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ATTRITION

“A reduction in the number of employees through

retirement, resignation or death”

“Unpredictable and uncontrollable, but normal,

reduction of work force due to resignations,

retirement, sickness, or death.”

RESIGNA-
TION

SICKNES RETIRE-
S ATTRITION MENT

DEATH

MEANING

Attrition is loss of a resource through obsolescence or spoilage. Attrition in

various forms at various different places means different things. In general the term

attrition may have the following meanings:

• In military it means:

a) Loss of person by withdrawal military.

b) Attrition welfare, the military strategy of wearing down the

enemy by continual losses in personal and material.

• In medical terms:

The loss of participants during an experiment.

• In terms of Dental Studies it means:

Loss of tooth structure by mechanical forces from opposing teeth.

• In terms of weathering as a natural phenomenon:

a) The wearing away of rocks in the sea.

b) A rubbing away or wearing down friction.

• In the Catholic Theology it means:

Imperfect contrition also known as attrition, in catholic theology.

• In terms of Language it means:

Loss of a first or second language or a portion of that language by

that community or an individual.

• Attrition also has a historical significance:

War of attrition, a limited war fought between Egypt and Israel from

1968 to1970.

• In corporate terms:

gradual, natural reduction in membership or personnel, as through

retirement, resignation, or death.

• In relation to a customer in business it means:

Customer attrition, a business term used to describe loss of client

and customers.

• In various other terms:

a) Repentance for sin motivated by fear of punishment rather than by

love of god.

b) A gradual diminution in number or strength because of constant

stress.

This project deals with attrition in any business organization.

Attrition is one of the biggest issues that any organization faces and in fact the

growing industries are facing presently. In any organization that is employee

centred, attrition means a situation, which an employer faces when any employee

leaves the organization due to any avoidable or unavoidable reason such as job

dissatisfaction, new opportunity in the market, retirement or any natural

causes such as sickness or death. The reasons for attrition may range from

professional to personal.

Attrition is a common phenomenon in any organization. Attrition in any way is not

beneficial for the organization. It is a very negative phenomenon and causes huge

any employee . recruitment. • The effects and impacts of attrition are also mostly negative resulting in various types of losses for the organization like the loss in costs acquired by the organization due to the processes of hiring. ATTRITION: AN INTRODUCTION Any new employee joining any organization usually has various dreams regarding his/her job and the nature of the job and work atmosphere. The loss can be in terms of money as well as in terms of manpower. • It also results in various incompetent processes like the inability of the company to offer services for various technical processes. training of the employees. Ideally.loss to the company.

get ample flexible schedule so that they can attend to their family and personal needs when necessary.  Inflexible and tight work schedules. In return the employee is more than happy to offer his services with full hard work and dedication to the organization. get ample chance for their career growth and advancement within the organization. And then there is the real world when the person really enters the organization and gets to set in the work culture that the harsh realities of the world come in front of him and cause him to exit the organization. This person is a person full of enthusiasm and youthfulness to give all he can to the organization and considers all the above said conditions to be just too minimal and minute. .  Do not like the work atmosphere.  Hate their coworkers. But then this is just the mind full of dreams and hopes of any person who is yet to enter the organization and start with his career. co-operative coworkers and staff. get good compensation for the service that they would offer to the organization. future stability within the organization.would expect the organization has a goodwill in the organization. The reasons may be:  Wanting more remuneration. good working conditions.  More benefits. And there are various reasons for them to leave. But dreams are dreams.

Companies invest a lot of time and money in training the employees but theses investments do not always get converted into profits. not only in India but also all over the world. High attrition rates significantly increase the investments that are made on the employees. A glimpse of attrition rates all over the world US 42% AUSTRALIA 29% EUROPE 24% INDIA 18% GLOBAL AVERAGE 24% .Attrition is one of the biggest nuisances in the organizations today. Though the attrition rates in India is not as high as those in the US but it is still a great challenge to keep attrition rate under control in India.

The telecom industry is being looked upon as the next big employment-generating sector in India. The telecom HR manager is not only required to fulfill this responsibility. also it is very important to see that the workforce appointed is consistent in performance. Not only this. which in no sense. but also find the right kind of people who can keep pace with the unique work patterns in this industry. Hence it is very important for the HR manager to find the right kind of people for the organization who can suit and fit in well in the organization. And for this the HR manager has to make sure that he appoints competent and reliable workforce into the organization. Then it is also the task of the HR to see that the employees are comfortable in their work atmosphere and have no problems regarding their job and work security. is an easy job. It is however no easy task for an HR manager in this sector to bridge the ever-increasing demand and supply gap of professionals. in any sector. in any department the Human Resource manager has the most important and perhaps the most challenging task to maintain a steady workforce in the organization. For maintaining a steady workforce it is important for him to maintain a balance between the demands and supply of workforce in the organization. It . ATTRITION & HR In any organization. It is a tough concern for the HR manager to see that the attrition rates are well in control. It is also the duty of the HR personnel to keep the motivation level of the employees high and see to it that the employees are performing their tasks with full efficiency. Thus it can be said that it is the HR personnel who are responsible to see that the attrition rates of the organization are well in control.

Amongst all these reasons and all so many things happening. 2. No effective training programs have been evolved. the responsibility of the manager increases of finding out “the best man” for the job and creating a “conducive work environment”. 4. the HR manager is expected to put his best foot forward and straighten all things. The salary growth plan for employees is not well defined. 3. Keeping low attrition levels is a major challenge in this industry. Motivational training is still to evolve in this industry. despite the monotonous work. . The HR manager believes that for sorting out and handling this situation of attrition. The toughness of the job and timings is not adequately conveyed. This industry sees a high percentage of females in the workforce. Most women leave their job either after marriage or because of social pressures caused by irregular working hours in the industry. which is around 70 percent. REASONS GIVEN BY HR FOR ATTRITION The reasons cited by various HR Personnel for attrition in the Telecom Sector are: 1. the average attrition rate in the telecom sector is approximately 30-35 percent though it is far less than the prevalent attrition rate in the US market. Long working hours and monotony of the job causes employees to leave. Thus females also become one reason for high attrition. This encourages poaching by other companies who can offer a higher salary to the employees. In India.is also his duty to keep the motivation levels high. 5.

sort out their problems and try all that is possible to maintain all the competent employees within the organization. .Thus. build innovative retention and motivational schemes. the HR manager has got a significant role to play in managing employees within the organization and controlling the attrition rate. most of the HR managers are seen busy putting in all the efforts to develop their employees. Thus.

the attrition rates of various organizations in past few years have been as: 2003 10% 2004 14% 2005 16% Attrition rates in Asia 16 14 12 10 Percentage 8 6 4 2 0 2003 2004 2005 Year To study the growing rate of attrition in the coming years in Asia a study was conducted and reasons for attrition were found out. The reasons given are: . ATTRITION RATES IN ASIA In Asia. Hewitt’s Attrition and Retention Study Asia Pacific 2006 has given reasons for the growing attrition in the organizations.

Employees gave a feedback on the attrition rates at various levels in the organization. Accordingly. Role stagnation The study also revealed the various strategies sought by the companies in Asia to combat attrition. Compensation unfairness. Providing opportunities to employees to learn new skills. 21% of the organizations who took part in the survey said that their employee left the organization because they got offers from other organizations offering better pay packages. The various strategies being used are: 1. Pay above the industry standards. Professional/supervisor/technical level highest (39%) . Provide work life balance. Less growth opportunities 3. 2. Attrition at various levels within an organization from employees’ point of view A survey was conducted where the employees of various organizations were asked questions on attrition. 1. 2. 3.

Senior/Top management level lowest (1%) Attrition at various levels Professional/ Supervisor/Te chnical Level 39% Others 60% Senior/Top Management Level 1% .

ATTRITION IN INDIA ATTRITION RATES IN VARIOUS SECTORS IN INDIA (2007) The attrition rates in different sectors for the year ended 2007 are shown in the following table: - Sector Attrition Rate FMCG 17 Manufacturing 20 Capital Goods 23 Construction 25 Non Voice BPO 25 IT – ITES 27 Telecom 30 Pharmaceuticals 32 Bio Technology 35 Services 40 Financial 44 Aviation 46 Retail 50 Voice .Based BPO 50 .

Attrition rate is on a continuous rise ever since showing no signs of slow down. And rate hasn’t decreased since then. 50 50 50 46 45 44 40 40 35 35 32 30 30 Percentage 27 25 25 25 23 20 20 17 15 10 5 0 IT-ITES FMCG Telecom Retail Financial Capital Goods Construction Non-Voice BPO Pharmaceuticals Services Aviation Manufacturing Voice Based BPO Biotechnology Sectors From the above table it can be concluded that by the end of 2007.attrition rate in various sectors was quite grim. . And on an average the attrition rate in Indian economy is around 20% whereas the global average is around 24%.

58% 2.00% 25.Comparison of Attrition Rates across Industries in previous few years % change Sr.00% 2.00% visible Auto 8 12.00% 2.00% 7.00% 9.00% 10.00% 20. 0-3 4-7 8-12 13+ Increase Sector from No years years years years in 2008 2006 to 2007 Pharma & 1 25.00% 5.00% 5. Rather a constant and steady increase in the attrition rates has been noticed.50% Financial 3 20.00% 20.00% 20.00% 5.00% 15.00% Chemicals 2 Manufacturing 8.00% 2.46% 3.00% 10.00% 12. The highest attrition rate has been seen in the advertisement and media industry while the manufacturing industry has been lucky enough to show a decrease in .00% 30.00% 25.50% 13.00% Services 4 Hospitality 35.00% 5 Ad & Media 40.00% 5.00% 9.00% 10 Infrastructure 16.46% 2.00% 3.00% 11.00% 20.00% 20.00% 6 BPO 40.00% 5.00% 22.00% 11 IT & Telecom 32.00% 20.00% 20.00% No 7 Automobile 7.00% 6.00% 7.00% Component 9 Banking 10.00% -3.00% 6.00% 20.00% 11.00% 14.00% 20.50% 2.00% 17.00% 35.00% 15.00% 2.50% 2.00% 5.00% In this table it can be clearly seen that except for a few occasion none of the sectors have shown a decline in attrition rates.00% 2.00% -5.00% 10.

Here is a small summary on the attrition rate of the top 4 IT giants of India i. TCS. Infact the workforce in this sector has been stated as one of the unstable workforce.5%. Infact IT professionals are one of the most well paid professionals. Wipro and Infosys. The number of jobs is ever increasing and this industry always has space for every new entrant.e. INFOSYS & SATYAM Despite being IT giants and despite being one of the most flourishing industries in India. . But interestingly the attrition rate is also ever increasing in this sector. The telecom industry has also seen an increase of 9% from its previous years. TCS. Satyam. The biggest problem with this industry is its inability to retain back employees in spite of giving really well and commendable salary packages. unconducive work environment and lack of job security amongst the employees. The reason for high attrition rate in this sector has been credited to the immense mental pressure. the industry is also facing huge rates of attrition since the past few years.attrition rate of 3. ATTRITION IN THE IT SECTOR IT sector is one of the most flourishing sectors in the present scenario. ATTRITION RATES OF WIPRO.

But during this recent Satyam fiasco even this company has noted down a considerably high rate of attrition. During the last quarter of 2006-2007 the attrition rate of wipro accounted to about 16.2%. But later it had increased to 13.On comparison of the 4 giants it has been found that Wipro.6% in 2005-2006. INFOSYS: Attrition rate for infosys for the period April-June 2006 was 11.9%. up from 10. WIPRO: Wipro has the highest attrition rate in the industry. Whereas the attrition rate of Wipro BPO on an annual basis has been around 48%.7% TCS: The attrition rate for TCS was 11. TCS & Infosys have a much higher rate of attrition as compared to Satyam.5 % in 2006-2007. .

9% during the last quarter of the year.SATYAM: Attrition rate for Satyam for the period January-March 2007 was 15.7%. ATTRITION IN TELECOM SECTOR IN INDIA . It has declined to 14.

But in this era of recession the attrition rate has reduced a little bit to around 1. Attrition arises generally when an employee leaves the organization due to any one of the following reasons: • Death of employee • Retirement • Better opportunities else where The telecom industry is facing great challenges in finding quality human resources. Attrition rates at an average vary between 20-40% while the top telecom companies vary at least at an average of 15%. In 2007. One of the most critical problems being faced by this industry presently is Attrition. It is providing employment opportunities at a very huge scale. In this organization. But along with the huge employment the industry provides also comes high rates of attrition as a big deterrent for the industry.India achieved the distinction of having the lowest call rates in the world and fastest growth rate in terms of number of subscribers.The telecom industry is one of the most flourishing industries in India today. At present the telecom industry over here is growing at a very rapid pace of 40-50% growth rate annually. It is the 2nd largest telecom market in the world only after China. This industry at present is facing a very high rate of attrition of 30-40% annually. the attrition rate averages to about 2.4% per month.9% per month. .

This is the world of cutthroat competition. India has always been one of the favourite destinations for telecom activities. Along with high attrition rate is also comes in hand the problem of poaching which is just adding to high attrition rates. However. They change their jobs at an average of 4-5 years.5 years. Each company is on the hunt of competent employees and if they find any employee who is already experienced and competent enough to be fruitful to the organization. In this organization. While the top-level employees are relatively more stable in this respect. each organization will try to grab that person. One of the reasons is the cheap labour available over here. Poaching is taking over of the employees of one organization by another at a higher salary. Thus attrition coupled with poaching leads to the increase in the costs for the company.The reasons for high rates of attrition is due to various factors like: • Salary • Work Timings • Other career options. But attrition is not the only problem creeping in this industry. it may be quite ironical or interesting to know that the attrition rates in India and the costs associated with it are so high that they override the benefits of lower . the second level employees change their organization and job at an average of 2 to 2. The rates of attrition also differ according to the level at which the employee is working.

managing attrition in the telecom sector is not just good for industry but rather important as a means for survival. see the factors affecting attrition. it is an area where the HR manager has to take a lead. WHO IS RESPONSIBLE FOR ATTRITION? . causes. measuring attrition and set out targets to curb the growing attrition within the organization. It is said that it is just this low wage cost that has caused various foreign players to move into the Indian market. impacts and methods to curb attrition in the telecom industry with special reference to this organization. Thus. Understand the causes of attrition. Hence. Thus the labour here no doubt is cheaper but if they are not able to learn the new job then there is no use of the cheap labour available and the investment done on them goes for a waste. High rates of attrition do not cause the people to stay long enough into any organization to learn their job completely.wage costs. In the following pages are given the factors.

The three choices given were: 1. which they feel. Compensation & Job Profile RESULTS OF THE SURVEY The result of the survey was as follows: REASONS FOR EXIT % OF RESPONDENTS EMPLOYEE 08. is the most accurate cause for attrition starting from the most obvious cause ranked at the first spot. Supervisor or Line Manager 3.82% .03% SUPERVISOR OR LINE MANAGER 38.Before moving on to the causes and various factors related with attrition it is important to know who is exactly responsible for attrition. For understanding this. The HR personnel were given three choices and asked to rank among the 3 choices the one. Employee 2. a survey was conducted amongst the entire HR department to find out who the HR thinks is responsible for attrition.15% COMPENSATION & JOB PROFILE 53.

SUPERVISORS OR LINE MANAGER AS A CAUSE OF ATTRITION A majority of HR professionals polled that immediate managers are a bigger reason for attrition. EMPLOYEE AS A REASON FOR ATTRITION Only 8% HR professionals felt that employees leave organizations on their own. employees are not self- motivated to leave the company they are working in. . Except in a few cases such as personal reasons. company brand and peer relationships. 1. they leave their manager". 2. location preference. It confirms the theory that "Employees don't leave their job or company. family issues. Who is Resonsible for Attrition SUPERVISOR 38% EMPLOYEE COMPENSATION & SUPERVISOR JOB PROFILE COMPENSATION & JOB PROFILE EMPLOYEE 54% 8% ANALYSIS OF THE RESULTS: The results of the survey were interesting and were helpful in providing deep insights into why attrition happens and what can be done to solve it.

COMPENSATION AND JOB PROFILE HR Managers voted unanimously that 'Compensation and Job Profile' are the primary cause of attrition. The responsibility for compensation policy and enriching the job profile lies on the senior management. HR should also be able to track changes in employee performance rating. gaps between employee and manager performance. disparity in the compensation packages is bound to occur and a mismatched job profile increases the likelihood of an exit. and most managers cannot do it effectively and consistently. Every company wants to become the 'best paying employer'. sudden increase in paid-time-off and should be prepared to act quickly if any visible trends are evident. 'Satisfying employee needs' often gets lower priority in the eyes of the manager.Meeting employees' expectations is a difficult task. However often this is not possible despite the best efforts made by the managers. the . but market forces. With a war for talent. 3. HR should continually train managers in handling employee expectations and provide them with tools to manage tasks related to their teams. tough competition and a slow economy do not allow them to do so When all employees work on goals that are aligned to the company objectives and there is a fair and transparent system to capture employee performance. Thus. Further managers do not have appropriate tools to manage employee related tasks and this leads to further dissatisfaction.

likelihood of a satisfied and motivated workforce increases and Compensation or Job Profile become manageable causes. .

CAUSES OF ATTRITION

There are various causes for attrition to occur in any organization. Each employee

working in the organization has his or her different view on why do employees

generally leave organization and their preferences and wants also differ

accordingly.

An employees’ leaving the organization can be looked upon differently by different

organization. While a person’s quitting the job is seen as attrition, loss of

productivity and increase in costs of organization by way of recruitment by the

organization the employee had been working in; it is seen as talent acquisition by

another organization which is in search of employees while for the person himself it

is a career move, economic growth and enhanced quality of life.

There are various reasons why people leave their current job. If these reasons are

controllable-one attempts to control. If these are not within the control of the

organization, the organization should prepare itself for managing attrition.

When a person leaves it causes a lot of disturbances in the organization. If it is a

small organization the disturbance is even greater. Hence it is important to

understand and manage attrition. There can be various reasons for people leaving

their current jobs.

On analyzing all the reasons given by the employees, various causes of attrition

were found in the organization, which compel employees to leave the company they

have been working in.

VARIOUS POSSIBLE REASONS FOR ATTRITION

Higher pay

Most of the employees leave the organization when they are not getting a

satisfactory pay for the work they do or when some other company is piping in to

pay them a much better remuneration for the same work that they are presently

doing.

Supervisors

A bad supervisor is ninety percent times the reason for the employee to leave the

organization.If the supervisor is not good,not co-operative,doesnot care for the

employees,doesnot give him ample training and feedback required,doesnot

appreciate his good work then probably he is not a supervisor with whom the

employees will be carry on for much time and will in all probability leave him.

Work timings

Work timings are a major cause for people to leave the job specially for females or

for people working in call centres or any other job that has no fixed work timings.

Career growth / Role Stagnation

Employees will also leave the job if they feel that the company has stagnated their

career graph or if the company doesnot have much to offer to them to satisfy their

career needs.Since for them it is not just about getting into a job but rather to see

themselves grow both by stature as well as by knowledge.

Job Security

Employees will also leave the organization if they are not sure that the organization

is happy enough with them to restore them as a part of organization.Employees who

are in doubt that organization might at any them ask them to leave,will quit it much

before themselves for sure.

Uninterseting Job

Monotonous,uninteresting job with the same thing to do everyday is also one of the

reasons for the employees to quit their job.

Work Environment

Often the employees are heard complaining of the unfriendly work environment in

which they are liable to work. The supervisor, co-workers, nature of job all is parts

of this work environment. When the environment crosses beyond the tolerance

level of the employee, he is forced to quit.

Work pressure

Mostly the employees are given targets on weekly or monthly basis which they are

supposed to fulfilled in order to be in the job.These weekly and monthly targets

often are more of a headache for the employees and create emmense mental

pressure on them. Such circumstances often lead to taking away the mental peace of

the employees.Such employees are often heard complaining about sleepless nights

and headaches.To avoid such situations,many of them quit.

Higher education & other personal reasons Last but not the least employees leave the organization owing to various personal reasons or for pursuing higher education so that they can give their career a better direction.But women are the most uncertain workforce. Women leave the job after marriage to take up their house-hold duties Females form a larger part of the workforce specially in the telecom sector.There are various reasons because of which females leave the work. .This causes them to quit themselves.physical abuse and sexual harrasment are few things which are much prevelant in the organization specially the corporate world.If they find the new place uncompatible or unadjustable they are likely to move over to a new organization.other career options and above them all marriage which causes them to quit and take up new job of house wife.marriage may also cause them to shift to a new place thus casuing them to quit. Poor performance Employees often leave even when they are not able to deliver upto the set standards of performance.It may be the uncertain work timings. Verbal abuse Verbal. Relocation to other places Transfer to other cities also causes employees to change organizations.They have the fear of being asked to quit the organization.This fear causes many to quit.

the various reasons for attrition can be grouped together under the following heads: The reasons for attrition have been grouped under basically three heads: 1. Individual Factors 2. In short . FACTORSAFFECTING FACTORS AFFECTINGATTRITION ATTRITION INDIVIDUAL ORGANIZATIONAL OTHERS Peer pressure Ambitions/Career Role Related aspirations Culture Environment Parental/Family No challenge Growth and mobility No learning career paths Personality factors Style of boss Pay packets Role clarity Role stress Lack of independence . Organizational factors 3. Other Factors.

However. that meet the growing aspirations of competent people. Either the organization is too small to fulfill their aspirations or the organization cannot offer them the career growth. if the organization can do something to create new opportunities. professional. It is more about building up their career and fulfilling all their aspirations and dreams. family aspirations and ambitions. parents etc. Staying away from home causes homesickness and many cannot take up such conditions for long enough. spouse. • Parental and family mobility: People also move about if their family is at distant places.INDIVIDUAL FACTORS • Ambitions or Career Aspirations: Today each person is much aware of what he wants. It is not just about studying somehow and getting into a job just for the sake of earning money. it should certainly be attempted. at different stages of one’s life to fulfill . which they are aspiring for. Thus organizations just have to satisfy themselves by taking attrition as a natural phenomenon and accepting the fact that each person here has come to earn money and make career and not to just be loyal to their organization and that each person has the right and will move around if given the opportunity. such attempts require correct diagnosis of the situation. Hence to be with their family they may leave and move. However. children. These can be economic. Need for being close with the family. At times other organizations provide the career opportunity that the individual is seeking for. It is also not possible to provide each employee the career growth that each one is seeking since each employee seeks to rise higher in his career and it is almost impossible to give each employee the top most position in the organization.

ORGANIZATIONAL FACTORS • Role related factors: The job related factors that cause the decision to leave include the following: 1. 4. Lack of learning opportunities. • Personality factors: Then there is a certain restless lot. 9. something exciting to keep themselves going. They have a continuous urge to do something different. They are highly achievement driven and want to achieve new heights in the shortest time. These factors may be intrinsic and job related or extrinsic and job related. Role clarity. Lack of independence or freedom and autonomy. 7. Such people keep on changing their jobs very quickly. Lack of excitement and innovation. Lack of scope for growth in terms of position. They always are on a lookout to explore new heights always. Lack of challenge. 6. which cannot just stick to one place. 3. They are highly ambitious and restless. . Inability to use ones’ competencies. 8. Boss and his styles. novelty in the job. salary. 2. Job Stress or role stress or role stagnation.different types of affiliation needs prompts a few people to leave their jobs and move from one city to another. 5. status and other factors.

bad boss. quality of living. the work load) and all such factors. Apart from this. wrong chemistry of the team.Intrinsic factors Factors related to the characteristic of the job. the nature of clients. It includes the work conditions (work at odd hours. • OTHERS o ECONOMIC FACTORS This deals with the aspirations in relation to salary and perks. housing. which cause difficulties. A large number of the extrinsic factors can be controlled. independence and autonomy. lack of respect shown to the individuals. need for savings etc. etc. Extrinsic factors Factors like role clarity. the various other factors are: o Mobility of partner o Fatigue .

The work timings in telecom industry are very odd. These days. Only 2 out of 10 employees on an average go on to be at the senior level. This affects the family life of the employee. in many organizations. only 20% of employees are able to go to senior levels. Mismatch of qualification and the job offered to them is also a problem. • The most obvious reason for employees leaving any organization is higher pay. In many organizations. some employees see no career growth in this sector. This means that the remaining 80% of employees look for other organization where they can get opportunities for growth. • Another factor is career growth. But with time. work timings are such that they are making employees leave the organization. Along with that. they apply for . • Another factor is the work timings. and obviously good offers are hard to resist by anyone. Most employees in telecom are approached with two or three jobs every week. • One more reason for leaving the organization is higher education. so they move on to other companies in search of changing the sector.REASONS GIVEN BY EMPLOYEES Employees themselves have cited various reasons for leaving the organization. In some organizations. employees are joining at very young age because of lucrative salaries being offered.

• Lack of security of employment has also contributed to higher attrition rate. They are bound to quit because sooner . • Monotonous job. • Instability of the employees themselves. Many see this space to be a sweatshop where all that the employees are required to do is just mechanically input numbers into excel sheets or. • Unsatisfactory work conditions leading to strained work relationships with the employer. The percentage of women workers in the telecom sector is around 30%. women workers leave the organization after marriage to take up their household duties thus leaving behind their irregular work hours. • The percentage of women workers is also responsible for higher attrition rate. worse still. work on the same lines and repeat the same work many times a day and night. • Dislike for the job or place. higher education and try to move on to other organizations or sectors to occupy top management positions. Generally. People who join a telecom usually do so to make a 'quick' buck.

• Other factors include accident making the worker permanently incapable of doing work.80% of employee turnover can also be attributed to the mistakes during hiring process The industry has concentrated on hiring young. the reasons cited for employees to leave the organization (in the order of most common to least) are: • Compensation • Job assigned not interesting • Environment not friendly • Personal Reasons TYPES OF ATTRITION IN TELECOM INDUSTRY Attrition in this industry is of two types. According to the HR manager of this organization. dynamic and these are looking for more than just a job. which leaves the deserving few disgruntled with top management and hence fosters attrition. or later they will find something more attractive in terms of the job profile or pay. • Talent in this space is generally overlooked. . • Mistakes during the hiring process.

1. The primary reason for people leaving the industry is due to the cause that the industry is viewed as a gap filler occupation. 2. late night work shifts. . Unfriendly working conditions. The lack of preplanned recruitment causes the firms to fulfill their immediate requirement by poaching resources working on similar projects in other firms. REASONS FOR EMPLOYEES LEAVING THE INDUSTRY 1. There is no certified institute providing telecom specific training and education. high-tension jobs acts as a deterrent for people to stick to this industry for long time REASONS FOR EMPLOYEES JOINING ANOTHER FIRM IN THE SAME INDUSTRY 1. Both these are two separate parts which need to be identified. The scarce resource in the market leads to wide scale poaching and head hunting amongst the competitors for the common pool. Industry has not witnessed mature HR processes such as Work force planning being implemented by the firms. 2. One part of the attrition is where the employee leaves the industry entirely. 2. There is a lot of immaturity in the industry. Second part is where the employee joins another firm in the industry. The chief cause is the unavailability of resources in the job market causing a great demand compared to the supply available.

the gap between reality and expectations and how this gap can be filled up.It is a model which identifies the needs which act as factors of motivation for the human behaviour. Thus it helps in understanding the needs of the employees. . MASLOW’S HIERARCHY OF HUMAN NEEDS Maslow’s Hierarchy of Needs is a theory in psychology. motivating them. This approach basically shows that there is certain basic human needs which if fulfilled lead to the motivation of people and help them to perform better at work. It was proposed by Abraham Maslow. It gives an insight on what are the expectations of the employees. which further helps in retention of the employees and lowering in the attrition in organization. Maslow’s Model helps in analyzing the causes of attrition and also a better understanding on how to motivate employees.ANALYZING CAUSES OF ATTRITION: MASLOWS THEORY APPROACH The best method to understand the causes of employee attrition is through the Maslow’s Hierarchical Model of Needs. This model has been applied over here in reference to the employees to see what it takes to motivate the employees.

Man first needs to get these basic amenities. and oxygen. It is the need for Security of body. shelter. of property. of employment. 2. Next higher level of needs cannot arise if the lower level of needs are not fulfilled. These levels have been presented in the form of a pyramid. Affection and Belongingness After the above two needs have been satisfied arises this need. The pyramid shows the following 5 needs: 1. 3.It is only when all the 5 levels are satisfied is the employee satisfied and motivated to perform.According to him. which are necessary to support life. These are the strongest needs because until all these needs are not fulfilled the person cannot think of any other needs. Safety Needs After the physiological needs have been fulfilled comes the need for safety and security. the needs are present in the form of a hierarchy and are present in form of 5 levels. of the family. of resources. of morality. The needs need to be fulfilled in this hierarchical order. sleep. affection and belongingness. This is the need for feeling of love. Needs of Love. of health. Physiological needs These are the basic human needs or the biological needs of food. water. Fulfillment of the basic level of need leads to the arousal of next higher level of need. People seek to overcome feelings of .

affection and the sense of belonging. If a person is hungry. problem solving. It is not always clear what a person wants when there is a need for self-actualization. Humans have a need for a stable. 5. high level of self-respect. Each person wants to be respected by others and would in turn respect others. self-fulfillment etc. When these needs are satisfied. it is very easy to know what the person is restless about. 4. weak. seeking personal growth.Esteem Needs This involves the respect of others as well as the respect by others. to be cared of. or lacking self. This involves both giving and receiving love. firmly based. When these needs are frustrated. unsafe. helpless and worthless. They always want to be loved. not loved or accepted. Self-Actualization Needs When all of the foregoing needs are satisfied. then and only then are the needs for self-actualization activated." The need that a person is himself worth of doing various things. . the person feels self-confident and valuable as a person in the world. Self.esteem. Self-actualization is a person's need to be and do that which the person was "born to do. His thirst for creativity. and respect from others.loneliness and alienation. the person feels inferior.

Only when the lower order needs of physical and emotional well being are satisfied the person is concerned with the higher order needs of influence and personal development. he will focus himself to the fulfillment of that lower level need but will not permanently move down to the lower level. maintenance of our higher order needs is no more important. once the human being moves up the pyramid. if the things that satisfy the lower order needs are swept away. .MASLOW’S HIERARCHICAL MODEL OF NEEDS According to the Model. Conversely. which deals with the most obvious needs for survival itself. Maslow's Hierarchy of Needs states that each need must be satisfied in turn. If a person having moved up the pyramid feels an urge of any unsatisfied lower level need. the lower level needs have been fulfilled and are of no more importance to the person. starting with the first.

The first factor. Physiological Needs These are the biological needs. which will fetch him “money” so that he can fulfill his basic needs. takes it to fulfill its bare minimum “Physiological Need”. who takes up the first job. Each person keeps his dreams aside and takes up a career. Presently the industry is providing better salary at entry level but the industry does not provide an adequate proportionate rise in salary with experience. These are the most basic needs and the strongest because these are the most important for a person’s satisfaction. This need should be continuously updated with time so that it fulfills his needs at every stage of his life. Any person. THE MODEL IN RELATION TO THE TELECOM INDUSTRY 1. • The Gap Between the Expectations and Reality Though the salary in this industry is quite high and also may look satisfying enough for people. which leads to dissatisfaction of these needs. The basic need is the compensation. is “money”. The person expects this need to be updated continuously with time so that it fulfills all the physiological needs. but people working in this industry still look forward to opportunities for making more money. which any person seeks while taking up his or her first job. . Same is in the telecom industry.

3. the company provides the best of security but with the industry growing rapidly there is need to maintain same standards of security.If for instance a person is satisfied with his salary. Affection and Belongingness . is comfortable with his work for the starting few years of his job. Safety Needs Once the physiological needs of the person is satisfied and the person becomes comfortable with his work. is the physical security of the person and his family. This is the need of job security or security at workplace. Asurity of being with the organization and retaining their jobs and position is very important for the people. This is specifically a prime concern for the female employees. the next need arises in him. then the person starts craving for the next level of needs. which the people in telecom sector are mostly concerned about. still have some itch. And with the recession going on. who believe that their job is secure enough. Second. Quality of Work Life is an important factor in creating a “sense of security” among employees. Need of Love. is the psychological fear of job security. First. job security is the prime concern for the employees. People. 2. Next arises the urge for love. affection and belongingness. There are two aspects of security. • The Gap Between The Expectations And Reality As far as physical security is concerned.

They want to participate in Cafeteria discussions. The company tries to compensate for this loss by providing fun filled atmosphere and congenial supervisors and working staff but still a large gap has been found between expectations and reality. At times the supervisor is good enough to pay attention to personal problems of the employees and try to help him out by giving him some leniency when it is required. Thus the lack of family and social life along with a friendly and . They want to know how their contribution is important to the company and is helping the company to grow. They often feel that they are not credited for the work that they do and their seniors often do not give them enough space to grow and do not allow their colleagues to bond with them well. • The Gap Between The Expectations And Reality “Immediate Supervisor” plays a big role in filling this gap. Often seniors take away the credit of the good work from the employees. But at times he might even give such hard tasks to employees so that they have sleepless nights. It is up to him to appreciate the employees’ work or not.People working in any organization want to feel closely attached to the organization. They believe organization kills most of their time and spares no time to live their private life. They want to bond with their colleagues. They want to be appreciated for the work that they do. In short they want to have a family like feeling. Also the employees are troubled that they do not have a proper time leaving time from the office. Like for example in this organization itself the employees are given just 4 days off even for an occasion like the marriage of the employee. Supervisor may also encourage the person to mingle with the colleagues. which in turn disturbs their family lives. But generally people in the industry are not satisfied. teams and to the people they work with.

appreciating work atmosphere is one of the major concerns for the employees

which needs to be dealt by the telecom companies.

4. Self-Esteem Needs

Having discovered all the love and affection, what employees next look in any

organization is the Self-Esteem needs. These involve needs for both self-esteem and

for the esteem a person gets from others. Each person always seeks high level of

respect from others as well as self-respect. Each person enjoys the respect, which

he gets from others at work place. And each person feels a natural inclination to

praise others, to appreciate their efforts, to praise their skills. And they expect the

same in return.

When these needs are satisfied the person feels self-confident and valuable.

When these needs are left unfulfilled, the person feels inferior, weak, helpless and

worthless.

Telecom industry is one industry, which requires highly qualified personnel at

every level. But at the same there are also posts and job requirements over here,

which do not require much qualification, or much qualified person. These are the

jobs, which are looked down by the society in the sense that people do not take such

posts in high esteem. For example the job of the sales person over here who is

required to do the sales. People do not appreciate such jobs so much. This attitude

has developed in general. Then how people develop a high self-esteem and get

respect from others depend a lot on themselves also as to how they themselves feel

about their jobs and how much they themselves value their jobs.

• The Gap Between The Expectations And Reality

People working in this industry have an unsatisfied esteem need because of the

general perception of people about their own job. The industry needs to work

upon changing the image of such posts in the society and in the organization

itself since most of the times it is the people in the organization itself who look

down upon these posts and the employees in this posts. Thus the employees of the

organization themselves resort to such types of discrepancies. And this needs to be

seriously looked down upon and removed.

5. Self - Actualization Needs

When all of the foregoing needs are satisfied, then the need for self-actualization

gets activated. It is all about realizing our true selves and achieving it. People

who are successful in achieving it whether in work life or in normal life, are willing

to help others on or off record. They are ready to solve all the queries, ready to

listen with the same enthusiasm. They do not get irritated; do take care of the needs

of the younger ones. Such people are the greatest and the most selfless people in

any organization.

The telecom firms nowadays are trying to provide career growth path and higher

educational opportunities for employees as a measure of retaining them. These

steps are strides in fulfilling the discontented self-actualization needs of the

employees. These are one of the few long-term motivations provided by companies.

• The Gap Between The Expectations And Reality

Though the companies have been trying to cater to the self-actualization needs of

their employees, this has been one of the major reasons for attrition. Unfulfillment

of such needs is a major reason for employee attrition.

It is important to cater to the above needs and explanations and pay attention

to them so that a deeper understanding on what employee want can be done so

that they can be retained into the organization for longer period of time and

attrition rate in the organization can be curbed.

Both the favourable and the unfavourable impacts can be studied differently. It can also be good at times. Thus its impacts can be favourable and unfavourable. direct and indirect. IMPACTS OF ATTRITION Attrition has various types of impacts on the organization. Attrition not necessarily always has to be bad. POSITIVE INDIRECT DIRECT IMPACTS NEGATIVE .

HEALTHY ATTRITION It signifies the importance of less productive employees voluntarily leaving the organization.POSITIVE IMPACTS “Good attrition minimizes the adverse impacts on business while bad attrition accentuates the loss. in the long-term. This. BENEFITS OF ATTRITION ." Attrition is also good at times. whose continuation of service would have negatively impacted productivity and profitability of the company. is detrimental to organizational health. Good attrition reduces the adverse impacts on the business. It benefits the organization when these employees leave. There are some people who have a negative and demoralizing influence on the work culture and team spirit. DESIRABLE ATTRITION It means getting rid of the employees with whom the organization does not wish to continue with. This can be done through resignation on part of the employees or termination of services on part of the employer. It can be said as Desirable attrition or Healthy attrition.

Removes the bottlenecks (in form of unproductive employees) in the progress of the company. 6. It is an opportunity for the organization to induce fresh blood into the organization with fresh skills and competencies at a lower cost. If such employees leave who have been unproductive for the organization and have been affecting the profitability of the company. 1. If the recruitment is external it infuses fresh blood into the organization. 7. the company is surely benefited. Entry of new talent also brings into the organization new thoughts. It gives a chance to gather knowledge about any new and better practices going on in the industry. ATTRITION RATE CAN ALSO PROVE TO BE BENEFICIAL IN THE FOLLOWING WAYS 1. It makes space for the entry of new talent. 3. 8. 4. If it happens they will be at a very high pay scale. 2. It assists in evolving high performance teams. If employees stay in the same organization for a long time. This new talent can be both from outside the organization or someone from inside. It also enhances the ability for execution. which in turn result will result in excessive manpower costs. most of them have maximum chances of being promoted. 2. 5. ideas hence more innovation and creativity. .

5. Then there are also a few people who have a negative or detrimental impact on the organization’s work culture and atmosphere. But if the unwanted employees leave the organization. Desirable attrition not only motivates the people of the organization right from higher level to the lower hierarchy but also warns each of them that there is no scope for incompetence in the organization. . Then. So such people are also better getting rid off. So it is rather a necessity to get rid of such people. But budget constraints sometimes do not allow them to do so. The loss of employee means a new recruitment which means a loss in terms of new recruitment. there is also a flip side of positive attrition. they lack the potential for future growth or the potential to remain a permanent part of the organization. the company can use this budget in rewarding the good performers. 2. Attrition can said to be a boon in disguise. 1. It points at the flaws existing in the system of the organization. 3. train him and motivate him properly in the correct direction. It is good to motivate the good performers of any organization by rewarding them. There are also people who are not able to work up to there performance expectations. productivity and profitability is always impacted. time consuming and costly. But then again.3. 4. groom him. Thus. which they deserve also. Thus each employee sets to do his or her work sincerely since he knows that any underperformance could show him the doors of the organization. It clearly points out at the inability of the organization to recruit the right kind of employee.

It leads to a dip in the entire organizational efficiency. TANGIBLE ASPECTS These are the aspects. The negative impacts of attrition can be studied both in the tangible as well as in the intangible form. . these can be reduced.” Attrition in any form is bad for the organization. which are under the control of the organization. the organization should adopt good retention policies as early as possible and the companies should be more employee centered to bond with the employees well so that attrition can be understood well and effective measures can be taken to curb it.Thus. NEGATIVE IMPACTS “Wrong attrition means that a wrong choice was made at the beginning. • Delay in execution of projects since many places fall vacant and this may also include some of the important posts of the organization. The tangible aspects are: • Loss of knowledge since certain brains leave the organization and take away with them their share of knowledge. and if worked upon.

the organization is sure to exploit the person fully and use the information gained for its own benefit. Once an employee walks out he takes with him a great deal of knowledge as well regarding various matters concerning the organization. This is a great loss in monetary terms. It gives the company a bad market reputation. • Burden and burn out on existing employees. INTANGIBLE ASPECTS These are the aspects. This may also contain some of the very private and delicate issues. If any company comes to know of the weak points of the organization it will definitely try its level best to take advantage of that organization. which are not under the control of the organization. • Internal information and knowledge is being shared outside. And if the employee gets into any competitive or rival organization. • Loss of production since delay in projects will result in delay and hence loss of production. The intangible aspects are: • Impact on the brand name. Attrition affects the reputation of any company badly. Hiring costs are sometimes as high as 2-3 times the salary of the employee. . Attrition rate does point out at the flaws existing in the organization. • Increasing cost of recruitment for hiring new employees for all the vacant positions. It increases the burden and workload on the existing employees till the time new employees are recruited and trained according to the work that is to be done.

Companies try their best to grab such employees. It is a very serious negative impact of attrition. getting them used to the company culture. The companies’ strengths and weaknesses both are highlighted. • Poaching. Most companies are on the hunt of such employees who are on the look out for a better job or a better remuneration. work environment etc. • Existing team also gets de-motivated for sometime. Poaching refers to one company trying to take away the experienced candidates from other telecom company to save on the training and other administrative costs. INDIRECT IMPACT . selection and retention policies. Besides. it also affects the clients’ relationship of the organization and thus the business. 3. 4. On seeing any employee moving out of organization. New recruitments need to be done adding to more costs of training. A high attrition rate indicates the company’s failure to set effective HR policies in terms of recruitment. many of them fear being thrown out as well thus increasing their fear and de-motivating them. DIRECT IMPACT 1. 2. Adding to this it may also influence some more employees to walk out of the organization.

3. It is a myth that every time an employee walks out of the door. Attrition is actually not detrimental for an organization. the organization suffers. Certain things cannot be compromised on. up to what time period they will be able to retain them is definitely not ascertained. 2. It impacts the companies’ image in the market and also its ability to manage its business in the competitive market. 1. 4. thus benefiting the overall industry in increasing its competencies. When some people leave burden on the remaining workforce increases since they are now expected to finish up that unfinished part as well thus leading to more attrition. Then it is also a problem for the companies to attract a potential employee. knowledge sharing amongst the firms. Some attrition is indeed desirable and necessary for organizational growth and development. Even if they are able to retain." ATTRITION COSTS . It brings decreased productivity. you are setting an example. IS ATTRITION ALWAYS BAD FOR THE ORGANIZATION? Attrition has some associated benefits along with low cost of operation. “Typically when you walk out people. It becomes difficult for the company to retain the present workforce.

internet postings etc. company policies. • LOW SALES COSTS It includes all those costs that are incurred in terms of experience and the contacts that were lost during the time for which the position was vacant and other such costs that result in either loss of customers or lower sales. in general the cost of attrition includes the following: ATTRITION COST = COST OF HIRING (RECRUITMENT . But this is not just a theoretical concept but all these costs can be calculated in monetary terms very well. Thus. agency. employee referrals. • TRAINING COSTS It includes various costs as induction program cost. etc. The sum total of attrition cost includes various types of costs. These costs can be summed up as: • HIRING OR RECRUITMENT COST It includes cost of advertisement. lodging costs during that period. they are not fully productive. orientation material and cost of the person who conducts orientation.The company incurs a number of costs when it hires any new employee. • LOW PRODUCTIVITY COSTS These costs are incurred as new employee is learning new job.

on company’s website etc. 2. 3. SOURCING These are the costs incurred while sourcing for candidates. COST)+COST OF TRAINING + INTANGIBLE LOSSES During attrition cost calculation. The hiring cost includes the following: 1. respond and route resumes to the hiring team. online job posting boards and resume banks. COST OF HIRING = Direct cost It includes 90% of the total costs included during the entire process. which includes print ads. SCREENING It involves: i. there may be various direct and indirect costs included. in the newspapers. Time and expense spend by the administrative staff to open. COST OF ADVERTISEMENT It includes the cost incurred by placing advertisements regarding new recruitments within the company. .

family shifting expenses . 5. medical expenses. 4. . It includes the following six factors: • Time spent on sourcing replacement. conduct. In case of telephonic interviews. number of interviews. The number of staff members involved in the interview. iii. COST OF RECRUITMENT It includes salary package. duration of the interview and the average cost of the interviewer’s time used in conducting the interviews. canteen . ii. The time spent in scheduling the interviews. how many of them were conducted and the time spent by the recruiter to prepare. training expenses and miscellaneous expenses depending upon company policies apart from above. iii. COST OF CONDUCT OF INTERVIEW i. Time the hiring team or the recruiter spends screening through the resumes. Any traveling expenses incurred by the hiring team or the interviewee. car expenses. ii. office setup . summarize and communicate the results of those interviewed.

6. Agency and search firm fees. • Training time. 8. 9. Fees of trainee if the trainee is external. Travel costs incurred by both recruiters and applicants. • Travel expenses. Wastage of productivity for a new recruit. Cost of registration if training is external. Other hiring costs include: 6. Cost of training material. Number of days when a person is non functional which is an indirect cost. 7. Stipend paid during training. 2. • Background or reference screening. if any. 3. • Re-location costs. COST OF TRAINING = Direct Cost It includes the following costs: 1. if any. 4. 5. 10. Time that a person takes while adjusting in the office that is an indirect cost. • Time spent on recruitment and selection. 11. Man hours of the person lost conducting the interview. Payment of consultants. Referral bonuses paid to the employee. .

Advertising .INTANGIBLE LOSSES It includes: 1. • Which standard method is being used to analyze the cost per hire? The Saratoga Institute includes six basic elements to calculate cost per hire: 1. Loss of production ANALYSIS OF ATTRITION COST: ANALYZING THE COST PER HIRE • EXTERNAL COST PER HIRE Analyzing the cost of each hire is very important for the company and it is more important for the company to analyze the quality of the hire. • What methods are being used to appoint the employees is also equally important: whether traditional methods are being used or new electronic methods are being used. Loss of sales 2. A cost benefit analysis needs to be done to evaluate the recruiting efficiency and effectiveness. • Hiring on so many employees each year consumes a large part of the companies’ budget.

Travel costs incurred by both recruiters and applicants 6. Company recruiter costs (including salary and benefits prorated if the recruiter performs duties other than staffing). Internal recruiter costs. Relocation costs 7. 2. 3. It includes four data elements: 1. Any internal advertising costs. 2. • INTERNAL COST PER HIRE The internal cost per hire calculation is also done on the same lines. Referral bonuses paid to employees 5. ATTRITION COSTS MAY BE AFFECTED BY THE FOLLOWING: • Regional Differences . Agency and search firm fees 3. and 4. The combination of both external and internal hiring costs provides a total cost analysis of the recruiting efforts. Travel and interview costs. Relocation costs.

Same can be said for the difference in the cost per hire in India. This regional difference can be attributed to several factors like: • The costs of doing business are higher over there. medical and manufacturing industries. . Delhi.Higher costs of Hire are seen for the pharmaceuticals. and 24. 19. The breakdown for external exempt hires shows that close to 50 percent of the costs are allocated to agencies fees and relocation expenses. is much higher than that in Lucknow.7 percent for travel costs. 32.3 percent for recruiter pay and benefits. • The costs of living are higher and hence are higher the salary demands.8 percent is kept for referral bonuses.9 percent are paid to agencies and search firms. 2.4 percent of the total hiring cost are spent on advertising.9 percent is paid for relocation expenses. Apart from this companies located in the western parts of the world also have higher costs of hire. Bangalore etc. • Costs By Source On breaking down the total hiring cost for detailed analysis it has been found that on an average 18. In India itself the cost per hire in the metros like Mumbai. only 1.

ATTRITION RATE “The rate of shrinkage in size or number” Or “A reduction in the number of employees through retirement. resignation or death. it is understood that high percent of attrition rate anyhow is not desirable for organization. It calculates in percentage the number of employees leaving the organization due to various reasons. No. Thus.” It depicts the overall percentage change in the workforce of an organization. Total number of resigns per month * 100 Total number of employees at the beginning of the month + Total number of new joinees – Total number of resignations 2. of employees resigned in that month * 100 Available manpower . FORMULA FOR CALCULATING THE ATTRITION RATE 1.

These hires are tracked for . ATTRITION CALCULATION A number of methods can be used to calculate attrition. METHODS TO CALCULATE ATTRITION There are basically two methods to calculate attrition. ANNUAL CALCULATION 2. COHORT CALCULATION It indicates the attrition over a period of time for a specific group at a specific time or a part of the total employees. ANNUAL CALCULATION It indicates the broad attrition pattern from year to year. Different companies use different methods for attrition calculation. This method is calculated by tracking a specific group of employees hired during a specific timeframe. The two methods are: 1. COHORT CALCULATION These methods compare employees who leave the organization with the total employees or a part of the total number of employees. It calculates attrition by dividing the employees who left the organization in a given year by an average of employees working in the organization at the beginning and end of the year.

Infant mortality attrition. It helps in calculating the ease with which people adapt themselves to the organization. It tells the percentage of the people who left the organization within one year. Fresher attrition that tells the number of employees who have left the organization within one year. The firm does not include the employees who are freshers who leave the organization within 3 months of joining or for further studies. This can be attributed to many factors like: The types of attrition that may or may not be taken into account: 1. It tells the attrition of those who left the organization due to poor performance. It tells the attrition of the key personnel of any organization like the senior executives leaving the organization. . 3. 2. It does not take the average of the total workforce. 3. The employee base on which the rate has to be calculated changes every often. So there is no fixed base. Low performance attrition. There is no one standard formula for the calculation of attrition. Critical resource attrition. 2. Different timeframes are used for tracking in this method. 4.selected intervals. The types of attrition that are taken into account while calculation: 1. At times the attrition of poor performers is also not treated as attrition.

Calculate the cost of lost productivity at a minimum of 50% of the person's compensation and benefits cost for each week the position is vacant. benefit deductions. CALCULATING ATTRITION RATE In terms of number: Total number of resigns per month (Voluntary or forced) / (total number of employees at the beginning of the month + total number of new joinees – number of resignations) * 100 In monetary terms: • COSTS DUE TO A PERSON LEAVING 1. benefit enrollments. Calculate the cost of the person who fills in while the position is vacant. 3. Calculate the cost of conducting an exit interview It includes the time of the person conducting the interview. (till the time the seat is vacant) even if there are people performing the work. Calculate the cost of the manager . the administrative costs of stopping payroll. Calculate the lost productivity at 100% if the position is completely vacant for any period of time. 2. the time of the person leaving.

. 7. who will pick up the work. This can range from a minimum of 30 hours to over 100 hours per position. and how to cover that work until a replacement is found. skills and contacts The person who leaves takes away with him out of the door various knowledge. 6. aptitude. conduct reference checks. what departmental deadlines will not be met or delivered late. Subtract the cost of the person who is leaving for the amount of time the position is vacant. contacts. internet posting costs. This is the manager responsible to understand what work remains. The cost of advertisements. 5. • RECRUITMENT COSTS 1. 3. develop and implement a sourcing strategy. values and behaviors. review candidates backgrounds. prepare for interviews. Calculate the cost of the various candidate pre-employment tests to help assess a candidates' skills. attitude. 4. abilities. Calculate the impact on departmental productivity Since the person is leaving. Calculate the cost of training The amount invested by the company in training the employee who is leaving. agency costs. make the employment offer and notify unsuccessful candidates. employee referral costs. conduct interviews. The cost of the internal recruiter's time to understand the position requirements. 2. Calculate the cost of lost knowledge. whose work will suffer. prepare candidate assessments.

During weeks 5 . The cost of departmental training as the actual development and delivery cost plus the cost of the salary of the new employee. The cost of orientation in terms of the new person's salary and the cost of the person who conducts the orientation. 3. After training.• TRAINING COSTS 1. During weeks 13 . computer or other technology equipment used in the delivery of training. 3. The cost of various training materials needed including company or product manuals. The cost of the person who conducts the training.6 weeks or more of classroom training. 2. And the cost of orientation materials.20. • LOST PRODUCTIVITY COSTS 1.12. the employee contributes at a 50% productivity level. the employee contributes at a 75% productivity level. 2.4 weeks. The cost is therefore 25% of full salary during that time period. The cost of mistakes the new employee makes during this elongated indoctrination period. 4. the employee contributes at a 25% productivity level for the first 2 . This cost is significantly higher for some positions such as sales representatives who require 4 . . The cost is therefore 50% of full salary during that time period. This cost is therefore 75% of the new employees full salary during that time period. 4.

or leasing other equipment such as cell phones. The cost of a manager's time spent developing trust and building confidence in the new employee's work. Hence. TURNOVER COST OF THE EMPLOYEE . cost of establishing email accounts. telephone hookups. 2. establish computer and security passwords and identification cards.• NEW HIRE COSTS 1. automobiles. their purpose is to provide some defined set of responsibilities that are necessary to the generation of revenue. • LOST SALES COSTS The revenue per employee is calculated by dividing total company revenue by the average number of employees in a given year. the lost revenue is calculated by multiplying the number of weeks the position is vacant by the average weekly revenue per employee. The cost of bringing the new person on board including the cost to put the person on the payroll. Whether an employee contributes directly or indirectly to the generation of revenue.

It is defined as the percentage of annual salary including other cost benefits given to an employee. The formula used for the calculation of Turnover cost of employee is: TURNOVER COST = HIRING COST + TRAINING COST + LEARNING CURVE LOSS COST + TERMINATION / SEPARATION COST + VACANCY COST TACKLING ATTRITION .It helps in calculating the cost per employee.

The factors may at times be very simple while at times quite complicated. Thus for dealing with attrition a proper look at how to tackle it is required so that proper action can be taken at the right time. Most of us go almost all the way through life as complete strangers to ourselves. Since for curing any disease a proper quarantine is required. Hence understanding how it can be dealt with and then trying the methods in the organization to curb attrition is equally important. their abilities. it is important to have a closer look at the following: Where and Why? It is important to identify the various sources of attrition.” Just understanding attrition. “ Ninety percent of the world’s woe comes from people not knowing themselves. It is more important to understand how such a thing can be dealt with since it is one of the most critical things in any organization now a days. its types and causes is not enough. Before going through the methods of attrition. their frailties. and even their real virtues. . Where. at what levels attrition is occurring and then going through the causes to analyze why is it happening. Any method utilized for retention should be based upon the factors responsible for attrition in the organization.

. role modeling counseling. MENTORING Mentoring is a term that is used to help. TOOLS TO MANAGE ATTRITION The most important tool to manage attrition is the process of mentoring. sharing knowledge and providing emotional support. region or group? • What age group? Once the source or the causes of attrition have been identified.Understanding the factors of attrition may help in solving some of the questions like: • Where is attrition occurring? • At what levels is it occurring? • Is it more in males than in females or vice versa? • Is it restricted to people from a particular department. advise and guide employees through the complexities of the business. managing it becomes relatively easier. It is a mutual learning partnership in which individuals assist each other with personal and career development through coaching. Following are the tools that help in checking attrition. Organization can decide upon it that whether any interventions can help reduce attrition or something else needs to be done.

• It involves the presence of an effective mentor. • It involves the presence of a good listener. This is a tool used by organization to nurture and grow their people. • The mentor and learner both should be creative enough to bring in new changes. • The Mentor is expected to have empathy.It can be called as an offline help from one person to another that helps in making significant transitions in knowledge. He is a person with whom the learner develops a one to one developmental . • The mentor should be good at generating alternatives. WHO IS A MENTOR? A mentor can be any person who acts as a guide and helps the learner understand and guides him in the correct path. • Should be a role model to the learner. not sympathy. work or thinking. • It contributes to the professional development of others. • Should be held in high esteem by people working with. • The mentor should not injure the learner’s self-esteem. It can be an informal practice or a formal program. IMPORTANT ASPECTS OF MENTORING: • It is both people and task oriented. He grooms the learner in the best possible manner. • The mentor should not develop dependency in the minds of the learner.

The learner often develops deep personal bonding with the mentor. He is a • Friend • Philosopher • Guide CHARACTERISTICS OF MENTOR A mentor is any person who has the following skills: • A desire to help others. • Have had positive experiences Any person who has had positive formal or informal experiences with a mentor tends to be good mentor himself. And it is in the presence of him that the person identifies having an enabled personal growth and enhancement taking place in terms of a person as a whole. • Time & Energy People who have the time and mental energy to devote to the relationship. up-to-date technological knowledge and skills. explains and models. • Good reputation for developing others Experienced people who have a good reputation for helping others develop their skills. .relationship and develops his own skills and capabilities. • Up-to-date knowledge Individuals who have maintained current. A mentor demonstrates.

• Ability to accept feedback whether positive or negative and act upon it. • Willingness to apply whatever learnt on the job. succumb himself to another person who will develop his skills and personality. • Is not shy asking for help. WHO IS A LEARNER? A learner is any person who is wanting to listen. • Learning Attitude Individuals who are still willing to learn and who see the potential benefits of a mentoring relationship. • Focused on achieving the desired results • Ability to communicate and work co-operatively with others. • Open and receptive to new ways of learning and trying new ideas. CHARACTERISTICS OF A LEARNER • Committed to expanding their capabilities. . He is a person who can lay down his trust on another person and is committed towards the goal of enhancing his personality.

THE MENTORING PROCESS EXPLORATION NEW UNDERSTANDING ACTION PLANNING 1. EXPLORATION It involves the following steps: • Taking the lead • Clarify aims and objectives of mentoring • Listen and ask open questions • Negotiate an agenda • Take lead in creating rapport • Show your commitment to the learner • Help mentee arrive at his / her own answer 2. NEW UNDERSTANDING .

• Offer encouragement. • Listen and challenge. • Giving constructive feedback. ACTION PLANNING It involves: • Examine options for action and their consequences • Negotiate the action plan • Encourage new and creative ways of thinking • Help to make decisions and solve problems • Monitor progress and evaluate outcomes • Give advice whenever required • Celebrate progress PHASES OF A MENTORING RELATIONSHIP . • Establish priorities. • Coach and demonstrate skills. ask closed and open questions. 3. • Recognize strengths and weaknesses. • Share experiences. • Be supportive and sensitive to the mentee. It involves: • Support and counsel.

THE MIDDLE PERIOD The middle phase is typically the most rewarding time for both mentor and mentee. 2. The mutual trust. ORIENTATION . both the mentor and mentee get to know each other. which occurs at this stage. The interaction. can give the protégé the confidence to challenge the ideas of the mentor. which has developed between the two. lays the foundation for a strong and beneficial relationship. . MIDDLE ORIENTATION PERIOD REDEFINING DISSOLVING THE THE RELATIONSHIP RELATIONSHIP The mentoring relationship typically has four distinct phases: 1. and build trust. BUILDING THE BASE During the first three to six months.

3. 4. The steps are: 1. Bench marking of the employees. Looking for work environment. DISSOLVING THE RELATIONSHIP The relationship begins to draw apart after a year or two. It is important. 2. although it is now on a more casual basis. just as the mentor will challenge the protégé’s ideas. at this stage that the mentor steps back from the formal relationship to discuss together with the protégé how they wish to continue their relationship. They continue to have some form of interaction. VARIOUS OTHER STEPS TO CURB ATTRITION IN THE ORGANIZATION The HR Manager told the various other steps to curb the attrition in the organization. where both parties can regard one another as equals. REDEFINING THE RELATIONSHIP The mentor-protégé relationship enters a new phase. Relevant grievance handling procedures for settling the grievances of the employees. 3. employer-employee relationship. Apart from this there are various other methods as well: .

This helps in retaining the employees.1. 5. 3. Shortening the Feedback Loop. Sharing of knowledge with others helps in retention of information within the organization. 4. roles and responsibilities and new policies to the employees well enough and also communicating it within the organization. This also helps to generate new ideas. It is important to make sure that the employees get ample of growth opportunities within the organization. Including the employees in the decision making process. 2. Hiring well and competent employees that are fit to be placed in the position and will remain with the company for an extended period of time. Balancing Work and Personal Life. 6. This helps in keeping the performance levels high and reinforcing positive behaviour amongst the employees. . Exit Interview. Participative Decision-making. This helps employees know the feedback of their work within a short interval of time. Company should help maintain a balance between work and family life. 8. Pay Packages. Interview with the employees leaving the organization will help employees find out reasons why the employees are leaving and the drawbacks in the organization. Employees should be paid appropriately and fairly for the work they do. 9. Sharing of Knowledge with Others. 7. Motivational Training: It surely helps in training the employees. Communicating the employees’ jobs.

The HR personnel or the immediate supervisor mostly conducts these interviews. EXIT INTERVIEW One of the best methods to find the reasons for employees’ leaving the organization is through conducting the Exit Interviews. It helps in finding out the exact reason for why the employees leave. Favoritism and preferential treatment towards employees is one of the surest reasons for employees to leave. Employees are able to give various valuable information to the organization that can be used by the organization. . No Favoritism. Hence it should be made sure that employees are treated equally and fairly. “Conducting exit interviews in the right manner can be an invaluable management tool for companies."Why our attrition rate is higher than other company".” Exit Interviews have now become a routine in the organization. These are the interview that is conducted with an employee just before he is leaving the organization. Thus it is helpful in finding out the real reason why employees leave which can be helpful in identifying the departments or areas of the organization that require improvements. Most of the companies are troubled now a days with the question that …. 10.

Anyhow the employees while giving the interview may be biased and judgmental about the company. He may also give wrong information since he is leaving. These interviews can help in creating a positive environment. these interviews can sometimes lead to character assassination and may divert from the main goal of conducting . wherein the employees if wanting to re-join later can do so without any hesitation. These help in identifying poor practices in organization that can be eliminated. These are the cost effective means of not just collecting the data regarding the recruitment. And to fight the giant of 'attrition'. The organization should spent equal time gaining feedback from employees throughout their association with the organization. selection. leave management. Besides. hence employees can disclose their feelings about the company without fear of repercussion. Many reforms in the existing appraisal system. exit interviews can be used as the arrow to strike right at its Achilles' heel. It's easier to fight the enemy if you know where to hit. Exit interviews give an inner view to the internal systems and working within the organization that affect an employees’ career in the company. These are conducted just before the employees’ departure. placement and training practices but also helps in reducing the employee attrition. human resource management system and many more improvement initiatives can be taken on the basis of the exit feedback.

for the employees leaving the company also maintains an E-Separation Portal which contains the employees name. Apart from this. This organization maintains an Employees Support Portal online in the company’s website.com THE WIN WIN MODEL: MODEL TO REDUCE ATTRITION RATE . Its URL is http:// eseparation. designation. these interviews should be conducted professionally and as far as possible steer away from personal grievances. helps an employee fill the Exit Interview Report and complete his full and final separation from the organization online. E-separation online system has been created for automating the employees’ resignation process. E-SEPARATION To automate the HR processes. approval and exit interview.relianceada. code. It is a portal for entering the resignation request. This is a portal provided for the Employees’ Support System where employees have been given various facilities like the online grievance redressal mechanism where employees can write in their grievances online. date of joining date of resignation.such interviews. Thus. relieving date.

• Recover training and development costs. Short Term Mitigation Plan 2.This is a model that has been created to satisfy the needs of both the employer and employee and thus give a better understanding of the attrition processes and reducing it. Long Term Contingency Plan This model is devised to reduce the impact of attrition by satisfying the needs of both employer and employee. The 4 stage framework: 1. Needs of the employee: • Enriched job profile . • Minimize cost in terms of time in training new workforce. Needs of the employer: • To get maximum returns from each employee. Long Term Mitigation Plan 4. This model encloses the employee by 4 levels of strategies thus reducing the attrition rate as well as minimizing the impact wherever it occurs. of people are there to carry on the process of proper manpower planning. • Ensure that adequate no. Short Term Contingency Plan 3.

Plans differentiate on the . • Better career path • Challenging work environment • Future prospects of the job THE WIN-WIN MODEL This model is conceptualized on the supposition that the employees need to be enclosed from the competitive companies by strategies at each level such that the attrition and its impact can be reduced to the minimum.

Short Term Mitigation Plan • Break Even Period It involves retaining the employees for a specified period of time called as the break-even period so as to recover the cost incurred on the employee. Short Term Contingency Plan It focuses on the work environment that enhances employee motivation for the job. . 2. One such measure is signing the bond between the employer and the employee. 1. informal work culture according to the needs of the young employees. For this the following can be done: • Flexible Salary Structure. For this companies adopt various measures. For this the minimum time period to recover the cost of employee should be calculated so that the employee can be retained for that time period.basis of tenure into short and long term as well as on the basis of usage into mitigation and contingency. It involves the maintenance of a conducive. • Small Tenure Bond After calculating the time-period measures should be taken to retain employees till this minimum time period. It is necessary for compensating the loss that happens to the employees in terms of losing their social life owing to the nature of job in the organization. fun filled environment.

Long Term Mitigation Plan These are the steps taken by the management to minimize the impact of attrition such that the firm does not face losses on the long-term basis. 4. • Provide job rotation amongst related departments on a periodic basis 3. • ‘Working from home' when required for a short term. Basic norms are being put in place and code of ethics is being stressed upon by industry. These steps include: • Defining job roles helps in mitigating the effects of attrition. • To reduce poaching of employees within the industry bilateral agreements between companies should being signed. • To minimize the training costs. . • Succession planning for the critical positions in the organization for faster replacement. Long Term Contingency Plan These are the attempts by the telecom industry to reduce the attrition as a whole. • An assessment and certification can also be helpful in creating an employable talent pool. which are in line with the requirements of the telecom industry. • Added benefits like sponsored vacations. • Variable pay package based on performance. the industry needs to work with the government to introduce courses at a school and college level. • Clear documentation of the process and the jobs performed.

• Focus should be on higher education and ongoing learning for the workforce. sponsoring employees on post-graduate programs and treating applicants and employees in the same way as one treats customers. getting in new blood into the organization. ROLE OF THE HR DEPARTMENT IN MANAGING ATTRITION Attrition at a minimum level is good in itself as it will help the organization in getting rid of unwanted employees. • A Common Database should be maintained by all the players of the industry to ensure that they are not cannibalizing each other’s resources. .

But it becomes a problem when the attrition rate is abnormal. • More diversity in the kind of employee hired needs to be brought so there is a diversified culture within the company. provide him ample training.inflow of new ideas. it is in the hands of HR to bring the right kind of people. Since it is the duty of the HR to bring in the right candidate in the organization. explain it to the management and along with it devise steps to reduce it. THE PRACTICES OF THE HR DEPARTMENT The HR is the most crucial department in the telecom sector.He needs to do the following: • While conducting the recruitment. the employee needs to start right from hiring. a good work atmosphere. Thus. HR needs to identify the employees who would stick with the company. • Keep an eye on good performing employees. For curbing attrition. the HR Department has a very crucial role to play in managing attrition and controlling it as well. when attrition rate increases it is the duty of the HR personnel to study the reasons of attrition. proper appraisal procedure and effective grievance redressal machinery. It has a variety of important roles to play right from recruitment of the person up to his exit from the organization. new enthusiasm into the organization also developing a fear into the minds of the people that any one can be thrown out which compels them to work properly. reward them and have a career plan for them in mind. Therefore. .

. To deal with the attrition rate HR specialist feels that a scientific and analytical approach needs to be implemented. having education and further learning and training for the employees. race. perks and communications also need to be looked upon. experience. This results in innovation and success. • In case of employees leaving. • Quality of Work Life is important. in terms of gender. • Discuss career plan with employees on a regular basis and take feedback from them. age. They need to give their employees personal space to grow and adjust with social life. Pay cheques are not enough to retain employees. Companies need to go for a more diverse workforce. benefits. TACKLING ATTRITION HEAD ON HR has been identified as one of the key departments in the telecom industry. HR devises different strategies to address short term challenges such as Attrition and also long term challenges such as ensuring availability of skilled talent pool. Other aspects like secure career. a good exit-feedback system should be in place so as to cover the reason for which the employees leave. One needs to focus on retention. treating employees in a friendly manner. making the work place healthier. According to the HR managers.

professionals are switching jobs either for money. Professionals now look for more challenging jobs. the cost of attrition is 1. various other reasons have come to the forefront. The employee is concerned about the environment in the organization. his compatibility with the supervisors. faced with a choice between more money and a challenging job. Age should not be a barrier for training employees.According to statistical analysis. employees have opted for the latter as it allows them to learn new technology and increase domain expertise. career satisfaction and opportunity to work with newer technologies. It is found that lack of match between personal requirements and organizational culture is quite prevalent. • BELOW THE SURFACE Going by the various surveys and exit interviews. “In several cases. However when attrition was dealt minutely. COMBATING HIGH ATTRITION BY HR The HR has found out various ways to combat attrition. exposure to newer technologies and expansion of their domain capabilities.” - . attention paid to him etc. • MONEY IS NOT EVERYTHING Money is a higher priority amongst freshers with less than 3 years of work experience.5 times the annual salary.

which are successful in retaining employees. which helps in attracting the right talent and retention. This act is a part of brand building. pass on their goals and achievements very successfully. global marketing. It is said that the organizations. vice-president. They believe that developing higher skills will keep them ahead in job market and result in better compensation. Talent Engagement & Development. The process of communication starts right at the time of recruitment.” -Bijay Sahoo. 24/7 Customer. employee joins a well-known company. In case of peer pressure. Vice-president. • COMMUNICATION “Companies should have a similar approach to employees and customers. A company should strive to retain an employee in the same way it tries to retain a customer. Wipro Technologies Communication is said to be the foundation of the entire process of managing attrition. Thus the employee can also leave the organization for his growth both vertical as well as horizontal.V Bharathwaj. Communication plays a very crucial role in retaining employees. . Workers generally analyze training programs of prospective companies with those of their organization in terms that how an organization grooms an employee. They start looking for a job with higher levels of responsibility.

employees will be confident about the future and not try to look for better options. • CONSIDER FEEDBACK It is important to take feedback from the employees on various issues and work with the HR department to sort out the differences. By the Exit Interview Inputs can be secured from employees through various employee relationship management tools. • VISION AND OBJECTIVES When any new entrant comes in organization and is in his probation period. • EMPLOYEES’ ADVOCATE . this is the time that he should be exposed to the best values the company has. If the employees are informed about the regular happenings in the company. is being introduced to the office culture. Thus identifying the right training for the right person is very important. Feedback can be got from the employees: 1. Training the employees in the newest technologies and well-managed succession plan also help to manage attrition. During the tenure of the employees 2.

Employees themselves have stated various reasons for why they leave organization. The HR is termed as employees’ advocate and a bridge between the top management and employees at all levels. Then various methods for curbing attrition have also been devised and it was finally found out that curbing attrition is actually not difficult and it is actually in the hands .One of the important reasons why employees leave companies is because of problems with their manager.” CONCLUSION Thus in a nutshell it can be said that Attrition whether good or bad can never be good for any organization. Various causes of attrition have been found out in the organization. “The HR department should have genuine interest in the employees’ welfare…it is responsible for making sure that their expectations are met. which can prove harmful to the company and its image in the long run. By doing this it is easier to meet the company’s business targets. These causes have also been analyzed and a SWOT analysis on attrition has also been conducted which explained in short the strengths and weaknesses of Attrition. It always shows the inability on part of the organization to maintain its employees and also brings to the forefront many of the flaws of the organization.

Thus attrition is bad and so are its consequences and managing this evil has become more than a necessity for the organizations today.of the HR manager who owns the maximum responsibility of managing and curbing attrition. .