“ATTRITION IN BUSINESS PROCESS

OUTSOURCING”

PROJECT REPORT SUBMITTED TOWARDS PARTIAL

FULFILLMENT OF POST GRADUATE DIPLOMA IN
MANAGEMENT

(Approved by AICTE, Govt. of India)

(Equivalent to MBA)
ACADEMIC SESSION
2008-10
Under the Guidance of: Submitted By:
Dr. Sadia Samar Ali, Ritu Singh (BM-08151)
Associate Prof. of Statistics, Rohit Rathee (BM-08152)
IMS Ghaziabad. Rohit Sharma (BM-08153)
Rohit Singhal (BM-08154)
Rohit Verma (BM-08155)
Rohit Yadav (BM-08156)

INSTITUTE OF MANAGEMENT STUDIES

C-238, BULANDSHAHR ROAD,
 GHAZIABAD -201009.
ACKNOWLEDGEMENT:

A single person alone can never be credited for performing any extraordinary work
successfully. It is only possible with the continuous and constant help and guidance
that they receive from others.

With due respect and regards we wish to express our deep sense of gratitude,
indebtedness and sincere phrases of thanks to Dr. Sadia Samar Ali for his invaluable
mentoring and exuberant guidance.

we are highly obliged by the constant support that we have got from our faculty
during the course of the project. Starting from the initial stages to the end stages we
have received continuous feedback with regard to the progress of the project.

Thanking her, once again.

TEAM MEMBER’S

Ritu Singh (BM 08151)

Rohit Rathee (BM-08152)
Rohit Sharma (BM-08153)
Rohit Singhal (BM 08154)
Rohit Verma (BM 08155)
Rohit Yadav (BM-08156)
 DECELARATION

TO WHOSOEVER IT MAY CONCERN

This is to certify that the Team Members of PGDM (Full time), 2008-2010 batch,
IMS Ghaziabad, have done this project under the supervision and able guidance of Dr.
Sadia Samar Ali (Associate Prof. )

This work is done solemnly by the group members and has never been published or
done before.

All the information provided is true to the best of our knowledge.

TEAM MEMBERS:- SIGNATURES

Ritu Singh (BM 08151)

Rohit Rathee (BM-08152)
Rohit Sharma (BM-08153)
Rohit Singhal (BM 08154)
Rohit Verma (BM 08155)
Rohit Yadav (BM-08156)
 CONTENTS

1.INTRODUCTION

2.
3.OBJECTIVES
4.RESEARCH METHODOLOGY
5.ANALYSIS OF DATA COLLECTED
6. CONCLUSION AND RECOMMENDATIONS
7.SCOPE OF STUDY
8.REFERENCES
INTRODUCTION:
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.

These nations have a good pool of English speaking youth who receive
accent and job related training before they are inducted at a salary which is
much lesser than what their counterparts in first world nations would demand.
This allows first world organizations to get higher profits and provide better
services by lowering the prices and by recruiting more labor than they could
possibly do otherwise. In addition to benefiting the first world nations,
business process outsourcing has also benefited third world nations by
generating much needed jobs.

ABOUT THE INDUSTRY

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.
The Indian business process outsourcing industry, roughly around 4-5
years old, is growing at a phenomenal pace. The number of BPO
companies in Indian cities has mushroomed from a handful a few years
ago to about 500 in 2004. The size of the Indian BPO market is likely to
be around $9-12 billion by 2006 and will employ around 400,000 people
(ICRA, Indian BPO industry report). 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.
Even after displaying impressive statistics about the growth and future,
the BPO industry in India is bleeding with heavy attrition. According to
several recruitment firms in the country, attrition in the ITES (IT enabled
services)-BPO industry is close to 35-40 %. The worse news is that, this
is only the reported figures and the actual figures are much higher and
can be as high as 80% annually. Nasscom in a report said the
outsourcing industry was expected to face a shortage of 262,000
professionals by 2012. This impediment is likely to affect the industry
severely in the long run by creating a man power shortage as well as
bringing up the cost arbitrage on which the Indian industry is playing at
the moment.

Benefits of BPO
By outsourcing their back office operations to third world countries, companies
can get huge cost cuts and concentrate on their core businesses. By doing so
they can provide better customer satisfaction leading to customer retention,
increased productivity, deal with competition effectively and in turn increase
profitability. By outsourcing business processes to countries like India many
companies have nearly cut their operational costs by half resulting into huge
profits. No wonder there is so much hype about outsourcing as almost all
companies no matter how big or small they are, have understood the benefits
of outsourcing and are taking a major dive into the industry.

KEY PLAYERS IN OUTSOURCING BUSINESS

Company Number of Employees

EXL 4,500

Spectramind 2,600

Daksh 2,000

WNS 1,600

vCustomer 1,500
Tracmail 1,365

HCL e-serve 870

Epicentre 700

ICICI OneSource 650

GTL 650

CONVERGYS 14,000

Source: Nasscom ITES directory September 2008

Number of
Captive Centres
Employees

GE Capital 12,000

e-serve International 3,149

eFunds 1,646

HSBC 1,128

Healthscribe India 1,126

American Express 979

Sitel India 584

Global e:Business Operations

475
(HP)

Axa Global 350

Source: Nasscom ITES directory September 2008

 S
Some old numbers Indian Market size estimates of BPO

Revenue \
2002 2003 2004 2005 2006 2007 CAGR
Year

Offshore
24,23
BPO 1,322 1,825 3,017 6,439 12,563 78.91
0
Revenue

Indian BPO
13,81
912 1,205 1,961 3,928 7,412 69.35
1
Revenue

Total BPO 110,16 121,68 131,17 143,09 157,03 173,0

9.45
Market 7 7 1 0 3 70

Figures in $ Source: Gartner Dataquest (May

CAGR in % 2002-07
million 2007)

Where are your BPO Providers today?

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QuickTimeª and a
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COMPANY: AN OVERVIEW
Genpact manages business processes for companies around
the world, combining its process expertise, information
technology and analytical capabilities with operational insight
derived from experience in diverse industries to provide a
wide range of services using its global delivery platform.
Genpact’s goal is to help clients improve the ways in which
they do business by using Lean Six Sigma principles, as well
as cutting-edge technology, to continuously improve business
processes.

Genpact manages business processes for companies around

the world. They combine their process expertise, information
technology and analytical capabilities with operational insight
derived from experience in diverse industries to provide a
wide range of services using our global delivery platform.

Genpact provides a wide range of services, including Finance

& Accounting, Collections and Customer Service, Insurance,
Supply Chain & Procurement, Analytics, Enterprise
Application, IT Infrastructure and Management.

Its goal is to help their clients improve the ways in which they
do business by continuously improving their business
processes through Six Sigma and Lean principles and by the
innovative use of technology. As a service provider, it strive to
be a seamless extension of our clients’ operations.

Genpact manages complex processes in multiple geographic

regions, delivering its services from a global network of more
than 31 operations centers in ten countries. Its global delivery
centers are located in India, China, Hungary, Mexico, the
Philippines, the Netherlands, Romania, Spain, Guatemala and
the United States.
Genpact has a unique heritage. They built their business by
meeting the demands of the leaders of the General Electric
Company (GE) to increase the productivity of their
businesses. GE began in 1997 as the India-based business
process services operation of GE Capital.

Genpact leadership team, processes and culture have been

deeply influenced by our eight years as a captive operation of
GE. Many elements of GE’s success-the rigorous use of
metrics and analytics, the relentless focus on improvement, a
strong emphasis on the client and innovative human
resources practices-are the foundations of our business.

Genpact became an independent company in 2005 and, since

then, they have grown rapidly, continued to expand their
range of services and diversified our client base.
 HISTORY:

Genpact began in 1997 as GE Capital International Services

(GECIS) - the India-based business process services
operations of GE Capital. During the eight years that followed,
they took on a wide range of complex and critical processes
and became a provider to many of GE’s financial-services and
manufacturing businesses.
In 2005, GE became an independent company, changing our
name to Genpact, which conveys its desire to generate value
and business impact for our clients. Since then it has grown
rapidly, significantly expanding its range of services and
diversifying its client base.

PRODUCT AND SERVICES

Genpact provides a wide range of business process,
technology and knowledge services, including Finance &
Accounting, Collections & Customer Relations, Insurance,
Procurement & Supply Chain, Analytics, Software, IT-
Infrastructure , Content Solutions and Re-engineering. By
offering these services, Genpact draws on three core
capabilities – process expertise, analytical capabilities and
technology expertise – as well as the operational insight
gained from the experience of managing thousands of
processes in diverse industries.
1. Finance and Acounting
Genpact provides a comprehensive range of Finance & Accounting services
with proven capability to deliver cost savings, process innovation and
operating excellence within the over-arching framework of compliance.

2. Colllection and Customer relations:

Genpact was a pioneer of outsourcing Collections & Customer Service. Over
the years, we have built expertise offering end-to-end solutions designed to
deliver unsurpassed service excellence to our customers and their end
customers.

3. Insurance:
Genpact offers a diverse set of services for all major insurance verticals,
including life, health, mortgage, and re-insurance, among others. These
services are powered by deep domain expertise and process excellence
through application of Lean Six Sigma principles.

4. Procurement and supply chain

From sourcing and procurement, to manufacturing, sales support, aftermarket
services and financial services support, Genpact combines its rich experience
with best practices and process rigor to deliver true business impact.

5. Softwares:
Genpact's integrated spectrum of software solutions spans enterprise
solutions deployment, technology integration, application/database
management, and support services, within an overall IT program-
management framework.

6.IT Infrastructure:
Genpact provides global IT-infrastructure, from planning and designing to
implementing and managing mission-critical IT systems like desktops,
servers, networks and security, while maintaining alignment with your overall
IT strategy.
7. Content Solution:
Genpact offers a creative set of e-learning, creative media and content
management solutions to enhance business performance by positively
impacting key metrics.

8. Re engineering:
With over 10 years of experience in managing and improving a range of
business processes and by leveraging our Lean Six Sigma DNA, Genpact
vastly improves and re-engineers business processes to deliver significant
impact.

PERFORMANCE:
BPO major Genpact today said its net profit more than doubled to
$33.6 million for the third quarter ended 30 September, 2008,
compared with $16.3 million for the same period in the last fiscal.
The company’s net profit grew more than double by 106 per cent
for the corresponding period, a company statement said.
For the nine month period ended 30 September, 2008, the company
posted a net profit of $78.1 million compared with $25.3 million for
the corresponding period in the last fiscal, registering a growth of
209%.
Company’s revenue for the third quarter ended 30 September,
2008, touched $270.8 million, whereas it was $214.8 million in the
same period a year ago, registering a growth of 26%.
For the nine month period, the company’s revenue grew by 28% to
register $759 million at the end of September 2008 from $591.6
million at 30 September, 2007.
“We completed a good third quarter, despite the dramatic changes
in the global economy that began several months ago,” Genpact
President and CEO Pramod Bhasin said.
He also said based on the company’s performance to date, he
expects the company’s revenue for the full year to grow by 26-28%
from $823 million in 2007.

THE CHALLENGES BEING FACED:

India is making progress by leap and bound on one hand, and
on the other hand, there are several important challenges are
being faced by the industry. These challenges are:
* Managing the high attrition rate of 30-to40%: -
Sometimes the prospect of earning could trigger the young
employees to switch over to a rival firm.
* Offering high incomes: - To retain employees is a problem
since this is a low margin industry with billing rates varying
between $6 per hour to $20 per hour based on the nature of
work.
* Mushrooming of small players: - Attractive growth rate
of the has resulted in many reckless starts-ups. Several
companies from unrelated sectors without the required
expertise entered the industry lured by the healthy potential of
the industry. These small companies are now finding difficult
to survive in this capital-intensive industry.
* Language problems: - Insufficient proficiency in English
language is a major hurdle.
* Shortage of training programme: - Though educated
youngsters are available in plenty, training a large number of
them in the needed skills for quick ramp up of numbers is
difficult due shortage of trainers.
* Night shifts: Because of night shifts the employees become
impatient and even angry, they also suffer from high stress
level, fatigue and ill health.
* TECHNOLOGICAL CHALLENGES:
The BPO companies in India need to maintain a highly
consistent infrastructure through optimum redundancy and
BCP capability. IT can provide high degree of Info-security
cover for operations through policies, prevention, and
detection (firewalls, intrusion detection, data encryption and
security, access control, virus control, identity management,
cyber-forensic investigation). This can drive down IT costs per
FTE on a y-o-y basis. Many BPOs will be able to use IT to drive
efficiencies and lower costs in customer processes and internal
processes in the organization. Many companies, which have
completed four to five years of operations, will be in a state of
technology refresh and will need to upgrade/replace
aging/obsolete equipment and technology.
SECURITY CHALLENGE: Security, of course, is a major
technological challenge. We must instill confidence in our
customers that we can secure their transactions better than
their on-shore IT staff. Right now BPOs do the arm- and leg-
work on client systems-application development companies
program client systems, and applications integrators integrate
and deploy client systems. The client doesn't want a system.
The client wants the work done.
So, if onshore regulations permit, and there is no security
consideration, and no IPR issues, then BPO players will have
the opportunity to own, host, maintain, and enhance
application systems to process the data. The cost benefits and
efficiencies will be passed on to the client.
OBJECTIVES OF SYUDY:
1) To analyse the future needs and aspirations of employees in the
organization.
2) To verify the satisfaction level of employee in the organization.
3) To ensure co-ordination between the employees and the
organization.
4) To focus the interest of the employees in the organization.
5) To bring out proper working between employees and organization in
order to project the company’s image.
6) To study measures to improve the situation and conditions of
employment.
7) To understand the rules and policies followed by the organization.
USE OF STUDY:
1. The research project report can be further used for future
references.
2. It can be used to forecast the future working pattern and
behaviour of the worker interested to work in this industry.
3.The research project can also be used to determine the likely
impact of BPO working conditions for new generation call
centres.
4. The rsector and provideesearch project format can be used
by the industry to analyse the reasons for employees
satisfaction and dissatisfaction.
5. The research project can be used for industry and
organization planning in order to provide customer delite solve
employees problem related to work.
SCOPE OF STUDY:
The report will provide a snapshot of the Indian BPO industry
and the dynamics that drive the sector.It will cover the size
and segment of the market, the existing industry senario, and
major trends in the sector.It will also seek to highlight the key
challenges that are faced by the industry.
The competitive provides an overview of landscape the major
participants in the sector.The study further covers some of the
key drivers for the sector and provides an overview of the
outlook for the industry and some major factors that are likely
to play a role in shaping the future of the industry.
IMPORTANCE OF STUDY:
1. IMPORTANCE TO EMPLOYEES:
New and existing aspirants and employees of the BPO industry
can analyze the data of the performance of the industry as a
whole as well of the organization and can make a move.
2. IMPORTANCE TO ORGANISATION:
The project report is important in itself for the organization to
get a bird eye view of the problem currently faced by the
company and the sector itself. So they can come out with new
ideas and plans to tackle the situation.
3. IMPORTANCE TO SHAREHOLDERS:
The project report is important for the shareholders point of
view. It gives them an idea regarding the efficient working of
the organization, its future prospects, current operations
problems faced,client satisfaction and employee satisfaction
ratio.

Attrition in Indian BPO Industry

What is the biggest challenge for the BPO industry in India
today? Well, it is a no brainer: Attrition!
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.

The size of the Indian BPO market is likely to be around $9-12

billion by 2006 and will employ around 400,000 people, ICRA
said in its Indian BPO industry report.

Mercer India said the industry should look beyond the traditional
areas of recruitment and some thought should be given to
employ physically challenged people and housewives. The
reasons for the high rate of attrition was due to various factors
like salary, work timings, other career options, adding that there
is always the danger of costs increasing while billing rates
decline.

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.

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.
ATTRITION RATES %

UNITED STATES OF AMERICA 42%

AUSTRALIA 29%

EUROPE 24%

INDIA 18%

GLOBAL AVERAGE 24%

SOURCE- TIMES NEWS NEW YORK 2008

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.

It will not be possible for the industry to arrive at a blanket

agreement on poaching but bilateral agreements between
companies are being signed. Basic norms are being put in place
and code of ethics is being stressed upon by industry.
Companies are being encouraged to adopt responsible behavior
in order to ensure that the industry does not become a victim of
its own actions. Industry needs to go aggressive but not
cannibalistic.

In order to ensure a consistent flow of trained manpower in the

future, the industry needs to work with the government to
introduce courses at a school and college level, which are in line
with the requirements of the ITES-BPO industry. India has one
of the largest pool of English speaking graduate workforce. The
challenge for the industry is not in employment but
employability. The industry is also hiring professionals from
outside the industry in order to meet its steady supply of
manpower.

Honest corporate managers will tell you that to make offshoring

work, you need at least a 300% to 400% wage spread between
American software writers, engineers, accountants, and call-
center employees and their Indian and Chinese counterparts.
Labor costs have to be very, very low overseas -- not just lower
-- to compensate for time-shifting, managing over such long
distances, and decreased productivity.

High attrition rate, price wars, poor infrastructure and lack of

data protection laws could derail India's booming outsourcing
industry. This seemed to sum up the views of BPO fraternity at
the Nasscom summit here.

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 BPO forum has identified HR as one of the key
challenges of the BPO 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 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.
According to experts, the cost of attrition is 1.5 times the annual
salary. Age should not be a barrier for training employees and
could in fact bring in more stability to the company.

Update In November 2008

With the global financial meltdown it appears employees prefer

to stick to their current jobs as much as possible. In November
2008 BPO attrition fell to 30%. The attrition rate in few leading
companies are,
Infosys BPO 28%
Wipro BPO 18%
TCS BPO 21-22%
Tesco HSC has seen a 6% drop in attrition
In 2007 the attrition rate was about 50-55%.
WHO IS RESPONSIBLE FOR ATTRITION?

HR Heads are worried about employees leaving their

organizations. Not only is it costly to lose trained
employees but their replacements are not easy to
come by. Hence the HR strives hard to keep attrition
at the minimum.

Greg Weiss, an HR consultant and principal of

Humanagement, in extensive interviews with HR
directors at 30 companies found that most companies
have little real understanding of why employees leave.

A public poll that was conducted at Cite HR (a popular

meeting point for HR professionals) to find the opinion
of the HR community on the reasons for attrition. The
poll was titled 'Who will held responsible for attrition?
and participants have to chose an option responsible
for attrition. The options were:
Employee
Supervisor or Line Manager
Compensation & Job Profile
The Poll Results: The HR community welcomed the
poll and a large number of them participated. The
results of the poll on a specific date were as follows
(The poll still continues and numbers of voters have
increased, however, the result remains more or less
same).

Reason for exit----------------- % of respondents

Employee ------------------------ 08.03%
Supervisor or line manager -------- 38.15%
Compensation & Job Profile -------- 53.82%
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1. Employee as a reason for attrition

Only 8% HR professionals felt that employees leave

organizations on their own. Except in a few cases such
as personal reasons, family issues, location
preference, company brand and peer relationships,
employees are not self-motivated to leave the
company they are working in.

Nevertheless it is important to find out common

causes for employee initiated exits where supervisors
and/or Job Profile / compensation are not the cause.

Employee Satisfaction surveys are the ways to identify

such areas of dissatisfaction, one of which may be HR
policy guidelines of the company. If you conduct these
surveys on a regular basis and map their results to
exit interviews; new findings may identify critical gaps
in how the employees perceive your policies. Very
important trends can be identified by regular surveys
conducted over the period of 1 – 2 years. These can
also help define future HR guidelines with minimal
disruption and dissatisfaction.

2. Supervisor or Line Manager as a cause of

attrition

A large majority of HR professionals polled that

immediate managers are a bigger reason for attrition.
It confirms Wayne Hochwarter[an associate professor
of management in the College of Business at Florida
State University] theory that "Employees don't leave
their job or company, they leave their manager".

Meeting employees' expectations is a difficult task,

and most managers cannot do it effectively and
consistently. 'Satisfying employee needs' often gets
lower priority in a manager's quadrant of activities.
Further managers do not have appropriate tools to
manage employee related tasks and this leads to
further dissatisfaction.

HR should continually train managers in handling

employee expectations and provide them with tools to
manage tasks related to their teams. An online
Manager Services solution allows a manager to
constantly counsel employees, manage their career
growth and aspirations and track their achievements.

HR should also be able to track changes in employee

performance rating, gaps between employee and
manager performance, sudden increase in paid-time-
off and should be prepared to act quickly if any visible
trends are evident.

3. Compensation and Job Profile

HR Managers voted unanimously that 'Compensation

\and Job Profile' are the primary cause of attrition.
With a war for talent, disparity in the compensation
packages is bound to occur and a mis-matched job
profile increases the likelihood of an exit.

The responsibility for compensation policy and

enriching the job profile lies on the senior
management. However, balancing P&L and employee
compensation shall always be a nightmare for them
given the high cost of talented employees.

Every company wants to become the 'best paying

employer', but market forces, tough competition and a
slow economy dictate otherwise. A fair and
transparent compensation policy can still be adopted
where each employee gets his/ her dues based on
company, team & individual performance.

If your employees are convinced that they are

compensated in direct proportion to their productivity,
you have won half the battle. The other half is won
when each individual is assigned SMART (Specific,
Measurable, Achievable, Reviewable and Time Based)
goals and you can cascade these from organization
objectives.

When all employees work on goals that are aligned to

the company objectives and there is a fair and
transparent system to capture employee performance,
the likelihood of a satisfied and motivated workforce
increases and Compensation or Job Profile become
manageable causes.
STUDY OF MICRO RESEARCH PROBLEM

Workplace stress and attrition—a direct co-

relation?

The buzzing BPO sector and the exceeding stress levels and
increasing attrition rates in this industry go hand-in-hand. The
globalization effect and the booming Indian market, the
presence of which is felt across the globe, have their share of
challenges and pressures for the workforce. The evolving
sector brings along with it long working hours, the graveyard
shift in the BPO industry, demanding clients, imposing bosses,
adhering to timelines and meeting stringent deadlines,
constant pressure to perform, excel and be abreast of the
latest know-how, multi-tasking, lack of a perfect work-life
balance, all of them in totality are taking their toll on people.

RESEARCH METHODOLOGY

Chi-Square Test
Chi-square is a statistical test commonly used to compare
observed data with data we would expect to obtain according to
a specific hypothesis. For example, if, according to Mendel's
laws, you expected 10 of 20 offspring from a cross to be male
and the actual observed number was 8 males, then you might
want to know about the "goodness to fit" between the observed
and expected. Were the deviations (differences between
observed and expected) the result of chance, or were they due to
other factors. How much deviation can occur before you, the
investigator, must conclude that something other than chance is
at work, causing the observed to differ from the expected. The
chi-square test is always testing what scientists call the null
hypothesis, which states that there is no significant difference
between the expected and observed result
The formula for calculating chi-square ( χ 2) is: χ 2= (o-e)2/e
 That is, chi-square is the sum of the squared difference between
observed (o) and the expected (e) data (or the deviation, d),
divided by the expected data in all possible categories.

Step-by-Step Procedure for Testing Your Hypothesis and

Calculating Chi-Square

1. State the hypothesis being tested and the predicted results.

Gather the data by conducting the proper experiment (or, if
working genetics problems, use the data provided in the
problem).

2. Determine the expected numbers for each observational class.

Remember to use numbers, not percentages.
Chi-square should not be calculated if the expected value in
any category is less than 5.
3. Calculate 2 using the formula. Complete all calculations to
three significant digits. Round off your answer to two
significant digits.

4. Use the chi-square distribution table to determine significance

of the value.

Determine degrees of freedom and locate the value in the

appropriate column.
Locate the value closest to your calculated 2 on that degrees of
freedom df row.
Move up the column to determine the p value.
5. State your conclusion in terms of your hypothesis.

a. If the p value for the calculated 2 is p > 0.05, accept your

hypothesis. 'The deviation is small enough that chance
alone accounts for it. A p value of 0.6, for example, means
that there is a 60% probability that any deviation from
expected is due to chance only. This is within the range of
 acceptable deviation.
b. If the p value for the calculated 2 is p < 0.05, reject your
hypothesis, and conclude that some factor other than
chance is operating for the deviation to be so great. For
example, a p value of 0.01 means that there is only a 1%
chance that this deviation is due to chance alone.
Therefore, other factors must be involved.
The chi-square test will be used to test for the "goodness to fit"
between observed and expected data from several laboratory
investigations.
ANALYSIS OF DATA COLLECTION
In order to present the report with a pragmatic approach along with the
theoritical aspect some primary and secondary data is collected so as to
present our report with facts and figures.
PRIMARY DATA:
The primary data has been collected by preparing a questannaire which
was circulated over fifty BPO employees working in different
organisations.They have beeen asked questions regarding the
satisfaction level in terms of pay packages provided to them and their
satisfaction and dissatisfaction level in terms of working conditions that
is followed by the industry. A specimen of the questionnaire is
attatched.
SECONDARY DATA:
The secondary data is also of utmost importance. It helps in the indepth
analysis of the industry and the organization. Various facts and figures
have been gathered through the industry websites and organization
portals.The industry profile , growth, services, problems their working
environment and all useful information has been taken up. A list of all
those referral websites are mentioned later in the report in references.

QUESTIONNAIRE
A study of on employees working in BPO and
their satisfaction or dissatisfaction level in
terms of salary earned and working
conditions.
PARTICULARS OF EXECUTIVE/PROFESSIONAL RESPONDENT

NAME:

AGE::

SEX(M/F):

QUESTIONS

QUES 1 : What salary package are you withdrawing annually ?

ANS : (1) upto 1.5 lakhs (2) 1.5 to 3 lakhs (3) more than 3
lakhs

QUES 2: Are you satisfied with the salary package you are
working on ?

ANS : (1) YES (2) NO

QUES 3: Do you think salary packages provided by BPO industry

is justified ?

ANS : (!) As per the workload (2) Working shift

(3) Qualification (4) As per the industry norm.

QUES 4: Would you like to switch to other company if rovided

with a better salary package

ANS : (1) YES (2) NO

QUES 5: Which shift would you like to prefer ?

ANS : (1) day shift (2) night shift (3) evening shift (4) early
morning shift

QUES 6: Why do you prefer a particular shift ?

ANS : (1) work load (2) salary package (3) convinent (4)
comfortness.

QUES 7: Have you ever faced any health disorder while working
in irregular working hours

ANS : (1) YES (2) NO

QUES 8: What do you think is the main reason for high attrition
rate in the BPO

ANS : (1) Salary Packages (2)Work load

(3) changing working hours/night shifts (4) Less

scope of promotion
1. Survey conducted to determine does the employee response
varies according to the shifting pattern or not.
The following table depicts the number of good and bad response
shown by the employees of the company.

Shift Good Bad Total

Day 12 4 16
Evening 10 7 17
Night 10 7 17
Total 32 18 50

Analysis of the association between the shift and response of the

employees :

Taking the null hypothesis that there is no association between the shift
and the good & bad responses.The expected frequencies are as
follows:
E11 = 16 X 32/50 = 10.24
E21 = 17 X 32/50 = 10.88
E31 = 17 X 32/30 = 10.88
E12 = 16 X 18/50 = 5.76
E22 = 17 X 18/50 = 6.12
E32 = 17 X 18/50 = 6.12

O E (O-E)2 (O-E)2/E
12 10.24 3.0976 0.3025
10 10.88 0.7744 0.0711
10 10.88 0.7744 0.0711
4 5.76 3.0976 0.5377
7 6.12 0.7744 0.1265
7 6.12 0.7744 0.1265
Total 1.2354

χ 2 = Σ (O-E)2/E = 1.2354

For υ =2, χ 2
0.05 =5.991

Since the calculated value is much lower than the table value, null
hypothesis is accepted. Therefore there is no association between the
shift and the response of the employees.

2. . Survey conducted to determine does the level of satisfaction

varies according to the salary pattern or not.
The following table depicts the level of satisfaction and average salary
(Rs. lakhs) shown by the employees of the company.

Level of Upto 1.5 1.5 – 3 lakhs More than 3 Total

satisfaction lakhs lakhs
High 6 5 5 16
Medium 7 5 4 17
Low 10 4 3 17
Total 23 14 12 50

Analysis of the association between the level of satisfaction and

average salary (Rs. lakhs) shown by the employees :

Taking the null hypothesis that there is no association between the level
of satisfaction and average salary (Rs. lakhs). The expected
frequencies are as follows:

E11 = 16 X 23/50 = 7.36

E21 = 17 X 23/50 = 7.82
E31 = 17 X 23/50 = 7.82
E12 = 16 X 14/50 = 4.48
E22 = 17 X 14/50 = 4.76
E32 = 17 X 14/50 = 4.76
E13 = 16 X 12/50 = 3.84
E23 = 17 X 12/50 = 4.08
E33 = 17 X 12/50 = 4.08

O E (O-E)2 (O-E)2/E
6 7.36 1.8486 0.2513
7 7.82 0.6724 0.0859
10 7.82 4.7524 0.6077
5 4.48 0.2704 0.0603
5 4.76 0.0576 0.0121
4 4.76 0.5776 0.1213
5 3.84 1.3456 0.3504
4 4.08 0.0064 0.0015
3 4.08 1.1664 0.2858
Total 1.7763

χ 2 = Σ (O-E)2/E = 1.7763

For υ =4, χ 2
0.05 = 9.488

Since the calculated value is much lower than the table value, null
hypothesis is accepted. Therefore there is no association between level
of satisfaction and average salary (Rs. lakhs) of the employees.

CONCLUSION
1. Young candidates with general and IT related qualifications have
been employed in BPO. 95% of the employees are of 22 to 32 years
of age in Call Centers.
2. The main job functions of the employees have been sales and
marketing [routine] in BPO and Call Centers. Employees are working
more than 40 hrs per week in Call Centers, including
night shifts and overtime being paid. Work pressure is moderate in
both categories.
3. Average monthly income ranges between US$ 100 to 200 in BPO
and Call Centers, and only 45% express job satisfaction.
4. Role of Trade Unions has been perceived negatively in both
sectors, 15% indicates that unions protects employees rights in
finance sector majority of them do not have any previous
experiences about unions. Around 40% of the respondents in
finance sector BPO and telecom
call centers indicates that unions most important role as salary and
wage negotiation and
grievance handling.

RECOMMENDATION

1. Increase awareness about unions and their importance focusing

on the traditional role in
protecting workers rights and protecting their interest in workplace.
2. Organize activities, and campaigns to attract the young exposed
to routine, repetitive and
monotonous jobs in BPO and Call Centers, with an objective to instill
positive attitudes
towards unions.
3. Build up confidence among workers that unions could extend
protection and safeguard their
rights under International Labor Standards, as their present job
functions in BPO and Call
Centers are now extended beyond national boundaries.
4. Prepare unions and their members to cope with changes now
emerging in the new global
supply chains, supported with technology and job migration.

5. Job promotions in the organization itself by way of internal job posting

and providing effective training program regarding skill enhancement
are the key to retain workers.
6. Companies can look into various options like good rewards, bonding
programme, flexible working hours and stronger career path.
7. Management also needs to consider other aspects like secure
career, benefits, perks and communication.
8. Making work a fun place, having education and ongoing learning for
the workforce and treating applicants and an employee in the same way
as one treats customers.
9. Companies need to go in for a diverse workforce, which does not
only mean race, gender diversity, but also include age, experience and
perspectives

REFERENCES

1. www.citehr.com/84816-project-attrition-bpo-sector.html
2. www.bpoindia.org/research/attrition-rate-big-challenge.shtml

3. www.financialexpress.com/news/attrition-rate-haunts-the-
booming-bpo- sector/62777/

4. www.citehr.com/82795-employee-attrition-bpo-sector.html

5. www.scribd.com/doc/49804/SG-KE-BL-BPO-Sector-Busting-the-
Myth

6. www.citehr.com/82795-employee-attrition-bpo-sector.html

7. www.osdir.com/ml/org.telecom.india-gii/2002-12/msg00077.html

8. www.tvoir.com/portal/news/Local-News/Attrition-rate-in-BPO-
Companies-is-7-8- points-higher-than-Other-Industries.asp

9. www.coolavenues.com/know/hr/kasi3.php

10. www.indopia.in/India-usa-uk-news/latest-
news/327947/Editorial/18/20/18

11. www.coolavenues.com/know/hr/kasi3.php