hired for the right job, but resources will also be deployed and trained appropriately. 3.6 -Employee retention

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Employee retention is one of the primary measures of the health of your organization. If you are losing critical staff members, you can safely bet that other people in their departments are looking as well. Exit interviews with departing employees provide valuable information you can use to retain remaining staff. Heed their results. Youll never have a more significant source of data about the health of your organization. some top ways to retain a great employee.. The quality of the supervision an employee receives is critical to employee retention. People leave managers and supervisors more often than they leave companies or jobs. It is not enough that the supervisor is well-liked or a nice person, starting with clear expectations of the employee, the supervisor has a critical role to play in retention. Anything the supervisor does to make an employee feel unvalued will contribute to turnover. Frequent employee complaints center on these areas. --lack of clarity about expectations, --lack of clarity about earning potential, --lack of feedback about performance, --failure to hold scheduled meetings, and --failure to provide a framework within which the employee perceives he can succeed. The ability of the employee to speak his or her mind freely within the organization is another key factor in employee retention. Does your organization solicit ideas and provide an environment in which people are comfortable providing feedback? If so, employees offer ideas, feel free to criticize and commit to continuous improvement. If not, they bite their tongues or find themselves constantly "in trouble" - until they leave. Talent and skill utilization is another environmental factor your key employees seek in your workplace. A motivated employee wants to contribute to work areas outside of his specific job description. How many people could contribute far more than they currently do? You just need to know their skills, talent and experience, and take the time to tap into it. As an example, in a small company, a manager pursued a new marketing plan and logo with the help of external consultants. An internal sales rep, with seven years of ad agency and logo development experience, repeatedly offered to help. His offer was ignored and he cited this as one reason why he quit his job. In fact, the recognition that the company didn't want to take advantage of his knowledge and capabilities helped precipitate his job search.

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In addition to the three retention tips offered by HR professionals in the SHRMCareerJournal.com survey, competitive salary, competitive vacation and holidays and tuition reimbursement, these are your key retention strategies. (If you think they read like the Golden Rule, you're right they do.) And, they're also common-sense, basic and incredibly hard to find in organizations today. Select the right people in the first place through behavior-based testing and competency screening. The right person, in the right seat, on the right bus is the starting point. Offer an attractive, competitive, benefits package with components such as life insurance, disability insurance and flexible hours. Provide opportunities for people to share their knowledge via training sessions, presentations, mentoring others and team assignments. Demonstrate respect for employees at all times Listen to them deeply; use their ideas; never ridicule or shame them. Offer performance feedback and praise good efforts and results. Enable employees to balance work and life. Allow flexible starting times, core business hours and flexible ending times. Involve employees in decisions that affect their jobs and the overall direction of the company whenever possible. .Recognize excellent performance, and especially, link pay to performance. Recognize and celebrate success. Mark their passage as important goals are achieved. Staff adequately so overtime is minimized for those who don't want it and people don't wear themselves out. Nurture and celebrate traditions. Have a costume party every Halloween. Run a food collection drive every November. Pick a monthly charity to help. Have an annual company dinner at a fancy hotel. Provide opportunities within the company for cross-training and career progression. People like to know that they have room for career movement. Provide the opportunity for career and personal growth through training and education, challenging assignments and more. Communicate goals, roles and

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responsibilities so people know what is expected and feel like part of the incrowd. Chapter-4 PROFILE OF THE COMPANY 4.1-History of the Company The saga of the Hinduja Group started in Sind, the cradle of the Indus Valley Civilization, where more than 5,000 years ago, the human race learnt its first lessons in organized business and banking. Parmanand Deepchand Hinduja, a young entrepreneur from the fabled town of Shikarpur, realized early in life that business was all about spotting opportunities, and seizing them wherever they surfaced. He traveled to Mumbai in 1914, and quickly learnt the ropes of business. The business journey, which began in Sind, entered the international arena with an office in Iran (the first outside India) in 1919. Merchant Banking and Trade were the twin pillars of the business and the Group remained headquartered in Iran, until 1979 when it moved to Europe. The Group has expanded and diversified its businesses, with significant social and charitable contributions, under the present leadership of Chairman, Srichand, ably supported by his brothers, Gopichand, Prakash and Ashok. Today, the Hinduja Group has become one of the largest diversified groups in the world spanning all the continents. The Group employs over 30,000 people and has offices in many key cities of the world and all the major cities in India. The Hinduja Family has always adapted to free-market reforms moving quickly in new markets that have opened, and capitalising on new economy opportunities. As a result, the Hinduja Group has now strategically positioned itself to contribute to old economy sectors such as Banking & Finance, Transport, Energy (Oil & Power) as well as the new economy of Technology, Media and Telecom.

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The Business Philosophy "My Dharma (duty) is to work, so that I can give." Parmanand Deepchand Hinduja (1901-1971) Founder, Hinduja Group. Firm believers in traditional family values, the Hindujas have all along striven to inculcate the family concept in their business enterprises. Every member of the Group is encouraged to practice the Vedic principles of work: 'Service with devotion' and ' Willingness to see fulfillment of one's self-interest in the active promotion of the interest of the collective'. Mutual trust, respect, cohesion and co-operation are emphasized as key organizational guidelines. At the same time, sound modern management practices are given primacy within individual companies of the Group and also at the corporate level. Professionals are allocated independent charge of diversified activities. There is a high premium on healthy internal competition, incentives to executives and employees for outperforming one another, and appreciation of good performance. The Group has, throughout its history, demonstrated a strong commitment to creating better understanding between the peoples and the governments of the world. Building amity and co-operation between their host country and their mother country, India, has been an article of faith.

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The Hinduja family in conducting its business activities for over 100 years, across Asia, Europe and America, has done so by following the example and inspiration of the Hinduja Group's founder, Shri. Parmanand Deepchand Hinduja (1901-1971), and his strong belief that it was his 'dharma (duty) to work so that he can give.' It was from Parmanand's experiences, instinct and belief in the need to work hard so as to progress in life, both professionally in business and personally as a man with a growing family, that he developed his five guiding principles. These guiding principles are pivotal to how the Group and family conduct themselves in their business and personal lives: It is the universality of these principles and how they can be applied in commerce, business management, philanthropic activities and one's own personal life that have enabled them to last the test of time. In carrying out the duty to work diligently carries the responsibility that one should also give something back to others and society. In turn to work hard and succeed will earn one respect in business. That respect also requires one to be able to meet all one's commitments and only enter into agreements that one knows one can honour. And this should apply whatever the economic conditions, of growth and recession. Hence the idea of my word is my bond. This enables one to build trust and confidence with all one's stakeholders, including employees, customers and suppliers, where long term relationships could be developed for the benefit of everyone. Following on from these two principles, the founder sought to seek new markets and products, enabling the Group to acquire geographical, product and industrial diversification. This led to the third abiding principle, Act Local, Think Global. Simplistic in its ideal, but difficult in its application, the potential market is the whole world.

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There is always a customer for your goods and services, the challenge is to find that market, get your product to that market, offer it at a competitive price, and ultimately have a satisfied and loyal customer. One has to understand the needs of each local market as each market has different traditions and customs. Understanding them, recognizing them and remaining sensitive to and respecting them will lead to business success. Meeting such challenges can be risky, but sharing this risk, and in turn reward can bring real benefit. Partnership for Growth builds on the principles of Act Local, Think Global and includes the idea of communication and working with others - both within and with other organisations. Only by doing these can organizations be flexible, look to the long term and innovate. It is by working with others, including your suppliers and customers, can one cut costs in the value chain and add to economic growth. Working with others also recognizes your own limitations and expertise, Seeking the right partnerships can bring the necessary expertise and innovation, and in sharing you can exchange ideas and concepts with partners on the clear understanding that with shared risk there is shared reward. The final principle, Advance Fearlessly, has as its base the other four principles. To grow your business takes time and effort, it involves risks and has setbacks as well as advances. However, with the founder and the Group risks are fewer through partnerships, the trust and confidence of customers is higher as commitments are honoured, while respect has been earned as the Hinduja Group has learnt to understand the different markets and cultures in which it operated. This allows the group to advance fearlessly. Vision statement HTMT's vision is to become a Scale Player and leader in its core business of Information Technology by leveraging the strength of its customer base, breath and depth of its service lines and management bandwidth. Mission statement HTMT will also offer high quality, cost effective, end-to-end solutions or breadth of experience across multiple technology platforms and verticals to enhance the business of its customers world-wide because of the remarkable advance it has achieved in modularity

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through subsidiaries in Media and Telecommunication, which are designed to function independently and yet to work together as a whole, coalescing around Technology. The five principles as under, distilled from the lifetime experience of the Founder of Hinduja Group, late Shri Parmanand D. Hinduja, serve as the cultural cornerstones of the business of the Group, leading to a synergistic and creative partnership of professional management and entrepreneurship among the Group Companies: *Work to Give *Word is Bond *Act Local; Think Global *Partnership for Growth *Advance Fearlessly *Value System Based on the above principles, HTMT has evolved the following set of Seven Values that illumine, inspire and energise the corporate life of the Company and its subsidiaries, like melding hues of the light spectrum. Customer Delight - Through excellence in service to customers and co-creation of value in partnership with them. Total Quality - Continuous quality improvement through innovation, process improvement and team work. Dependability - Expectations being met consistently through professionalism People Empowerment - Empowerment of employees to enhance self motivation and customer service Corporate Governance - Maintenance of the Highest standards of corporate governance and business ethics. Global Mindset - Local Responsiveness and global perspective

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Sustained Growth - Consistent growth and profitability through a sustainable business model for rewarding all the stakeholders viz: shareholders, employees, customers and society as a whole. 4.2-Corporate Profile Hinduja TMT (HTMT), an established name in the IT sector, has coalesced its Technology, Media and Telecom assets to achieve synergy of operations and become India's First Convergence Corporation. HTMT has emerged as an IT company that delivers time and cost effective solutions to its vast and diverse clientele all over the world, adding value and simplifying life for its customers. To meet the challenges on the horizon as digital odyssey gathers pace, HTMT has on board, skilled professionals from the diverse fields of IT, Telecom, Banking, Finance, Transport, Manufacturing, Health Care, Insurance and Education backed by world-class infrastructure that is continuously improved to ensure global standards of environment, resources and deliverables.

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Why clients opt for HTMT?

Some reasons: 1.The first truly convergent company in India 2.Ability to initiate BPO & Call center project in under 60 working days 3. Availability of a rare mix of talent from varied fields of Insurance, Telecom, IT and Customer services 4. Offers the highest cost advantage due to its location in India 5. Best Human Resources across various fields available 6. Experienced Technology Partners for BPO & Call Center 7. Excellent HR Policies 8. Compliance with global quality standards 9. Offer the best technology platforms - with support from the IT Services Division for Software and Technology Services.

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4.3- Product and Services HTMT has a wide range of business in the following core areas 1.Hinduja group: The Hinduja Group provides a wide range of products & services in over 50 countries. The group activities are divided into three core areas: 1. International trading 2. Investment banking 3. Global investments 2. Technology: HTMT's core activity is in Technology Services. The IT Services division offers Software Technology Solutions with a focus on e-commerce and web-based applications, ERP solutions, Systems Integration, and IT Enabled Services 4. Media With the convergence of technology and communications, HTMT has converged its media assets under one company IN Network Entertainment Ltd., offering quality infotainment programming & products to its consumers. 5. Telecom Telecom services - wired and wireless - are revolutionizing communications globally. HTMT offers its subscribers a unique mix of both ensuring quality communications at an efficient cost and high speed.

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The Hinduja Group provides a wide range of products & services in over 50 countries. The group activities are divided into three core areas

Through its Global Investments, the Hiunduja Group is a major player in Automotive Manufacturing, Financial Services, Banking, Trading, Oil, Media & Communications, Information Technology, Chemicals & Infrastructure and Projects Development. Quick to grasp new opportunities, the group is expanding its investments and advisory services in both the old and new economy sectors Back Office Processing HTMT has a well developed Healthcare / Insurance practice with over three years of experience. HTMT provides Claims Adjudication Services to two leading Fortune 500 Healthcare Insurance companies in US. Today, HTMT is a leader in the Healthcare Insurance Claims Adjudicating Domain, with more than three years experience.

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Types of Claims processed by HTMT are :

HMO - Health Maintenance Organization COB - Coordination of benefits OPR - Over payment recovery CRP - Claim Resolution Processing Contact Center Services HTMT has been one of the pioneers in the contact center space in India. The first contact center of HTMT was established in the year 1996 for a group company in Mumbai. HTMT is currently working with customers in the Telecoms, Consumer Durables, Financial Services and FMCG area.

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4.4-Number of Branches HTMT is a publicly listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in India. Having catered to global clientele for over 10 years now, HTMT's customers include Fortune 200 companies across a wide range of verticals like telecom, healthcare insurance, pharmaceutical products, consumer electronics, financial services, energy and utilities among others. HTMT employs over 7500 worldwide across centers in Bangalore, Mumbai (India), Manila, (Philippines), Mauritius, New Jersey (USA) and Toronto (Canada). HTMT was ranked among the Top 5 employers for two consecutive years in the industry according to an employee satisfaction survey conducted by Dataquest and IDC Company Achievements:

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4.5-Financial Highlights

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4.6-HTMT HR-policies/strategies for Controlling the attrition rate and retaining the employees:

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The attrition is calculated in the company as follows: Monthly Attrition No. of separations -------------------------------------------------------------------------------* 100 Headcount (Beginning of month + end of month) /2 The average turnover rate is 24% per annum for all our non-voice processes. The main reasons for staff turnover are as listed below: 1) Better Prospects - This comprises of 42.5% of the total attrition. This includes: Better salary package Brand pull Change in work environment Shift in industry 2) Personal and Health Reasons - This comprises 15% of the total attrition. This includes Employee being unwell thus forcing him/her to leave the system A family member unwell Hometown Relocation Employee joining family business Inability to cope with night shifts Marriage etc 3) Higher Education - This comprises of 10% of the total attrition. Many associates who are in the system are Graduates, generally in the age group of 21-24 years. At some point associates generate the interest to continue with their studies and this prompts them to quit from their current jobs. 4) Wedding - This comprises 5% of the total attrition. This includes women who get married and not willing to work in night shifts 5) Relocation - This comprises 5% of the total attrition

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Measures to control attrition: The company employs various measures to ensure motivation and retention of talent. We take pride in some of the practices and HR policies that have helped motivate and retain talent within the organization. The management at HTMT works hard in retaining our employees and we will ensure similar commitment towards the Lydian program. HTMT is an employee centric organization, and understand that the BPO sector is largely people centric. Some of our initiatives towards managing staff turnover are as mentioned below: Efforts towards employee satisfaction: Cross Training Employee help-line to ensure timely redressal of grievances One on one sessions with HR / Floor Manager Open door policy Employee climate surveys Individual Empowerment to take decisions Self Managed teams to work on Strategic Company wide Initiatives Loyalty bonus - An associate gets an attractive loyalty bonus at the end of every completed year. This loyalty bonus gets added to his salary and is given besides the regular appraisal hike. Shift rotation and job enrichment: HTMT employs shift rotation every month so that employees get the opportunity to attend to personal problems balancing both office and home needs. Adequate opportunities are provided for employees willing to take initiatives and try out new systems & processes.

Other measures we have implemented also include: Conducting annual staff get-togethers Sports competitions

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Recognition for outstanding employees Access to a well-stocked Library Sponsorship of professional courses to deserving employees Conduct personality development programs Enhanced incentive schemes Salaries pegged against the top quartile in our Industry Access to Indoor Games like Table Tennis, Caroms etc. Access to an In House Doctor and a Psychiatrist HTMT has undertaken the following key Initiatives in the last 2-3 years to address attrition:

Gurgles A Dip Stick Survey of new employees who have completed 3 months in the system to tract & attest any issues at an early stage

Internal Job Posting Ensuring growth opportunities from within existing resources Salary Correction Based on survey done, to match industry standards Internal & External Training programs conducted to enhance soft skills, decision making skills etc. to make an able leader and manager

Employee Engagement Activities to mitigate fatigue and boredom Monthly and Yearly awards to recognize performers across levels and functions Trainee award / trainer award / Mentor award / Workaholic award / Best GL award / Best Performer award / Hall of Fame award / Innovation award

Stress Busting Activities Hawk sessions before a candidate comes onboard Helps a candidate experience the touch, look & feel of the job before committing oneself

Internal Feedback taken in the first 30-60-90 days to ensure that there is a systematic method of tracking grievances and solving the same

Harassment rules framed and communicated to all employees ensuring a harassment free work environment

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Engaged Gallup to conduct survey across the organization and collect feedback regarding How employees feel about the organization

Introduced 1 year / 2 year commitment benefit based contracts ensuring the organization gets full benefit for the cost incurred on training imparted

Medical Insurance to take care of critical ailments and Hospitalization

Retention: Listed below are some of the measures HTMT plan to implement to keep associates motivated : Performance based, Variable Incentive schemes Several non-monetary recognitions for outstanding associates Create an awareness drive for each target & action plan, not just to make the associates aware of the target and action plan but to boost their adrenaline in their day-to-day operation Bundle monetary and non-monetary incentives with individual and team performance to encourage them to reach the set goals Regular floor monitoring / coaching followed by one-to-one feedback covering strengths & areas of improvements Availability of an employee help-line to ensure timely redressal of grievances Put associates through bi-annual personality development & career growth programs Ensure participation in Skip Level Meetings between associates & management, handled by the COO / HR Head / Respective Business Unit Head to voice out any concerns with relation to their job, work environment, peers, supervisors etc.

Employee motivation and retention strategy (reward & Incentives plan) HTMT believes and has implemented an attractive reward & incentive policy. Every agent has the opportunity to earn 20% over and above his fixed salary which is linked to performance. This highly incentivised structure ensures that agents give their peak

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productivity. Over and above the compensation structure HTMT has implemented the following programs to ensure retention of talent HTMT believes and focuses on Intrinsic Motivation by ensuring enough opportunities are provided within the organization for employees to have a sense of ownership. We have a strong mentoring program for nurturing talent. Each senior management personnel adopt a group of 5 fast trackers in consultation with the CEO and HRD and mentors round the year. The mentor also takes part in the performance appraisal and performance improvement program. The Mentor is responsible for career management of the employee. Development of the employees under the senior manager is a KRA for the senior manager. HTMT takes pride in its innovative HR policies, the management at HTMT work hard in retaining their employees. We have been an employee centric organization and understand that the BPO sector is largely people centric; we have excellent policies to recruit and retain talent. Employee career path plans Career planning is viewed from two angles: Linear plan this is for employees who are driven by motives such as power and achievement which will help them move in an upward direction within the organization. Expert for individuals who are keen on advancing their expertise in ones chosen field on the assumption that they are motivated by expertise, technical competence and security. The important distinction being between the linear progression and expert progression being that there is no specific time limit for a person to move and also the financial implications are different.

Career Management Philosophy: HTMT believes in the capability of its home grown talent, primarily because of their understanding of internal processes and their exposure to the existing systems and procedures. As a philosophy HTMT will encourage Internal Promotions for its existing

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positions. It will be HTMTs endeavor to fill all positions through internal growth and external search will only be done in instances in which it is unable to fill positions through internal growth. Career Progression will be based purely on performance and NOT on number of years of experience and Seniority in the organization. An employee has the opportunity to move across functions and gain multi process exposure-through internal job postings. It is to be noted that only available vacancies will be filled up by internal promotions to the extent it is found feasible. Graph-9-Diagrammatic representation of HTMT fast track career path plans

OPERATION MANAGER / TRAINING MANAGER / QA MANAGER

Functional TRANSITION Lead (TRG / QA / OPS)

FRONTLINE MANAGER (TRG/QA /OPS)

Customer Service Representative

o Employee background checks Full background check is conducted for each successful candidate. This includes checking whether the candidates are free from any court cases apart from their previous work experience etc... After successful background check, applicants

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undergo a thorough medical examination wherein physical, laboratory, and drug tests are conducted by duly accredited hospitals/clinics. o Employee educational standards We accept candidates who are at minimum college graduates. Course preference during graduation may depend on client's requirements

Chapter-5 DATA ANALYSIS AND RESULTS Present study is based on the information received through introduction of the

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structured questionnaire [Annexure I], supplemented by the inputs derived from the informal discussions subsequently held with the employees and company literatures. The data has been analyzed qualitatively. The Analysis is done directly without considering the interrelation with other questions, the analysis and results of the study are discussed in the following section

Table-8 - Showing about how employees feel about Communication and Planning

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No: of Respondent employees Particulars (1)-Disagree strongly (2) 2 2 2 (3) 21 7 9 (4) 24 34 29 (5)-Agree Strongly 10 15 18

Understand the long-term strategy of 2 the company Have confidence in the leadership of 2 the company Have confidence in the management of the company top 2

GRAPH-10- Showing about how employees feel about Communication and Planning in HTMT

Interference: The communication process and pattern is very important in an organization


communication and flow of information through a proper channel and its effectiveness is necessary for a business to be successful, and in interface with planning and done with the employees of the company proves to be much effective. 40%of the employees agree and 16.6% of them strongly agree that they understand the long term strategy of the company.25% strongly agree and 56.6% agree that they have confidence in the leadership of the company.48% agree and 30% of employees strongly agree that they do have confidence in the top management of the company.

Table -9- specifying about their role in the Company

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No: of Respondent employees Particulars (1)-Disagree strongly Given enough authority to make 2 decisions I need to make like the type of work that I do believe my job is secure 0 2 3 7 9 10 26 20 22 21 4 25 17 (2) (3) (4) (5)-Agree Strongly 12

Graph-11- specifying about the employee role in the company

Inference: Employee empowerment is the buzz word in the recent trends of HRM,and their role
and the degree of sense of job security effects the attrition rate of the company.28% of the employees agree and 20% of the employees strongly agree that they are given enough authority to make decisions, and very less i.e. 3.33% of them disagree strongly to the above point. 43.3% agree and 36.6% strongly agree that the like the type of work they do.33% agree and 35% of them strongly agree that they believe their job is secure , 11.6% of the employee disagree to the latter pont

Table- 10-Specifying how the employees feel about the corporate culture
No: of Respondent employees

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Particulars Corporate communications enough frequent

(1)-Disagree strongly 0 3 1

(2) 6 6 4

(3) 21 8 6

(4) 19 31 23

(5)-Agree Strongly 14 12 26

I can trust what the company tells me Believe there is a spirit of cooperation

Graph-12- Specifying how the employees feel about the corporate culture

Inference:31.6% of the employees and 23.33 % of the agree strongly that their corporate communication is frequent enough, 51.6% agree and 20% of the employees strongly agree that they can trust what the company tells them .38.33% agree and 48.33% strongly agree that that there is a sprit of cooperation in the company .Its a good sing for the company that 0% of the employees have disagreed strongly to the option of corporate communication frequent enough, and 1.66% of them disagree strongly that there is a sprit of corporation.

Table -11- Showing the employee relationship with immediate supervisor


No: of Respondent employees

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Particulars supervisor treats me fairly supervisor asks me for my input to help make decisions Supervisor give me full freedom to take any decision

(1)-Disagree strongly 2 2 6

(2) 3 6 4

(3) 10 11 19

(4) 22 22 17

(5)-Agree Strongly 23 19 14

Graph -13 Showing the employee relationship with immediate supervisor

Inference: In any organization or process for that matter, relationship with the team member or team leader is significant to have a cordial working condition. In this regard the employees of HTMT of 36% agree and 38.33% strongly agree that they are being treated fairly by the team leader or supervisor, 36.66% agree and 31.6% strongly agree that they are asked for their input by the supervisors/team leaders. and only 10% disagree for the above point.28.33% agree and 23.33% strongly agree that the supervisors give full freedom to take decisions.

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Table-12- Specifying about the Pay and Benefits


No: of Respondent employees Particulars salary is fair for my responsibilities (1)-Disagree strongly 10 (2) 12 (3) 15 (4) 19 (5)-Agree Strongly 24

Graph-14- specifying about the pay and benefit

Inference: The major motivating factors either to retain the employees or the cause for the attrition is the pay and benefits offered by the company. With this regard only 6.66% of them agree strongly and 31.6% agree that their salary is fair for their responsibilities, and 16.66% disagree strongly and 20% just disagree for the above point

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Table-13- Showing the Rating of HTMT


No: of Respondent employees Particulars salary Working conditions Advancement Training Development Over all (1)-Disagree strongly 2 15 14 4 14 15 15 26 24 15 11 13 11 14 12 11 (2) (3) (4) (5)-Agree Strongly 8 4 7 5

Graph-15- showing the rating of HTMT

Inference: when asked to rate their company in terms of the salary, working conditions and others as shown in the graph 25% have rated high, and 6.6% as low with respect to the working conditions prevailing in the company. 3.33% have rated high but 13.33% of them

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have rated low with reference to the salary structure of the company. over all 43.33% have rated high and 8.33% low.

Table-14-Showing the effect of shift change policy of HTMT on maintaining the WLB of employees
No: of Respondent employees Particulars Shift change policy of HTMT (1)-Disagree strongly 6 9 19 17 (2) (3) (4) (5)-Agree Strongly 9

Graph-16- Showing the effect of shift change policy of HTMT on maintaining the WLB of employees

Inference: The above graph shows that majority of the employees i.e. 31.6% of them neither agrees nor disagree that the shift change policy does affect the WLB or helps in

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WLB, but in average of 21% agree that the shift change policy helps in maintaining a WLB. But in average of 21% the respondents disagree that there is any effect of shift change policy on the WLB.

Table- 15- Specifying the Main cause for Attrition in HTMT

No of Particulars Better Salary Better working environment Personal and health reasons Higher Education Shift industry Others Respondent employees 14 40 4 6 4 0

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Graph-17- Specifying the Main cause for Attrition in HTMT

Inference: When the employees were asked about what could be the reasons for the attrition in HTMT, 66.66% of the respondents have said that it could be because of better working conditions, and 23.33% have opted for salary as the reasons for atrrtion.and in least 6.66% for personal and health reasons, 10% for higher education and 6.66% for shift in industry.

Table -16- Showing the effectiveness of the HR-Policies of HTMT

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No: of Respondent employees Particulars Cross training Open Door policy Shift Rotation Job Enrichment Internal Job posting Internal and External Training Programme (1)-Highly effective 8 6 8 10 20 12 (2)Effective 25 31 20 20 14 21 (3)Average 22 19 21 24 19 18 (4)-Below Average 5 4 11 6 7 9

Graph-18- Showing the effectiveness of the HR -Policies of HTMT

Inference: The above graph shows the effectiveness of the Retention strategies of HTMT, 41% of the employees think that the policy of cross training in effective, but 36.66% think that its effect is average and only 8.33% say its effectiveness is below average. In terms of shift rotation policy 31.6% think it is average, and 51.66% rate it effective .in terms of job enrichment 40% rate it average and 10% below average, and 33.33% say effective and 16.66% say highly effective. 33.33% say that the internal job posting is highly effective and 23.33% just effective, 31.66% rate its effectiveness as average and 11.66% below average

Table-17- Showing the effectiveness of retention Strategies of HTMT.

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No: of Respondent employees Particulars Career Path Scope for higher education Enhanced incentive schemes Work life balance strategies Conducting employment development programme (1)-Highly effective 11 9 6 7 10 (2)-Effective 20 21 16 22 7 (3)Average 21 18 28 23 23 (4)-Below Average 8 12 10 8 10

Graph-19- Showing the effectiveness of retention Strategies of HTMT

Inference:18.33% of employees rate career path process as highly effective ,and low of 13.33% rate the effectiveness as below average.15% of the employees feel the policy of giving scope for higher education is highly effective in retaining the employees and low of 20% have rated its effectiveness as below average. 46.66% rate the policy of enhanced incentive scheme as average and only 10% as highly effective.11.66% think that work life balancing strategies has highly effective and 13.33 % has below average.16.66% say the strategy of conducting employment programme is highly effective and 16.66% think it effectiveness is below average

Chapter-6

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Findings i. ii. iii. iv. v. vi. Among the total respondents (66.66%) of them stated that the main reasons for attrition are the working conditions. Out of the total respondents (56%) of them agree that they understand the long term strategy of the company. Among the total respondents (48%) of them agree that they are given enough authority to make decisions. More than (50%) of the total respondents agree that the relationship with the immediate supervisor is good and supervisors treat them fairly. Among the total respondents (18.33%) think that the shift change policy effectiveness is below average. The employees have indicated that the performance appraisal system in the company is not proper ,and have also indicated that this may be the major reason for leaving the company, vii. Pay and benefits- More than 50% of the employees want hike in salary, Cab facility to be provided, or transportation allowance to be given in the compensation package. viii. ix. employees have desired to have more of refreshment programmes, and personality development programme so that it reduces their stress, The prime finding which shows the main reason for employee attrition is the salary as discussed before and also in relation to that is the slow growth of career in the company and promotions to be done takes long time and many are not happy with that and this may indirectly give way for de-motivating them and increase in attrition rate in turn. x. The employees have shown their concern for having a non transparent way of dealing with I J P(internal job posting)

Recommendations

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i. ii.

A committee has to be formed to keep track on working conditions by taking feedback from employees and taking necessary steps for continuous improvement. Providing and facilitating the right working environment is critical to retaining employees given the nature of the work. This includes providing a safe and secure workplace to all employees and transparency and objectivity in performance management, compensation and promotion policies to build and maintain confidence .MBO system (management by objective) could be adopted.

iii.

The ability of the employee to speak his or her mind freely within the organization is another key factor in employee retention, Few of the programmes, like best feed back, or best suggestion may also bring about more innovative and creative ideas, which encourage them to perform better. So that they need not feel bored of the monotonous job work.

iv.

The staff members must feel rewarded, recognized and appreciated. Frequently saying thank you goes a long way. Monetary rewards, bonuses and gifts make the thank you even more appreciated. Understandable raises, tied to accomplishments and achievement, help retain staff

v.

The company should opt for employee Empowerment, and should give few decision making powers so that they need not wait for team leader permission and indirectly it would motivate the employees to do better and improve decision making ability. Involve employees in decisions that affect their jobs and the overall direction of the company whenever possible

vi.

The best action the company can do to try to boost their retention rates is to analyze salary and benefits packages to determine if they measure up to the competition. Policies and Benefits Can Reduce Turnover

vii.

The concept of pay for complexity, could be implemented which recognizes that functions and processes vary in complexity and hence should be compensated differently

viii.

Employees are not happy with the appraisal system, so the company should think of changing the present appraisal system or having an more transparent system like involving employee participation in that, 360 degree kind of appraisal system would be an good option.

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ix.

Career aspirations may leave if they are not rotated to a favorable assignment soon enough, and if timely Promotions not made. So the company should opt for job rotation.

x.

Implement a structured and formal exit interview process, and consider the exit interview results as a valuable and important feed back for further improvement.

Conclusion

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BPO industry is leading the Indian IT industry growth. The projections for future are encouraging but the challenges facing the industry are no less daunting. A shortfall of talented workforce coupled with a high attrition rate may have a crippling effect on the industry. Ability to arrest attrition, therefore, assumes strategic significance and can be used as a competitive advantage for long-term survival in the industry We can safely conclude that attrition and retention in the ITES sector has the potential to derail what promises to be a multi-billion dollar export earner for India. It is possible to temper high attrition rates by adopting a strategic approach to the management of human capital where there is synergy between the personal development goals of employees and the developmental goals of the company The BPO industry will have to bear with the inevitable evil of attrition for the coming decades but with strategic implementation of the HR policies of the company. To conclude, BPOs need to understand that now, the case is not about giving more salaries and preventing the employees from leaving. Employees need much more than what is obvious. A long term relationship needs to be established with its employees. Moreover, employees in this sector need a lot of personal space and a well thought-out career growth plan. Also, HR practices are needed to be fine-tuned so as to get the right kind of employees. Some of the strategies suggested in this paper can be very easily implemented without any cost to the company. Some other strategies are not so easily implement able, but are very important for the growth of this sector, and are necessary for benefiting the country on the whole and make it much easier and manageable.

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