INTRODUCTION TO EMPLOYEE TURNOVER In IT INDUSTRY

There are some keys to win over the employees in an India Software Company. The IT managers have forgotten those soft-skills and techniques in the long-coarse of time. This is one of the reasons why Software Companies faces high ratio of employee turnover in a firm. The survey carried on Top Software Companies in India tells that the employee dissatisfaction level has increased up to 27% in 2007. Most of the employees complained that the pressure given by their boss and dumping work-load in Software Outsourcing setting. Now what worst could happen in Software Company, if the company fails in delivering positive energy to the employees and cares less about their employees. Such companies usually lack the motivation to deliver to its worker due to ill-prospect manager in the firm. Most of the managers find difficult to delegate the work to their employees. They are not at fault perhaps, but even they are not talk to do the same. India Software Development needs to have an organized structure and management so as to retain their employees for long-time. Consolidations should not be only in the words, but all also action performed by the IT Manager.

MEANING OF EMPLOYEE TURNOVER:

Employee turnover occurs when employees voluntarily leave their jobs and must be replaced. Turnover is expressed as an annual percentage of the total workforce. For example, 25 percent employee turnover would mean that one-quarter of a company's workforce at the beginning of the year has left by the end of the year. Turnover should not to be confused with layoffs, which involve the termination of employees at the employer's discretion in response to business conditions such as reduced sales or a merger with another company. “Employee turnover has been defined as the rate of change in the working staff of concern during the definite period”. In other words, it signifies the shifting of work force into and out of an organization. It is a major of extent to which old employees leave and new employees enter into service in a given period. Employee turnover is the cause and effect of instability of employment, apart from being a major of the morale and efficiency or otherwise of worker. Therefore, it can be concluded that Employee turnover is a perpetual concern for companies. Having to replace staff at regular interval can be headache for a busy manager and the entire resource- shaping circus of hiring and training new employee is one that company scarcely look forward to.

FACTORS RELATED TO EMPLOYEE TURNOVER:

There are several factors which are related to employee turnover, thus, as shown with the help of diagram as below:

The explanation of these factors related to Employee Turnover is as under:
1. The Economy in this model, the overall economy sets the

stage for alternative employment opportunities. In a tight economy, generally there are less alternative opportunities and

Company culture is determined by a bunch of things as skills. 2. Company culture is another strong determinant of turnover intentions. rewards/recognition. 4. a younger workforce will have more job and company changes than an older workforce. Industry Trends the Health Care industry is a good example of how industry trends interact with the general economy. 3.employees are less willing to leave their current jobs even if they are dissatisfied. All things being equal. This has created an atmosphere of uncertainty and dissatisfaction for many health care professionals. The current good economy offers career opportunities outside of the industry and can increase the level of turnover that might already occur. Some of this has little to do with enlightened practices and is simply a product of workforce demographics. leadership. Part-time personnel are less stable than full-time personnel and a workforce with greater average tenure will have fewer turnovers than a workforce with less average tenure. The net effect is that turnover is very high in this . Within any industry. and communications. With managed health care has come an increased focus on profitability and cost reduction. and rapid consolidation of hospitals. there are some organizations that simply do a much better job of retaining employees than others. Organizational Characteristics nested within an industry is the specific organization.

There is a well documented body of research that suggests the following job characteristics are most commonly associated with job satisfaction: ∗ Variety . and India have created tremendous opportunities and competition for talented IT .Jobs that offer greater freedom and choice in execution (i. Job Characteristics one of the most researched areas is the relationship between job satisfaction and turnover. empowerment) are associated with higher satisfaction levels ∗ ∗ Identity . 5.e.Jobs that offer a sense of ownership and personal accountability are associated with higher satisfaction levels ∗ Feedback .Jobs that offer intrinsic feedback on quality of performance are associated with higher satisfaction levels Defining the Employee Turnover Problem: Global outsourcing and the astounding amount of foreign direct investment pouring into China. Russia.Jobs that offer a greater variety of tasks are associated with higher satisfaction levels Autonomy ..industry and there is an increasing shortage of qualified professionals.

Indian IT-ITES industry recorded US$ 39.30%. A recent study revealed that employees leave either because of compensation reasons or due to better growth opportunities. The downside of this increased competition is a rising rate of turnover. The IT industry's contribution to GDP was 4. According to NASSCOM. particularly in India. . Almost every sector in India is facing high rates of turnover these days. it is constantly facing high turnover rates of 25% .6 billion in revenues in 2006-07. Below are the details of turnover rates of various players in IT sector shown with help of diagram:According to the survey conducted by BES and Data Quest. Even the big brands are also facing the same problem. Though the IT/ITES sector is booming. Sierra Atlantic recorded highest turnover rate (29%) followed by Kanbay with 25% and Accel Frontline with 20 per cent.professionals in those countries.8 per cent in 2005-06. The revenue of US$ 49-50 billion has been projected in 2007-08 at a growth rate of 24-27 per cent.

hire. interview. How do the hiring and training processes break down in terms of total costs in India? . Think about the time and money it took to find. train.Turnover Rates of Major IT Players To put these turnover numbers into perspective. then 25 of its IT staff will leave each year. if a company has 100 programmers and a turnover rate of 25%. Now think about losing them and starting the hiring and training processes anew. and coach those 25 people.

Now imagine a 25% turnover rate and replacing 25 of these programmers each year. negotiating. Companies usually allot one week for programmers to become familiar with the new business. it quickly becomes apparent why companies are investing in strategies to prevent turnover. TRUTHS ABOUT EMPLOYEE TURNOVER . two more weeks for technical training.000 annually in acquisition and employee training costs. screening. Based on a yearly salary of $15.000 for the programmer. and one last week for customer training.The typical time for advertising. After considering these figures. interviewing.000 for the human resource person and $25. it would cost an additional $63. and hiring a new employee is about two weeks.

Secondly. So. most of them will be at the top of their pay scale which will result in excessive manpower costs. abilities & attitudes which can keep the organization from becoming stagnant. approaches. there is no such thing as zero attrition. Consider the costs of replacing the key employee who falls in to . if all employees continue to stay in the same organization. Turnover Includes Costs: Turnover always includes some costs. Firstly. There are other such facts about turnover. rather than achieving zero attrition companies should focus on identifying whom they want to keep so that they have healthy attrition rate. Companies may have healthier turnover rates. Some of such facts relating to employee turnover have been highlighted below: Turnover Always Happens: Companies who believe in zero attrition rates only fool themselves. however. new employees bring new ideas. Nothing can top these employees from moving on. about which most of us are not aware. This happens because employees keep on moving due to reasons like marriage or further education. Some Turnover is Desirable: Zero attrition is not desirable mainly because of two reasons.It is difficult to accept when organizations say they have zero attrition rates.

low engagement levels. motivating. The Manager Can Reduce Attrition: Managers should take primary responsibility for retaining their employees. developing. etc. 6. loss of knowledge and so on. loss of morale. training costs. Moreover. There should be universal acceptance of the . Salaries are not always the solution to attrition. High Salary Doesn’t Work: Most managers assume that a high salary package is enough to keep employees loyal to their organization. Managers should try to support their subordinates and give proper feedback on performance. less support from superiors and so on. Reducing Turnover takes Commitment: Reducing turnover takes an investment in coaching. no recognition. HR managers should work in collaboration to make the key employees last in their organization. poor working conditions. low productivity. This includes the costs of recruitment advertisement. mentoring & listening to people. Managers should try to identify the roots of the problem and then find a feasible solution. referral bonuses. Much of the employee’s perception of job satisfaction stems from the relationship they share with their immediate supervisor. selection testing.the category of high performers. turnover results in loss of time and efforts. Employees may face other problems like low job satisfaction.

goal of reducing turnover along with top management commitment and dedication. REASONS FOR EMPLOYEE TURNOVER .

All the major IT companies have faced these realities. At the same time the attrition cannot be attributed to employees alone. non- . The way the industry is projected and speed at which the companies are expanding has a major part in employee turnover. For a moment if we look back. The readiness in all aspects will ease the problems to some extent. Even today. When there is no focus and in the absence of business plans. But in call centers the reasons are many and it is also true that for funny reasons people change jobs. In our country we start the industry and then develop the infrastructure. work practices and credibility of the organization. Organizational Matters: The employees always assess the management values. work culture. Turnover does not happen for one or two reasons. There are always ups and downs in the business. If you look within. The Indian companies do have difficulties in getting the businesses and retain it for a long time. Various studies/survey conducted indicates that every one is contributing to the prevailing attrition. the main reason for changing jobs is for higher salary and better benefits. did we plan for the growth of this industry and answer will be no.It is not easy to find out as to who contributes and who has the control on the attrition of employees. the specific reasons for attrition are varied in nature and it is interesting to know why the people change jobs so quickly.

good treatment from the superiors. friendly approach from one and all. Monotony sets in very quickly and this is one of the main reasons for attrition. They take time to get adjusted with the new campaigns and few employees find it difficult to get adjusted and they leave immediately. rigid rules and stick approach will not suit the call center. Youngsters look jobs as being temporary and they quickly change the job once they get in to their own field. Job Matters: No doubt the jobs today bring lots of pressure and stress is high. It is quite common that employees are moved from one process to another. Employees expect very professional approach and international working environment. Employees look for freedom. It means bossism. and good motivation. good encouragement. Working Environment: Working environment is the most important cause of high turnover. The other option is to move to such other process work where there is no pressure of sales and meeting service level agreements (SLA). The employees move out if there are strained relations with the superiors or with the subordinates or any slightest discontent. The employees leave the job if there is too much pressure on performance or any work related pressure.availability of the campaigns makes people to quickly move out of the organization. They expect very friendly and learning environment. .

The next important personal reason is going for higher education. headache. Health is another aspect. Poaching: . Employees who have allergic problems and unable to cope with the AC hall etc will tend to get various other health problems and loose interest to work. MCA and others appear for GATE examination or other examinations and once they get cleared they quickly move out. The salary and offered from Foreign companies have gone up very high and it is highly impossible for Indian IT companies to meet the expectation of the employees. throat infection and gynecological dysfunction for lady employees. Most of the BE. better positions and better benefits are the most important reasons for attrition. The employees expect salary revision once in 4-6 months and if not they move to other organizations. Employees do get affected with health problems like sleep disturbances. The foremost personal reasons are getting married or falling in love or change of place. indigestion. Personal Reasons: The personal reasons are many and only few are visible to us. which contributes for attrition.Salary and Other Benefits: Moving from one job to another for higher salary.

The placement agencies have good days for doing more business. HR has not really understood the problems associated with employees’ careers and jobs. An HR professional can be termed an employee’s advocate and a bridge between top management and employees at all levels. There is a huge gap between HR professionals and employees in terms of understanding challenges and delivering requirements. By doing this it is easier to meet the company’s business targets.The demand for trained and competent manpower is very high. EFFECTS OF EMPLOYEE TURNOVER . Poaching has become very common. The big companies target employees of small companies. The employees with 4-6 months experience have very good confidence and dare to walk out and get a better job in a week's time. The company’s overall plans and strategies also depend on HR professionals as they voice employees’ problems and requirements. Employee’s Advocate: One of the main reasons why employees leave companies is because of problems with their managers. Most of the organizations have employee referral schemes and this makes people to spread message and refer the know candidates from the previous companies and earn too. The HR department should have genuine interest in the employees’ welfare…it is responsible for making sure that their expectations are met.

Additional direct and indirect cost increase the cost of production and in turn there is a reduction in the profit. 3. But employers should remember that turnover is not that bad either. Bringing in new ideas and skills from new hires. 4.There is no set level of employee turnover which effects on the employing organisation become damaging. An optimum mix of employee turnover can help in many ways. Productivity 2. Interdependence of workers which creates bottlenecks in the smooth flow of activities which affects the overall co-ordination. Service delivery 3. A little rate of employee turnover may result into: 1. More staffing flexibility. REDUCING EMPLOYEE TURNOVER . 5. Mostly it is said that employee turnover is not good for the organizations. 2. What is required is an optimum mix of turnover. not too high-not too low. Spread of organizational knowledge 4. Better employee-job matches. Facilitate change and innovation. High rate of turnover may lead to decrease in: 1.

In addition. Skill Interventions 3. The employment culture is changing as well. Selection Interventions EARLY INTERVENTIONS: . there are Seven Major Areas of Intervention that helps to Reduce Employee Turnover mentioned below: 1. Early Interventions 2.With today's baby boomer generation beginning to retire from the labor market. Turnover is becoming a serious problem in today's corporate environment. many IT companies are finding it increasingly difficult to retain employees. Communication Interventions 5. Reward/recognition Interventions 6. Therefore. rather than grow with one company throughout the employment life as was once commonplace. It is now relatively common to change jobs every few years. Job Enrichment Interventions 7. employees are increasingly demanding a balance between work and family life. Leadership Interventions 4.

and gradually introduces the employee into the organization. A good orientation program helps prevent misunderstandings. Managing employee’s expectations should actually start before employment. Thus the Orientation Programs should not be a one-day event. gives better results of training efforts.The fact that large numbers of employees turnover in the first six months of employment suggests that this is a critical time for helping people adjust to new roles. establish a support system for the new employee. the personal development of employees helps in employee retention. LEADERSHIP INTERVENTIONS: . A good practice is to set up a "buddy" system for new employees. they have low turnover rates. making introductions. they should span the first three months of employment. and helping avoid early pitfalls. Most importantly. and they have impressive numbers of applicants per job. For Example. providing advice. A "buddy" is a seasoned employee who volunteers to "look out for the new employee". rather than a one-day "core dump" of information. By providing just-in-time information and training. the top-rated companies spend considerable time in training their people. SKILL INTERVENTIONS: Keep employees motivated and committed by enthusiastically offering both training and development opportunities. On the hand.

3.Do what you say you are going to do or offer a good reason why you cannot. Measure employee perceptions of leadership behaviors and incorporate behavioral expectations into leaders’ performance management expectations. such as: 1. Same applies to employee retention also.Better Bosses mean lower turnover.Use suggestion boxes as an anonymous way for employees to speak out. To impact turnover. COMMUNICATION INTERVENTIONS: There are certain ways of communication intervention that helps to reduce turnover rates. 2.Set up monthly or at least quarterly forums in which employees can talk with decision-makers on issues important to them. make sure that supervisory promotion and training programs have interpersonal skills as part of their focus. and interacting in a fair and considerate manner are all things that good leaders do to help new employees be successful and receive enjoyment from their jobs. Eliminate Fear Of Reprisal: . Establishing performance expectations. providing coaching and positive feedback. Improve Credibility: . Find Ways To Communicate: . .Communication is the solution to almost everything in this world. 4. Hold Open Forums: . thus employers should determine various ways of communication such as a quarterly employee newsletter.

but the creative use of money is a key to retention. This type of bonus can be very effective if performance metrics are readily available and additional costs are consistent with the value of superior performance. Various kinds of contingent bonus strategies can be used to help with retention. Share important information so this might make employees feel a sense of accomplishment or on problems that might encourage them to go the extra mile. .Treat employees as partners. 3.5. REWARDS/RECOGNITION INTERVENTIONS: Money can talk volumes. Performance bonuses can help an employee reach high levels of income providing they can consistently demonstrate superior levels of performance. This type of bonus system can help guarantee service for a finite number of years but also address long term retention. Share Important Information: . which are:1. Deferred bonuses are paid out incrementally with a significant back-end payoff for a combination of performance and retention. Salary Adjustments a third option besides the use of bonuses a regularly salary adjustments for your star performers or an individual with key skill sets so that they are not tempted to go elsewhere for bigger paychecks. 2.

to avoid costly turnover. EMPLOYEE RETENTION STRATEGIES .JOB ENRICHMENT INTERVENTION: Increasing the job satisfaction of high turnover jobs can reduce turnover. the following job design strategies are associated with increased job satisfaction: 1. you can have a huge impact on turnover. the right education and work experiences are not enough to ensure employee survival. Provide greater ownership and decision-making on how the job is performed and hold the job holder accountable for quality of outputs 3. For individuals who have a need for growth. today hiring managers must look beyond the candidates’ ability to perform and make sure the candidate is also motivated to perform in the work opportunity. By improving the initial fit between an individual and a job. Improve the accuracy and quality of feedback on performance SELECTION INTERVENTION: Improved selection may be the most powerful weapon against turnover. therefore. Selection is a preventive technique for reducing turnover. Add more significant responsibilities 4. Increase the variety of tasks performed 2. Hiring managers have become more sophisticated in identifying the candidate whose credentials best match the requirements of an open position. However.

3. 4. Low Level. Recognize and appreciate their achievements. Keep providing them feedback on their performance. the basic practices which should be kept in mind in the employee retention strategies are as following: 1. 6.e. Make employees realize that they are the most valuable asset of the organization.Apart from above mentioned Intervention Techniques another means to Reduce Employee Turnover. is applying Employee Retention Strategies. Therefore. trust them and respect them. 8. Create an environment where the employees want to work and have fun. These practices can be categorized in three levels of management i. Empower the employees: Give the employees the authority to get things done. Have faith in them. Keep their morale high. Hire the right people in the first place. Medium Level and High level which is shown with the help of Flow Chart as under:- . 5. 9. Provide them information and knowledge. 2. 7.

HOW TO RESTRANIT EMPLOYEE TURNOVER .

" People analyze the training programmes of prospective companies with those of their current organization. "In several cases. Vision and Objectives: The next level of communication. money is still considered to be the highest priority. better learning opportunities. employees have opted for the latter as it allows them to learn new technology and increase domain expertise. following are the ways to curb employees in an organization as under: Money Is Not Everything: Although the importance of higher packages is slowly diminishing. faced with a choice between more money and a challenging job." A number of professionals are looking at more challenging jobs. among fresher or laterals with less than three years of work experience. thus. a crucial part of retention. which means that how an organization grooms an employee is weighed to a greater extent. They also look for a job with higher levels of responsibility. Employees want not only work recognition. . but also extra perks. This is because they know that developing next-level skills will keep them ahead in the job market. and finally result in better compensation. starts with acquainting employees with the company’s vision and objectives.Employee Turnover has become a major concern for organization today with labor shortage and competitive pressure making retention of key employees a strategic issue.

Companies should have a similar approach to employees and customers. employees will be confident about the future and not try to look for better options. and reward factors will contribute to holding back employees. especially new entrants. industry experts have found several loopholes at the top management and HR management level. It is at this time that new entrants experiment with different options. Hence they should be exposed to the best values the company has. they should be familiarized with the culture of the company. about the company’s status and achievements is a must. Conducting regular meetings and updating employees. Mentoring and handholding new recruits from day one to four months are important tasks. If a company strives to retain an employee in the same way it tries to retain a customer. during this period. him leaving the organization could be out of question.” If they are informed about regular happenings in the company. Treat Employees like Customers: Even while companies strive to understand which organizational.” They should concentrate on leadership and brand building as people prefer to be associated with a brand. . job.Organizations successful in retaining employees clearly pass on their goals and achievements. The youth should feel proud to be a part of the billion-dollar industry.

In cases of peer pressure. . and through exit interviews. based on their revelations. which attracts the right talent and helps in retention as well. organizations need to structure their offer-mix while recruiting new hires. “The feedback we get through this tool will be analyzed. the organization can address the problems of existing employees. This communication begins right from recruitment. and action will be taken on it. an employee aims to join a well-known company.Since software professionals have different priorities at different points of time. Our employees are very excited that their feedback is being taken seriously. Communication is the foundation for the entire process of managing attrition. Consider Feedback: It is important to take feedback from employees through different means and work with the HR department to iron out differences. Understanding an employee’s needs at various levels is a recommended HR practice. As industry experts point out. as well as promoting potential ones. This could be achieved by brand building.” says Sahoo. Inputs can be secured from existing employees through various employee relationship management tools. The Wipro Listens and Responds initiative at Wipro aims to capture the concerns and grievances of its employees. thereby curb attrition. Exit interviews help management learn the reasons why employees leave the company. feedback can be got in two ways—during the employee’s tenure.

thereby giving IT workers more free time. educational assistance. Standard perks for an India-based "fresher" (a new entrant in the IT services industry with little work experience) typically include free transportation. According to Wipro's web site. IT service providers have to offer innovative compensation and benefits—or risk losing valued employees to competitors. its employees even have access to an agency that will handle such "domestic chores" as paying bills.Spend Time Developing and Benchmarking Incentives: Whenever the demand for a professional arises in a particular field. and interest-free loans to absorb the cost of relocation or maybe to finance the purchase of a two-wheeler. Change Locations: The high prices and resource crunch in top-tier Indian cities such as Bangalore and Mumbai have led many companies to execute . healthcare benefits. performance-based bonuses. stock options. the perks associated with the job start to pile up. onsite cafeteria. Nonstop evaluation and benchmarking are "need to do" activities for IT managers.

and the search to find qualified people may take longer. In response. where labor and real estate costs as well as attrition may be cut in half. projects. Many vendors are sending work to tier-two cities (Hyderabad or Chennai) or even tier-three cities (Noida or Chandigarh). and European multinational companies have long had learning programs that set expectations for performance goals such as learning a particular tool or proprietary software. Established U. It may become the only reason your best employees stay with you.S. Companies practicing off shoring need to provide new challenges and opportunities for skills development through training or job rotation. Such benefits come at a price: The infrastructure quality lags that of more advanced cities. so it pays to periodically survey employees —hopefully before their exit interviews . and technologies.alternative location strategies. Offshore employees are asking for a clear career path with increased responsibility and frequent recognition of achievement. Rotate Employees: Employees who don't feel challenged by their work often leave. Just Ask: Are Your Employees Satisfied? Retention is inextricably linked to employee satisfaction. companies such as TCS have programs that rotate employees into different disciplines about every two years and expose them to new locations.

it can be hard to convince management to allot more time to the . which don't reveal as much as the reasons they stay. however. Too often. For example. An important aspect of implementing a retention program understands that it should not be one-size-fits-all. Spend More Time Recruiting: With huge projects ramping up within exceedingly short windows. then they truly have to be designed with the employee in mind. and act on the data gathered. since they would have allowed him to spend time with his family. individualized needs. If your company doesn't bother. If incentives are meant to keep employees happy. The aim is to determine why some employees depart and some remain with the company. Many companies examine the reasons employees leave. a company might reward a father with three young children a monetary bonus as thanks for working overtime for five months straight. To the father. don't be surprised if workers head for the door as soon as year-end bonuses are handed out or stock options vest. and organizations should tailor incentives for their employees if they want to retain them. and to define the traits of productive. days off might have been more attractive. The global workforce has different. employers and employees disagree on what constitutes a good incentive.—about job satisfaction issues. successful employees. Knowing your employees and personalizing rewards makes a difference.

Simple measures. it's difficult to retain good employees if the company doesn't have a process to hire the right people in the first place. However. Having employees interview candidates also may increase the chances of success. such as incorporating skills tests that relate directly to the job in question. can help companies to determine whether the applicant is indeed an expert programmer or merely an intermediate programmer.recruiting process. as these employees can better identify potential personality clashes that HR personnel may not spot. EMPLOYEE TURNOVER COST CALCULATION .

. This describes how the cost of turnover is can be calculated using some basic organizational parameters... + Cost of Additional Temporary Help …………………………………………….The impact of employee turnover on company performance is often understated by organizations. The calculator should only be used as a guide in understanding the impact of turnover on a company.Wages and Benefits saved due to Vacancy ……………………………………… Cost of Replacement: .. . The following table can be helpful to calculate the cost of employee turnover per week or per month:- Separation Cost/Employee Detachment Cost: Cost of Exit Interview …………………………………………………………… + Cost of Termination Time ………………………………………………………. The purpose of this document is to provide talent cost of turnover calculator with insight into how costs are calculated and the reasons why certain costs were include or excluded form the calculator.. + Cost spent in Administrative Procedures ………………………………………… + Increased Unemployment Tax …………………………………………………… Cost of Vacancy: Cost of Additional Overtime ……………………………………………………. If the desire is to understand the true cost of turnover then it is suggested that a greater degree of analytical work is undertaken.

Pre Employment Administrative Expenses + Cost of Attracting Applicants + Cost of Entrance Interviews + Testing Costs + Staff Costs + Travel and Moving Expenses + Post Employment Information Gathering & Dissemination Costs + Cost of Post Employment Medical Exams Training Costs: Cost of Informational Literature + Formal Training Costs + Informal Training Costs Employee Performance Differential: Differential in Performance Costs/Benefits TOTAL TURNOVER COSTS PER EMPLOYEE MEASUREMENT OF EMPLOYEE TURNOVER:- .

no.X 100 Avg.Three different methods are used for measuring the Employee turnover rate: 1) SEPARATION METHOD: It is computed as: Number of separation in a period -----------------------------------------. no. of worker 2) REPLACEMENT METHOD: It is calculated as:Number of replacement in a period ------------------------------------------.X 100 Avg. of worker 3) FLUX METHOD: It is calculated as:Number of separation + Number of replacement ----------------------------------------------X 100 Avg. of worker BENEFITS OF TURNOVER . no.

The term “healthy turnover” or “good turnover” signifies the importance of less productive employees voluntarily leaving the organization.Turnover is not bad always if it happens in a controlled manner. whose continuation of service would have negatively impacted productivity and profitability of the company. The only concern is how organizations differentiate “good turnover” from “bad turnover”. When certain employees leave. This means if the ones who have left fall in the category of low performers. Turnover rates are considered to be beneficial in some ways: 1. If all employees stay in the same organization for a very long time. approaches. 3. 4. New employees bring new ideas. There are also some people in the organization who have a negative and demoralizing influence on the work culture and . the company is benefited. most of them will be at the top of their pay scale which will result in excessive manpower costs. Some turnover is always desirable and necessary for organizational growth and development. the turnover in considered being healthy. 2. abilities & attitudes which can keep the organization from becoming stagnant.

The only positive point is that the realization has initiated action that will lead to cutting loss. but when undesirable employees leave the company. This. Even good turnover indicates loss as recruitment is a time consuming and costly affair. It benefits the organization in the following ways: o o o It removes bottleneck in the progress of the company It creates space for the entry of new talents It assists in evolving high performance teams 6.team spirit. SUGGESTIONS . lack potential for future or need disciplinary action. There are people who are not able to balance their performance as per expectations. However. in the long-term. as the rewards are limited. Desirable turnover also includes termination of employees with whom the organization does not want to continue a relationship. business pressures do not allow the management to overreward the performers. Furthermore. 5. is detrimental to organizational health. some companies believe turnover in any form is bad for an organization for it means that a wrong choice was made at the beginning while recruiting. the good employees can be given the share that they deserve.

Setting a time frame and numbers creates impetus for action. 3. Retentions. Consider potential benefits of encouraging informal mentoring. 6. A clear link between business goals and the desired results of the succession planning will assist in gaining commitment from the organization and staff. 2.Employee turnover for instance may include cost that results from employees’ slower work pace and increased absenteeism. To be successful it must be portrayed as a core issue. Implement careful and strategic planning for targeted individuals’ career development. A company puts in maximum investment towards developing its manpower in order to get best output which results in high profit and productivity for the company. The grievance redressed procedure can be improved. Following suggestions are given to decrease the percentage of Employee Turnover in IT Industry as under: 1. Initial and on-going personal involvement of the Chief Executive is crucial to success. Clearly define targets and goals. 7. and Retirement benefits should be properly imposed. The 3 R’s that is Recruitments. . thus. Ensure there is strong leadership and commitment from senior management. Better pay package for deserving employee can be considered for their retention. Integrate succession planning into business and diversity objectives. 5. 4. Being identified is not enough. MBO technique can be applied so that employee set their own goals.

CONCLUSION .

3. . Therefore. With all these they also. Employees leave not always for higher salaries. Rather. They expect the management to get a buy-in from them on critical decisions that effect the organization. as well as the other promises communicated. the major issues lie with the unarticulated needs of the employees. the following points have been concluded:1. 4. The main objective of this report is to study vital causes of employee turnover and their effects on the IT industry and to discover those hidden roots of the trouble to reduce such employee turnover. They want to trust the senior management and also walk the talk when it comes to living the vision and mission. Employees often expect a sense of worth from peers. quite naturally yarn for a well-planned career growth path. But the fact remains that however satisfied they may seem employees leave.The ever-increasing tangible and intangible costs of replacing an existing employee with known skill sets and knowledge of the organizational culture would leave any HR executive with sleepless nights. So employee turnover is sometimes referred to as a symptom of many hidden problems. seniors and other departments. In fact. Inculcating values like trust and accountability among the employees is the best way to hold back talents in an organization 2. there is a limit to the salaries an employer can afford to pay even its best performing employees.

The human resource department has a critical role to play in this organization-individual competency alignment. 6. Trust.5. employees need to be trained through role transitions. Finally. 7. They need to work on the existing data on performances and generate actions plans for individual level performance management. The responsibility of predicting process and individual performance levels based on industry trends is entirely on the HR team. while formulating effective employee retention programmed. The factors can be encapsulated as Fit. employers need to take care of all the factors that affect an employee. Confidence & Trust. This allows employees change their career path as per their skills and future goals. . To ensure that their skills and roles are aligned to that of the organization. and Listening.

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