Title: Factors That Affect the Employees’ Retention in the BPO Industry

CHAPTER 1: THE PROBLEM AND ITS BACKGROUND

1.1 Introduction
Employee Retention has been long a challenge for the Human Resource
Management in the workplace. There are various factors that affect this and some are
money dissatisfaction, no opportunities for growth, employees lied during the interview,
unrealistic expectations and etc. Employee Retention and Employee turnover are one of
the most critical aspects that contribute to the success of an organization. These two
terms, even though can be considered interconnected with each other, are two different
terms. If employee retentions pertain to the phenomenon where employees choose to
stay on with their current company and don’t actively seek other job prospects
(BasuMallick, 2021), employee turnover on the other hand is the percentage of
employees that leave an organization during a given time (Shweta, 2022).

When employee turnover is mentioned, it could not be denied that it is incurring

costs to the company. This is the very reason why managements will opt to choose to
retain their most valuable employees in the workplace than hire new ones and start all
over again with the training and orientation. Aside from this cost, there are also other
effects that it can cause to the workplace when one employee chooses to leave a
workplace. According to Shweta (2022), these are (1) extra expense in recruiting a
replacement, (2) lower morale for those who are left, (3) shortage of skilled and
knowledgeable workforce, (4) loss of belief in team’s capabilities, and more. These are
the very reasons why most managements would rather have the top employees retained.

To help put a solution to this, this paper would be focused on identifying what are
the factors that contribute to the employees’ retention, specifically in the BPO or Business
Process Outsourcing Industry and how these factors can be utilized to help management
aid the employee turnover and how the employees can assess whether a BPO company
is suited to their preferences to help them retain better.
1.2 Statement of the Problem
In a now fast paced and competitive industry, companies must have a clear
understanding of why employees are leaving the workplace. This can be applied not only
for the bottom line but also with the top talent. By having a clear understanding of the
value of the employees, with measuring of the financial impact of retention and turnover
and managing these can greatly contribute to the advantages of a company.

Having these said, the paper will be significantly focused on the factors that greatly
contributed to the decisions of employees, if they will be staying on their workplace or if
they will pursue their career path with a different company. Of course, on the company’s
perspective, it would be more ideal to not have their employees leave, especially their top
talents so as to not incur more expenses. But the problem here is that it can be hard for
the contributing factors to be identified.

That is why this study aims to determine the Employment Retention Factors,
specifically in the Business Process Outsourcing Industry. Specifically, it seeks to answer
the following questions:

1. Who are the samples:

1.1 Age
1.2 Gender
1.3 Educational Attainment
1.4 Length of service in the present BPO company
2. What are the factors that affect employee retention?
3. How can these factors be used by BPO companies to implement a more effective
human resource management to help reduce the rate of employee turnover?

1.3 Significance of the Study

This part specifically talks about the importance of the paper and who are the
specific group of people that would mostly benefit to this study.
Employers - It was mentioned on this paper that employee retention and turnover
contribute to the welfare of a company financially. If the top talents decide to retain,
company would gain a definite advantage since they won’t have the need to hire new
talents but if an employee decides to leave, a whole new process of hiring and training
will take place which will incur an even higher cost to the company. Having this said, if
employers will be able to have a better understanding of the factors that contribute to an
employee’s retention, they can increase the odds of the top performing people to stay in
the workplace.

Business Process Outsourcing (BPO) Employees - Since this paper would be focused
primarily on the factors that affect the employee retention in the Business Process
Outsourcing (BPO) Industry, another group of people that would benefit on this study are
the existing employees in the said industry. By being able to identify if the workplace they
are currently in is still advantageous to their end, they would be able to know if it is still
worth staying on their current workplace or if leaving is the next best option.

Future Applicants - The researchers believe that future applicants would benefit on this
study because future applicants would be able to assess if the company they are
considering applying for has the important factors that they value to consider retention in
the workplace. In a way, it would save the time of the applicant because they would be
able to assess in the first place if the company will be worth applying for in achieving their
career goals.

Future Researchers - Lastly, future researchers, are the group of people that would
benefit on this study. The researchers believe that the factors that are affecting the
employee retention are dynamic and not static. By being able to continuously assess what
are these factors from time to time, the body of knowledge regarding the topic will not be
stale and rigid and this paper would benefit the future researchers so they can base their
future study on this paper’s findings.
1.4 Scope and Delimitation of the Study
This paper is primarily focused on the assessment of the factors that are deemed
important by the employees in the BPO industry. The conducting of the study would be
from February to May 2023 and the respondents would be strictly from the employees
that are working from BPO industries. Age, gender, educational attainment are not of
importance to allow the diversity of data but will be grouped in the data analysis to allow
the researches to see the relationship between these factors if they contribute to the
employee retention of the employees.

1.5 Theoretical Framework

The Herzberg two-factor hypothesis, which asserts that there are variables
influencing people's behavior toward work, serves as the foundation for this study. The
five factors he associated with motivation are pay, achievement, recognition, growth,
responsibility, and performance of the entire job. Because of the highly competitive nature
of today's business environment, skilled employees have become the key differentiator
for most organizations. (Amido, 2018) Another anchored theory that emphasizes on this
study is the idea that people are more motivated by the intrinsic aspects of work than
byextrinsic rewards. Employees will be loyal to the company if they feel that you care
about their well-being and that their jobs are secure.

The Herzberg and Maslow's theories aim to preside and discover the factors that
motivate employees to remain in the BPO companies. This hierarchy suggests that
people are motivated to fulfill basic needs before moving on to other, more advanced
needs. These resources been reviewed, and study based on (Cherry, 2019) explains that,
while these needs can be powerful motivators of human behavior, they do not necessarily
take the hierarchical form that Maslow described.
1.5 Conceptual Framework

INPUT PROCESS OUTPUT

• Given Factors Evaluation of sample • Implement various
questions gathered by “Employee Retention
the researchers. Programs.”
• Offer Higher Wages
1. Who are the
samples?
1.1 Age
1.2 Gender
1.3 Educational
Attainment
1.4 Length of
service in the
present BPO
company
2. What are the factors
that affect employee
retention?

Hypothesis
There is absolutely no significant relationship between the factors affecting the
employee retention towards the employee retention.

Definition of Terms
BPO (Business Process Outsourcing) - the industry that provide support for other
companies. As the name indicates, this is a way for other businesses to outsource tasks
to make their processes more efficient.

Employee Retention - is defined as an organization's ability to prevent employee turnover,

or the number of people who leave their job in a certain period, either voluntarily or
involuntarily.
Employee Turnover - the measurement of the number of employees who leave an
organization during a specified time period, typically one year.

Herzberg Two-Factor Hypothesis - posits that job satisfaction and dissatisfaction are not
opposites. The research underpinning this theory identifies characteristics of jobs that
related to job satisfaction.