Shashank Project Report

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EMPLOYEE RETENTION IN ANY INDUSTRY

BY

Mr. SHASHANK KUMAR TRIPATHI

A PROJECT REPORT

Submitted to

KASHI INSTITUTE OF TECHNOLOGY

In partial fulfillment of the requirements

For the award of the

MASTER OF BUSINESS ADMINISTRATION

DEPARTMENT OF MANAGEMENT

KASHI INSTITUTE OF TECHNOLOGY

(AFFILIATED WITH GAUTAM BUDDHA TECHNICAL

UNIVERSITY ,LUCKNOW)

SESSION-2010-2011

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BONAFIDE CERTIFICATE

Certified that this project report titledEmployee

Retention is the bonafide work of Ms ShaliniSwaroop

who carried out the research under mysupervision.

Certified further, that to the best of myknowledge the

work reported herein does not form part of anyother

project or dissertation on the basis of which adegree or

award was conferred on an earlier occasion onthis or any

other candidate.

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Mr. B.K.SINGH

(HOD)

DECLARATION

I, the undersigned Shalini Swaroop herebydeclare that

the Project Report entitled EmployeeRetention is the

result of my own efforts and the same has notbeen

previously submitted to any examination of theBharti

Vidyapeeth University, Pune or any other

University.

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Signature

Date:

Place: (SHASHANK TRIPATHI)

ABSTRACT

In this continuously changing contemporaryeconomy, companies have to be able to anticipatetechnological innovations and to compete with othercompanies worldwide. This need makes important acompanys ability to evolve through its employeeslearning and through continuous development.

Securing and retaining skilled employees play an

important role in this process, because employeesknowledge and skills are central to companies abilityto be economically competitive. Given that employeeretention is very important for the functioning andcompetitiveness of a company, this study focuses on

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the organisational and personal factors that influenceemployee retention.

A special interest is taken in employees learning,because this is seen as a retention supportingactivity. Leadership skills and seniority have apositive relationship with employee retention and thelevel of readiness and initiative regarding learningare negatively related to retention.

ACKNOWLEDGEMENT

I express my deep sense of gratitude to Mr. V JGomes

who had given me the opportunity to carry outmyproject work. I am extremely thankful to theguidinglights on the project titles Employee Retentionin anyIndustry that have guided me towards a sense

of

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purpose and taught me to channelize energies inthe proper direction.

I take immense pleasure in expressing mygratitude to Mr. Jamshed K. who gave me

this opportunity to do the project. Also I wouldlike tothank all my friends and family who helped me alot in giving me inputs to my project.

SHASHANK TRIPATHI

PROJECT EVALUATION SHEET

PROJECT NAME: EMPLOYEE RETENTION

STUDENT NAME: SHALINI SWAROOP (ITM/08/093)

A. Assessment of Project Report

Mr/Ms________________________, has assessed the Project Report, on____________. The project report is awarded _______marks out of 280.

Signature of Assessor ________________.

B. Assessment of Project Presentation

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Mr/Ms________________________, has attended the Project Presentation, on

____________. The project presentation is awarded _______marks out of 40.

Signature of Assessor ________________.

C. Assessment of day-to-day activity

Mr/Ms________________________, has observed the students activity, on this

project. On _____________, he/she has awarded _____ marks out of 40.

Signature of Project Guide ________________.

D. Mr/Ms________________________, has conducted a viva with the student,

regarding the project on ____________ and awarded _______marks out of 40.

Signature of Project Committee Representative ________________.

E. TOTAL MARKS

The student has obtained ______ marks out of 400.

LIST OF CONTENT

Title Page 1

Certificate 2

Declaration 3

Abstract 4

Acknowledgement 5

Evaluation Sheet 6

Table Of Contents 7

List Of Tables 8

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List Of Figures 9

Chapters1. Introduction to Employee Retention 11

2. Purpose and Importance of Retention 18

3. Retention Myth 33

4. Employee Attrition 37

5. Factors responsible for Employee Attrition 49

6. Overview of Employee Turnover Research 56

7. Comparison between different companies 65

Attrition rate

8. Conclusion 76

Bibliography 80

LIST OF TABLES

Serial No. Table Name Table No.

1 Attrition rate of different

companies

1.1

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LIST OF FIGURES

Serial No. Figure Name Figure No.

1. Major things in Retention 1.1

2. Keeping good employee

on-board

2.1

3. Poll-Result:who is

responsible for all (Pie-

chart)

6.1

4. Attrition rates in different

sectors

7.1

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CHAPTER 1

INTRODUCTION TO EMPLOYEE

RETENTION

CHAPTER 1

INTRODUCTION TO EMPLOYEE

RETENTION

Employee retention is a process in which the employees areencouraged to remain with the organization for the maximum period of

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time or until the completion of the project. Employee retention isbeneficial for the organization as well as the employee.

Employees today are different. They are not the ones who dont havegood opportunities in hand. As soon as they feel dissatisfied with thecurrent employer or the job, they switch over to the next job. It is theresponsibility of the employer to retain their best employees. If theydont, they would be left with no good employees. A good employershould know how to attract and retain its employees.

Retention involves five major things:

Compensation Environment Growth

relationship support

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Employee Retention would require a lot of efforts, energy, andresources but the results are worth it.

In this continuously changing contemporary economy, companies have

to be able to anticipate technological innovations and to compete withother companies worldwide. This need makes important a companysability to evolve through its employees learning and throughcontinuous development.

Securing and retaining skilled employees plays an important role inthis process, because employees knowledge and skills are central tocompanies ability to be economically competitive. Given thatemployee retention is very important for the functioning andcompetitiveness of a company, this study focuses on theorganizational and personal factors that influence employee retention.

A special interest is taken in employees learning, because this is seenas a retention supporting activity. A questionnaire was administered to349 employees, and 11 employees were interviewed. The interviewsare used to illustrate and contextualize the quantitative results.

The results show a large positive contribution of appreciation andstimulation of the employee to employee retention. This result isconsistent with findings of earlier research. However, the retentionbenefits arising from personal development offer new possibilitieswhen attempting to enhance employee retention. This study alsoshowed that individual differences influence employee retention.

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Leadership skills and seniority have a positive relationship withemployee retention and the level of readiness and initiative regardinglearning are negatively related to retention.

Employee retention is the effort by employers to encourage currentemployees to remain employed with the organization. Programs suchas learning and development, rewards, and recognition, successionplanning and providing policies and practices that address their needsare examples of ways of retaining employees.

Companies today are forced to function in a world full of change andcomplexity, and it is more important than ever to have the rightemployees in order to survive the surrounding competition. It is a factthat a too high turnover rate affects companies in a negative way andretention strategies should therefore be high on the agenda.

Employee Retention involves taking measures to encourage employeesto remain in the organization for the maximum period of time.Corporate is facing a lot of problems in employee retention these days.

Hiring knowledgeable people for the job is essential for an employer.But retention is even more important than hiring. There is no dearth ofopportunities for a talented person. There are many organizationswhich are looking for such employees. If a person is not satisfied bythe job hes doing, he may switch over to some other more suitablejob. In todays environment it becomes very important fororganizations to retain their employees.

The top organizations are on the top because they value theiremployees and they know how to keep them glued to the organization.Employees stay and leave organizations for some reasons.

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The picture states the latest statementthat corporate believes in Love them or Lose them

The reason may be personal or professional. These reasons should beunderstood by the employer and should be taken care of. Theorganizations are becoming aware of these reasons and adopting

many strategies for employee retention.

Your best employees have lots of reasons to leave. Keep them happy,loyal, and productive with these proven strategies. Create a Culture ofRetention Source: Harvard Knowledgebase Without an effectiveemployee retention program, labor shortages will be in process.

Young people are more mobile and less committed to individual

organizations. The baby boomers are approaching retirement age. Toretain staff, organizations have to be more flexible, ensuring thatwork/life balance is possible. There are many facets to employeeretention. It is much more than having appropriate organizationalpolicies.

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Key employee retention is critical to the long term health andsuccess of the business. Managers readily agree that retaining the bestemployees ensures customer satisfaction, product sales, satisfiedcoworkers and reporting staff, effective succession planning anddeeply imbedded organizational knowledge and learning.

You can't have something on the outside if you don't first have it onthe inside. In other words you cannot attract good employees if youdon't first have the right attitude towards your existing employees,provide a good working atmosphere, tools and growth opportunities.

Argues that employee turnover is highest among employees who arenot satisfied with their jobs. Because qualified employees arebecoming more scarce and difficult to retain, organizations need tofocus on increasing employee satisfaction.

Suggests that one useful approach for increasing employee

satisfaction is to view workers as customers. Based on the notion ofemployee as customer, illustrates how a customer satisfactionmeasurement approach can be applied to the measurement ofemployee attitudes.

Suggests that the metaphor of employee as customer is indeeduseful. Also demon-strates how this approach yields actionable resultsthat managers can implement to increase employee satisfaction andthereby retention.

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CHAPTER 2

PURPOSE AND IMPORTANCE OF

EMPLOYEE RETENTION

CHAPTER 2

PURPOSE AND IMPORTANCE OF

EMPLOYEE RETENTION

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The purpose of the thesis is to discuss and explain the subtleties ofretention in knowledge-based firms from a human resourcemanagement perspective. Furthermore, to investigate which employeedemands firms should consider when formulating their retentionstrategies.

Most IT / Telecommunication consulting companies suffer highemployee turnover. Engaged and satisfied employees are more likelyto stay with their companies. Identifying motivation and satisfactionfactors for IT consultants is therefore of great importance in increasingemployee retention.

Retention management is a highly topical subject and an important

dilemma many organizations might face in the future, if not facing italready. We believe that the leader plays a key role in employeeretention and retention management. The concept of retentionmanagement can both have a narrow, and a broader significance

Now that so much is being done by organizations to retain itsemployees, why is retention so important? Is it just to reduce theturnover costs? Well, the answer is a definite no. Its not only the costincurred by a company that emphasizes the need of retainingemployees but also the need to retain talented employees from gettingpoached.

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The process of employee retention will benefit an organization in thefollowing ways:--

1. The Cost of Turnover:

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The cost of employee turnover adds hundreds of thousands of moneyto a companys expenses. While it is difficult to fully calculate the costof turnover (including hiring costs, training costs and productivity loss)industry experts often quote 25% of the average employee salary as aconservative estimate.

2. Loss of Company Knowledge:

When an employee leaves, he takes with him valuable knowledgeabout the company, customers, current projects and past history(sometimes to competitors). Often much time and money has beenspent on the employee in expectation of a future return. When theemployee leaves, the investment is not realized.

3. Interruption of Customer Service:

Customers and clients do business with a company in part because ofthe people. Relationships are developed that encourage continuedsponsorship of the business. When an employee leaves, therelationships that employee built for the company are severed, whichcould lead to potential customer loss.

4. Turnover leads to more turnovers:

When an employee terminates, the effect is felt throughout theorganization. Co-workers are often required to pick up the slack. Theunspoken negativity often intensifies for the remaining staff.

5. Goodwill of the company:

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The goodwill of a company is maintained when the attrition rates arelow. Higher retention rates motivate potential employees to join theorganization.

6. Regaining efficiency:

If an employee resigns, then good amount of time is lost in hiring anew employee and then training him/her and this goes to theloss of the company directly which many a times goes unnoticed. Andeven after this you cannot assure us of the same efficiency from thenew employee.

Main retention strategies

This is not an exhaustive list, one can add or delete any of the belowmentioned strategies. Secondly, the need of the hour is to have "rightbasics". Every individual is different, his needs are different, and hisemotions, his problems are different. So, every HR-Professionalsshould concentrate on their basics.

1. Communications - Getting Your People to Care

Communication is the first step toward creating the kind ofenvironment that people care about, and if they care, they just maystay. I'm not talking about a lot of New Age stroking designed to

bring out the inner person or false praise that creates a misplacedsense of security. Instead, keep your people in the loop aboutwhat's happening with the company. At any time, all of youremployees should have a pretty good idea of how business hasbeen, and they should be aware of what issues the company isattempting to address.

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That means that you regularly keep your people up to date withimportant events affecting the company. If November was good, letthem know, and while you're at it, tell them what you expect tohappen in December. Share good news, as well as points of concern. Ifyou've got "issues," talk about them before they start making youcrazy. And if they don't get resolved, figure out whether the problemstems from a couple of individuals or from your system.

The point here is that you want to treat these people as your partners,which they are. They may not have to worry about covering the payrollthis week, but they do have worries of their own. Treat them with atleast as much respect as they give you. As the store's owner or

manager, you set the tone for the entire organization. If yoursalespeople, for instance, enjoy their encounters with you, they aremuch more likely to greet customers with a positive attitude. They arealso much more likely to enjoy their work when they don't have a fire-breathing dragon looking to singe their butts.

Listen to your employees when they have ideas for improvement.Again, the benefits extend beyond just making people feel appreciatedfor their contributions. These are, after all, the people who do the workevery day. They may have some ideas to improve productivity, andwhen they do come up with one, let everybody know where it came

from. Post a "brag board" in your break room, or circulate an internalnewsletter that touts these contributions. The pay-off is a contagiousfeeling of pride and, perhaps, some new efficiency that saves thecompany money.

2. Set Clear Expectations

How often do you appraise your employees/team-members? What are your expectations from your employees/team-

members? What are the parameters to measure theirperformance? Have you communicated to them?

What will be the consequences, if they fail? What will be the rewards, if they exceed the expected level?

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If you are not having any expectations, how you are going to appraise,your employees? Yes, you are going to be biased, because you don'thave set standards.

The role of a CEO, HR Manager is like a director of a movie;choreographer of a stage show, where there is a defined role for eachcharacter, each participant.

Setting expectations initiates the process. Managers need to sitdown with each employee and clearly define what's expected ofthem. Management consultant, Kenneth Philips, states that whenexpectations are not clear, employees may not be in sync with theirjob's current demands and priorities. Setting expectations is not a

once and done activity. Jobs change. Priorities change. Resourceschange. Managers need to revise and set new expectationsthroughout the year. Setting expectations revolves around thefollowing three areas:

o Key job responsibilitieso Performance factors and standardso Goals

Why is a setting expectation important? Quite simply, this processcan be the cornerstone of improving the motivational climate withinyour sphere of responsibility. If your employees know what is expectedof them, it allows them to focus on results and to monitor themselvesagainst the set standards. Environments in which expectations are notclear, or change from week to week, seldom create high-performingwork groups.

The three principles that should drive expectations are clarity,relevance, and simplicity.

Clarity. Expectations should focus on outcomes, not activities. Inother words, you achieve clarity when you identify the expectedresults rather than the method for achieving them. Managers often

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make the mistake of attempting to direct the process that anemployee will use rather than being clear about results. The advantageof identifying the outcome is that you, the manager, focus only on thegoal; after all, the employee will develop the method for achieving thedesired results.

Defining the objective often requires some thought on the part of themanager because it is easy to fall into the "activities trap." Whiledeveloping a strategic plan for a department or division is a worthyactivity, it does not represent an outcome. In the activities trap,developing a plan is the goal, rather than increasing your marketshare.

Relevance. The principle of relevance helps define the "why" of theassignment. If your employees have a full understanding of the

project's importance, they can make adjustments as unanticipatedfactors crop up within the process. They probably also will be morecommitted to the result because they can see more easily how it fitsinto the big picture and how their efforts impact the company.

This understanding typically is accomplished through dialogue betweenthe manager and subordinate, which allows for a more thoroughreview of the situation and for feedback and discussion. This processbuilds good will with the employee and sets the stage for additionalresponsibilities.

Simplicity creates a sense of grounding for employees as theyendeavor to carry out assignments. If managers identify the work insimple, straightforward terms, employees will find it much easier tofollow through on managers' wishes. To accomplish this, a managermust identify the key message in a fashion that the employee canembrace.

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3. Proper Rewarding

A research reports says that in today's scenario,

o 70% of your employees are less motivated today than they

used to be.o 80% of your employees could perform significantly better

if they wanted to.o 50% of your employees only put enough effort into their

work to keep their job.

As you might be aware of Employee Reward covers how people arerewarded in accordance with their value to an organization. It is aboutboth financial and non-financial rewards and embraces the strategies,policies, structures and processes used to develop and maintain

reward systems. The ways in which people are valued can make aconsiderable impact on the effectiveness of the organization, and is atthe heart of the employment relationship.

The aim of employee reward policies and practices, if any in yourorganization is to help attract, retain and motivate high-quality people.Getting it wrong can have a significant negative effect on the

motivation, commitment and morale of employees. Personnel anddevelopment professionals will be involved frequently in reward issues,whether they are generalists or specialize in people resourcing,learning and development or employee relations.

Keep following parameters in mind, while designing a reward policy:

Build a high degree of recognition value into every reward you

offer.Recognition is the most cost-effective motivator there is. While the

high cost of other rewards forces us to give them sparingly,recognition can be given any time, at very little cost.

Some very ordinary items and events can be imbued withextraordinary motivational significance, far in excess of their monetaryvalue. I am constantly amazed at how motivating a pizza or movietickets can be if is given with sufficient appreciation. A sincere thankyou can be delivered at any place and at any time, costs absolutely

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nothing and can be more motivationally powerful than a substantialmonetary bonus. Organizations can provide innovative recognition inan infinite number of ways.

For example, (A Hypothetical Incident) a small manufacturingcompany made its employees feel like heroes when they attained amajor safety milestone - 100 days without a single accident. On themorning of day 100, it was announced that a catered lunch would beserved the next day, if they made it to the 5:30 shift without anaccident. At 5:15 anticipating was building.

Managers took confetti and streamers to the balcony overlooking theshop floor. When the 5:30 whistle blew, there were congratulations allaround, confetti flew through the air and banners were unfurled. Itwas a great moment for everyone - and one that was not soonforgotten. The recognition value of this celebration was extremelyhigh, while the monetary cost was relatively low.

Highly motivating organizations even celebrate small successes. Ahealth-conscious company distributes fruit bowls to employees' workareas when key personal milestones are attained. Another companyuses a more fattening approach: fresh-baked chocolate-chip cookies tosay thank you.

Reduce entitlements and link as many rewards as possible toperformance.

Clearly the traditional "pay for loyalty" systems in most organizationsneed to be changed. Don't let attendance be your major criterion forrewards. Most employees resent those who only put in their time andyet receive the same reward as those who go the extra mile. Today'semployees have higher expectations for what work can and should be,and they want to receive rewards that reflect their personal efforts andcontributions.

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This is why so many companies are moving toward performance-basedrewards, including performance bonuses, gain-sharing and non-monetary recognition. Although not a panacea, companies are findingthat these new reward systems do allow them to give substantialrewards to those who really deserve them. Smart organizations arelooking for opportunities to reduce across-the-board entitlements, andthereby find more resources for discretionary performance-basedrewards, without increasing the total cost of rewards.

Troubleshoot your reward system to make sure that whatrewarding is what you really want to happen.

The Law of Rewards - "What you reward is what you get" - Isextremely powerful. No matter what your orientation materials or jobdescription might say, it is the rewards your organization gives thatcommunicate the real expectations. The most important question toask in evaluating the reward system in your organization is, do therewards we are giving elicit the performance we want? Start with theresults you want to achieve and then pinpoint the types of behaviors

needed to achieve them.

For example:

o If you believe teamwork is going to get you the results youwant, make sure you reward teamwork, and not internalcompetition between departments.

o If you want quality, make sure that productivity isn't over

emphasized. And,o If you want long-term solutions, don't reward quick fixes

Also, don't confuse employees with too many rewards. It is better tofocus rewards on the critical few behaviors and results, rather thandiluting them by rewarding the trivial many.

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Reward promptly.

Rewards should be given as soon as possible after the performancehas taken place. This is why the most successful gain-sharingprograms pay employees monthly, rather than quarterly or annually asin the past.

There is a well-accepted law of behavioral psychology, that if you wantsomeone to repeat a behavior, you should positively recognize it

immediately. From this law, smart supervisors and managers can learna vital lesson: Look for any employee doing something right, rightnow, and recognizes it.

A support to this, here is my favorite reward story:

"When a senior manager in one organization was trying to figure out away to recognize an employee who had just done a great job, hespontaneously picked up a banana (which his wife had packed in hislunch), and handed it to the astonished employee with heartycongratulations. Now, one of the highest honors in that company has

been dubbed the "Golden Banana Award"."

Give employees a choice of rewards. Rewards are as different asthe people who receive them and it doesn't make sense to giverewards that recipients don't find rewarding. For example, somepeople prefer more pay, while others prefer more time off. Apromotion might be more rewarding to one person, while a job-sharingarrangement might be more rewarding for another. Some people are

excited about sports events, others about movies. Some employeeswould love a dinner in a romantic restaurant, others a book by theirfavorite author. Food, fun, education, improved work environment,gifts, travel, family-oriented activities - the options are endless.

How do you know what will be rewarding to employees? Ask them.Smart organizations are also letting employees choose their ownrewards from reward menus and catalogs. Personalizing rewards

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shows that a company cares enough to discover what "interests" eachemployee, rather than just distributing generic items. It also reducesthe following danger: In one organization I was visiting, an employeeopened a big drawer in his desk and disdainfully showed me all the"worthless trinkets" he had collected over the years.

Increase the longevity of your rewards. This can be done in anumber of ways: One of the keys to reward longevity is symbolism.The more symbolic an item is of the accomplishment, the more likely it

is to continue reminding the employee of why it was given. Forinstance, a T-shirt of coffee mug with a meaningful inscription willcontinue rewarding those who wear it, or use it, long after its initialreceipt. There are many tokens of appreciation I still keep on or nearmy desk that remind me of the joy of past accomplishments, while themonetary rewards I have received are long spent and long forgotten.

Another way to increase the longevity of rewards in your organizationis by using some kind of point system. Rather than rewarding eachindividual behavior or accomplishment, points can be awarded, whichemployees can accumulate and eventually trade for items from a

reward menu or gift catalog. This keeps the anticipation of rewardsfresh for longer periods of time. It also addresses the need for rewardindividualization.

One company that designs motivational systems offers an electronicdebit-card system to help larger clients cope with the complexity ofdistributing, tracking and redeeming employees' points. Employeescan use their points to purchase virtually anything they want, from

sports equipment and clothing to automobiles and overseas vacations.They only caveat for such programs is to make sure that therecognition value of the rewards isn't lost because of the impersonalnature of the technology.

One company uses a game it Call Safety Bingo. All employees receivea weekly bingo card. When an employee is observed working safely, anumber is presented (immediate recognition). When they get "bingo",

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they receive a safety jacket (along with appropriate verbalreinforcement). The rewards escalate for subsequent wins.

This type of program keeps employees interested for long periods oftime, even though there might be weeks or months between rewards,and makes routine work more fun overall.

Interestingly, when researchers have investigated the motivationaldynamics of these workplace games, they have found that the major

motivator is the playing, not the prize.

Be continually vigilant of demotivators that may undermine

your organization's best efforts to provide power rewards, andreduce them promptly.

Most demotivators can be dramatically reduced by soliciting employeeinvolvement in identifying highest-priority demotivators and byenlisting top-management commitment to support their reduction.

It is probably self-evident that considerable sensitivity is needed in theadministration of any reward system. One demotivator that is probablyendemic in any reward system modification (especially as anorganization moves from entitlements to more performance-basedrewards) is a sense that something is being taken away.

Employees need to be educated about the reasons that this is beingdone, understand the ultimate benefits to them and the organization,

and should probably have some input into the change process.

To avoid the perception of unfairness, it is important, first andforemost, that the process for allocating rewards is viewed byemployees as being impartial. This requires an objective measurementsystem that few organizations have. Without such objectivemeasurement, any reward system is probably destined to failure.

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CHAPTER - 3

RETENTION MYTHS

CHAPTER -3

RETENTION MYTHS

The process of retention is not as easy at it seems. There are so manytactics and strategies used in retention of employees by theorganizations. The basic purpose of these strategies should be toincrease employee satisfaction, boost employee morale hence achieveretention.

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But some times these strategies are not used properly or even worse,wrong strategies are used. Because of which these strategies fail toachieve the desired results. There are many myths related to theemployee retention process.

These myths exist because the strategies being used are either wrongor are being used from a long time. These mythsprevent the employerfrom successfully implementing the retention strategies. Let us learnabout some of these myths.

1. Employees leave an organization for more pay:

Money may be the motivating factor for some but for many peopleit is not the most important factor. Money matters more to the low-income-employees for whom its a survival issue. Money can makean employee stay in an organization but not for long.

The factors more important than money are job satisfaction, jobresponsibilities, and individuals skill development. The employersshould understand this and work out some other ways to makeemployees feel satisfied. When employees leave, management triesto retain them by offering more money. But instead they should tryto figure out the main reason behind it.

Issues that are mainly the cause of dissatisfaction are organizationspolicies and procedures, working conditions, relationship with thesupervisor and salary, etc. For such employees, achievement, growth,respect, recognition, is the main concern

2. Incentives can increase productivity:

Incentives can surely increase productivity but not for long term.Cash incentives, volume work targets and speed awards are old

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management beliefs. They can generate work speedily and involumes but cant boost employee commitment.

Rather speed can hamper the quality of work produced. What reallyglues employees to their work and organization is quality work,meaningful responsibilities, recognition, respect, growthopportunities and friendly supervisors.

3. Employees run away from responsibilities:

It is a myth that employees run from responsibilities. In-factemployees feel more responsible if they are given extraresponsibilities apart from their regular job. Employees look for

variety, greater control on the processes and authority to takedecisions in their present job.

They want opportunities to learn and grow. Management can assignextra responsibilities to their employees and appreciate them on thecompletion of these tasks. This will induce a sense of pride in theemployee and will improve the relationship between themanagement and the employee.

4. Loyalty is a thing of the past:

Employees can be loyal but what they need is an employer forwhom they can be loyal. There is no reason for the employee tohop jobs if hes satisfied with the employer.

5. Taking measures to increase employee satisfaction will beexpensive for the organizations:

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The things actually required to improve employee satisfaction likerespect, career growth and development, appreciation, etc. cant bebought. They are free of cost. An employer or management thatreacts well to the employees ideas and suggestions is enough forthe employees to be retained.

CHAPTER 4

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EMPLOYEE ATTRITION

CHAPTER 4

EMPLOYEE ATTRITION

Employee attrition is a very major issue not only in India but abroad

as well. Attrition rate is increasing day by day and its especially the

software industry which is affected the most. Why an Employee leaves

a company is the question asked by most of the employers.

Companies even hire Private HR professionals to study the company's

work and find out why an employee is dissatisfied.

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HR department does the recruiting of new employees and then send

them for training so that they can understand work and work culture

and become better professionals. Each and every company faces

employee turn over problem whether big or small. An employee leaveshis present job for another job to get better pay package and good

working conditions.

Every Company calculates Employee attrition rate and takes measures

to reduce it. The facts and figures are not made public as it may

tarnish the image of the company in front of its own employees and its

loyal customers.

A survey has found out that there are various reasons for Employee

Attrition -

1.Higher Pay Package in another company

2.Working Conditions

3.Opportunities for growth in new company

4.Change of Place problem

5.A better Boss in new company

6.Brand Image of the new company

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Employee attrition costs a lot to the company. There are various costs

which are borne by the company at the start when the employee is

under training period. Costs such as

1. Conveyance Cost

2. Cost of lodging of the new employee

3. Trainers cost

4. Cost of venue where training will be conducted

5. Materials to be supplied during training process

A company has a training period of 3 to 6 months. During this time an

employee is not fruitful for the company. If an employee leaves the

company when he starts working, company suffers a big loss in terms

of money as well as workforce. Every company takes measures to hold

the talented workforce by means of perks, Increments, Bonus and

extra facilities. No one wants to lose good brains to their competitors.

Now the question is how to reduce employee attrition. What should a

company do to hold on the talent.

There are various companies like TATA and Reliance who do a lot to

reduce attrition rate.

Flexible working conditions have been given to employees who

have problem working 10 5.

Private hospitals for employees where they can get their regular

health check up done without spending much money.

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Free overseas tour once in a year when a target is achieved.

Few Companies are getting more and more work savvy and just want

to get their work done by hook or by crook. The mentality needs to be

changed. Target for completion of a work should be there but that

should not hamper an employee personal life.

Companies should conduct various seminars on how to balance

personal and professional life. A employee can be productive if and

only if his personal life is balanced. Make employees a part of your

work culture family and see the difference.

Attrition rate cannot become completely obsolete but it can surely be

minimized.

TYPES OF ATTRITION

Monetary :--getting a higher salary, most common types.

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Stress :-- too stressed in current job, more relaxed environment in tobe company, another common reason.

Motivation :-- not satisfied with appraisal and other motivation fromorganization.

Job security :-- brand name of the to be company, more secured job,more opportunity to diversify experience etc

Stagnancy :--spend enough time in current organization, need toexplore self.

Location :-- going closer or at home place.

Personal :-- need to inherit family business, getting married andspouse at different location, going into parenthood etc.

Health :-- can't continue to do the job, physically or mentally

challenged, etc.

Is attrition always bad for an organization?

While organizations lament the challenges that they have to constantlyencounter as a consequence of employee turnover, the truth is that allattrition is actually not detrimental for an organization.

It is in fact a myth that every time an employee walks out of the door,the organization suffers. Some attrition is desirable and necessary fororganizational growth and development. The point is how todifferentiate between what is commonly known as good attritionfrom bad attrition. It is a thin line, which is not always easy tounderstand.

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It benefits an organization when certain employees leave, whosecontinuation of service would have negatively impacted productivityand profitability of the company.

There are also some people who have a negative and demoralizinginfluence on the work culture and team spirit. This, in the long-term, isdetrimental to organizational health. On the contrary, when thedeparture of certain employees creates a setback (most oftentemporary) in terms of work continuity and progress, is commonlyconsidered bad attrition.

The time and investment lost in hiring and developing these peoplealong with the cost of finding a replacement and bringing him up tothe productivity level, all come at a high price.

The term healthy attrition is used to signify the importance of less

productive employees voluntarily leaving the organization. In theperformance analysis of the ones who have left, if the proportion ofhigh performers leaving is higher, the attrition is not good or healthy.Plain numbers and attrition figures do not signify anything without adeeper analysis.

Benefits of healthy attrition

Desirable attrition also includes termination of employees with whomthe organization does not want to continue a relationship. It can be

through resignation or by employer. The significant question is: howdoes healthy attrition benefit an organization? Dr J K Nair, COO andExecutive VP, California Software Company, lists a few advantages:

Removes bottleneck in the progress of the company

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Creates space for the entry of new talents, external as well asinternal

Helps planting ambassadors in the ecosystem who can havea positive impact on the growth of the organization

Assists in evolving high performance teams

It also sends a necessary message to the other employees that thereis no place for incompetence. Typically when you walk out people, youare setting an example. Certain things are non-compromising.

Deadwoods in any organization have a debilating impact on people.These are the people who are not able to scale their performance asper expectations, lack potential for future or need disciplinary action.

Furthermore, as the rewards are limited, business pressures do notallow the management to over-reward the performers, but whenundesirable employees leave the company, the good employees can begiven the share that they deserve.

There is also a flip side to the situationthe fact that good attrition isa pointer to the failure of the existing system and processes in theorganization in hiring the right employee, grooming and training himto be a productive worker. Any attrition in any form is bad for anorganization. It means that a wrong choice was made at thebeginning . The only plus point is that the realization has initiatedaction that will lead to cutting loss.

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Impact of attrition

Direct impact: A high attrition indicates thefailure on the companys ability to set effectiveHR priorities. Clients and business get affectedand the companys internal strengths andweaknesses get highlighted. New hires need tobe constantly added, further costs in trainingthem, getting them aligned to the company

culture, etc.,all a challenge.

Indirect impact: Difficulty in the companyretaining remaining employees and to whatextent? Problem for the company in attractingpotential employees. Typically, high attritionalso leads to a chronic or systemic cycleattrition brings decreased productivity, peopleleave causing others to work harder and thiscontributes to more attrition. All this has a

significant impact on the companys strength inmanaging their business in a competitiveenvironment.

Analyzing the impact

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Productivity and profitability are both impacted, either negatively andpositively, according to the type of attrition. Even good attrition isindicative of loss as recruitment is a time consuming and costly affair.It is tantamount to investment that has gone astray. Having saidthat, good attrition minimizes the adverse impact on business whilebad attrition accentuates the loss. The cost of hiring is sometimes notless than two to three times the salary of the employee.

The impact on work progress is tremendous, particularly if a project isunderway and one of the key people leaves. It leads to dip in entireorganizational efficiency, and a lot depends on how it is able to coverthe setback.

Organizations should execute top of the line retention policies in theright earnest and consistency. They should be more employee-centered and look for further ways to bond employees to theircompanies. Company performance is optimally aligned to the skills itsemployees possess. High attrition implies that certain necessary skills

are vulnerable or are not present due to employees being lost. Thisresults in lower than optimal levels of business performance. If theskills are constantly not available, the situation gets compounded intoa crisis with key projects, revenues, etc., getting affected. Business isthen reduced to just managing crisis, added Bhardwaj. For example, a2 percent attrition difference can make a significant difference in theultimate business impact.

Managing the problem

There is no sure-fire solution to control attrition. The only way out is tomanage it well. This can be done by having cautious hiring with propersystems and processes in place to ensure that only the right talent isinducted into the company. Those found lacking in particular skills orcompetence should be informed of the expectations from them and putthrough a training process. Continuous skills upgradation opportunities

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should also be provided to good employees for their growth anddevelopment. Career management, ESOPs, increments, rewards, andambience are significant retention measures reminding that bothkinds of attrition are unhealthy for business.

When productive people leave it is understandably bad, but even whendesirable attrition happens (after crossing six to seven months), itdefinitely impacts the business. It is loss of opportunity andinvestment gone badly.

Today an employee is clear on his needs and what he wants out of the

job. This makes the function of employee life cycle management morecritical and one that requires more attention and focus. By carefullytuning and aligning employee aspirations with the companys overallobjectives, to a large extent, attrition can be substantially reduced. .

Constant analyses of the causes that lead to employee turnover will goa long way in curbing the problem from the root stage. The topmanagement should continuously focus on the issue and implementeffective recruitment and retention measures.

Attrition, Boon or Bane?

Attrition is Gradual Exhaust. What is getting exhausting? Resourceslike Manpower, Projects, Infrastructure and other such sources whichdirectly influence business. Whenever people from industry spell theword they mean it is employees. Attrition is referred as a greatproblem for a company, which has lot of projects on hand and is inexpansion mode. But when the same problem is viewed frommanagement point of view Attrition is blessing in disguise whenmaintained at an appropriate level. What is appropriate has to be

decided in consultation with the remaining heads of departments.

Advantages of attrition:

1) When employee is not productive either by his own performance orthe lack of availability of projects on which he is proficient.

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2) When employee exceeds normal increments and remains in theorganization in anticipation of promotions without required skills.

This will certainly bring down the responsibility of management to payextra bit of money which it would incur when it benchmarks aemployee and suffers if the projects are not in the pipeline.Attrition also helps in finding new talents who have a great zeal ofenergy and willingness to work on projects onsite whereas the seniorswould like to stay back in one place for their domestic reasons.

Disadvantages of attrition:

1) It lures the potential employees to migrate to other companies insearch of either better pay or position.

2) This will definitely put the company on the back foot as the newentrant not only needs to know his role in the project but will alsohave to cope up with his new team members which will consume time.

These are the few reasons which will force a company to cough up ahuge amount of money in availing the services of the sourcing agents.

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CHAPTER 5

FACTORS RESPONSIBLE FOREMPLOYEE ATTRITION

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CHAPTER 5

FACTORS RESPONSIBLE FOR

EMPLOYEE ATTRITION

The last few years have witnessed alarming rates of employee churnand the modern world has termed this employee turnover asAttrition. The decision of ending association lies solely withemployees but the organization plays a major role in decision making.Location preference, work environment, monetary dissatisfaction orpersonal priorities are some of the various reasons for employees toexit an organization.

Attrition becomes a serious concern for organizations when it startsadversely impacting day-to-day efficiency and business continuity.Undoubtedly it is a threat to productivity, knowledge, expertise andbusiness relationships, resulting in significant loss of investmentincurred in recruitment and training of employees.

However, these tangible losses are invariably and inevitablyaccompanied by intangible losses; such as low employee motivationlevel or lack of sustained and mutually dependent relationships.

Factors Responsible for Attrition

Understanding how economic forces at global/regional/national levelinfluence attrition in specific organizations are essential.

Some industries have greater difficulty in retaining employees thanothers. For instance, ITeS, leisure and retail industries are associatedwith very high attrition rates vis--vis financial services and IT sector.The latter are also are grappling with attrition, but not in the sameleague.

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It is evident that while employees from these industries are subject todemanding work environments in different degrees, companies arealso experiencing scarcity of skills. Other factors that have a bearingon attrition and should be evaluated by organizations are economicforces at global/regional/national level and geographic location of anorganization.

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The Causes of Attrition

There are a number of factors that contribute to employee turnover.

We explore some of these factors in more detail below.

1. The economy - in exit interviews one of the most common

reasons given for leaving is the availability of higher paying jobs.

Some minimum wage workers report leaving one job for another

that pays only 50 cents an hour more. Obviously, in a better

economy the availability of alternative jobs plays a role in

turnover, but this tends to be overstated in exit interviews.

2. The performance of the organization - an organization

perceived to be in economic difficulty will also raise the specter

of impending layoffs. Workers believe that it is rational to seek

other employment.

3. The organizational culture - much has been written about

organizational culture. It is sufficient to note here that the

reward system, the strength of leadership, the ability of the

organizations to elicit a sense of commitment on the part of

workers, and its development of a sense of shared goals, among

other factors, will influence such indices of job satisfaction as

turnover intentions and turnover rate.

4. The characteristics of the job - some jobs are intrinsically

more attractive than others. A job's attractiveness will be

affected by many characteristics, including its repetitiveness,

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challenge, danger, perceived importance, and capacity to elicit a

sense of accomplishment. A job's status is also important, as are

many other factors.

5. Unrealistic expectations - Another factor is the unrealistic

expectations and general lack of knowledge that many job

applicants have about the job at the time that they receive an

offer. When these unrealistic expectations are not realized, the

worker becomes disillusioned and decides to quit.

6. Demographics - empirical studies have demonstrated that

turnover is associated in particular situations with demographic

and biographical characteristics of workers. But to use lifestyle

factors (e.g. smoking) or past employment history (e.g. many

job changes) as an explicit basis for screening applicants, it is

important for legality and fairness to job applicants to verify

such biodata empirically.

7. The person - In addition to the factors listed above, there are

also factors specific to the individual that can influence turnover

rates. These include both personal and trait-based factors.

Personal factors include things such as changes in family situation, a

desire to learn a new skill or trade, or an unsolicited job offer. In

addition to these personal factors, there are also trait-based or

personality features that are associated with turnover. These traits are

some of the same characteristics that predict job performance and

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counterproductive behaviors such as loafing, absenteeism, theft,

substance abuse on the job, and sabotage of employer's equipment or

production. These traits can be measured and used in employee

screening to identify individuals showing lower probability of turnover.

In order to actively participate in reducing costs associated with

turnover, organizations need to identify those factors over which they

do have some control and initiate necessary changes to reduce

turnover attributable to these "controllable" factors.

Adopting an effective applicant screening procedures is an efficient and

cost effective method of identifying employees who possess thenecessary traits and behavior s to succeed on the job and are,

therefore, less likely to leave.

In the view point whenever we speak about the problem of attrition wemean gradual exhaust of potential employee. Major companies in andaround the world are now thinking of finding possible solutions bychoosing the available alternatives.

Like working from home, Trying to give them lesser pressure likepaying their telephone bills, Water bills, Buying groceries, periodichealth check camps for the family, School admission for children,these are few activities though appears to be small but surely a strongweapon in the armory to tackle attrition.

It is very important that company gains the confidence of theemployee that itll shoulder the employee requirements shall reduce

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only increase mutual faith. Company at the time of inception ofemployee shall look into the strong factors like the responsibilities heis inevitably shouldering at personal level along with the required skillset he possess.

It may be said that attrition is a boon to the organization if taken fromthe view point of management.

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CHAPTER 6

OVERVIEW OF EMPLOYEE

TURNOVER RESEARCH

CHAPTER 6

OVERVIEW OF EMPLOYEE TURNOVER

RESEARCH

The impact of turnover has received considerable attention by seniormanagement, human resources professionals, and industrialpsychologists. It has proven to be one of the most costly andseemingly intractable human resource challenges confrontingorganizations. This paper provides a summary of information,abstracted from published research, on the costs of turnover, factorscontributing to its magnitude in organizations, and proposed remedies.

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Costs of Turnover

Analyses of the costs associated with turnover yield surprisingly high

estimates. The high cost of losing key employees has long been

recognized. However, it is important for organizations to understand

that general turnover rates in the workforce can also have a serious

impact on an organization's profitability, and even survival. There are

a number of costs incurred as a result of employee turnover. These

costs are derived from a number of different sources, a few of which

are listed below.

1. Recruitment of replacements, including administrative expenses,

advertising, screening and interviewing, and services associated

with selection, such as security checks, processing of references,

and, possibly, psychological testing.

2. Administrative hiring costs.

3. Lost productivity associated with the interim period before a

replacement can be placed on the job.

4. Lost productivity due to the time required for a new worker to

get up to speed on the job.

5. Lost productivity associated with the time that coworkers must

spend away from their work to help a new worker.

6. Costs of training, including supervisory and coworker time spentin formal training, as well as the time that the worker in training

must spend off the job.

7. Costs associated with the period prior to voluntary termination

when workers tend to be less productive.

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8. In some cases costs associated with the communication of

proprietary trade secrets, procedures, and skills to competitive

organizations.

9. Public relations costs associated with having a large number of

voluntary or involuntary terminations in the community

spreading gossip about the organization.

10. Increased unemployment insurance costs.

Who is responsible for Attrition?

HR Heads are worried about employees leaving their organizations.Not only is it costly to lose trained employees but their replacementsare not easy to come by. Hence the HR strives hard to keep attrition atthe minimum.

Greg Weiss, an HR consultant and principal of Humanagement, inextensive interviews with HR directors at 30 companies found that

most companies have little real understanding of why employeesleave.

I came across a public poll that was conducted at Cite HR (a popularmeeting point for HR professionals) to find the opinion of the HRcommunity on the reasons for attrition. The poll was titled 'Who will

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held responsible for attrition?' and participants have to chose an optionresponsible for attrition. The options were:

1. Employee2. Supervisor or Line Manager3. Compensation & Job Profile

The Poll Results:

The HR community welcomed the poll and a large number of themparticipated. The results of the poll on a specific date were as follows(The poll still continues and numbers of voters have increased,however, the result remains more or less same).

Reason for exit----------------- % of respondents

Employee ------------------------ 08.03%Supervisor or line manager -------- 38.15%Compensation & Job Profile -------- 53.82%

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Analysis of the poll results: The results of the poll are veryinteresting and can provide deep insights into why attrition happensand what may help solve it.

1. Employee as a reason for attrition

Only 8% HR professionals felt that employees leave organizations ontheir own. Except in a few cases such as personal reasons, familyissues, location preference, company brand and peer relationships,employees are not self-motivated to leave the company they areworking in.

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Nevertheless it is important to find out common causes for employeeinitiated exits where supervisors and/or Job Profile / compensation arenot the cause.

Employee Satisfaction surveys are the ways to identify such areas ofdissatisfaction, one of which may be HR policy guidelines of the

company. If you conduct these surveys on a regular basis and maptheir results to exit interviews; new findings may identify critical gapsin how the employees perceive your policies. Very important trendscan be identified by regular surveys conducted over the period of 1 2years. These can also help define future HR guidelines with minimaldisruption and dissatisfaction.

There are a number of survey tools available in the marketplace andone such popular tool is the Employee Satisfaction Survey. It helpsintegrate various aspects of HR to give more meaningful results.

2. Supervisor or Line Manager as a cause of attrition

A large majority of HR professionals polled that immediate managersare a bigger reason for attrition. It confirms Wayne Hochwarter [anassociate professor of management in the College of Business at

Florida State University] theory that "Employees don't leave their jobor company, they leave their manager".

Meeting employees' expectations is a difficult task, and mostmanagers cannot do it effectively and consistently. 'Satisfyingemployee needs' often gets lower priority in a manager's quadrant ofactivities. Further managers do not have appropriate tools to manageemployee related tasks and this leads to further dissatisfaction.

HR should continually train managers in handling employeeexpectations and provide them with tools to manage tasks related to

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their teams. An online Manager Services solution allows a manager toconstantly counsel employees, manage their career growth andaspirations and track their achievements.

HR should also be able to track changes in employee performancerating, gaps between employee and manager performance, suddenincrease in paid-time-off and should be prepared to act quickly if anyvisible trends are evident.

3. Compensation and Job Profile

HR Managers voted unanimously that 'Compensation and Job Profile'are the primary cause of attrition.

With a war for talent, disparity in the compensation packages is boundto occur and a mis-matched job profile increases the likelihood of anexit.

The responsibility for compensation policy and enriching the job profilelies on the senior management. However, balancing P&L and employeecompensation shall always be a nightmare for them given the highcost of talented employees.

Every company wants to become the 'best paying employer', butmarket forces, tough competition and a slow economy dictateotherwise. A fair and transparent compensation policy can still beadopted where each employee gets his/ her dues based on company,team & individual performance.

If your employees are convinced that they are compensated in directproportion to their productivity, you have won half the battle. Theother half is won when each individual is assigned SMART (Specific,Measurable, Achievable, Reviewable and Time Based) goals and youcan cascade these from organization objectives.

When all employees work on goals that are aligned to the companyobjectives and there is a fair and transparent system to capture

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employee performance, the likelihood of a satisfied and motivatedworkforce increases and Compensation or Job Profile becomemanageable causes.

I have always been a believer of one fact that "people leave managersand not companies" I still find it to be a strong reason of movement ofpeople from one organsiation to the other.Pay and compensation are the other associated factors. Imagine asituation:

A manager who does not appreciate the value added by his teammembers, does not have an open communication with his teammembers, does not appraise them well (i am talking in terms ofperformance not compensation); does not mentor them....result an

employee who is withdrawn...productivty is lower....ultimate result"poor performance evaluation leading to poor compensationincrement".

As such these factors are interrelated strongly. I believe that thepeople who can help the most in Retention are team managers/linemanagers as they are directly associated with employees.HR too is responsible at times on the same lines as line managers are:over promising , false hopes, not providing what was promised duringselection etc.

As far as training the managers are concerns it is very difficult tochange his /her perception about the leadership standards because ifthe leaders are like creating groups in or groups out then training can't

solve the situations he or she continue to behave in the similarmanner. In order to solve these situations it is required by the HR toensure that quality of leadership is selected in the organization.

Attrition can cause serious problems for clinical researchers byintroducing biases into an experiment. Preinclusion and postinclusionattrition can threaten both internal and external validity. This article

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provides a comprehensive approach to attrition, examining thepossible impact of this occurrence at each phase of the study. Certainmethods of recruitment and types of research protocols may decreasethe occurrence of attrition. When attrition does occur, experimentalmethods are useful for preserving validity, including: completers-onlyanalysis; optimization; endpoint analysis; and time-controlled analysis.Statistical approaches also can be implemented such as standardizedchange scores, data replacement by regression, endpoint analysis withregression, and worst case scenarios. The application of a singleapproach to the data will most likely introduce bias; however, astatistical bracketing procedure that compares two methods withopposing biases will yield greater confidence in the validity of theresults.

CHAPTER - 7

COMPARISON BETWEEN DIFFERENT

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COMPANIES ATTRITION RATE

CHAPTER 7

COMPARISON BETWEEN DIFFERENT

COMPANIES ATTRITION RATE

Attrition is an International Problem

Employers who have difficulty retaining their valued employees oftendismiss the problem as being unavoidable or an anomaly in theirindustry. In a futile attempt to find excuses, many companies citewhatever comparative numbers they can discover to justify theirlosses. They point the fingers at other employers instead of addressingtheir own shortcomings. Time is running out. Employee turnover iscreating problems across industries and across internationalboundaries.

Developed countries have sent a significant number of jobs to India,assuming that an abundance of workers were dedicated, productive,hard-working, and stable. Indias information technology industry isexperiencing a high attrition rate. The loss of experienced people andthe cost of replacing them with fresh graduates---and training them---

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All the sectors are facing attrition. But the reasons and effects ofattrition in every sector are different. Let us discuss the attrition ratesof these sectors in detail:

FMCG Sector

Manufacturing Sector

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Capital Goods Sector

Construction Sector

Non-voice BPO Sector

IT ITES Sector

o Attrition Rates Of Wipro, TCS, Satyam and Infosys

Telecom Sector

Pharmaceuticals Sector

Biotechnology Sector

Services Sector

Financial Sector

Aviation Sector

Retail Sector

Voice-based BPO

Attrition rates in Indian FMCG Sector

The Indian FMCG sector demonstrated a steady rise in the attritionrate over the past three years. The attrition rate was 9.8 % in 2004. Itmoved up to 10.8 % in 2005. In 2006, the attrition rate became 17 %.

The major companies in FMCG sector are Asian paints, BritanniaColgate, Cadbury, HLL (HUL), ITC, Marico, Nestle, P&G, Palmolive,Pepsi, Reckitt Benckiser, etc.

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Attrition Rates in IT Sector

Almost every sector in India is facing high rates of attrition these days.A recent study revealed that employees leave either because ofcompensation reasons or due to better growth opportunities.

According to NASSCOM, Indian IT-ITES industry recorded US$ 39.6billion in revenues in 2006-07. The revenue of US$ 49-50 billion hasbeen projected in 2007-08 at a growth rate of 24-27 per cent. The ITindustry's contribution to GDP was 4.8 per cent in 2005-06.

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Though the IT/ITES sector is booming, it is constantly facing highattrition rates of 25% - 30%. Even the big brands are also facing thesame problem. Below are the details of attrition rates of variousplayers in IT sector.

According to the survey conducted by BES and Data Quest, SierraAtlantic recorded highest attrition rate (29%) followed by Kanbay with25% and Accel Frontline with 20 per cent.

Rank Company Attrition rate (FY 06)

1 Sierra Atlantic 29%

2 Kanbay 25%

3 Accel Frontline 20%

4 Sasken 19%

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5 Nucleus 18%

6 Geometric 18%

7 Flextronics 18%

8 HCL Infosys 16%

9 Induslogic 16%10 NIIT Technologies 15%

11 Cybage 15%

12 Wipro 13%

13 Hexaware 13%

14 Computer Sciences Corp 12%

15 Infosys 10%

16 TCS 9%

17 Interra 9%

18 RMSI 8%19 Cadence 8%

20 Aztecsoft 6%

Attrition rates of Wipro, TCS, Satyam and Infosys

Inspite of being IT giants, these 4 companies are facing high attrition

rates. They are facing problems in retaining their employeesirrespective of the fact that they are providing an attractivecompensation packages to their employees. TCS, infosys and wiprofaced high attrition rate as compared to satyam.

Wipro: The attrition rate of wipro is 16.2% during the last quarter of2006-07. On annual basis, the attrition rate of wipro BPO was 48 %.The main reasons being told are the odd working hours and the higherstudies. Wipros attrition rate is the highest in the industry.

Satyam: Attrition rate for Satyam for the period January-March 2007was 15.7%. It has declined to 14.9%

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Infosys: Attrition rate for infosys for the period April-June 2006 was11.9%. But now it has increased to is 13.7%, same as in the lastquarter.

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TCS: The attrition rate for TCS is 11.5 %, up from 10.6% last year.

These firms collectively hired more than 25,000 employees in theApril-June period. The total headcount for these 4 organizationsbecame 2,85,357.

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CHAPTER 8

CONCLUSION

CHAPTER 8

CONCLUSION

The employee survey is a diagnostic tool used to assess theeffectiveness of the work environment and its ability to engage andmotivate employees and support a client-focused culture. Specifically,

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this was accomplished by measuring employee opinions, perceptions,and beliefs in 10 areas:

teamwork compensation and recognition communications personal growth employee involvement diversity quality of work life safety and security leadership recruitment and retention

Employees were provided with opportunities to share candid input in

the survey and should be involved in responding to the survey results.

Several key questions were posed, with the goal of having thequestions addressed by the results of the survey. The table on thenext page outlines how the survey results address each question. Thisinformation will help government to make improvements in the workenvironment.

Key Question

Results

Are employees engaged do they know how their work contributes to theirdepartment are they motivated to help the organization succeed, do they intend to stay with the organization? Are there differences among employee groups based on gender,

age groups, or other demographic factors?

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What are areas of strength and where does the organizationneed to focus in order to make improvements to the workenvironment?

How It Was Measured/Assessed

Engagement is assessed by looking at three critical dimensions ofengagement:

do employees intend to stay with the organization do employees understand how their work relates to the

organization's goals and objectives. are employees motivated in their jobs.

What are the strengths and opportunities for improvement

noted in the survey results?

Strengths

There are many areas of strength that firms should continue to buildon. Specifically, employees responded favorably to questions regardingteamwork, employee involvement, and communications. In addition,employees report that they know how their work contributes to theirdepartment's overall priorities/purpose and that they feel safe workingin their jobs.

Employees also responded favorably to questions regarding work-lifebalance, feel they have access to training opportunities, and feel thatthey can apply their training to their jobs. Respondents also feel they

have access to job postings, and they have a good understanding oftheir benefits program.

Opportunities for improvement

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Results also indicate several areas in the work environment thatrequire improvements. Employees expressed concerns about reportingworkplace ethical concerns or dilemmas without fear of reprisal andconcerns about the fairness of their compensation.

Leadership was also a concern for employees, specifically with regardsto having confidence in their department leadership, feeling thatleaders set a good example for employees, and feeling thatsupervisors manage workgroup conflict. Furthermore, employees donot perceive that they have opportunities for career advancement andthey do not believe that hiring is based on merit.

Employees also expressed concerns related to diversity and theirdepartment's commitment to diversity. In certain areas, the resultsindicate that employees neither agree nor disagree with the questions

being asked. As an example, over 20% of employees report neutralfeelings about diversity. This information should be considered whenreviewing the results in detail.

Engagement and motivation in the work environment

Employees who are engaged intend to stay with an organization, feelconnected to the organization's goals and objectives, and aremotivated in their jobs.

BIBLIOGRAPHY

www.googlescholar.com

www.google.co.inPrimary data from the Manager of Indian Bank

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Documents

Shashank Project Report