Attrition Problems in Akriti Enterprises

History
Akriti Enterprises, with headquarters in Ahmedabad (Gujarat), is a leading management and technology consulting firm providing strategic business solutions for clients within the life sciences and consumer products industries worldwide. Twenty years ago, in 1991, a small group of Big Few consultants had a vision of creating a different kind of consulting company, one that focuses on the success of their clients while encouraging the personal growth of their stewards. For over 20 years, Akriti Enterprises has operated with this vision: Akriti Enterprises will be the most effective and highly sought-after integrator of business solutions for its core clients, promoting business growth and market diversification, while providing a rewarding and stimulating environment for its stewards. In the early days it has specialized expertise in mission critical business processes and technologies. They are the foundation of their service offerings. However, ten years ago they recognized the need their clients had in taking enterprise-wide projects to the next level one that successfully delivered the business benefits originally envisioned for these engagements. To effectively meet this challenge, their strategy was revised to incorporate an industry focused approach. By targeting and investing in key industry practices, they evolved their service offerings to incorporate the most pressing strategy, process, organization, and technology needs. This focus enables them to target their investments on behalf of their clients, ensure their professionals receive proper training, and create a community for their clients to collaborate on key industry issues and opportunities. They frequently compete with major consultancies and the most sophisticated buyers choose Akriti Enterprises due to their service delivery model, depth of experience on the teams. They propose industry expertise, and track record of delivering successful results. Their strategy is to be the best not the biggest. They recognize the need for their clients to assemble high impact teams with the necessary experience and culture to fit in to their organization. The market leaders turn to Akriti Enterprises to help them bridge the gap between strategy and execution to sustain a competitive advantage. Transformational projects are frequently driven by the teams themselves and their ability to bring the organization through the changes. Throughout the years they have shaped a go-to-market model that centers on working for a targeted number of core clients within their industry practices. These strategic core clients

typically engage them on transformational assignments and they commit the necessary resources to deliver superior results. This strategy allows their clients to truly hold a strategic position in their firm, get the attention they deserve, and leads to statistically higher client satisfaction than other larger consultancies. For the past 20 years, Akriti Enterprises has had the privilege of being trusted by the worlds leading Consumer Products and Life Sciences companies to successfully deliver the most complicated and mission-critical initiatives. The investments it makes in building the skills of their professionals, developing innovative approaches to solving complex challenges, and fostering their industry knowledge position them to envision fresh strategies, bring leading industry practices, and implement technologies to enable strategic results. What makes their people special is their passion for service and commitment to get the job in an environment where their client counterparts build lasting relationships far beyond the duration of their assignments. This unique service model sets them apart in the consulting industry and is a key reason their impressive repeat business, client referrals, and industry leading Net Promoter Score. They are able to deliver meaningful results due to their expertise. Their rounded consultants comprised of their 40-40-20% blend of industry, consulting, and university graduates. Frequently they attract the brightest talent from other consultancies due to their unique culture and the ability for their professionals to make an immediate difference to their clients and the firm.

A Unique Culture
Ask their clients and their stewards, and they would agree what made Akriti Enterprises unique was their culture. From the can-do attitude of their consultants to their uncompromising focus on their clients success, Akriti Enterprisess unique culture underpinned everything they did. Their culture was defined by these 10 core values:

Brilliant Client Service Business Focus Differentiated Performance Diversity Entrepreneurial Spirit

Ethics and Integrity Flexibility and Adaptability Initiative Professionalism Teamwork

At the end of the day, their philosophy is that as a private firm seeking to be the best they take care of two key constituents their clients and their people. They take these measures seriously by engaging an outside third party firms to measure their client satisfaction and their employee satisfaction. By combining integrity, adaptability, and a whatever-it-takes attitude, they have achieved an extremely high rate of retention, referral and repeat business and a 10-year average client satisfaction rate of 97% and employee satisfaction of 4.2 out of 5.

Present Scenerio
Akriti Enterprises emphasise on centralization aspect of decision making. Policies are determined by a top level manager, which has caused dissatisfaction among employees in the recent past although it has given profitable results to the organization for a long time. Atul, the manager of IT domain of the company, joined the company in 2001. After his ten wonderful years in Akriti Enterprises, he seems to be disturbed over the past one and a half year about the recent developments in his team. He has moved through the ranks to the current position. He was one of the top performers of the company with sound technical skills and always had a good rapport with all the team members from his early days. Though all the projects under his guidance were going fine, he felt a sense of dissatisfaction from quite a few of his team members in recent times. He had already received resignations from few of his team members. He was sitting in his new office cabin, after finishing a customer call. He was waiting for an e-mail from Neha, the HR manager, for the short listed candidates for the weekends interview. He had raised a request with the staffing function for new resources for his team. His team was badly hit by attrition from the past few months. He saw the reminder flash from his outlook calendar for the scheduled meeting with Anurag and Sonia, the two project managers in the company. The meeting was about to start in 5 minutes time. He started to

move towards the meeting room that was just adjacent to his cabin. To his surprise Anurag, Neha and Sonia were already there and their concerned faces clearly suggested what was about to follow. Anurag and Sonia said in a chorus voice . "Hi ,Atul ", Atul nodded with a smile. Atul said "I think everyone is already aware of what they are here for, He pointed at Neha and said "why do u think the attrition percentage has shot up suddenly?". Neha said in a loud and clear voice that most of the employees suggested in the exit interviews that they are not happy about the appraisal, reward and recognition system. Anurag replied "I think they are all aware that the hike in their domain last year was 5% where as the hike was between 10 to 12% in other domains such as Financials, Retail and Pharma. There are also other companies like TechnoWise (our competitor) that has been giving 10% hike in the same domain. Atul said, Company is losing 40% of its female consultants. They turned to Neha, the HR, to find out the reason for the same. Neha replied, The job of a tech consultant is demanding. Employees travel approximately 75 to 80 percent of the time. Survey results validated that the company was not providing female workers with opportunities for advancement. Moreover, female employees did not perceive the company had much interest in their well-being. Their interest seems to be violated and therefore the attrition rate of female employees was growing at an alarming rate. Moreover, this work life problem is not confined to just women. The work timings in the company are very odd for all the employees as most of the clients are based in United States. Hence late night client calls are to be addressed. This affects the family life of the employee. Also, the male to female ratio in the company is quiet high. The number of females in company is as large as 45%. This means that working hour problem is quiet obvious 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. This unfavourable work environment has led to high employee turnover, decline in productivity and absenteeism.

Sonia said, Some of the employee realizes that some other employee from a different organization puts in much less efforts than he does, but receives a much higher compensation than him. This causes an employee to feel that may be he is not getting compensated fairly and are causing him to quit the job Neha said, Yes, very true. In fact it is because of this mis-match of expectations and qualifications of the employees that the problem is arising. They believe that 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. Along with that some employees see no career growth in this sector, so they move onto other companies in search of changing the sector. 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. Anurag said, Definitely. Also, employee has to do the same work again and again, which makes his work monotonous and due to lack of responsibility and authority his growth is restricted to a particular role, so they move to other companies where they can play different roles and handle more responsibility. Sonia added, Some of the employees feel that they are not getting due recognition for their achievements, a feeling of de-motivation is creeping into them and this is causing them to consider leaving the organization. Employees have an expectation that when they work well, they will get some recognition from their managers in the form of a personal appreciation or an award Anurag said, The centralization and least opportunity to employees in decision making can also be added to the list of reasons for higher rate of attrition. Sonia said, High rate of attrition is causing a lot of problems and we cant live with it. We are not able to maintain proper customer relations due to lack of consistency in the service delivery. Atul said , I think its high time that we take some action. We need to maintain good relations with our customers and keep them satisfied with our services or else we will lose them thereby affecting the overall image of the company. Its not only the image of the

company that is at stake but also a lot of costs that are involved like recruitment cost , training cost (Annexure) etc. Neha Said, Yes, I have realised the criticality of this issue and have already started working on formulating new strategies and policies that can help us to curb the high rate of attrition. I request you to give me a weeks time for giving you my final policy plan on this issue Atul winded up the meeting scheduling a meeting in the next week for the discussion on the new policy plan that would be given by Neha. Now Neha have to formulate a plan which can reduce the rate of attrition and also keep the employees satisfied in the company.

Questions:
1) What are the major reasons of high employee turnover of the company? 2) What changes in HR policies are essential for reducing the rate of attrition? 3) How can the project managers help in the reduction of employee turnover?

ANNEXURE

COST OF RECRUITMENT: I.Recruitment Cost

1.The cost of advertisements; agency costs; employee referral costs; internet posting costs. 2.The cost of the internal recruiter's time to understand the position requirements, develop and implement a sourcing strategy, review candidates backgrounds, prepare for interviews, conduct interviews, prepare candidate assessments, conduct reference checks, make the employment offer and notify unsuccessful candidates. This can range from a minimum of 30hours to over 100 hours per position.

II. Training Costs

1.The cost of orientation in terms of the new person's salary and the cost of the person who conducts the orientation. Also include the cost of orientation materials. 2. The cost of departmental training as the actual development and delivery cost plus the cost of the salary of the new employee. Note that the cost will be significantly higher for some positions such as sales representatives and call center agents who require4 - 6 weeks or more of classroom training. 3. The cost of the person(s) who conduct the training. 4. The cost of various training materials needed including company or product manuals, computer or other technology equipment used in the delivery of training.

III.Lost Productivity Costs

As the new employee is learning the new job, the company policies and practices, etc. they are not fully productive. Use the following guidelines to calculate the cost of this lost productivity: 1. Upon completion of whatever training is provided, the employee is contributing at a 25% productivity level for the first 2 - 4weeks. The cost therefore is 75% of the new employees full salary during that time period. 2. During weeks 5 - 12, the employee is contributing at a 50%productivity level. The cost is therefore 50% of full salary during that time period.

3.During weeks 13 - 20, the employee is contributing at a 75%productivity level. The cost is therefore 25% of full salary during that time period.4.

IV. New Hire Costs

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

V. Lost Sales Costs

1.Calculate the revenue per employee by dividing total company revenue by the average number of employees in a given year. Whether an employee contributes directly or indirectly to the generation of revenue, their purpose is to provide some defined set of responsibilities that are necessary to the generation of revenue. Thus we can say that if a person leaves a job company has to suffer losses as it involves many costs

EXHIBITS Male-Female Ratio in Akriti Enterprises:

Male Female Ratio

Female Male

45% 55%

Percentage of Employees looking for new job opportunities (2012 and early 2013) :

India
Looking for New Opportunities Want to stay with the company

Gujarat
Looking for New Opportunities Want to stay with the company

44% 56%

49%

51%

Akriti Enterprises
Looking for New Opportunities Want to stay with the company

32% 68%

Case Notes:
1. What is the purpose or objective that the participants should achieve? The case, talks about the problem regarding the high turnover ratio of employees in a leading management and technology consulting firm which provides business solutions for clients within the life sciences and consumer products industries worldwide. The objective of the participants, while discussing the case should be, to apply the concepts of recruitment, job-satisfaction, attrition and compensation to solve the problems in the case. It will enhance the participants 2. Issues involved in the case. The primary issues involved in the case are: a) The firm is facing a high turnover ratio compared to other companies in the same industry. b) The employees of the firm are not contend with their assigned roles in the organization. Thus, there is no or minimal job satisfaction c) The wages and salaries given to the employees is not perceived to be high enough according to the employees. Also, the perks and bonus system in the firm is not satisfactory when compared to other firms in the same domain. 3. The links between the case, the concept and the tools/techniques relevant in the situation. The case is meant to be solved by applying the concepts of compensation management, employee engagement, performance management, learning & development and career management etc. The tools that can be used here is to set employee objectives, defining job-roles & responsibilities, and pay for performance. 4. Preparation expected from the participants. The participants involved in the case needs to be well versed with the concepts mentioned above. Also, having a prior knowledge of the BPO & KPO industry, and how these concepts ar implemented there can prove to be beneficial in the analysis of the case.

5. Cross references, if any, to other cases and situations.

No cross references. It is a hypothetical case.

6. Is individual or group analysis of the case needed? Ideal size of the group. The case involves many stakeholders like the Domain manager, HR manager, Project managers, the customers and the employees. The case would be best discussed in a

group of 5 or 6 people. A better way to do this is to have a role play among the group members with each member assuming the role of one of the stakeholders.