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Submitted by:

Anisha Aggarwal Anubha agarwal Kanika Arora Pallavi Singh Sujata Swarna Sharma Group 7, section E

We would like to thank Mrs. Netra Ray HR executive at HCL Pvt.Ltd. (BPO) sector 16, Noida for providing us with information about the reasons for attrition and the steps that are being followed by them and for bearing with our endless questions.

We are grateful to Professor J.R Sharma for his support and guidance and for giving us an opportunity to work on this report.

We also thank our librarian for providing us with necessary material.

At last we would like to thank our family and friends for their encouragement, motivation and support.


1). 4

Objective and purpose

2). 5

Executive summary

3). 6


3.1) meaning of attrition 7 3.2) BPO industry in India 10 3.3) pharmaceutical industry in India 11


Cost of attrition





6). 18

Ways to control attrition

7). 24

Initiatives taken by other companies.

8). 26

Interpretation and analysis




10). 29


11). 32


To find out the rate of attrition and what are the reasons for the same and how to cope up with it.


The purpose of the report is to understand the reasons of attrition in BPO and pharmaceutical industry and what measures can be taken up by the organization to bring the rate of attrition up to 25%. And to see as what the other companies are doing in order to tackle this universal phenomenon.

In the current scenario of high economic growth and rapid globalization, the fight for talent is becoming increasingly intense. Talent or human resource is a major asset for any company. Company Invest high amount of money for their recruitment, selection & training and what happens to company if these Talents or Employees leave the organization in short while seeking new opportunities. Plagued by erratic attrition trends and cutthroat global competition, organizations are now realizing the need to understand the supply-demand equation better in order to garner strong mechanisms to attract and retain top talent.

Employee retention is critical to the long-term health and success of any organization; however it is becoming increasingly difficult for companies across the globe to attract, motivate and retain key talent. Attrition rates are still on the rise and as the war for talent becomes more intense each year it is becoming increasingly important for companies to ensure they have the right people in place to guide future business success.

Overall attrition rates are continuing to rise in Asia. The aggregate rate across all markets reached 18 percent in 2007, marking a two percent increase on 2006. Meanwhile budgeted attrition, which remained lower than actual attrition, rose slightly from 10 to 11 percent year on year.

At 39 percent, overall employee turnover was highest at the professional /supervisor/ technical level. Unsurprisingly, attrition was lowest among senior/top management at just 0.5 percent. The Banking and Finance sector saw the greatest employee turnover at 25 percent, while the lowest turnover was recorded in the manufacturing industry at 11 percent.

The facts revealed that external inequity of compensation was the main reason for employees leaving their organization; however other causes include limited growth opportunities and role stagnation.

Retention also remains a key challenge in BPO and pharmaceutical industry. More than half of the employees in this sector have a retention bonus plan or are in discussions to create one. The top three retention measures suggested are: pay above the market; provide the opportunity to learn new skills; and encourage a favorable work/life balance. An overwhelming majority of companies said they house an exit-interview policy to learn more about why employees are leaving.

In an environment of rapid growth, globalization and expansion, the pressure to attract and retain outstanding employees has become a scary reality for most organizations. The new-age economies, with their attendant paradigm shifts in human capital management, have placed a heavy demand on todays organizations and Attrition is emerging as a key business concern for organizations. It is turning into a bigger issue than attracting talent. The annual attrition rate is 20-30 per cent (reduction in the number of employees through retirement, resignation or death) across industries in India. It is as high as 44 per cent in BFSI

(banking, financial services and insurance) vertical and 35 per cent in BPO (business process outsourcing). Attracting and retaining key talent has become one of the key drivers of overall business performance in organizations and companies have been utilizing a diverse range of methods to draw in new hires and ensure they stay as Attrition is an expensive phenomenon, potentially impacting the bottom line of businesses. The cost of attrition is not just the loss of that employee but it includes an array of hidden costs such as recruitment costs, selection costs, training costs, cost of covering during the period and opportunity costs. The organizational costs associated with the turnover in terms of hiring, training and productivity loss costs can add up to more than five per cent of an organizations operating costs. As far as India is concerned, attrition is a serious trend, especially in todays knowledge-driven marketplace where people are the most important assets. While organizations cope with attrition by devising compelling retention strategies, it is imperative for organizations to predict attrition early in the recruitment process to curtail loss of time, cost and effort.

First of all we need to know what attrition exactly is. Attrition is the rate of shrinkage in the size or a gradual, natural reduction in membership or personnel, as through retirement, resignation, or death. It is Normal and uncontrollable reduction of a work force because of retirement, death, sickness, and relocation. It is one method of reducing the size of a work force without management taking any overt actions. The drawback to reduction by attrition is that reductions are often unpredictable and can leave gaps in an organization. The formula for calculating attrition rate is;-

Attrition Rate% =

Total no of resignation per month (Whether voluntary or compulsory) 100 Total no of employee in the beginning of the month + total No of new joinees total no of resignation. x

Attrition causes huge loss to the company, not only in terms of manpower but also in monetary terms. The cost of attrition would be explained in details later in this report. Moreover, this report will also cover the reasons why the employees leave a company. Attrition is a universal phenomenon and no industry is devoid of it, but the degree

fluctuates from industry to industry and at different levels. Attrition by Employee Group

According to the study, the overall employee turnover rate was highest at the professional/supervisor/technical staff level, recording total and voluntary attrition at a very high 39 percent and 33 percent respectively. (See Figure 1)

The professional/supervisor/technical group constitutes a high percentage of the total employee base in all organizations and high attrition at this level impacts the business adversely. At 0.5 percent, attrition was lowest at the senior/top management level. Employees at this level tend to be nearing the end of their careers, which means they are more averse to risk and more likely to move to opportunities that are substantially better. Hence attrition is considerably low at this level.

1)Employee attrition by group


We have examined two important sectors in which the attrition rate is high i.e. BPO/IT industry and pharmaceutical industry, and we have focused basically at middle level of employees where the rate is highest. Lastly, this report will explain what can be done to control the attrition in both these sectors. And what are the measures that are taken up by other companies. 2).



BPO Industry in India

It is said that the Indian BPO Industry has come of age. This is very true if we analyze both the past and present scenarios. Defying all the permutations and combinations, the Indian outsourcing industry has registered a massive growth over the years. India has remained one of the most favorite offshore destinations for BPO/ITES activities. One of the most prominent reasons for the same is cheap labor. Over the past five years, the Indian BPO/ITES has been growing at a rate of about 5060%. As per NASSCOM, the Indian BPO/ITES registered a growth rate of 46% and clocked revenue of UD$ 3.6 billion in 2003-04 up from UD$ 2.5 billion in 2002-03.This industry has contributed a great deal to the export revenues of the country and is expected to do that in future too. This industry is expected to generate one million jobs by 2009. HR management is one of the most critical areas in this industry, so important that it can be referred to as HR-enabled services rather than IT-enabled services. The reason for the same is that this industry is facing a very high rate of attrition of around 30-40%. Though this rate is not very high as compared to US which faces an attrition rate of around 70% though, our next main competitor in this area, China, is facing the attrition rate as low as 12-15%. The consequence of the same is that this results in higher costs to the company and so the companies may lose its main competitive edge which is lower costs. Later on, we have explained why the cost of attrition is so high. This means that there is a very high need to control the attrition rate in the industry.


Pharmaceutical industry in India

The Indian Pharmaceutical Industry today is in the front rank of Indias science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology. A highly organized sector, the Indian Pharma Industry is estimated to be worth $ 4.5 billion, growing at about 8 to 9 percent annually. It ranks very high in the third world, in terms of technology, quality and range of medicines manufactured. From simple headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now made indigenously. According to the Economic Survey (2006-07), the pharmaceuticals industry had achieved a turnover of about US$ 12 billion in 2005-06, and is expected to grow by 13% in 2007. Its pharma export value reached about US$ 4.7 billion during 2005-06.Pharmaceutical industry accounts for about 2.91% of total FDI into the country. The FDI in pharmaceutical sector is estimated to have touched US$ 172 million, thereby showing a compounded annual growth rate of about 62.6%. Drugs and pharmaceuticals sector is at 8th rank in India's top 10 FDI attracting sectors. According to the Economic Survey for the year 2006-07, the value of pharma output has increased ten times over the last 15 years.

From Rs. 50 billion in 1990 it has grown to Rs.550 billion (US$ 12 billion) in 2005-06. Driven by growing number of pharmaceutical units, increased knowledge skills, improved quality and increasing national as well as international demand, India is now recognized as a leading global pharma player.



Competent workforce: India has a pool of personnel with high managerial and technical competence as also skilled workforce. It has an educated work force and English is commonly used. Professional services are easily available. Cost-effective chemical synthesis: Its track record of development, particularly in the area of improved costbeneficial chemical synthesis for various drug molecules is excellent. It provides a wide variety of bulk drugs and exports sophisticated bulk drugs. Legal & Financial Framework: India has a 58 year old democracy and hence has a solid legal framework and



Facts and figures taken from


strong financial markets. There is already an established international industry and business community.

Information & Technology: It has a good network of world-class educational institutions and established strengths in Information Technology. Globalization: The country is committed to a free market economy and globalization. Above all, it has a 70 million middle class market, which is continuously growing. Consolidation: For the first time in many years, the international pharmaceutical and outsourcing industry is finding great opportunities in India. The process of consolidation, which has become a generalized phenomenon in the world pharmaceutical industry, has started taking place in India.



There are a number of costs which are incurred by a BPO when they hire any new employee. These costs can be in terms of monetary or can be in terms of time wasted or any other intangible things. Some of these costs can be as stated below: Costs Due to a Person Leaving

I. Recruitment Costs

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 30 hours to over 100 hours per position.
3. Calculate the cost of the various candidate pre-employment tests

to help assess candidates' skills, abilities, aptitude, attitude, values and behaviors. 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 require 4 - 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 - 4 weeks. 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. Calculate the cost of mistakes the new employee makes during this elongated indoctrination period. 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 hookups, 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. Calculate the lost revenue by multiplying the number of weeks the position is vacant by the average weekly revenue per employee. Thus we can say that if a person leaves a job company has to suffer losses as it involves many costs.

The main factors of attrition in both sectors are as follows: 1) External inequity of compensation

External inequity arises when an 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 could cause an employee to feel that maybe he is not getting compensated fairly and can cause him to quit the job

2) Work Timings The work timings in BPO are very odd. This affects the family life of the employee. Moreover, the male to female ratio in BPO is quiet low. The number of females in BPO can be as large as 35%. This means that working hour problem is quiet acute in their case especially after they

get married, as after marriage comes social and family pressure to adjust work timings and take care of families.

Career Growth

Only 2 out of 10 employees on an average go on to be at the senior level. This means that other employees look forward to change their job at other places where they can get better opportunities to progress. Also, another problem arises with the mis-match of expectations and qualifications of the employees. Along with that, some employees see no career growth in this sector, so they move on to other companies in search of changing the sector. 4) Higher Education This is a problem as most of the employees in this sector are pretty young and aspiring. They join the firm because of lucrative salary. But with time, they try to move on to other sectors or top management and one of the ways to do this is higher education

5) Role stagnation

Attrition rate is higher at knowledge level (middle level) in which the 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 responsibility.

6) Work life imbalance

The scientific approach towards management and organization resulted in a rigid structural hierarchy, exhaustive specialization of jobs, deployment of unskilled employees and an unfavorable work environment. This led to high employee turnover, decline in productivity, absenteeism.

7) Lack of recognition

When an employee feels that he is not getting due recognition for his achievement, a feeling of demotivation creeps into him, and this can cause him 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 etc.

8) Under-utilization of skills

Proper utilization of skills has a tremendous impact on the satisfaction of employees. If a work is given to an employee it must be supported by adequate powers and responsibilities which enable them to move

up the career ladder and when their skills and potential is being overlooked they end up with leaving the job.

9) Performance assessment

An employee may feel disappointed by the performance appraisal report and feel that he has not been appraised in an unbiased manner. It may happen that he feels that the appraisal process itself is flawed and the appraisers are biased. This can cause the employee to put in his papers and leave the organization.

10)Internal inequity of compensation

Internal inequity occurs when the employee feels that the amount of efforts he puts in to do his job are much more than what rewards he gets in return for them. This can cause him to feel de-motivated and nurture feelings of dissatisfaction and eventually resign from his post.

11)Business instability


Many a times, when the organization faces some kind of instability or uncertainty with regards to operations, an employee might quit his job before he is asked to leave. Many a times when employees get a whim that the organization is going to down-size or is going to be taken over by another company, they tend to feel safer quitting the job than worrying about whether the organization will retain them.



In an environment of rapid growth, globalization and expansion, the pressure to attract and retain outstanding employees has become a scary reality for most organizations. The new-age economies, with their attendant paradigm shifts in human capital management, have placed a heavy demand on todays organizations. Keeping in mind that overall turnover levels in Asia are high (this includes those who are not only moving jobs but also shifting careers), attracting and retaining employees becomes one of the more strategic plans an organization can develop. The Road Ahead The road ahead for the BPO and pharmaceutical firms is very important because if they are not able to control the attrition rate they will lose their competitive edge in the global market. For these certain, strategies and certain improvements are needed to be made in the processes followed in order to bring down the rate of attrition to 25%

Providing Something Extra

Its always about providing something extra to your employees. Good salary is something which is a standard in the industry. So what needs to be done is to give some perks to the employees. They need to be given perks like rewards for their good performances. Owing to the odd working hours, the employees have very tattered personal lives. So perks like foreign tours or company sponsored vacations are always a welcome gift. ii. Honoring Performers Performance based incentives is a must in the BPO companies as these are generally the employees who gets picked up by the placement hunters most often. These employees are also among the most aspiring ones in the company so there is a need to give them ample opportunity to rise and progress in the organization.

iii.Building Relationship Relationship is something which lasts over time. So, if a company needs to hold on to its employees, it needs to build a strong bonding with the employees. As we will see in the case of Office-Tiger discussed below, there is a need to instill pride in the employees. They need to be shown that the work done by them is important. Also, work needs to be shown in the form of challenge to the employee rather than just a monotonous routine work. Provide employee with ESOPs, which would give them a feeling that they are working for themselves and that they are an inseparable part of the company. iv. HR Practices HR is the most critical department in any BPO. While conducting the recruitment, it is in the hands of HR to bring the right kind of people. HR needs to identify the employees who would stick with the company and not get the employees solely based on the qualifications and communication skills. Moreover, more diversity in the kind of employee hired needs to be brought so there is a diversified culture within the company. Companies need to look to hire from non metro cities as the employees from these cities are more likely to stay with the company than those from metros. Also, they need to keep an eye on good performing employees and have a career plan in mind. Not only this, they need to discuss it with these employees on a regular basis and take feedback from them. They also need to give their employees personal space to grow and adjust with social life. Moreover, in case of employees leaving a good exit-feedback system should be in place so as to cover the reason for which the employees leave. v. Consider feed back It is important to take feedback from employees through different means and work with the HR department to iron out differences.

Feedback can be got in two waysduring the employees tenure, and through exit interviews. Inputs can be secured from existing employees through various employee relationship management tools. Exit interviews help management learn the reasons why employees leave the company; based on their revelations, the organization can address the problems of existing employees, thereby curb attrition. vi.Quality of work life The success of any organization depends on how it attracts recruits, motivates, and retains its workforce. Organizations need to be more flexible so that they develop their talented workforce and gain their commitment. Thus, organizations are required to retain employees by addressing their work life issues.

The elements that are relevant to an individuals quality of work life include the task, the physical work environment, social environment within the organization, administrative system and relationship between life on and off the job.

The basic objectives of a QWL program are improved working conditions for the employee and increase organizational effectiveness. Providing quality work life involves taking care of the following aspects: a) Occupational health care: The safe work environment

provides the basis for the person to enjoy working. The work should not pose a health hazard for the person. The employer and employee, aware of their risks and rights, could achieve a lot in their mutually beneficial dialogue. b) Suitable working time: Organizations are offering flexible work options to their employees wherein employees enjoy flexitimings for dedicating their efforts at work. c) Appropriate salary: The appropriate as well as attractive salary has always been an important factor in retaining employees. Providing employees salary at par with the other counterparts of above that what competitors are paying motivates them to stick with the company for long. QWL consists of opportunities for active involvement in group working arrangements or problem solving that are of mutual benefit to employees or employers, based on labor management cooperation. People also conceive of QWL as a set of methods, such as autonomous work groups, job enrichment, and highinvolvement aimed at boosting the satisfaction and productivity of workers. It requires employee commitment to the organization and an environment in which this commitment can flourish. Providing quality at work not only reduces attrition but also helps in reduced absenteeism and improved job satisfaction. Not only does QWL contribute to a company's ability to recruit quality people, but also it enhances a company's competitiveness. Common beliefs support the contention that QWL will positively nurture a more flexible, loyal, and motivated workforce, which are essential in

determining the company's competitiveness.

9). Transparent work culture A transparent work environment can serve as one of the primary triggers to facilitate accountability, trust, communication, responsibility, pride and so on. It is believed that in a transparent work culture employees rigorously communicate with their peers and exchange ideas and thoughts before they are finally matured in to full-blown concepts. It induces responsibility among employees and accountability towards other peers, which gradually builds up trust and pride. More importantly, transparency in work environment discourages work-politics which often hinders company goals as employees start to advance their personal objectives at the expense of development of the company as a single entity. Employees comprise the most vital assets of the company. In a work place where employees are not able to use their full potential and not heard and valued, they are likely to leave because of stress and frustration. In a transparent environment while employees get a sense of achievement and belongingness from a healthy work environment, the company is benefited with a stronger, reliable work-force harboring bright new ideas for its growth.

10). Office-Tiger: A Role Model BPO to Follow According to Office-Tiger model it tries is to instill a sense of pride in its employees. Make the employees feel proud of doing the work they do. Every project given to them is converted to a challenge which drives away the monotony that creeps into the job. Every employee is given a feel that the work given to him or her is very important. Moreover, there should be a rigorous recruitment process. After that the employees undergo an induction program where they hone their various skills. Employees work on live projects and if, during their project work, they feel that some improvement is needed, they can go back to that stage of training. This helps the employee continuously improve himself. Also, employees are given encouragement to become Financial Analysts or Research Analysts. 11) Communication Communication is a process in which a message is conveyed to the receiver by the sender. The message may be or may not be in a common format or language that both the sender and receiver understand. So there is a need to encode and decode the message in the process. Encoding and decoding also helps in the security of the message. The process of communication is incomplete without the feedback .



Communication is the solution to almost everything in this


world. Same applies to employee retention also. Straight-from-the-shoulder communication is what the employees need from their employers. Employees look for organizations where communication and process are transparent. Nothing is hidden and shared with the employees. Communication mediums Open door policy: Organizations should support open door policies so that the employees feel comfortable and are able to express their doubts and feeling to their employers. Frequent meetings and Social gatherings Emails, Newsletters, Intranet and many more So there should be effective communication across the organization and this communication should be two-way. Communication alone can lead to unimaginable heights of employee retention.



ICICI OneSource has introduced a career diversification

programme whereby employees who have been with the company for more than 18 months can switch to positions in the ICICI group after passing internal tests. Company officials point out that the objective of this policy is to ensure that future growth of employees is getting due consideration from the senior management. Also it highlights that skills learnt in the BPO industry such as customer friendliness and rapid response to customer problems have wider applications in today's competitive markets.
Neil soft, they have crche facilities within the company

premises, and they have trained teachers to look after young children. Company officials highlight that women in the age group 28-35 are increasingly selecting the BPO industry as a preferred

career choice and as these employees have young children it becomes necessary for companies to provide adequate facilities
Wipro's Spectra mind has introduced medical insurance for

their employees and they also provide 24-hour medical facilities for employees.
Tran works Information Services and Zenta Technologies

which are already providing accommodation to their senior staff are contemplating this for lower level staff. It could also include paying the entire deposit amount for flats or a certain percentage of the registration fees. Apart from improving long-term work prospects, HR managers are providing life enhancers in the form of community or sporting activities in a bid to improve staff morale.
E-Funds International the company is focusing on social and

sporting events such as organizing six-a-side soccer games and cricket matches.
Federal Express in India believes in spotting talent early and

investing in it. Employees with leadership or management potential are identified and training programmes are held to improve their skills. They are then assigned senior management positions. Rewarding merit in this way improves the image of the workplace among the employees. Also in place at FedEx are online platforms for employees to raise issues or complaints. This ensures no issue takes an unpleasant shape or is blown out of proportion.

Intel Technology has a direct communication programme

running, wherein the president, Intel Technology India, is meeting all the employees face to face in small groups. The CEO also maintains accessibility through blogging. They have an internal committee to ensure retention of highly qualified employees by offering them alternative groups to work in. Also, consultants were hired to find jobs in other organizations for the employees who were made to leave the company. Adobe India promotes the spirit of research by giving moral and financial support to employees who have business ideas. The company then decides whether or not to approve the idea. If the idea is successful, the company absorbs it into its business; else the employee goes back to the usual job. The programme is extremely popular among the employees, and fresh ideas come in daily
IBM executive MBA programmes and Web based learning tools

help in training the employees to be better managers. Also the company sends the senior level employees to Wharton, Stanford and Harvard. It also has an anonymous feedback programme (one of the first of its kind in the country), through which the employees can give feedback freely.



Reason 1: Demand is more than supply: there is no dearth of graduates and plus two pass but the supply of people with English speaking ability in this category is not adequate. Strategy: Constantly identify talent, recruit and train either in-house if scale of operations permit that or through an outsourced training agency in case of smaller operations. Reason 2: People are joining with a short-term view and as a stepping stone to something else. Strategy: Create a culture and work environment that encourages people to think of a call center job as a long-term career option. Use counseling by HR and line management. This has to be backed up by demonstrated and perceived efforts by the management to move up the value chain so that employees can clearly see that the management is making efforts to create opportunities for upward mobility among employees. Reason 3: A lot of young people are taking up call center jobs just to earn some money on the side and not as a serious and long-term career option.

Strategy: Create a culture and work environment that encourages people to think of a call center job as a long-term career option. Use counseling by HR and line management. Again this has to be backed up management efforts to move up the knowledge continuum in terms of the processes handled. Reason 4: Long-term or intangible or contingency benefits such as PF or medical coverage do not have much attraction for call center employees as they want everything in cash. Strategy: Redesign the compensation package for call center employees and try to pay as much as possible in hard cash. Work out if necessary a new pay structure highly skewed towards cash benefits. Reason 5: Call center employees have an average age profile of 20-24 years, so they are highly emotional, impulsive and immature when taking career decisions. Strategy: Constant counseling. Reason 6: low company morale. Strategy: following steps can be taken up by the HR department in order to satisfy their employees. 4). MOTIVATING EMPLOYEES


With the strong growth expected in the Indian economy going ahead, it is clear that human resources will be the key competitive advantage if the country has to sustain this robust growth. Tackling attrition is not

an easy task and the strategies suggested in the report are not exhaustive to retain the human capital of BPOs. These are just the basics and if implemented in a proper way can give good Results, but it can only become effective when both employee & employer understand the importance of these precautionary measures & continuously follow them only then this emerging & growing sector will give its proper results.


After a detailed analysis of both the industries we find that a key step in designing an effective retention strategy is to ensure you have the right tools to gauge employee engagement. Investing in the measurement of employee engagement is a key element of building the type of high-performance culture that drives business. According to the study, regular or formal employee interaction with managers and interaction with human resources are the two most common ways of gauging engagement levels in organizations. We recommend the following points to be followed:

Good organizational behavior

Recognizing the contribution of outstanding achievers also inspires others to try hard and put in their best. A good organizational behavior also focuses on areas like training, career development and believe in equipping workforce better on the professional front. Good organizational behavior is instrumental in extending the tenure of employees in the organization as it increases their self-esteem, confidence, morale and motivation. A substantial growth of employee's self-esteem is as important as the concept of learning in the industry. Otherwise, pharmaceutical organizations will meet a sorry fate as far as retention policies are concerned.

Salary structure

Basic (54%), HRA (26%), Medical Reimbursement (8%), Management Supplement (12%), PF Contribution (actual), Tiffin Allowance (Rs 25-30 per day of attendance), Attendance Bonus (Rs 500-1000 per month), Loyalty Bonus (1 months salary after completion of each year in the company), Performance Incentives (linked to specific performance criteria), Referral Allowance (Rs 2000-3000 per candidate referred and recruited). The EEE-Model Exposure, Experience and Education are three things which are vital to any employee in any sector or industry. These needs of the employees are needed to be taken care of for an employee to feel motivated An employee expects the company to give him good exposure in the kind of work he is doing. Not only this, he needs to get a good experience working in the company from its top management and colleagues. Monthly dinner with CEO of bonding programs with the other employees of the BPO would be a good idea.

Also, some employees aspire for higher education to increase their knowledge base. Some partnership with management institutes for short courses needs to be provided. Alternatively, company can bear all the cost of further education for its good performing employees.


Methods to relieve stress

Stress is important from the point of view of retention and productivity. Consequently, company can:

Organize events such as picnics, dance parties, gettogethers, cultural evenings, quizzes and games and outdoor sports and games. Appoint professional agencies to organize regular stints of aerobic exercises and dancing sessions for employees as part of stress management.



The Hindu 14 July 2008, Monday, business (newspaper). Hewitts attrition and retention report 2006... Stephens Robbins, Organizational behavior, Pearson education

( 2008) ,page 234.