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³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´

INDEX S.NO 
Definition  What is attrition analysis  Kind of Challenges Faced By Orgnisation  a model of turnover process  top 3 reasons why talent say I quit  reasons for employee attrition  ten reasons why attrition arises  cost of attrition  factors affecting attrition  attrition rate  how to manage attrition  employees quit bosses and not organizations  inadequate career opportunities  how to improve retention Chapter 2 COMPANY PROFILE Chapter 3 OBJECTIVE OF THE STUDY Chapter 4 INDIAN SCENARIO Chapter 5 WHERE IS ATTRITION OCCURING Chapter 6 ANALYSIS

CONTENT

Chapter 1 INTRODUCTION

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³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´

Chapter 7 FINDING AND CONCLUSIONS Chapter 8 SUGGESTIONS AND RECOMENDATIONS Chapter 9 BIBLIOGRAPHY

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³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´

CHAPTER.1

INTRODUCTION

In the best of worlds, employees would love their jobs, like their coworkers, work hard for their employers, get paid well for their work, have ample chances for advancement, and flexible schedules so they could attend to personal or family needs when necessary. And never leave. But then there's the real world. And in the real world, employees, do leave, either because they want more money, hate the working conditions, hate their coworkers, want a change, or because their spouse gets a

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³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´

dream job in another state. So, what does all that turnover cost? And what employees are likely to have the highest turnover? Who is likely to stay the longest? The high attrition rate in the IT industry has always been its greatest concern and a subject of much analysis and debate. Organisations use different methodologies for calculating their turnover rate. It is a known fact that turnover calculation is a grey area which does not always depict the true picture. Further, the approach to this calculation might vary from organisation to organisation. Disclosure of the figure not only has a direct impact on the business but also affects employee morale and productivity. Significantly, it might also trigger a chain reaction²a high attrition rate will lead to more people leaving the organisation, while a lower rate will act as a retention strategy. It is therefore not surprising that most industry observers are sceptical when organisations µdisclose¶ their employee turnover.

:: DEFINATION :: 
A reduction in the number of employees through retirement, resignation or death.  A reduction or decrease in numbers, size, or strength.  A wearing down or weakening of resistance, especially as a result of continuous pressure or harassment.  Attrition is also called Total Turnover Or Wastage Rate.
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³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´

Attrition is one of the most serious concerns of the organisations today, irrespective of the industry in which they are operating. Attrition is all about people leaving organisations with the slightest provocation and having no respect and commitment to the company in which they are working.

WHAT IS ATTRITION ANALYSIS?
Attrition analysis is a study in which an analysis gives the data on what is the current attrition trend in the company. Its an analysis done by taking time, manpower strength & no. of people resigned into consideration to derive the final outcome.

i.e., Attrition % = (No. of separations/Total employees) *100

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death. or employer-initiated termination). and involuntary instances where the employee has no choice in their termination ( such as long term sickness. INVOLUNTARY TURNOVER :: Instances of voluntary turnover. initiated at the choice of the employee. moving overseas. Typically.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ :: VOLONTARY VS. The Characteristics Of Employees: Page 6 of 57 .

 How do we create an organization in where people want to stick around. voluntary turnover can be predicted ( and in turn controlled) by the construct of turnover intent.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ Who engage in involuntary turnover are no different from job stayers.  The good people will be able to pick and choose their working environment. However. :: KIND OF CHALLENGES FACED BY ORGNISATION & PARADIGM SHIFT :: THE INTERNAL CHALLENGE:  Who is going to do the work ?  What knowledge are we about to lose ?  What skills will we lose ?  What traditions will change? Is this is good ? THE EXTERNAL CHALLENGE:  The market place for good talent will be competitive. Page 7 of 57 .

³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ :: A MODEL OF THE TURNOVER PROCESS :: Causes of job dissatisfaction Job dissatisfaction Thinking about leaving Looking for alternative Compare alternative Intension to quit Actual turnover :: TOP 3 REASONS WHY TALENT SAYS I QUIT :: I don t think my Boss know how to handle people They are offering me similar job wid good bugs Page 8 of 57 I don t know where I m handed in this place .

employees are not self-motivated to leave the company they are working in. Why an Employee leaves a company is the question asked by most of the employers. Hence the HR strives hard to keep attrition at the minimum. Page 9 of 57 . Nevertheless it is important to find out common causes for employee initiated exits where supervisors and/or Job Profile / compensation are not the cause. 1) EMPLOYEE AS A REASON FOR ATTRITION: Only 8% HR professionals felt that employees leave organizations on their own. family issues. Attrition rate is increasing day by day and its especially the software industry which is affected the most. Except in a few cases such as personal reasons. location preference. Each and every company faces employee turn over problem whether big or small. company brand and peer relationships. HR Heads are worried about employees leaving their organizations. Not only is it costly to lose trained employees but their replacements are not easy to come by. Companies even hire Private HR professionals to study the company's work and find out why an employee is dissatisfied.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ :: REASON FOR EMPLOYEE ATTRITION :: Employee attrition is a very big problem not only in India but outside India too. An employee leaves his present job for another job to get better pay package and good working conditions.

they leave their manager".82% 2) SUPERVISOR AS A REASON FOR ATTRITION: A large majority of HR professionals polled that immediate managers are a bigger reason for attrition.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ Reason for exit Employee Supervisor or line manager Compensation & Job Profile % of respondents 08. Further Page 10 of 57 .15% 53. Meeting employees' expectations is a difficult task.03% 38. It confirms Wayne Hochwarter [an associate professor of management in the College of Business at Florida State University] theory that "Employees don't leave their job or company.'Satisfying employee needs' often gets lower priority in a manager's quadrant of activities. and most managers cannot do it effectively and consistently.

3) COMPENSATION OR JOB PROFILE AS A REASON FOR ATTRITION: HR Managers voted unanimously that 'Compensation and Job Profile' are the primary cause of attrition. 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. the likelihood of a satisfied and motivated workforce increases and Compensation or Job Profile become manageable causes.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ managers do not have appropriate tools to manage employee related tasks and this leads to further dissatisfaction. but market forces. Page 11 of 57 . With a war for talent. tough competition and a slow economy dictate otherwise. Every company wants to become the 'best paying employer'. disparity in the compensation packages is bound to occur and a mis-matched job profile increases the likelihood of an exit.

and how employees are recognized and appreciated for individual contributions and accomplishments. Dissatisfied employees cited inadequate opportunities for career advancement as the reason they want to quit. such as promotions that don't pan out. have led many employees to give up on moving up the corporate ladder at their particular company. or skills." The three major portions of an employee's total rewards package are compensation. The work experience includes things like company culture. are generally much happier. dress code. INSUFFICIENT RECOGNITION OR APPRECIATION "There is no recognition of my creative talent. It has been proven time and again that fair pay practices benefit not only the employee. Employees who are paid competitively. Dissatisfied employees are disgruntled because of insufficient recognition or appreciation shows the importance of elements Page 12 of 57 . but also the employer (by reducing unwanted and unanticipated turnover costs). Empty promises by upper management.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ TEN REASONS WHY ATTRITION ARISES INADEQUATE COMPENSATION: Inadequate compensation is by far the number one reason that dissatisfied employees want to leave their job. relative to their specific market. training. INADEQUATE OPPORTUNITIES FOR CAREER ADVANCEMENT: Opportunity for career advancement is a major factor in retaining employees and keeping them happy. and the work experience. benefits.

or even just a pat on the back. surfing the Internet. BOREDOM "My job duties have gone from being challenging to boring. or find a job that promises more Page 13 of 57 . to adopt measures that lower employee take-home pay." 20. perhaps at companies offering more generous employer contributions towards the cost of basic medical coverage. such as employee recognition programs.3% of dissatisfied employees feel as if they have reached the pinnacle of their professional development at the company at which they are currently employed. goes a long way toward improving employee retention rates. This has spurred some employees to start looking for work elsewhere." 15. start their own business. INADEQUATE DEVELOPMENT OPPORTUNITIES FOR PROFESSIONAL "I'm probably too experienced and educated for this organization. There is only so much socializing with coworkers. or simply spacing out that an employee can do before it's time to find a new job. INADEQUATE BENEFITS "The insurance premiums I pay cut deep into my paycheck. Whether they are leaving to further their education." In many instances. This proves that rewarding top performers with cash or gift certificates.1% of dissatisfied employees are unhappy because of boredom.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ of the work experience.

³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ professional growth. that their company or job is going under. lack of profits. opportunity for professional development proves to be an important factor in retaining and satisfying employees. competitive threats. or rumor.my knees are hurting due to 12 hour shifts. Many of the 11. hard hours and are finally realizing the effect that their job is having on their overall health and stress level. industry decline." Many employees are working long. Many employees are searching for new jobs in response to the fact. Lack of this kind of approach leads to attrition. Page 14 of 57 . and rumors that the company may be sold. Some of these employees are opting to leave the workforce entirely. while others are in search of a job that won't give them an ulcer.8% of respondents who cited insufficient job security as their top reason for leaving lack confidence in upper management's ability to save the company. INSUFFICIENT JOB SECURITY Insufficient job security is a result of a variety of different factors. UNDESIRABLE IMPACT ON HEALTH OR STRESS LEVEL "This is bad for my health. including outsourcing. NO INTERNAL NETWORKING OF EMPLOYEES Internal networking of employees must be encouraged to create team spirit across the organisation.

and mailing Personnel staff time processing applications. journal. and a different new employee is hired without that hard won experience and starts over at the beginning again. screening applications time. interviewing. especially for recruiting the kind of diverse staff a great organization wants?  Management time for trips to job fairs & colleges. dealing with certifications. folding. addressing.  Loss of work flow continuity when employees leave or are not because they are not as successful as required? Page 15 of 57 rehired . etc. and other inquiries. meetings to make decisions?   Newspaper.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ :: FACTORS TO CONSIDER IN THE COST OF ATTRITION :: What You Want To Identify Are Your Organization's Costs For:  New employee recruitment.   New employee initial orientation New employee training during the first year or two? (both that just for new employees and all other organization training)  Reduced results when an employee leaves with what they have learned from trial and error. answering phones. Internet and other ads Technology specialist time for placing recruitment and job info on the organization web site   Brochure and flyer printing.

appropriate retention and capacity utilization or talent utilization tactics should be used. If these are controllableone attempts to control. economic growth and enhanced quality of life/convenience or closeness to family etc. It could also mean bringing down the negative affects of attrition and increasing the positive affects of attrition. evaluating. it is looked at as talent acquisition by the new organization and to the individual it means a career move. In one of the organizations. If these are not within the control of the organization. Page 16 of 57 . attrition has been used as brand building opportunity. coaching. Managing attrition does not mean reducing attrition only. the organization should prepare itself for managing attrition. These reasons may vary from individual to individual and when data are collected from a large number of individuals leaving or who have left an organization.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ Management time spent orienting. and supporting new employees who are not retained? ::FACTORS AFFECTING ATTRITION:: There are various reasons why people leave their current job. Thus an organization may say that we provide talent for other companies or they may say that if you join us your brand value goes up and you get good jobs etc. To increase the positive effects of attrition and reduce the negative affects. While an employee¶s leaving the job is considered attrition by one organization. developing. some consistencies may be observed-providing more insights as to why people leave in large numbers.

There can be various reasons for people leaving their current jobs. 1. It is rare not to have such career aspirations. There are economic. family aspirations and all kinds of aspirations and ambitions that affect a persons desire to move. Hence it is important to understand and manage attrition. If it is a small organization the disturbance is even greater. AMBITIONS OR CAREER ASPIRATIONS: It is but natural in a growing society and growing economy that employees at all levels aspire to build their career. professional.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ Today when a person leaves it causes a lot of disturbances in the organization. Page 17 of 57 .

at different stages of ones life to fulfill different types of affiliation needs prompt a few people to leave their jobs and move from one city to another. spouse.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ 2. etc. batch. They get bored and fatigued easily. They are highly achievement driven and want to achieve new heights in the shortest time. Organizations in their zeal to compete with one another in the market places commission such compensation surveys and further fuel the situation instead of controlling it. Some may have a different motivation or value profile which may not be matched by the current job or the company and hence the decision to leave. They need to change their job or what they are doing at periodic intervals. Individuals today are flooded with such comparisons. Need for being close with the family. They waste others time discussing organizational politics and polluting the atmosphere. city. organization. PARENTAL AND FAMILY MOBILITY. parents etc. Otherwise they are restless and create morale problems with others working with them. 3. Although we have largely moved away from the joint family concept. there are still strong affiliations and affections. there are numerous dimensions on which similarities can be picked up and compared. 4. children. Page 18 of 57 . Sometimes the desire to be with the closed ones also pushes the person to move. age group. COMPARISONS AND EQUITY CONSIDERATIONS: Comparisons with peers or classmates from the same college. first job. PERSONALITY FACTORS: Some people have a high need for variety. They have either been socialized so or fulfill their own power or other motives.

6. need for savings etc. ECONOMIC FACTORS: This deal with the aspirations in relation to salary and perks. e) Role clarity. housing. f) Job Stress. d) Lack of scope for growth in terms of position¶ salary. c) Boss and his styles. g) Lack of independence or freedom and autonomy. Page 19 of 57 . status and other factors. JOB RELATED FACTORS: The job related factors that cause the decision to leave are many these include the following: a) Inability to use ones¶ competencies. b) Lack of challenge. In addition to these there could be many other factors that affect decisions: a) Mobility of partner b) Fatigue c) Family reasons like having to look after old parents.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ 5. quality of living. h) Lack of learning opportunities.

a quarterly index should be applied till a company¶s 10th anniversary. Subsequently. An attrition rate can also be a combination of these two factors. It can be a measure of how many customers leave over a certain period of time or how many employees leave over a certain period of time. annual attrition figures should be measured and accounted for. also known as a churn rate. After this. It happened to recent slowdown in world market. It is usually expressed in percentage.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ :: ATTRITION RATE :: DEFINITION: The rate of shrinkage in size or number of employees is known as Attrition rate. This dip in attrition rate is not sudden. An attrition rate. This is the optimum within the services industry as Page 20 of 57 . HOW TO CALCULATE ATTRITION RATE? ³Ideally. attrition should be calculated on a monthly basis for companies that have over 50 employees for the first five years of its business. However experts are saying that the main reasons of the downfall of attrition rate is lesser number of new jobs in industry and companies preferring freshers over experienced employees as freshers are very cheaper as compared to experienced employees. Attrition rate in Indian IT industry has gone down and it has reached a level which was there in this industry 3 years back. can be a measure of two things.

total number of resignations) Page 21 of 57 . also. maturity achieves stability around a company¶s 10th anniversary.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ companies tend to have different challenges at different stages of their business lifecycle.´ WHAT IS THE HR ATTRITION RATE FORMULA? The Most Commonly Used Formulae Are : Total Number of Resigns per month (Whether voluntary or forced) X 100 ----------------------------------------------------------------------------------------(Total Number of employees at the beginning of the month + total number of new joine .

³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ Number of employee separations-involuntary separations X 100 ------------------------------------------------------------------------------------*Average employee count (*Avg. Of attritions x 100) / (Actual Employees + New Joined)) /100.Of employees present ((no. EXAMPLE:Actual Employees=150 No.of employee left X 100 ------------------------------------------Total No . Of new Joined=25 Attritions=20 Current Headcount=155 Page 22 of 57 . employee count = January month strength + December month strength Total Terminations in a month ------------------------------------------------------------------------------------(Total Head Count at the beginning of the month) + (Total New Hires) Total No.

1142 i. 175 x 0. Page 23 of 57 .e.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ So according to the formula: ((20 x 100) / (150 + 25)) / 100 Which comes to 0. both negative and positive. which is your current headcount and at the same time you can say my attrition is 11.42% of 175 i. On The Negative Side.e. of employees who left in the year / average employees in the year) x 100 ::CONSEQUENCES OF ATTRITION:: The labour turnover can have a number of serious consequences. Attrition = (No.42% that shows you lost 20 employees of 150 and 25 more joined which makes count to 175. 11% Now as you had 150 previously and now 25 joined so it makes 150 + 25 =175 Now if you calculate 11.1142 = 20 Which clearly shows that 175 .20 = 155. Turnover Can Have The Following Consequences:  significant replacement costs.

³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´  significant operational disruption.  displacement of poor performers. Questionnaires need to be designed carefully to be effective. ::DIAGONISING ATTRITION:: Commonly Used Techniques In The Industry:  SURVEY: Surveys are a reasonable way of obtaining relevant information. though response rates are often disappointing.  a service contractor¶s ability to take on new work may be impeded. However.  reduction of paybill costs ± initial employment cost of replacement staff may be lower.  vacancies in key posts will increase internal promotion prospects. those who remain. knowledge and experience. On The Positive Side.  adjustment of staffing mix to provide greater flexibility. or pressure on. They Page 24 of 57 . Turnover May Have The Following Consequences:  vacant posts provide opportunities for re-structuring sections or departments.  promotion of innovation.  employee dissatisfaction and loss of morale.  productivity and creativity may diminish. flexibility.  further turnover may be stimulated by an increase in the workload.  loss of key skills.

ranking of items or checklist format.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ should be easy to use. anonymous and fairly brief. But companies can reduce the employee attrition rates by taking few steps. HOW TO MANAGE ATTRITION? Now days with the huge demand of Software Professionals around the world and with the company willing to pay high salary package software professional tend to switch companies. Exit interviews will normally to be done in the form of a questionnaire. though some firms wait until after the departure.  EXIT INTERVIEWS : Exit interviews are used by the majority of companies. Page 25 of 57 . though one to one interviews are also used. They tend to be conducted just before an employee leaves. multiple choice answers. Questions can be open or closed.

Create Opportunities For Employees: The Company has to create growth opportunities for employees to enhance their learning experience and earning abilities. Page 26 of 57 . 7.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ 1. 4. a pat on the back in time and celebrating small achievements with great fan-fare will help employees feel valued in the organization. 5. 2. Review Recruiting Practices: Selection and Recruitment policies must be reviewed to suit the growing needs of the organization. Feel Valued In Organization: Non-financial rewards. 3. 6. Engaging Employees: Employees must be engaged on continuous basis and they should not get bored with their work. Technology Opportunities: Leveraging technology to manage the organization and enhancing the technical expertise of the employees will help organization grow without much problem of attrition. Career Path For Employees: Employee career path must be declared during the recruitment process and should be explained to the recruited people. 8. Attitude and Experience) of the employees. Skills. which can be managed through internal transfers and training from time to time. Compensation And Management: Compensation and Management must be managed based on the KSAs (Knowledge. Contact With Senior Management: Senior Management should address employees periodically and should make them feel like a family.

middle level managers must be flexible and act as Chief Happiness Officers to avoid triggers of attrition. Make the employee feel that i am working from home and not from office. 14. 11. 13. Feel Part Of The Company's Mission: The Company's mission must be reiterated from time to time to reinforce the learning and experience of the people. Picnic/Outings: Too much work and stress takes a toll on the body and smaller chunk of employee leave because of health issues. family pressure. Incentives For Extra Work Time: All the IT companies work on so crunch time that there is limited scope for the companies and the employee to save time. 12. Educate Employees On Their Impact: Educate employees regularly on what kind of impact they are creating on organization through their contribution. But this takes toll on the employee mental stamina and so if the company can come up by curbing late working of the employee during less work pressure and at the time of pressure delivery of the product give them the confidence that working late will help them by giving incentives. Flexibility: Immediate bosses. Attendance : Policies with regard to attendance must be creative and flexible. 10. Page 27 of 57 . Regular picnics and outing for Lunch/Dinner makes him/her body relax and feels comfortable.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ 9. too much stress.

:: EMPLOYEES QUIT BOSSES AND NOT ORGANISATIONS ::  Key management positions being given to younger people has given rise to inexperienced people managers. Page 28 of 57 .³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ 15. Satisfaction: All is human needs is they should be satisfied with what they are doing. Need to counsel your employee whether they are satisfied with their job by means of surveys etc.

³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´  Don¶t look at attrition merely as a statistics. Sensitize line managers towards people issues.´ ::HOW TO IMPROVE RETENTION :: 1.  Equip front line and first time managers to manage talent related issues.SHOW EMPLOYEES THAT YOU HAVE AN INTEREST IN THEIR SUCCESS: 60 to 70 % of workers do not feel that their Page 29 of 57 .  Attrition is not only an HR issue. A good manager can reduce attrition within his/her team to near zero-level if he/she keeps sight of the touch point.. ³ There is a strong correlation between employee attrition and front line management. Read the story behind the numbers.  Identify the underlying issues contributing to attrition.

Managers of successful companies are acutely aware that even the most brilliant business model will not work without skilled individuals motivated by a culture of management concern. 4. 3. Employees get the message that. GIVE EMPLOYEES A CLEAR IDEA OF THE LONG TERM GOALS OF THE COMPANY: Three quarters of unhappy employees do not believe that their company knows where it is going. more important.ALLOW EMPLOYEES THE ROOM TO DEVELOP THEIR SKILL: Many employees find themselves trapped in a narrow job function so mission-critical that the organisation cannot afford to move them. The company also loses strong performers who could have filled other. Too often. resign. MEASURE SOFT SKILL: Many companies say they value people and train their management team to cope with people issues. This should be followed up with behaviour that is consistent with what they have told employees. roles over the long term. unable to satisfy their need for growth. Yet these same managers are rewarded based on their technical skills and financial results. Companies should endeavour to change their perceptions by communicating effectively to employees the direction it wants to take.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ companies help them to develop their career. Frustrated employees. leaving holes that disrupt the company¶s workflow in the short term. people skills are not rewarded and no measure exists to evaluate them. ³people skills don¶t matter´ and so neither do people. 2. Page 30 of 57 ..

The productive employee often has to take on more work to compensate for the poor performance of others. and they can feel that management is either turning a blind eye to unjust practices. or does not have sufficient interest in what goes on ³below decks´ to notice any disparity in working practices amongst employees. DEVELOP YOUR MANAGEMENT TEAM: People see good bosses as the wind beneath their wings. and employees who lack confidence in their bosses will leave the organisation sooner rather than later. WEED OUT POOR PERFORMERS IN NON-MANAGEMENT RANKS: Managers often under-estimate how strongly employees resent the presence of underperformers within their work group. both morale and retention improve.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ 6. communicate it effectively to their teams and deploy initiatives that are consistent with company strategy. 7. A key retention strategy is to weed out marginal managers. When the slackers are weeded out. ³INADEQUATE CAREER OPPORTUNITIES CAN DRIVE YOUR EMPLOYEES OUT OF THE DOOR´ Page 31 of 57 . Replace them with managers who can craft a compelling game plan.

However the Average Performers« the so called ³Solid Citizens´ are actually the high risk group when it comes to attrition. this is a universally accepted fact. and probably a group where the company has made major investments in terms of training and other employee costs overtime. This group forms the bulk of the organisation.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ High Performers need to be retained. HOW TO MINIMISE ATTRITION  Segment attrition data to understand who is it that you are losing and target accordingly. are easier to retain. This is a group that feels neglected and disillusioned in our race to appease the high performers. Page 32 of 57 . Organisations today focus a large part of their energy and resources to retain high performers.

³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´  Spend time during recruitment to explain your culture and expectations. Drive accountability for retention out to front-line managers.  Look at an aggregate industry wide solution in conjunction with individual strategies.  Ensure that when people leave the organisation.  Look at and communicate career development initiatives of the employee from the day he is taken onboard.  Build a value proposition in terms of learning and career growth. Page 33 of 57 . their knowledge doesn't leave with them. ARRESTING ATTRITION  Train your recruiters to find the perfect match between company's requirement and employee aspirations keeping in mind the culture fit of the employee.  Ensure a work environment for the employees which is truly appreciated by them.  Make your line managers equally responsible for attrition.  Focus attention on equipping the front line managers with necessary skills so that they are able to manage people issues skillfully.

³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ CHAPTER. 2 COMPANY PROFILE Page 34 of 57 .

India. China & Argentina that involve 3. Business Intelligence. Retail. including Cloud Computing. partners with technology and software-enabled businesses to deliver quality products to market rapidly and cost-effectively. Healthcare. Finance.000 of the brightest & most innovative software minds. GlobalLogic has created a network of global innovation hubs in the US. Wireless and Telecom. GlobalLogic is also an expert in cutting-edge tools and technologies. Page 35 of 57 . Ukraine. Connecting GlobalLogic¶s hubs & clients is an awardwinning platform (GlobalLogic VelocityŒ) that cultivates rapid Agile collaboration.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ GlobalLogic is the leader in software R&D services. Infrastructure. GlobalLogic Inc. Open Source and Software-as-aService. The company has ongoing partnerships with more than 150 emerging and established clients in markets such as Digital Media.

MISSIONS AND VALUES: GlobalLogic¶s mission is to partner with the world¶s emerging and established software leaders to help them bring great products to market in less time and at less cost. 500 company and was recognized as a top global employer by IDC and Hewitt Associates. GlobalLogic is committed to providing: y World-class software engineers who partner with and extend the capabilities of our clients¶ existing engineering teams to take on new areas of development y Rigorous product engineering method and platform based on distributed Agile software development and open source tools to ensures complete visibility and accountability at each stage during the product development lifecycle y Structured partnerships that fully incorporate client objectives while guaranteeing quality. cost savings and time-to-market satisfaction. Furthermore. To do this. Globallogic Is Headquartered In Vienna. GlobalLogic adheres to a strict business philosophy based on the following values: Page 36 of 57 .³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ GlobalLogic has been ranked an Inc. Virginia And Is Backed By Sequoia Capital And New Enterprise Associates.

We always strive to treat our clients. and where each thought is valued and factored into making decisions. so that everyone has access to the most complete data in order to make the best decisions. Page 37 of 57 . We always hold ourselves to the highest ethical standards and take personal responsibility for our words and actions. We believe in the free flow of information. We believe in always doing what we say we will and when we say we will do it. We maximize transparency to create an environment where every individual is accessible and encouraged to contribute. True teamwork and true partnership assumes an intimate understanding and alignment of each other¶s goals and requires each party to actively care for and trust the other. TEAMWORK: We believe that a good team is stronger than the sum of its parts. INNOVATION: We believe in always learning and innovating. take risks and speak out. good for our clients and good for the business. OPENNESS: We greatly value our people and seek to empower them. investors and colleagues as partners. We encourage and reward those who challenge conventional wisdom.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ INTEGRITY: We believe in treating people with respect. regardless of rank or power. We believe that inspiring people to grow is good for the individual.

y GlobalLogic Product Engineering LabSM (PEL) . and require product Page 38 of 57 . GlobalLogic PEP enables clients to integrate talented engineers into discrete projects that are ³time-boxed´.GlobalLogic PET enables clients to rapidly extend product development and support resources to a global level while building teams that specialize in product verticals including Telecom.For technology companies that lack a product engineering team or want to establish a global team to support a single product or entire product line. GlobalLogic can rapidly set up an offshore lab in India. Healthcare. Consumer and Enterprise. China or Eastern Europe.For technology companies that already have a local software development and support team. enabling them to build on their own unique strengths while leveraging GlobalLogic¶s experienced product engineers. GlobalLogic enables clients to quickly access and apply product engineers on a project basis.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ GLOBALLOGIC SERVICES: GlobalLogic has created solutions designed to meet the growth stagespecific needs of our clients. y GlobalLogic Product Engineering ProjectSM (PEP) . delivery innovation. global engineering centres and platform for distributed software product development. y GlobalLogic Product Engineering TeamSM (PET) .

RoR. .Over the years. y Product Vertical & Technology Expertise .GlobalLogic¶s Professional Services offering provides clients with on-site or offshore product engineer¶s on-demand. GlobalLogic has gained technical expertise and conceived of methodologies in emerging technologies and domains.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ vertical and technology expertise in Telecom. Our award-winning HR team works with our clients to identify the exact skill-sets needed. sourcing candidates from GlobalLogic¶s product engineering centers in India. Page 39 of 57 . We have implemented excellence centers that consistently provide innovative solutions to our client partners. as well as J2EE. y GlobalLogic Professional Services SM (PS) .NET or open source. China and the US. Consumer and Enterprise. Healthcare. Ukraine.

3 OBJECTIVE OF THE STUDY  To fulfill the future needs and aspirations of employees in the organization.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ CHAPTER. Page 40 of 57 .  To verify the satisfaction level of employee in the organization.

³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´  To ensure organization. Page 41 of 57 .  To bring out proper working between employees and organization to improve the company¶s image.  To take efforts and measures to improve the situation and conditions of employment. co-ordination between the employees and the  To protect the interest of the employees in the organization.  To understand the rules and policies followed by the organization.  To make employees proud of their own company.

4 INDIAN SCENARIO ::EMPLOYEE ATTRITION IN INDIA:: Staff attrition (or turnover) represents significant costs to technology and business process outsourcing (BPO) companies. High attrition rates drive Page 42 of 57 .³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ CHAPTER.

lack of job security. Employees leave their jobs for a number of reasons including: wanting more money. recruiting. retirement and death. and create substantial continuity problems for longer-lived projects. it has been reported that Hewlett-Packard have found the cost per µticket¶ (the cost of Page 43 of 57 . High wage inflation is another major factor in job hopping. irregular working hours. desire for change. and family reasons. They also increase the prospect of customer service complaints or quality problems. poor working conditions. while wages in call centers in Indian are less than one-eighth of those in Northern Europe. and productivity costs. better opportunities. :: ATTRITION RATES & COST IN INDIA :: In India. difficulties with coworkers. However. the average annual attrition rate in the business process outsourcing (BPO) sector hit a high of close to 50% a few years ago. lack of advancement opportunities. Furthermore. Better attrition management and the 2008-2009 global economic slow down have helped reduce the figure to 24-30%. but this still has a significant impact on costs and quality. Some companies believe that the attrition rates in India²and the costs associated with them²are so high that they can override the benefits of lower wage costs. For example. There are many causes for attrition including. and increase human resources.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ up training costs. attrition rates in India¶s business process outsourcing (BPO) industry are about 8 percent higher than the national average. most attrition is due to employee turnover.

and long-term benefits such as performance bonuses. Hay¶s Group recommends providing a better balance of short. India¶s government is acutely aware of the attrition issue and has introduced several initiatives to create BPO jobs in rural areas of the country.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ processing a query) was double in India ³due to the inability of the staff to resolve customer queries efficiently because of language barriers and inexperience´. country head of Hay Group¶s Reward Information Services in India. :: MANAGING ATTRITION IN INDIA :: To ensure that attrition rates are kept to a minimum. companies can ensure that they get higher productivity without hefty increases in salary costs and minimize attrition costs and issues at the same time. According to Oscar De Mello. effectively communicating details of compensation plans to encourage employee buy-in. and promoting non-financial benefits such as Page 44 of 57 . By creatively designing their total reward package towards more short-term incentives and benefits. It is simply attrition² people do not stay long enough to be taught or to learn the job. adjusting pay might not automatically lead to higher operating costs for BPO companies. The issue is not with the quality or education of the staff and still less with the investment in technology. employee stock option plans and retention bonuses. businesses need to redesign their reward and recognition packages to help the industry hold onto staff and to find the right kind of people who can keep pace with the unique work patterns. and linking the package to performance.

Not only will this help reduce attrition. First. job rotation and transparent performance management systems. Finally. review your team structure and ensure that there is sufficient information sharing and collaboration so that the loss of any one person does not set you back. Second. if you are working on a longer-term project. get to know your key team members.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ career development. while others simply try to hide it. understand your partner¶s attrition rates and their management practices. Some firms manage attrition well. but help you minimize the down side if you do lose a key team member Page 45 of 57 .

³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ CHAPTER. 5 WHERE IS ATTRITION OCCURING? Is it more in males than females? What levels? Is there anything in common among those who leave? Is it related to some disciplines or people from a particular region or linguistic group? Is it more among Page 46 of 57 .

In one study by the author of an engineering services company the attrition was found to be more among certain section of engineers who faced the stress due to changing technologies and requirements of the company. Those who left the drilling division were found to be older in age and those who left Finance department younger in age. They were a very critical part of the organization as they were most familiar with the routes and clients. For Example: In one oil Exploration Company such an analysis revealed that attrition is limited to those from the Drilling division and financial services division. Those who left the finance department left because the demand for young CAs and financial managers had gone up in the outside environment. It then became easy for UPS to hire loaders and save the drivers from this work. The survey revealed Page 47 of 57 . Those who left the Drilling department left with VRS and got good jobs elsewhere because experienced people are in demand. They then discovered that the driver's job included loading and unloading which they hated. It reduced the attrition rate remarkably. Simple demographic analysis among those who level could reveal some insights. Until the study was conducted it was assumed that people left because they did not like the style of their manager. In both cases there were push as well as pull factors operating simultaneously.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ candidates from certain colleges or institutions? Age groups? Etc. UPS found that they had a lot of attrition amongst its drivers who pick up and deliver the parcel services.

Later the company had to undertake a program to change the CTC structure and also to educate the permanent employees. In another study of a software services company the root cause for attrition was found to be the differential wage structure of the permanent employees as compared to the temporary employees. At least the organization can then determine if any internal interventions will help reduce attrition. Once the source/cause of attrition is identified.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ that on the contrary employees stayed longer because of the task centered but developmental style of their manager. Temporary employees were paid on an hourly rate at double the amount of hourly rate calculated for permanent employees by dividing the cost to the company by 2000 hours. However they were not properly informed of the amounts spent by the company through various benefits and the outsourcing fee that was paid to the agency. solving the problem becomes relatively easy. Page 48 of 57 .

6 ANALYSIS :: AN OVERVIEW OF ATTRITION RATE IN IT & ITeS SECTOR IN INDIA :: IT COMPANIES:  Infosys  TCS Page 49 of 57 .³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ CHAPTER.

8 13.4 Q4(FY10) Q1(FY11) 43 42 According to the above graph. we observed that the attrition rate in IT Companies is increasing & so of ITeS is decreasing.8 13.8 12.9 2321. Page 50 of 57 .312.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´  Wipro  HCL ITeS COMPANIES:  Genpact  WNS ATTRITION RATE 50 40 ATTRITION RATE (%) 30 20 10 0 INFOSYS TCS WIPRO HCL GENPACT WNS COMPANY NAME 15.8 11.4 15.1 16.

³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ CHAPTER.  They try all possible ways to retain their employee but if not then«« Page 51 of 57 . 7 FINDINGS & CONCLUSIONS  The recruitment and selection through walk in interview only.

Page 52 of 57 .  The exit interviews were conducted as and when required by the company.  Various other workshops conducted which helps the employee to be motivated and keep working.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´  Retention polices followed provides the employee both monetary and non monetary benefits.  Other welfare program are also conducted for them.

³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ CHAPTER. Page 53 of 57 . bonding programme. flexible working hours and stronger career path. 8 SUGGESTIONS AND RECOMMENDATIONS  Companies can look into various options like good rewards.

benefits.  Making work a fun place.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´  Management also needs to consider other aspects like secure career. Page 54 of 57 . perks and communication. having education and ongoing learning for the workforce and treating applicants and an employee in the same way as one treats customers.

³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ CHAPTER. 9 BIBLIOGRAPHY Page 55 of 57 .

Com  Www.Com  Www.Chrmglobal.Indiatimes.Org  Www.³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´  Nasscom Strategic Review 2010  Cite Hr .Com  Www.Nasscom.Com  Www.Livemint.in  NAUKRIHUB  Economictimes.In Page 56 of 57 .Bpoindia.Chrmglobal.org  contentwriter.Com  www.Com  Hewitt  b p o india .Siliconindia.

³A STUDY OF ATTRITION AS A CHALLENGE AND TRENDS IN IT/ITes SECTOR´ Page 57 of 57 .