attrition
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Its about Attrition at call centersTRANSCRIPT
UNIVERSITY OF MUMBAI
A PROJECT ONATTRITION
SUBMITTED BYAyyangar Nisha Jagannathan
TYBMS Vth SEMESTER
PROJECT GUIDE Mrs Swati Nalawade
YEAR (2007-08)S.I.E.S (Nerul) college of Commerce
Sri Chandrasekarendra Saraswathy Vidyapuram,Plot 1-C, Sector V, Nerul, Navi Mumbai-400706
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If employees are to be products,
Their shelf lives are getting shorter
“ATTRITION”
ACKNOWLEDGEMENT
The successful completion of this project was a result of the kind co-operation &
guidance I have received from various persons & institution. Though I would like to
acknowledge them individually I mention below only few though the contribution from the
rest was of no less importance.
Firstly I thank the S.I.E.S (Nerul) college of Arts, Science and Commerce, and the staff
of the college for having given me this opportunity to do this project and providing me with
the required advice and guidance.
I specially thank my project guide ____________________ for sparing her valuable
time and effort to give me the necessary information and clearing my concepts regarding my
topic and completing this project successfully.
Finally I am grateful to my friends and many other Call center employees for providing
me with the information by responding to the survey conducted by me.
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CERTIFICATE
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DECLARATION
I, NISHA JAGANNATHAN OF S.I.E.S (NERUL) COLLEGE OF ARTS,
SCIENCE & COMMERCE HEREBY DECLARE THAT I HAVE COMPLETED
THE PROJECT ENTITLED ATTRITION IN PARTIAL FULFILLMENT OF THE
REQUIREMENT FOR THE THIRD YEAR OF THE BACHELOR OF
MANAGEMENT STUDIES COURSE FOR THE ACADEMIC YEAR 2007-2008.
I FURTHER DECLARE THAT THE INFORMATION SUBMITTED BY
ME IS TRUE AND ORIGINAL TO THE BEST OF MY KNOWLEDGE.
DATE: STUDENT NAME:
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Sr. no. CONTENTS Pg.No.
01. EXECUTIVE SUMMARY 08.02. OBJECTIVE OF THE PROJECT 09.03. METHODOLOGY OF STUDY 09.04. DEFINING ATTRITION AND PROBLEM 10.05. REASONS FOR ATTRITION 12.06. HOW TO HANDLE ATTRITION? 16.07. HOW TO SAVE HIGH ATTRITION RATES? 23.08. HOW TO CURB ATTRITION? 27.09. COST OF TURNOVER 36.10. ARTICLE: ‘Attrition at Call Canters’ 47.11. CASE EXAMPLE : 'I'll never work at a call
centre again!'50.
12. WHY PEOPLE ARE LEAVING BPO’s? 53.13. QUESTIONNAIRE ON ATTRITION 63.14. CONCLUSION15. BIBLOGRAPHY
INDEX
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EXECUTIVE SUMMARY
Human Capital is the most crucial resource on which the Information Technology &
Information Technology Enabled Services (IT & ITES) industry in India depends. Next to the
location advantage that India has, the factor for the country's immense success in the overseas
markets, is its abundant & cost effective human capital which is one of the key asset that has
kept India sustain its edge in the ITES sector Human Resource (HR) professionals all over the
world, working in Call-Center or Contact Center or BPO industry are leaving no stone
unturned to formulate strategies to retain human capital, but nothing is working in their favor.
In spite of all their trials the average attrition rate in the BPO this sector is still very high.
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 dream job in another state.
So, what does that entire turnover cost? And what employees are likely to have the
highest turnover? Who is likely to stay the longest?
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OBJECTIVE:
The objective of this project is to understand the retention strategies adopted by
various Indian BPO companies (especially the call centers) and propose innovative strategies
that these companies can adopt to get a better solution to this Herculean problem that the BPO
industry is facing. Though the issues and options analyzed are with respect to Indian service
providers, the same may be applied to service providers across the globe as the issues and
options remain the same irrespective of place of operation.
METHODOLOGY OF STUDY:
To know about retention strategies adopted by various Indian BPO companies
(Especially the call centers) the Internet and print medium like magazine and newspaper were
used in which the interviews of HR managers were published. The reason behind choosing
call center segment of BPO is, Customer care based call center activities constitute for more
than one third of the total employment and revenue in BPO segment.
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DEFINING ATTRITION:
"A reduction in the number of employees through retirement, resignation or
death"
DEFINING THE ATTRITION PROBLEM:
Attrition is beginning to significantly affect offshore return on investment(ROI.) Just
as businesses faced a scarcity of talented IT resources during the dotcom era, organizations in
offshore countries such as India are experiencing similar pains. Skilled employees are hopping
from job to job and taking with them the customer knowledge and technical expertise that any
company needs. Their salaries are increasing, along with their perks, benefits, and bonuses.
Global outsourcing and the astounding amount of foreign direct
investment pouring into China, Russia, and India have created tremendous
opportunities and competition for talented IT professionals in those
countries. The downside of this increased competition is a rising rate of
attrition, particularly in India. Fiscal third-quarter 2005 (ended December
2004) results filed by Infosys, Wipro, Satyam, and TCS listed attrition rates
between 7.6% and 17.7%. while an April 2005 BusinessWeek article estimated an attrition
rate of 60%, with some Indian service providers experiencing up to 80% turnover.
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To put these attrition numbers into perspective, if a company has 100 programmers and
an attrition rate of 25%, then 25 of its IT staff will leave each year. Think about the time and
money it took to find, interview, hire, train, and coach those 25 people. Now think about
losing them and starting the hiring and training processes anew.
How do the hiring and training processes break down in terms of total costs in India?
The typical time for advertising, interviewing, screening, negotiating, and hiring a new
employee is about two weeks. Companies usually allot one week for programmers to become
familiar with the new business, two more weeks for technical training, and one last week for
customer training. Now imagine a 25% attrition rate and replacing 25 of these programmers
each year. Based on a yearly salary of $15,000 for the human resource person and $25,000 for
the programmer, it would cost an additional $63,000 annually in acquisition and employee
training costs. After considering these figures, it quickly becomes apparent why companies are
investing in strategies to prevent attrition.
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REASONS FOR ATTRITION:
It is not easy to find out as to who contributes and who has the
control on the attrition of employees. Various studies/survey conducted
indicates that every one is contributing to the prevailing attrition. Attrition
does not happen for one or two reasons. The way the industry is projected
and speed at which the companies are expanding has a major part in
attrition.
For a moment if we look back, did we plan for the growth of this
industry and answer will be “NO”. The readiness in all aspects will ease the
problems to some extent. In our country we start the industry and then
develop the infrastructure. All the major IT companies have faced these
realities. If you look within, the specific reasons for attrition are varied in
nature and it is interesting to know why the people change jobs so quickly.
Even today, the main reason for changing jobs is for higher salary and
better benefits. But in call centers the reasons are many and it is also true
that for funny reasons people change jobs. At the same time the attrition
cannot be attributed to employees alone.
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Organizational matters:
The employees always assess the management values, work culture,
work
practices and credibility of the organization. The Indian companies do have
difficulties in getting the businesses and retain it for a long time. There are
always ups and downs in the business. When there is no focus and in the
absence of business plans, non-availability of the campaigns makes people
to quickly move out of the organization.
Working environment:
Working environment is the most important cause of attrition.
Employees expect
very professional approach and international working environment. They
expect very friendly and learning environment. It means bossism; rigid
rules and stick approach will not suit the call center. Employees look for
freedom, good treatment from the superiors, good encouragement,
friendly approach from one and all, and good motivation.
Job matters:
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No doubt the jobs today bring lots of pressure and stress is high. The
employees
leave the job if there is too much pressure on performance or any work
related pressure. It is quite common that employees are moved from one
process to another. They take time to get adjusted with the new
campaigns and few employees find it difficult to get adjusted and they
leave immediately. Monotony sets in very quickly and this is one of the
main reasons for attrition. Youngsters look jobs as being temporary and
they quickly change the job once they get in to their own field. The other
option is to move to such other process work where there is no pressure of
sales and meeting service level agreements (SLA). The employees move
out if there are strained relations with the superiors or with the
subordinates or any slightest discontent.
Salary and other benefits:
Moving from one job to another for higher salary, better positions
and better
benefits are the most important reasons for attrition. The salary and
offered from MNC companies in Bangalore, Delhi and Mumbai have gone
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up very high (Rs 15000 to Rs 18000 per month) and it is highly impossible
for Indian companies to meet the expectation of the employees. The
employees expect salary revision once in 4-6 months and if not they move
to other organizations.
Personal reasons:
The personal reasons are many and only few are visible to us. The
foremost
personal reasons are getting married or falling in love or change of place.
The next important personal reason is going for higher education. Most of
the BE, MCA and others appear for GATE examination or other
examinations and once they get cleared they quickly move out.
Health is another aspect, which contributes for attrition. Employees do get
affected with health problems like sleep disturbances, indigestion,
headache, throat infection and gynecological dysfunction for lady
employees. Employees who have allergic problems and unable to cope
with the AC hall etc will tend to get various other health problems and
loose interest to work.
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Poaching:
The demand for trained and competent manpower is very high.
Poaching has become very common. The big companies target employees
of small companies. The placement agencies have good days for doing
more business.
The employees with 4-6 months experience have very good confidence
and dare to walk out and get a better job in a week's time. Most of the
organizations have employee referral schemes and this makes people to
spread message and refer the know candidates from the previous
companies and earn too.
Employee’s advocate:
One of the main reasons why employees leave companies is because
of problems with their managers. An HR professional can be termed an
employee’s advocate and a bridge between top management and
employees at all levels. There is a huge gap between HR professionals and
employees in terms of understanding challenges and delivering
requirements. HR has not really understood the problems associated with
employees’ careers and jobs. The company’s overall plans and strategies
also depend on HR professionals as they voice employees’ problems and
requirements. The HR department should have genuine interest in the
employees’ welfare…it is responsible for making sure that their
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expectations are met. By doing this it is easier to meet the company’s
business targets.
HOW TO HANDLE ATTRITION?
Earlier the retention was the sole responsibility of HR Department
and at the most the department heads will be accountable for the
retention of talent. In companies the wheels have changed and multi
dimensional approach needs to be adopted. More of concerted efforts only
would help to retain the talent. Everyone has to contribute to hold the
employees little longer period. All the leading companies are trying several
methods to retain the talent and few of those innovative HR
practices(based on a survey) are:
Providing stimulating work environment:
In terms of stated work pressure, only 17% have claimed ‘light pressure’.
This may point to a reasonably high-pressure environment in conventional
terms, not realized as most respondents have no other industry
experience. The atmosphere at the workplace however, was generally
positive. Almost half worked more than 45 hours per week.
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BASE 100
Heavy pressure 17%
Moderate pressure 66%
Light pressure 17%
BASE 100
Happy 57%
Neutral 39%
Unhappy 4%
Free transport and free food:
Majority of the breaks were for meals and there were no significant
problems faced in taking the breaks.
Almost 2/3rd employees travel more than 10 kms to work everyday. This is
a huge strain on quality time available with the family and ostensibly
results in stress in numerous ways compared with other industries. The
root cause is that most BPOs are located outside the city as government
lands have been allocated to the MNCs at better rates there.
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BASE 100
Tea/Coffee/Refreshment break 69%
Lunch Break 76%
Break fast 7%
Dinner 15%
All other break reasons 3%
Not specified 9%
BASE 100
Yes- Problem to break 8%
No - Problem to take break 88%
Refused 4%
BASE 100
Up to 10 km. 68%
11-19 km. 12%
> 20 km. 17%
Can’t say 3%
Although taxi / bus services are provided by most employers, as many as
30% workers travel crammed (more than 5 persons to a taxi). What’s
more, 79% waste more than 30 minutes of their productive lives everyday
waiting for commute. Interestingly, lower salary workers get no such
benefits.
Good rewards and recognition programmes:
As many as 56% admitted to being asked to work overtime. 44%
refused the question implying that conditions are created such that all
probably are coerced into working overtime. The oppressive part was
further that as high as 41% claimed to not having been paid for overtime.
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BASE 100
1-2 hrs. 29%
>2 hrs. 27%
Refused 44%
BASE 100
Paid 59%
Not Paid 41%
Recreation clubs, Canteens, Entertain programmes , fun
activities with in the work area:
Many companies have canteens though the quality of food is not great.
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BASE 100
Yes – Health affected 16%
No – Health not affected 80%
Can’t say 4%
BASE 100
Good – Canteen quality 41%
Average 51%
Poor 4%
Can’t say 4%
BASE 100
Yes – canteen at work place 87%
No – No canteen 13%
Other practices include:
- Promotions and salary increase on a regular basis.
- Better learning opportunities, Encourage enroll for distance learning
programmes.
- Regular holiday packages, gifts, outings etc.
All the above activities are being undertaken to a greater extent or
little more in all large Companies. Surprisingly the attrition rate is not
coming down in any of the companies, but it is going up and it may
increase in the coming days. This is a time to introspect as to what is
lacking in the approach. One thing is missing is attention to individual
needs. Employees have varied expectations and it is becoming difficult to
understand them and by the time you make an attempt to understand the
expectation changes and it is still becoming difficult to meet the
customized demands or expectations. To quote an example, if a friend
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leaves, another close friend will also leave and he will lure another 3-5
persons. Moving for higher education and marriage are the major reasons
for attrition. To tackle these will be impossible with any type of strategies
and approaches. The HR personnel have become silent spectators and
start hunting for new personnel to replace.
The broader approach is to bring sanctity in the recruitment process
like demand the relieving letter from the previous company, have non-hire
agreements with the companies in the particular area. It is not easy to
bring the entire company under a forum. Nasscom has attempted to bring
out certain guidelines on the matter and the impact is not felt yet. The
MNC culture, high salary level and benefits offered by them are the only
two major aspect of attrition and no one can halt them doing so.
How Insights Can Help Build Strong Manager/Employee
Relationships:
The Insights Discovery System is based on perspectives and
attitudes relevant to understanding organizational and cultural
requirements and needs of people in relation to motivation and leadership.
The understanding of individual differences that Insights provides is
fundamental to improving communication, co-operation and building
effective and high morale teams. This understanding is what bridges the
gap between manager and employee.
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The Insights Discovery System generates reports that reveal
personal preferences or triggers of each individual - including issues that
cause stress. In essence, Insights can bring about a closer relationship
between employee and manager to enable both parties to better adapt,
connect and understand one another.
An employee may be highly competent but his or her style may be
different from that of the direct manager. The "Value to a Team" section of
an Insights report provides crucial information to a manager who tends to
evaluate all employees against one set of standards. Insights can help
managers recognize the value and uniqueness of each person's
contributions then reward them accordingly.
Insights also serve as a communication vehicle for discussions about
an employee's current and future interests. Insights help managers and
employees better identify what values (needs) are most important to each
individual and how these values impact the person's attitude towards
work. Values can range from an employee feeling stable and secure to
someone enjoying challenge.
The Insights Discovery System is a powerful workforce enhancement tool.
It can:
- Enhance the effectiveness, commitment and retention of an incumbent
workforce though increased understanding of human behavior
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- Motivate and retain employees whose basic monetary and material needs
may have been satisfied, but who are seeking their internal drives
- Improve HR planning and development
- Identify motivational and managerial issues related to interpersonal
style
- Reduce the impact of turbulence and organizational transition on
employee commitment and productivity.
HOW TO SAVE HIGH ATTRITION RATES?
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How much would you invest to keep your employees focused
and happy?
This is the question on the minds of CEOs and managers worldwide as the
technology boom lifts and the employment market opens.
From the employer's perspective, employees are an investment. You
interview to make sure an individual has good work ethic, motivation, and
drive. Most of the time, employees are considered a financial investment.
Yet there's much more to it than that. There is a significant emotional
investment that is crucial to accelerating business strategies and reaching
organizational goals.
You probably know someone who owns an outdated, overused vehicle but
won't entertain the thought of trading it in even though they can afford to
upgrade. Why, you might ask, do they keep it? Well, the owner has
probably invested substantial time, money and care into keeping it in top
condition, not to mention the dependability that has taken them to
countless doctors appointments, baseball practices and events. It seems
senseless to throw it away. The cost of replacing the vehicle would be
enormous compared to the cost of upkeep on the old one. Even with
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inanimate objects, we become accustomed to personality and quirks and
develop a common trust.
When this same logic is applied to employees, we find the cost of replacing
employees comparable to that of investing in a new automobile.
Recruitment, hiring, benefits and administrative costs put an organization
upside down on the investment.
Thankfully, companies have come to realize that keeping employees is
more cost-effective than replacing them. Retaining valuable employees
has other benefits - retaining the vault of knowledge that's been
accumulated, skills learned and trust and relationships they have built with
customers and co-workers.
People Are Not Easily Replaced
Even though today's pool of unemployed workers is deep,
organizations choose to spend more time and resources on retaining
existing employees than starting from scratch. Yes, there are financial
reasons behind this focus on retention. However, there are many other
contributing factors such as the effect attrition has on customer service,
corporate culture and employee morale and loyalty. All these factors can
and will be effected by turnover. Basically, when good people leave an
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organization they take their training and knowledge and often times,
relationships with them.
Drivers of Turnover
Turnover is often driven by corporate restructuring and tight
competition for key talent. For many firms, surprise employee departures
can have a significant effect on the execution of business plans and may
eventually cause a parallel decline in productivity. This phenomenon is
especially true in light of current economic uncertainty and following
corporate downsizing when the impact of losing critical employees
increases exponentially.
When managers or supervisors are asked why good people leave, most
respond, "It’s about money." Or, they dismiss the departure matter-of-
factly by stating the employee "received a better offer." Contrary to
popular belief, research indicates that money is not even on the list of top
five reasons employees give when asked why they are leaving an
organization.
When viewed from the employees' perspective, a healthy organization is
one in which people are generally satisfied with the quality of their work
life. On most days they feel good about going to work. They feel
empowered to help shape decisions that affect them, they have the
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resources and skills to satisfy customer needs and they are generally
confident in the abilities of the leadership team.
From the organization's perspective, the organization is healthy if it is
viable as measured by profitability, competitive market position and
customer satisfaction. A healthy organization also responds well to the
need for change; it is adaptive and thereby ensures its future - meaning
that following a major upheaval or transition, the healthy organization
rebounds and employees remain committed.
Bottom line, it is the role of the manager, that most influences an
employee's decision to stay or depart from an organization. People will
leave if they don't like their manager - even when they are well paid,
receive recognition and have a chance to learn and grow. In fact, disliking
or not respecting the boss is the primary reason for talent loss. Research
shows the reasons for employee departures are (in descending order):
1. Employee/manager relationship
2. Inability to use core skills
3. Not able to impact the organization's goals, mission
4. Frequent reorganizations; lack of control over career
5. Inability to grow and develop
6. Employee/organization values misalignment
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7. Lack of resources to do the job
8. Unclear expectations
9. Lack of flexibility; no 'whole life balance'
10. Salary/benefits
It is very important to know that the above factors are often NOT the
ones mentioned in most attrition studies published by individual
organizations. Additionally, this information does not match the data
frequently obtained during an employee's exit interview when asked about
the reasons for departing. The rationale behind this discrepancy is that exit
interviews are frequently conducted by the departing employee's manager
or HR manager, hindering honest responses. Typically, employees are
hesitant to tell these company representatives the truth for fear of burning
bridges or getting a bad reference.
HOW TO CURB ATTRITION?
Money is not everything
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Although the importance of higher packages is slowly diminishing, among
fresher or laterals with less than three years of work experience, money is
still considered to be the highest priority. Employees want not only work
recognition, but also extra perks." A number of professionals are looking at
more challenging jobs. "In several cases, faced with a choice between
more money and a challenging job, employees have opted for the latter as
it allows them to learn new technology and increase domain expertise."
People analyze the training programmes of prospective companies with
those of their current organization, which means that how an organization
grooms an employee is weighed to a greater extent. This is because they
know that developing next-level skills will keep them ahead in the job
market, and finally result in better compensation. They also look for a job
with higher levels of responsibility, better learning opportunities.
Vision and objectives
The next level of communication, a crucial part of retention, starts
with acquainting employees with the company’s vision and objectives.
Organizations successful in retaining employees clearly pass on their goals
and achievements. Conducting regular meetings and updating employees,
especially new entrants, about the company’s status and achievements is
a must.” They should concentrate on leadership and brand building as
people prefer to be associated with a brand. Respect for the job should be
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created by BPOs. The youth should feel proud to be a part of the billion-
dollar industry.
Mentoring and handholding new recruits from day one to four months are
important tasks; during this period, they should be familiarized with the
culture of the company. It is at this time that new entrants experiment with
different options. Hence they should be exposed to the best values the
company has.” If they are informed about regular happenings in the
company, employees will be confident about the future and not try to look
for better options.
Treat employees like Customers
Even while companies strive to understand which organizational, job, and
reward factors will contribute to holding back employees, industry experts
have found several loopholes at the top management and HR management
level. Companies should have a similar approach to employees and
customers. If a company strives to retain an employee in the same way it
tries to retain a customer, him leaving the organization could be out of
question.
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Since software professionals have different priorities at different points of
time, organizations need to structure their offer-mix while recruiting new
hires, as well as promoting potential ones. Communication is the
foundation for the entire process of managing attrition. This
communication begins right from recruitment. In cases of peer pressure,
an employee aims to join a well-known company. This could be achieved
by brand building, which attracts the right talent and helps in retention as
well.
Understanding an employee’s needs at various levels is a recommended
HR practice.
Firing
Sometimes, firing can look like attrition. Looking at firing and attrition
together in a different light, firing can be an excellent tool to contain
attrition. Attrition can simply be defined as employee leaving his current
job due to reasons like, job pressure, health problems, personal reasons,
inefficient boss, lack of job security etc. All the above reasons are
interlinked and can be the reasons for good workers to quit. If the team
has under-performers who despite given sufficient support and training is
unable to perform, but they continue to be part of the team damage the
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morale of the team. A performer will not want to be part of the team, which
has non-performers because he will have to compensate for the non-
performer, thereby increasing his job output/pressure. A continuous job
pressure results in health problems. Having frequent health problems not
only reduces his performance, but also affects him financially. At this
juncture, the performer realizes that he is working with an inefficient
manager who is not capable of “cleaning up” the team by firing non-
performers. With the above, the performer employee feels insecure and
resigns. Firing non-performers can be an efficient tool to contain attrition.
Consider feedback
It is important to take feedback from employees through different means
and work with the HR department to iron out differences. As industry
experts point out, feedback can be got in two ways—during the employee’s
tenure, and through exit interviews. Inputs can be secured from existing
employees through various employee relationship management tools. The
Wipro Listens and Responds initiative at Wipro aims to capture the
concerns and grievances of its employees. “The feedback we get through
this tool will be analyzed, and action will be taken on it. Our employees are
very excited that their feedback is being taken seriously,” says Sahoo. Exit
interviews help management learn the reasons why employees leave the
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company; based on their revelations, the organization can address the
problems of existing employees, thereby curb attrition.
Spend Time Developing and Benchmarking Incentives
Whenever the demand for a professional in a particular field heats up, the
perks associated with the job start to pile up. Standard perks for an India-
based "fresher" (a new entrant in the IT services industry with little work
experience) typically include free transportation, educational assistance,
healthcare benefits, performance-based bonuses, onsite cafeteria, stock
options, and interest-free loans to absorb the cost of relocation or maybe
to finance the purchase of a two-wheeler. According to Wipro's web site, its
employees even have access to an agency that will handle such "domestic
chores" as paying bills, thereby giving IT workers more free time.
An important part of designing incentives is aligning them with market
benchmarks. As far as salaries, HR firm Hewitt Associates reports that India
showed the largest overall salary increase in the Asia-Pacific region in
2004. Salaries in India grew by 11.6% overall, while China trailed with a
6.4%–8.4% hike, the Philippines showed a 7.4%–7.7% increase, and Korea
saw wages jump by 6.4%–6.8%. Salary increases for middle managers in
India were even more dramatic: Nasscom, India's software association
found that salaries for middle managers rose by as much as 30% in the
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last two years. These salaries are often paired with expansive benefit
packages that include standard entry-level benefits as well as special
services such as help finding and buying a home or enrolling children in
school.
Captive centers and IT service providers have to offer innovative
compensation and benefits—or risk losing valued employees to
competitors. Nonstop evaluation and benchmarking are "need to do"
activities for IT managers.
Subsidize Education and Certification
In the United States, many companies reimburse employees for advanced
degrees or certifications that relate to their area of expertise. Until
recently, the opposite was true in India, but that trend has begun to
change as businesses have discovered that a significant portion of their
attrition problems stem from employees leaving to pursue a master's
degree. Several offshore service providers have teamed with universities
to offer their workers management-level master's courses at a subsidized
rate, and watched attrition rates drop as a result.
For example, Cognizant Technology Solutions, an IT service firm with
17,000 employees, partially reimburses Indian staff that pursues master's
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degrees at BITS, a higher-education institution located in Pilani, India.
Business process outsourcing (BPO) player 24/7 Customer, in association
with the Indian Institute of Management Bangalore, launched a
management-education seminar series called "Beyond Knowledge,"
through which 24/7 aims to educate employees about the BPO industry
and discuss related careers. Multiple providers have followed the lead of
Cognizant and 24/7.
In several offshore countries, advanced degrees are considered crucial to
social standing. It's important for U.S. firms with little international
experience to recognize this desire among employees and design
programs accordingly.
Change Locations
The high prices and resource crunch in top-tier Indian cities such as
Bangalore and Mumbai have led many companies to execute alternative
location strategies. Many vendors are sending work to tier-two cities
(Hyderabad or Chennai) or even tier-three cities (Noida or Chandigarh),
where labor and real estate costs as well as attrition may be cut in half.
Such benefits come at a price: The infrastructure quality lags that of more
advanced cities, and the search to find qualified people may take longer.
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Another option to combat the rising attrition rates in India is to locate in
other countries. Sykes Enterprises, for example, disclosed that it is
relocating the customer contact management work at its Bangalore, India,
facility because the center delivered an inadequate return and a limited
competitive advantage. The Tampa-based company thinks the work is
better suited for the other Asia-Pacific offshore centers in its portfolio, such
as China. Sykes expected to incur total charges of approximately $0.8–
$1.5 million for its plan to relocate work.
Rotate Employees
Employees who don't feel challenged by their work often leave. In
response, companies such as TCS have programs that rotate employees
into different disciplines about every two years and expose them to new
locations, projects, and technologies. L&T InfoTech, a software solutions
provider with 4,000 employees and six development centers in India, has
implemented a similar program.
Offshore employees are asking for a clear career path with increased
responsibility and frequent recognition of achievement. Established U.S.
and European multinational companies have long had learning programs
that set expectations for performance goals such as learning a particular
tool or proprietary software. Companies practicing off shoring need to
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provide new challenges and opportunities for skills development through
training or job rotation. It may become the only reason your best
employees stay with you.
Combat Poaching by Encouraging Referrals
Rather than going through a prolonged posting process and screening a
deluge of résumés, some companies poach employees directly from their
competitors and offer to double salaries or buy out contracts on the spot to
scale up quickly. Poaching is generally a bad idea, as it drives up salaries
and discourages employee loyalty.
An employee referral program can serve as an alternative and effective
recruiting strategy. Satisfied employees can be a company's best sales tool
and add a personal touch that a print or radio campaign lacks. A Voice &
Data survey of the top 15 Indian outsourcing companies with 1,000-plus
employees found that referrals constituted 23% of new hires. For some
companies, the number was even higher, at 40%. The study also observed
that recruits hired through employee referral programs are "stickier"; that
is, they stay with companies longer than non-referrals.
Just Ask: Are Your Employees Satisfied?
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Retention is inextricably linked to employee satisfaction, so it pays to
periodically survey employees —hopefully before their exit interviews—
about job satisfaction issues, and act on the data gathered. The aim is to
determine why some employees depart and some remain with the
company, and to define the traits of productive, successful employees.
Many companies examine the reasons employees leave, which don't reveal
as much as the reasons they stay.
An important aspect of implementing a retention program understands
that it should not be one-size-fits-all. If incentives are meant to keep
employees happy, then they truly have to be designed with the employee
in mind. Too often, employers and employees disagree on what constitutes
a good incentive. For example, a company might reward a father with
three young children a monetary bonus as thanks for working overtime for
five months straight. To the father, however, days off might have been
more attractive, since they would have allowed him to spend time with his
family.
Knowing your employees and personalizing rewards makes a difference.
The global workforce has different, individualized needs, and organizations
should tailor incentives for their employees if they want to retain them. If
39
your company doesn't bother, don't be surprised if workers head for the
door as soon as year-end bonuses are handed out or stock options vest.
Spend More Time Recruiting
With huge projects ramping up within exceedingly short windows, it can be
hard to convince management to allot more time to the recruiting process.
However, it's difficult to retain good employees if the company doesn't
have a process to hire the right people in the first place. Simple measures,
such as incorporating skills tests that relate directly to the job in question,
can help companies to determine whether the applicant is indeed an
expert programmer or merely an intermediate programmer. Having
employees interview candidates also may increase the chances of success,
as these employees can better identify potential personality clashes that
HR personnel may not spot.
COSTS OF TURNOVER
The impact of employee turnover on company performance is often
understated by organizations. This describes how the cost of turnover is
can be calculated using some basic organizational parameters. The
purpose of this document is to provide talent cost of turnover calculator
with insight into how costs are calculated and the reasons why certain
costs were include or excluded form the calculator. The calculator should
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only be used as a guide in understanding the impact of turnover on a
company. If the desire is to understand the true cost of turnover then it is
suggested that a greater degree of analytical work is undertaken.
The key areas used in the calculation of turnover are:
Administration and sourcing costs
These include the administration of the termination and recruitment
functions together with the costs associated with interviewing, testing and
attracting applicants.
New Hire costs
Once a person has been employed an organization generally spends
significant resources in the induction and administration of bringing them
into the organization.
Lost productivity
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The hidden costs associated with lost productivity of employees prior
to leaving the organization and new less skilled employees are one the
largest components of the total cost associated with turnover.
Dysfunctional and avoidable turnover
Determining the level of dysfunctional and avoidable attrition
provides a perspective on the scope of control that a company has to
manage their turnover costs. Determining the cost of turnover is the first
step in the process of developing a management plan. To deal with an
attrition issue effectively the reasons for turnover and an understanding of
the demographics of turnover need to be understood.
Undoubtedly, the financial costs of turnover have attracted the attention of
academics and practitioners alike. Besides the more familiar costs
associated with the administration of terminated employees the economic
costs such as productivity losses need to be included in any calculation. In
particular, departure of employees - especially experienced or talented
ones - may threaten overall firm productivity or client retention.
Furthermore, personnel losses may endanger the firm’s future
opportunities in the marketplace or the morale of their remaining work
force. Human resource accounting experts Cascio, Hom and Griffeth define
exit expenses as having two main components - direct and indirect costs. A
company incurs both direct and indirect costs that result in losses in
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production dollars and overall production volume, as well as increased
administrative costs. Direct Costs are actual dollars spent each time an
employer has to attract, select, and induct a replacement for an employee
who leaves the organization. Indirect costs are those expenditures
attributable to turnovers affects on production - that is costs for incomplete
or disrupted work, loss of quality, etc.
The cost of turnover can be calculated by measuring the time taken to
administer each activity plus the direct costs such as advertising costs. The
turnover costs calculated using the calculator represent dollars spent. The
potential loss of revenue if these dollars were invested elsewhere or
through lost productivity is not calculated. Therefore, the figures are an
indication of the minimum costs that the organization is subjected to when
an individual leaves the company.
Administration & Sourcing costs
The most visible cost of turnover is incurred by organizations in the
area of recruitment administration and sourcing. The time associated with
processing terminated employees and recruits places a burden on
organizations where staff turnover is excessively high. The assumption is
that this is largely an administrative task conducted by people at 80% of
the average company salary. In addition the direct costs to a company for
recruitment agency and advertising costs are highly transparent.
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1. Process Administration:
Resignation Administration -
The time taken to administer a resignation will include activities such
as: conducting exit interviews & processing of administrative tasks. The
time taken to perform these activities is ideally measured as a result of
analyzing the processes involved.
Recruitment Administration -
A large amount of time is often spent in administering the recruitment
process. Writing the job ad, posting it onto job boards, organizing
agencies and reference checking all require the use of organizational
resources, whether internal staff or outsourced. The hours spent
involved in these activities does need to be factored into the cost of
turnover.
2. Sourcing Costs:
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Agency expenses -
The cost of sourcing a successful applicant from an agency may be one
of the largest single direct costs associated with recruitment.
Advertising costs -
The cost associated with posting job ads to job boards or traditional
media such as newspapers can be significant. The average cost per
vacancies is used within the calculation.
3. Interview Costs:
Interview -
A core component of recruitment administration is the cost associated
with interviewing applicants. Interviews make use internal resources.
The more interviews held and the greater the number of candidates
interviewed the larger the costs associated with these activities.
Testing -
Companies are making greater use of psychometric and aptitude
testing in their recruitment processes. These tests can be costly to
administer and as such need to be factored into the overall attrition
costs.
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Travel -
Companies may pay the costs associated with bringing an applicant to
the interview location. Although this may not be done for every
candidate an average is used in the I4 calculator.
Cost of New Hire
The two costs measured in this area are the administrative tasks
associated with inducting a new hire into the organization and the
associated induction training. When measuring the cost of attrition
sometimes the total cost of training that an individual has received whilst
in the employment of an organization is included. However, as all learning
undertaken by employees will be used back on the job an add value to the
business it is inappropriate to count it as a cost of attrition. Also, where
particular jobs have high training, often there is a corresponding lower rate
of pay which acknowledges the investment that the organization is making
in the individual, eg. Youth wages. One aspect of training directly
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associated with turnover, however, is the induction of new staff to the
organization. High staff turnover will necessitate greater levels of
resources being made available to induct new employees. It is the
opportunity costs of these resources that must also be calculated.
1. Induction Administration
The process of induction into an organization can involve a
substantial amount of time. The activities included here would include the
processing of new hires into organization systems (HR) and introductions
to fellow employees.
Induction Fixed Costs -
The fixed costs associated with inductions include the cost of materials
such as induction kits and staff manuals.
Induction Training -
Any initial training received by an employee on joining the company. This
includes the costs of the materials, presenters and the opportunity costs
associated with the new employee taking time off work to participate.
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Relocation Expenses -
Similar to travel these cost are incurred by companies in an effort to
source the best talent for alternate locations. An average cost needs to be
captured as part of the calculation process.
Productivity Losses
The most detrimental aspect of staff turnover is lost productivity.
Evidence has found that leavers often miss work or are tardy before they
depart. Deery and Iverson argue that according to progression-of-
withdrawal models the productivity of leavers may deteriorate before they
depart.
Turnover is commonly viewed as belonging to a family of withdrawal
behaviors that physically distance employees from unpleasant work
settings. Serving a common psychology function, withdrawal actions
reduce the time spent in an adverse environment and thus reduce job
dissatisfaction.
Studies have shown that employees leaving a company will have a greater
level of absenteeism prior to leaving. Excessive sick leave is not only
costly, but is also an early warning signal that an individual may be
considering resigning from the organization. Not only does staff take more
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sick leave but Hom and Griffeth state that their overall productivity
decreases as well. Furthermore, resignations may disrupt other employees’
work if their work depends on the leavers or they must assume the
leavers’ duties.
The second effect of loss of productivity occurs when new hires join the
organization. They will not have the networks, understanding of
organizational processes or product/service knowledge to be effective.
Studies have shown that a new hire will generally take between 3- 8
months to become effective in their new role. The longer period is
associated with more senior roles.
Excluded costs
Not all the costs associated with turnover have been included in the
i4 attrition calculator. Costs that cannot be accurately measured or
assumed have been excluded. These costs, although hidden, may be the
most critical in terms of organizational impact. Examples of hidden costs
are included below to highlight the organizational impact of attrition.
Employee Demoralization
Turnover may erode the morale and stability of those who remain
employed. Their morale suffers because they lose friends and may
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interpret motives for quitting as social criticisms about the job. A belief
that a leaver has a “better” job elsewhere may change employees’
perceptions of their jobs. As a result stayers may denigrate their present
position in the light of superior alternatives and begin contemplating other
employment. This phenomenon may lead to a cycle of attrition whereby
employees leaving a company prompt other to do the same.
Impaired Quality of Service
Turnover also hinders the delivery of service and retention of
customers. Attrition among service personnel impairs customer service
because understaffed branches delay or withhold service. Unlike
experienced leavers, new employees may also provide less competent or
less personalized service because they do not know the clients and can’t
meet customer expectations through lack of knowledge and experience.
If satisfied employees make customers feel well treated, disgruntled
employees may provide careless service before they leave. Turnover also
interrupts the transmission of service values and norms, which are the
essential underpinnings of high quality service, to successive generations
of employees. Customers' perceptions, attitudes and intentions seem to be
affected by what employees’ experience, both in their specific role of
service employees and their more general role of organizational
employees. It has been found that there is a high correlation between
employee turnover and customer turnover. Therefore, the cost of
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decreased customer satisfaction and loyalty should be taken into account
when considering staff turnover.
Turnover reason & cost impact
Just as attrition can lower productivity, incur financial costs, and
undermine stayers' morale, turnover can have the opposite ramifications
under certain circumstances or for certain firms. That is that the exit of
marginal performers may improve overall firm productivity, while new
replacements for leavers can infuse companies with new ideas and
technology. Though turnover is obviously costly, personnel shrinkage -
especially among administrative staff - can nonetheless reduce overhead
costs. Further resignations may create more job and empowerment
opportunities for employees who remain in firms.
Functional and Dysfunctional Turnover
Departing from conventional beliefs, some academics point out that
turnover can prevent stagnation and complacency, facilitate change and
innovation, and displace poor performers. Turnover is not inherently
negative. Although it creates personnel costs, the organizational
consequences of turnover are dependent on who leaves and who stays.
The departure of good performers is construed as dysfunctional turnover -
representing a loss to the organization - for their replacements are likely to
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be of lower caliber. The departure of poor performers is viewed as
functional turnover - because they are apt to be replaced by better
performers. Research into whether high performers or low performers
leave tends to have found mixed results. A meta-analysis conducted by
McEvoy and Cascio found that generally it is the poor performers that will
leave their place of work. There are two possible explanations for this:
firstly, terminated staff has on average a lower tenure than current staff
and so have not had the time or opportunity to develop the skills
necessary to perform well; or the current performance management
systems which exist are encouraging high performers to stay and poor
performers to quit.
Avoidable and Unavoidable
Further differentiation should occur between organizationally
avoidable turnover and organizationally unavoidable turnover. For
example, organizations cannot control (that is, it is unavoidable) turnover
caused by an employees death, or by an employee’s quitting to follow a
relocating spouse. It is important to identify carefully those exits that are
avoidable and those that are unavoidable. After all, leavers whose
departures are unavoidable resemble stayers more than they resemble the
leavers whose departure is avoidable; they do not resign because they are
unhappy with their jobs or the organization.
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Despite the appeal, determining whether exits are avoidable or
unavoidable may prove difficult because employees may falsify reports of
their reasons for leaving, they may not wish to burn their bridges behind
them.
The cost of attrition is only calculated on the level of avoidable
turnover. There is no benefit in including the cost of unavoidable turnover
since a company has no control over these events and can therefore not
put in place action plans to minimize the negative consequences of staff
turnover.
Article -
‘Attrition at Call Canters’
The evolving BPO industry has got the perplexing issue of
managing human resources, says BHIMA RAO
Attrition of employees in the call centre industry is mind-boggling and it is
creating havoc for the industry and especially for the HR department. The
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attrition rate varies from minimum 30 per cent to a maximum 90 per cent
per annum. The software also saw this rate till the incident of September
11, 2001. I wonder why the attrition rate was not so high in any other new
industry like telecom, retail stores, banking etc. Who has to introspect, how
much responsibility should be borne and are we collectively contributing
directly or indirectly for the attrition.
Attrition is not a new problem and it has existed earlier and will continue to
exist in any industry. But there is a limit for every thing. The call center
industry is new and every one is in a great hurry to make some thing or do
some thing, become someone in the sun rise industry. The government,
promoters, management team, employees, consultants, media and so
many others play a major role in developing any new industry and extend
helping hand for stabilization and finally growth of the industry.
Our country is fortunate to be identified as one of the best places for BPO
and the beginning is really good. Now the growth of BPO industry is mainly
depending on the cost effectiveness and quality of the manpower. All other
factors are being taken care by the government through liberalized laws,
providing infrastructure like telecom and we are best in the IT. The cost
effectiveness will depend mainly on controlling the running cost and
quality is dependent on the manpower employed. Attrition of employees
increases the cost of recruitment and training. It has impact on
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maintaining the quality and competent manpower to meet the standards
set by international customers.
Four reasons why youngsters quit BPOs
What drives young people to quit call centres and data processing
units as fast as they join them? As industry attrition rates (how soon people
quit jobs) climb as high as 80 percent in some companies, human resource
executives in various BPO firms tried to pinpoint the reasons that make
young people between the ages of 22 and 26 shuffle jobs in months. They
were participating in a seminar on key HR issues for the BPO industry in
Bangalore today. This is what they came up with.
1. BPO not seen a long term career
"This industry is still not being accepted for a long term career," said
Mphasis BPO Services' hief human resources officer Manab Bose.
2. High aspirations that the industry cannot meet
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BPO employees have high aspirations. They want to see 'wealth' in this
lifetime and have low respect for authority. This is because most BPO
employees have immense family support.
3. Good talent is prone to poaching
ICICI OneSource President and CEO Raju Bhatnagar said the pulls of the
market (poaching by competitors) cannot be countered easily. BPO firms
try to pick the best talent, he explained, and good talent is prone to be
poached or to shifting jobs. He suggested that firms should instead look at
the average person, train and retain him/ her for the longer haul.
4. Employees face pressure at home and at work
Philips Software CEO Bob Hoekstra felt BPO employees are in a piquant
situation, having to handle pressure both from their customers and at
home.
"There is an enormous conflict in age group [in terms of the fact that]
youngsters are serving mature customers, and they are prone to make
mistakes," he said.
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CASE EXAMPLE
'I'll never work at a call centre again!'
Subhash Mukherjee | November 18, 2004
The BPO/ITES sector is only expected to grow larger, and more profitable,
over the next few years. Most young people are eager to jump on the
money-making BPO bandwagon.
But is working for a BPO all that it's made out to be?
No, says Subhash Mukherjee (name changed on request), who recently
quit his job at a call centre.
This, in his own words, is his story:
I am 20 years old. I was recently hired by a call centre in Kolkata to work
for an overseas-based company. I was earning Rs 7,500 per month.
57
My workday began with calls I had to answer for five hours continuously,
without a break. As soon as I was through with one call, the next one would
be waiting. There was no time for me to even say a few words to the
person sitting next to me. After five hours of constantly answering calls, I
would get a 20-minute break. Then, I would take calls again for another
three hours. Without a break. I would take around 350 calls a day.
One day, I reached breaking point. After taking 156 calls at a stretch, my
throat started to hurt terribly. I paused to take a breath and, in the
process, I missed a call. The calls that are directed to us were constantly
monitored by a machine. Immediately, it alerted my supervisor to the fact
that I had missed a call. My supervisor came and asked me why I was in
the 'wrap mode'.
What this means is that my dialer shows a red bar when the person on the
other end of the line hangs up without getting a response. The red bar is
an indication that I did not take the call -- that the call was not 'live'. At
that moment, I just wanted to pick up my bag and leave. Permanently.
Instead, I stayed calm for the duration of my hours at work.
I fielded all my calls till 1 am. But I had made up my mind -- I would quit this
job with its inhuman pressures and its lack of empathy for employees. Workplaces like this
have only one goal -- to make money. This job expects you to work even if you are feeling ill;
58
even if your throat hurts. You cannot take even a 10-second break; the dialer throws calls at
you continuously and you have to start pitching (taking them) immediately. If you do not
respond to the person at the other end of the line, s/he might hang up. That shows on your
machine. You have to ask for permission to go to the toilet. Often, your request is denied by
your supervisor.
You repeat the same five sentences 350 times a day. Isn't it pathetic?
When I started out, there was no pressure. Gradually, though, the stress
grew beyond the levels of human tolerance. Working at the call centre was
a great learning experience for me. Now, it was time for a break. When I
worked, I had no time to watch a film, no time to read a book, no time to
meet friends, no time to swim. For the last few months that I worked at the
call center, I had time only for two meals a day. As a result, I lost my
appetite. I would return home at 2.30 am and go to sleep at 4 am. I would
get up at noon and go back to work at 3.30 pm. Now that I have quit, I can
go out with my friends. I can spend time rediscovering myself. With the
approximately Rs 65 per hour that I made, I can buy a few books and have
some fun. Maybe that will take away the pain that came with this job. But,
believe me; the money could in no way make up for the pain!
I'll never work at a call centre again. Nothing is worth the ordeal I
went through.
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Subhash Mukherjee quit his job in mid-October. He is now
pursuing an Economics degree at the Kolkata State University.
Explained below are suggestions for the above story as well as for any other call center
organization.
WHY PEOPLE ARE LEAVING BPO’s?
In spite of the salaries and facilities being high (especially for a graduate who
starts his / her career with a BPO company) the average attrition rate is very high in this
industry There are numerous reasons for the attrition to be high which can be categorized into
two broad classifications. The first can be coined as
“Drive Attrition” which caused due to the employer; the second one can be termed as
“Drag Attrition” which caused due to the employee.
The reasons for Drive Attrition are due to employer’s policy / policies of
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terminating the employee at the end of the contract period for employment. Also the quality
policy of the BPO companies guides them to retain only the most productive employee and
hence makes them to terminate employee at regular intervals. A BPO company operates 24
hours a day and 365 days a year. The companies do not have a particular day as weekly off for
its employees. The employees are not even entitled for national holidays declared by
Government of India, as the company works with clients calendar. The call agents can avail
leave (which should not affect the schedule) only with prior consent, and any unauthorized
absence is a sufficient reason for terminating as employee.
Drag Attrition is basically due to the host of insecurities and vulnerabilities
associated with the taking up a career with a BPO company. The job of a call center agent (to
start off) can be compared to a telemarketing or a telephone operator. Hence the scope to take
up any other job (in case needed) or change of field is ruled out, as the experience gained in a
call center will not be an iota of importance. Many others quit, as the chance to climb up the
corporate ladder is bleak. Only a few very get promoted to the cadre of team leader and as
soon as promotions are announced the many of frustrated employees quit Further BPO
company work does not provide any scope for skill up gradation for the employee. The
employer trains the employee to speak good English and nothing else, which adds to the Drive
attrition rate. Also the nature of job in a typical BPO company is psychologically very
stressful. The working hours are artificially created which affect the natural rhythm of human
body. The symptoms of chronic fatigue, gastrointestinal problems, peptic ulcer, insomnia
and even depression are caused due to change of 24-hour biological rhythm of the body, hence
Drive attrition rate shoots up.
Listing out the reasons for non retaining of human capital include lack of growth
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opportunity for the employees, lack of time based promotion, poaching of employees by other
competitive BPOs for higher salaries, employees quitting to pursue higher education, loss of
employees personal life, employees physical stress and health reasons, uneasy relationship
with peers or managers.
Present Strategies Adopted To Retain Human Capital
Companies have different kinds of strategies adopted to tackle the problem of
retaining human capital. It ranges from cash incentives to career concern for the
employee. As only 5 out of 150 employees become team leaders in a year, companies like
Daksh services and Global Vantedge believe that cash incentives are a great way to get
employees to stay on. Companies like GE, Wipro Spectramind Offer management diplomas
and MBA courses to their employees, as most fresh graduates want to study further. Further,
they also give innovative incentives like
scholarships. If an employee leave in between, they he or she has to discontinue the course.
Exl Service.com and ICICI one source hires outstation candidates (Mainly Non-Metros)
and put them in shared company accommodation. Also as an incentive the company picks up
the utility bills. If the employee leaves he or she loses the apartment.
Also for leading call centers like 24/7 customer and MsourceE non metro talent currently
constitutes nearly 25-35 per cent of total hiring, and the main reason for this to happen is to
reduce attrition rate.
Many companies like HCL Tech BPO Services, GTL, Tracmail, and Vertex India use
various psychometric tests to get people who can work at night and can handle the monotony.
They also believe that giving career counseling and planning career paths to its employee help
to control attrition. Some of the BPO firms have adapted to the strategy of employing
62
housewives and retired school teachers. They believe that this would help in controlling
attrition, as they feel that the tendency and the potential of the employed to get shifted would
reduce drastically, where as some other BPO majors like Wipro’s Spectramind believes that
recruiting the undergraduates itself is a strategy to control attrition. Spectramind removed the
graduation prerequisite for their employees in order to keep human resource level from
waning Leaving alone the legal and mandatory benefits such as provident-fund and gratuity,
other strategies that are designed by the BPOs for providing benefits to the professionals
include;
Group Medi-claim Insurance Scheme; This insurance scheme is to provide adequate
insurance coverage of employees for expenses related to hospitalization due to illness, disease
or injury or pregnancy in case of female employees or spouse of male employees. All
employees and their dependent family members are eligible. Dependent family members
include spouse, non-earning parents and children above three months
Personal Accident Insurance Scheme; This scheme is to provide adequate insurance
coverage for Hospitalization expenses arising out of injuries sustained in an accident.
This covers total / partial disablement / death due to accident and due to accidents.
Subsidized Food and Transportation; BPOs provide transportation facility to all the
employees from home till office at subsidized rates or even at zero cost. Lunch is also
provided free of cost.
Company Leased Accommodation; Some of the companies provides shared
accommodation for all the out station employees, in fact some of the BPO companies also
undertakes to pay electricity/water bills as well as the Society charges for the shared
63
accommodation. The purpose is to provide to the employees to lead a more comfortable work
life balance.
Recreation, Cafeteria, ATM, gym and Concierge facilities; The recreation facilities include
pool tables, chess tables and coffee bars. BPOs Companies also have well equipped gyms,
personal trainers and showers at facilities.
Corporate Credit Card; The main purpose of the corporate credit card is enable the timely
and efficient payment of official expenses which the employees undertake for purposes such
as travel related expenses like Hotel bills, Air tickets etc
Cellular Phone / Laptop; Cellular phone / Laptop are provided to the employees on the basis
of business need.
Personal Health Care (Regular medical check-ups); Some of the BPO'S provides the
facility for extensive health check-up. For employees with above 40 years of age, the medical
check-up are given once in a year.
Loans; Many BPO companies provide loan facility on different occasions like, during the
times of medical emergency, at the time of their wedding, also new recruits are provided with
interest free loans to assist them in their initial settlement at the work location.
Educational Benefits; Many BPO companies have this policy to develop the personality and
knowledge level of their employees and hence reimburses the expenses incurred towards
tuition fees, examination fees, and purchase of books subject, for pursuing MBA, and/or other
management qualification at India's top most Business Schools.
Performance based incentives: In many BPO companies they have plans for, performance
based incentive scheme. The parameters for calculation are process performance i.e. speed,
64
accuracy and productivity of each process. The Pay for Performance is high as 22% of the
salary.
Regular Get together and other cultural programs: BPOs also organizes cultural
program as and when possible but most of the times, once in a quarter, in which all the
employees are given an opportunity to display their talents in dramatics, singing, acting,
dancing etc. Apart from that the organizations also conduct various sports programs such as
Cricket, football, etc and regularly play matches with the teams of other organizations and
colleges.
Wedding Day Gift; Employee is given wedding day gift voucher worth Rs. 2000/- to Rs.
7000/- based on their level in the organization.
Employee Referral Scheme; In several companies employee referral scheme is implemented
to encourage employees to refer friends and relatives for employment in the organization.
Employee Stock Option Plan; Some BPOs also give ESOP scheme to their employees to
make them more loyal to the company they work.
In spite of these benefits that are given through innovative strategies, people still leave BPOs
at a faster rate and retaining them has become a real challenge for the HR managers.
Now, the actual question, What types of retention strategies are required to solve this problem
and retain the Human capital, which is a crucial resource in the high growth IT-ITES industry
in India .
Strategies Suggested For Retaining Human Capital in BPOs
BPO service providers moving into value creation and value enhancement processes
of clients; The BPO service providers must look at value creation and value enhancement
65
in the process or activity that they do and this would be the one of the best strategy for the firm
to control attrition. Although a majority of players face high attrition rates there is a certain
class of players who have a much lower rate of attrition than the industry
average, and these operators operate in the niche segment in areas like research and analysis.
Office Tiger has set up its shop in India at Chennai. The attrition experienced by
Office Tiger, a US$20 million annual turn over company stands at 8%, much lower in
comparison to the rest of the BPO industry
The major reason being that, Office Tiger offers specialized services such as business research
for banking industry and analytics to its clients, where there is a lot of value addition
happening. Indian BPO’s can adopt this strategy, the main reason being that the Indian
software giants like Infosys, Wipro and Satyam have already proven their potential in the
world’s software market segment for the credibility and creative ability of Indian work force.
Hence Indian brain is acknowledged world over for the spectacular creativity and capability
for problem diagnosis & solving.
Hence if the Indian BPOs have a better edge over the other players in the world in moving
towards the value creation and value enhancement processes of its clients. This would mean
that BPOs have to go for specialized services segment or in other words move towards the
KPO (Knowledge Process Outsourcing) where the stress is laid on as business research
areas and this would for sure reduce the attrition rate drastically.
Changing perception of employees from life style to career; The perception of the
employee about the BPO has to change from being a life style to a career option. One
way of doing this is to re-construct the organization structure. The chances to climb the
corporate ladder should be made to look bright. In the present day the options that a BPO
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employee has in climbing up the corporate ladder is as shown in Figure1.1a.
Some modification done to this corporate ladder in increasing the number of levels,
can give a prospective picture to the path ahead for a call center agent, and also will
aid to change the perception from life style to career, which will control attrition to a
reasonable extent. The modified version is shown in figure below.
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Change the employable target audience and also in a way become socially
responsible; Neither age nor physical appearance is a hurdle for call center employment.
So the BPO firms should take in those who are physically handicapped, and hence in a
way become socially responsible. This could be the best adopted strategy for Indian BPO
companies, the reason being that two percent of Indian population are physically
challenged (www.indiastat.com), this would mean that two percent of One billion, which
is a real big number. Also there are many schools in India, who give formal education to
the physically challenged. So the Indian BPO’s can definitely look this as a viable
strategy for bringing down the rate of attrition. Also this strategy will make target
employees to be more committed and loyal to work, as they would look at this job as a
career and would not shift jobs very frequently. Another reason for not shifting jobs
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would be that any other job would not give them a salary comparable to BPO company
standards
Make employees feel that the company cares this can be done through effective
communication; proper communication is the first step toward creating pleasant
environment for the employees and also a way to show that the employer cares and they
just may stay. The employees should be well aware of what's happening with the
company. At any time, all of the employees should have a pretty good idea of how
business has been, and they should be aware of what issues the company is attempting to
address. The people should also be kept up to date with important events affecting the
company. The managers should listen to the employees when they have ideas for
improvement. They may have some ideas to improve productivity, and when they do
come up with one, let everybody know where it came from.
Clarity in expectations; employees should be very clear about the appraisal system,
companies expectations from employees/team-members, parameters to measure their
performance, consequences of failure in meeting the expectations, rewards awarded if
they exceed the expected level of expectation
Giving employees a choice of rewards; Rewards are as different as the people who
receive them and it doesn't make sense to give rewards that recipients don't find
rewarding. For example, some people prefer more pay, while others prefer more time off.
A promotion might be more rewarding to one person, while a job-sharing arrangement
might be more rewarding for another. Some people are excited about sports events, others
about movies. Some employees would love a dinner in a romantic restaurant, others a
book by their favorite author. Food, fun, education, improved work environment, gifts,
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travel, family-oriented activities - the options are endless. How can one know what will
be rewarding to employees? Best thing to do is to “Ask them”. Smart organizations are
also letting employees choose their own rewards from reward menus and catalogs.
Personalizing rewards shows that a company cares enough to discover what "interests"
each employee, rather than just distributing generic items.
Adding value; the key employees seek frequent opportunities to learn and grow in their
careers, knowledge and skill. With out which will feel they will get stagnated. A
careeroriented,
valued employee must experience growth in value for him/herself within the
organization.
QUESTIONNAIRE ON ATTRITION
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AIM: To find out the reasons for increasing rate of attrition in BPO industry, and suggestions
from the respective employees to be implemented which will help to reduce the attrition rate.
Employee Attrition Survey
1. Occupation: ________________________
2. Work environment: ________________________
(Excellent, Good, Satisfactory, Bad)
3. I feel I am a valued part of my office: ________________________
(Strongly agree, somewhat agree, neutral, somewhat disagree, strongly disagree.)
4. Promoting respect and fair treatment
among all staff is a high priority of this office: ________________________
(Strongly agree, somewhat agree, neutral, somewhat disagree, strongly disagree.)
5. Communication among staff in this office is effective: ________________________
(Strongly agree, somewhat agree, neutral, somewhat disagree, strongly disagree.)
6. I have a clear sense of the future direction of this office: ________________________
(Strongly agree, somewhat agree, neutral, somewhat disagree, strongly disagree.)
7. My office’s atmosphere is generally friendly: ________________________
(Strongly agree, somewhat agree, neutral, somewhat disagree, strongly disagree.)
8. Morale in this office is high: ________________________
(Strongly agree, somewhat agree, neutral, somewhat disagree, strongly disagree.)
9. There is a spirit of cooperation among staff in this office: ________________________
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(Strongly agree, somewhat agree, neutral, somewhat disagree, strongly disagree.)
10. This office has policies that are supportive of its staff: ________________________
(Strongly agree, somewhat agree, neutral, somewhat disagree, strongly disagree.)
11. My workload and expected completion times
are reasonable: _____________________________
(Strongly agree, somewhat agree, neutral, somewhat disagree, strongly disagree.)
12. I receive constructive feedback about the quality
of my work: ________________________
(Strongly agree, somewhat agree, neutral, somewhat disagree, strongly disagree.)
13. I feel encouraged by my office to pursue professional
development opportunities: ____________________________
(Strongly agree, somewhat agree, neutral, somewhat disagree, strongly disagree.)
14. This office reasonably accommodates personal needs: ____________________________
(Strongly agree, somewhat agree, neutral, somewhat disagree, strongly disagree.)
15. I feel heard when I communicate with others
in my office: ____________________________
(Strongly agree, somewhat agree, neutral, somewhat disagree, strongly disagree.)
16. I like my job: ____________________________
(Strongly agree, somewhat agree, neutral, somewhat disagree, strongly disagree.)
17. What is the extent of work pressure at your work place? ____________________________
1. Heavy pressure
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2. Moderate Pressure
3. Light Pressure
18. How long do you travel to work everyday? ____________________________
1. Up to 10 km
2. 11-19 km.
3. > 20 km.
4. Can’t say
19. Do you face any problem when to wish to take a break? ____________________________
1. Yes- Problem to break
2. No - Problem to take break
3. Refused
20. Do you work overtime?
If yes, then for how many hours? _______________________
1. 1-2 hrs.
2. >2hrs.
3. Refuse
21. Are you paid for the hours you work overtime?
________________________
1. Yes
2. No
22. Which is the break where you consume much time? ________________________
1.Tea/Coffee/Refreshment break
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2.Lunch Break
3.Break fast
4.Dinner
5.All other break reasons
6.Not specified
23. Is your work a reason for your health problems? ________________________
1. Yes.
2. No.
24. Do you have canteen at your work place? ________________________
If yes, then how is the quality of the food ?
1. Good
2. Average
3. Poor
4. Can’t say
25. I think often about seeking employment elsewhere: ____________________________
(Yes, No.)
26. Suggestions, if any.
CONCLUSION:
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The strategies suggested in the project are not exhaustive to retain the human capital of
BPOs. These are just the basics and if implemented in a proper way can give good results.
The organization has to maintain quality of service, which they attain by inculcating the right
philosophy and principles in our staff. Training programmes are thus very important. It is a
challenge to create passion for work in people and that applies for HR people too. Secondly,
they have to battle with attrition, which is highest in the BPO employees. Besides a good
salary, the company needs to give people fancy designations, career paths, and empower them,
which will lead to better productivity. They should also have a succession plan for at least the
top two levels. They have to attract the right talent, because there is a dearth of trained
personnel. The parameters of judging talent are different for various roles; soft skills have
assumed immense significance today. People are in a sensitive state of mind; a customer care
executive cannot afford to be rude with their customer. To curb the high attrition rate, the
success mantra for a BPO is not just offering a fat pay packet, but chalking out long-term
development and career growth for employees, along with giving them a sense of
empowerment. A company should always innovate, keep their employees busy with various
projects. So that the functioning of an organization is not plagued by somebody’s sudden exit,
it is important to keep a databank of apt substitutes ready. They should try to chat with the
employees trying to understand who is not happy and may leave the organisation. They should
try to address their problems and grievances and always keep the replacements ready. This
may encourage retention strategies , thus reducing attrition rate .
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