JNROnline Journal Journal of Natural Remedies

ISSN: 2320-3358 (e) Vol. 21, No. 4(S2),(2020)

ISSN: 0972-5547(p)

A STUDY ON EMPLOYEE ATTRITION AND EMPLOYEE RETENTION IN IT

SECTOR
M. K. Indumathi
Research Scholar, Bharathiar University, Coimbatore.
Dr. R. Akila
Professor- MBA Department, Jeppiaar Engineering College, Chennai
ABSTRACT
Employee attrition is a serious issue in today’s knowledge-driven marketplace where employees
are the most important human capital assets. It is not that much easy to find out as to who
contributes and who has the control on the employee attrition. Various studies conducted
showed that everyone is contributing to the attrition. The way the industry is projected and
speed at which the companies are developing has a major part in attrition.
Even today, the main reason for changing jobs is for better salary and benefits. When a well-
trained employee leaves the organisation, it creates an empty space in an organization. It creates a
great difficulty for Human resource personnel to fill the gap that has occurred as it incurs more
cost and time. Modern managers are taking various steps to reduce the employee attrition rate
and it is a challenging task as many of the employees may also tend to leave the job for various
undisclosed factors Employee attrition is a major problem globally. Employee attrition refers to
the loss of employees through a number of circumstances. This study aims to examine the cause
of the attrition in IT sector and to analyze factors which can help in retaining employees. The
primary data for the study will be collected using questionnaire through online. Google sheets
will be used for this purpose. Non probability snow ball sampling method will be used to collect
the samples. The sample size for the study will be 50 employees who work in IT sector for
minimum of one year. Percentage analysis and interval estimation are the tools used for data
analysis.
Keywords: Attrition, work load, IT sector, retention

I. INTRODUCTION
Attrition and Retention processes are common in every industry in all sectors in all over the
world. The attrition may be caused by the organization at times in order to reduce the work force
and also to reduce the expenses on salary of employees or it can be to come out from loss of
business. The organization forced few workers who are considered not necessary and some who
always makes problems with the organization. The organization is ready to retain certain
employees whose expertise is considered to be important and without whom, it may not be easy
to successfully complete the work and to keep the business successful. At the same time, the
workers voluntarily leave the organization seeking new opportunities.
Anuradha et al. (2012) have indicated that the modern technology and needs have together made
the information technology industry as much important and one of the most capital intensive
industries of the whole world. In the last two decades, the IT industry has contributed
significantly to economic growth in terms of GDP, foreign exchange earnings and employment
generation. Gaurav Bagga (2013) identified the high rates of employee attrition in IT industry in
India and put forward certain possible solutions. He identified that how employees seemed are
most likely to leave a company after certain period of time.
Varaprasad Goud (2014) has identified the retention strategies followed in HCL Technologies
and Infosys in order to analyse how the retention strategies pay way for long time development.
He concluded that the retention strategies implemented by HCL have promoted sustainable
development. Mita Mehta et al. (2014) have considered a theoretical study taking into various
research studies to derive certain factors that impact employee commitment and retention in a
work environment. They have studied the following factors: career development opportunities,
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effective talent management strategies, recruitment, on boarding and orientation, investment in

training and development, culture of the organization, leadership, communication, image of the
company, autonomy and empowerment, audits, personal causes, flexi time, performance
appraisals, career growth and development opportunities.
Venkatesh Kumar & Uma Maheswari (2015) have received primary data from 100 employees of
IT industry in Chennai City on certain factors; employee path, rewards and motivation. The
fifteen variables of the questionnaire were grouped into four major topics. The findings from the
study revealed that to prevent attrition and also to retain the employees, the organizations need
to provide with best salary, higher education, performance rewards and also to consider the
personal problems of employees especially when they are working during night shifts.
The most two prominent forms of attrition are attrition as a consequence of employees leaving
an organization, and the other one is employees retiring from an organization. Although attrition
may describe trends in sales and marketing; this will focus upon the former reason for attrition as
well as some of the underlying reasons associated with people leaving an organization. Attrition
is part of the natural life cycle for every organization. The early departure of a productive
member of the organization can stimulate an impression of fear and doubt that makes more
attrition easily.

II. REVIEW OF LITERATURE:

Arora & Athreye (2002) have indicated that India has emerged as a major exporter of software
services in the international economy in the past decade. In the initial years, the excess supply of
software personnel and scientific personnel helped the industry to grow to a much greater extent.
Further they understood that the wages in the software industry started to rise as the demand for
software personnel increased. Higher wages attract employees and so they decide to leave the
organisation. Shortage of qualified personnel and worker attrition were the two main problems
expressed by several organisations.
Sudipta Dev (2005) has indentified that calculating employee attrition rate is difficult because
there are no proper theories for attrition rate calculation. This calculation may vary from one
organization to another. He also indicated that the impact of attrition affects the morale and
productivity of the business and also concluded that high attrition rate will lead to more people
leaving the organization and low rate would act as a best retention strategy.
Snyder et al. (2006) have identified the personnel selection of information technology workers.
Many software professionals prefer for job changes in order to gain new skills, better experience
and advanced training in new technologies. It is also possible that the short tenure of IT
professionals may be due to the increased focus by the organizations on hiring workers who
have the certain skills needed to deliver on the project immediately. Later, once the project is
completed they may realize that the formerly valuable skills are no longer beneficial and this
leads to increased attrition.
Sharma (2007) has indicated that, in India, the average attrition rates range between 12 percent
and 35 percent. This makes it very tough for the companies to develop future term strategies for
internal development of skills and also in knowledge. Thus, attrition is of great importance for
the entire industry. The competitive advantage of the Indian software industry owes its origin to
the availability of large number of skilled employees at lower than international cost. The loss of
an employee results in increasing the cost in various ways. These include cost of the position
vacant, cost of recruiting a new person, cost of training, loss of knowledge and loss of
productivity.
Gaan (2011) indicated that employee turnover has been a major issue pertaining to Information
Technology personnel. Frequently IT personnel have a stronger than average tendency to leave
their current employer in order to work for another. Employee Retention involves taking certain
measures to encourage employees and to make them to stay within the organization for the

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maximum period of time. Study concluded that the manager’s practices in support of their
employees were very important for reducing the turnover.
Ramanaiah & Lavanya (2011) have identified the level of commitment towards retention
practices in IT and Non-IT companies in Chennai. They found that IT companies should
identify the difference between avoidable and unavoidable departure and also they should take
measure to retain their key talent. The results showed that there is a definite commitment
towards retention practices but when we consider the commitment levels then it is different in
IT and Non-IT companies. They have indicated that employers should treat their employees as
an asset and not as a liability.
Rajnish & Chawla (2012) identified the key factors of retention and its strategies. The main
purpose of the paper was to identify and study the key factors of retention. Exploratory research
was used for their study. The findings revealed the importance of training, consultation of the
employees during target setting, satisfaction with compensation level, rewards and recognition
given to the executives, working conditions, job capability, satisfaction with the initiatives taken
by HR, and participation in management.
Varaprasad Goud (2014) has identified the retention strategies followed in HCL Technologies
and Infosys in order to analyse how the retention strategies pay way for long time development.
He concluded that the retention strategies implemented by HCL have promoted sustainable
development.
Mita Mehta et al. (2014) have considered a theoretical study taking into various research studies
to derive certain factors that impact employee commitment and retention in a work
environment. They have studied the following factors: career development opportunities,
effective talent management strategies, recruitment, on boarding and orientation, investment in
training and development, culture of the organization, leadership, communication, image of the
company, autonomy and empowerment, audits, personal causes, flexi time, performance
appraisals, career growth and development opportunities.
OBJECTIVES OF THE STUDY:
 To understand the problem of attrition in IT sector.
 To understand the underlying factors that retains the employees in IT sector.
 To suggest the areas for improvement to retain employees

III. RESEARCH DESIGN

Claire Selltiz et al. (1962) indicated that research Design as “the arrangement of conditions for
collection and analysis of data in a manner that aims to combine relevance to the research
purpose with economy in procedure”. This study has main focus on employees regarding
attrition and retention strategies. Further, the data obtained from the employees through
questionnaire was used with proper statistical tools to carry out the empirical analysis.
This study was designed to be an empirical one as the data is collected with the help of primary
data which is questionnaire. The study is also exploratory cum descriptive in nature depending
on the both primary data like survey method and secondary data like newspaper, articles,
literature reviews etc..
Descriptive research helps to obtain information concerning the current status of the
phenomena and to describe "what exists" with respect to variables or conditions in a particular
situation. Descriptive research is a type of research that describes a population that is being
studied like current status of employee attrition and retention
The study is about the attrition of employees and also to retain employees in some Information
Technology firms in Chennai. The study concentrates on parts of employee attrition from the
view of employees. Software organizations in Chennai were chosen after considering about the
different parameters like number of employees, firm's age and size etc.
Sampling technique:
Population:
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By selecting some of elements in a population, we may draw conclusions about the entire
population. The population for the study is the employees of IT companies who work in
Chennai.
Sample Size
Samples size is defined as the number of items to be selected from the population to constitute
the sample. For this research a sample of 50 employees in IT sector were considered.
Data collection:
Primary Data
Primary data are those which give first hand information and it is fresh. Primary data for the
study is collected through questionnaire which contains closed form of questions.
Secondary Data
Mostly secondary data will be collected from the company and from the records of IT sector
also. Apart from this, the reviews of various researchers, articles help in collecting relevant data.
Questionnaire design:
The questionnaire is well structured and it consists of closed ended questions. There are a total
of 15 questions that aims to cover all aspects of the employee attrition retention factors.
Tools used:
 Simple percentage method
 Interval estimation
Simple Percentage Method
Percentages are used to describe relationship in general. Percentage reduces everything to a
common base and allows meaningful comparison.
% of Respondents = No. of. Respondents / Total Respondents X100
Interval Estimation:
Interval estimation (margin of error) uses sample data to determine a range (interval) that, at an
established level of confidence, will contain the population proportion.
To estimate the standard error of the proportion

where p = sample proportion q=1-p

To estimate the confidence interval
CV = critical value
CI = p ± (CV)(Sp)
FINDINGS:
 Majority (52%) of the respondents are male.
 Majority (46%) of the respondents are in the age group of 26-30 years.
 It is found that more respondents (72%) have less than 5 years of experience.
 It is found that majority (36%) of the respondents work in the organisation which has
less than 100 employees.
 Majority (50%) of the respondents agree that organisation policies plays major role in
employee attrition.
 It is found that majority (34%) of the respondents neither agree nor disagree that spouse
relocation is the reason for attrition
 Majority(32%) of the respondents are neither satisfied nor dissatisfied regarding the
incentives offered in the organisation
 Majority (62%) of the respondents feel that organization should implement employee
retention strategies
 Majority (36%) of the respondents agree that recognition helps in employee retention
 Majority (50%) of the respondents are satisfied with the current job
 Majority (38%) of the respondents are satisfied with the feedback given by the
employer
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 Majority (40%) of the respondents neither agree nor disagree that job is stressful
 It is found that more number of employees (70%) feel that they are empowered in their
organization.
 Majority (58%) of the respondents are satisfied with the insurance schemes offered by
the organization.
 Majority (46%) of the respondents are satisfied with the pay given by the organization.
 It is found that with 95% confidence interval, the respondents between 50% and 73%
feel that organisation should implement retention strategies.
SUGGESTIONS:
 Proper training is very important before assigning certain task to fresh graduates. This
helps in proper understanding about job role and also reduce fear and stress
 Organization should motivate employees by providing awards, rewards and incentives
once in year. It increases employees’ satisfaction and interest towards job and also
increases concern productivity.
 Apart from salary, employees need add-on benefits that cover their family for example-
insurance.
 Employees should be empowered to work. It helps employees to take a way in decision
making during critical situation.
 Appreciate and recognise employees whenever required and this will help to reduce
employee retention.
 Organisation policies should be framed in such a way which suits the employees as this
helps to reduce attrition rate in the organisation.
 Retention strategies should be framed on regular basis to reduce attrition.

IV. CONCLUSION
Organisation should concentrate on employees mind set and they should provide proper
training, motivation, better hike and also to take right decision in case of internal affairs.
Successions planning are very important it helps in retaining employees and accelerate growth of
the organization.
The study was very much useful in understanding the relative importance of various factors
responsible for employee attrition. Most employees are not motivated only by money.
Historically, firms have used money and financial rewards to retain employees but this may not
be the same for all employees. Software employees are enjoying the fastest salary progression of
almost any profession, yet they are changing jobs constantly.
Today’s employees need more than monetary compensation. Research revealed that salary, job
content, recognition is important reasons for employee attrition. The IT sector can retain
employees by dealing with the two important factors which are opportunity for development and
growth and Salary. More focus on employee training is required and employee recognition is also
required. Salary needs to be made more competitive which helps in reducing job change. In
order to retain employees it is important to provide sufficient opportunities for development and
growth, recognition, competitive salary and incentives.

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