stemming the tide of attirtion

Stemming the Tide of Attrition in India: Keys to Increasing Retention

ExEcuTIvE OvERvIEw

leadersh ipi n s i g h t s

ExEcuTIvE SummARy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

InTROducTIOn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

KEy FIndInGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

REcOmmEndATIOnS FOR AcTIOn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

. Address Practices That Affect Employee Engagement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

. Implement Effective Performance management Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

. develop management Skills Through coaching. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

. create Structured career Paths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

. Provide development Opportunities for All Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

. consider culture differences. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

. nurture Employees Before the 3-5 year mark. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

. Highlight Organizational commitment to the community. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

cOncLuSIOn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

ABOuT THIS STudy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

cOnTRIBuTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

THE RIGHT mAnAGEmEnT STORy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

TABLE OF cOnTEnTS

about . th i s . r e port

this.report.is.an.executive-level.summary.of.a.

comprehensive.talent.management.and.hr.practices.study.

conducted.in.4th.Quarter.2007.by.right.Management.

and.Villanova.school.of.business ..it.is.based.on.the.

results.of.a.survey.of.4,811.individuals.from.28.indian.

companies.in.five.industries:.business.process.outsourcing,.

information.technology,.engineering.and.Manufacturing,.

pharmaceuticals,.and.banking.and.Financial.services .

if.you.are.interested.to.learn.more.about.the.study,.please.

contact.your.local.right.Management.office .

2

S T E m m I n G T H E T I d E O F AT T R I T I O n I n I n d I AExecutive Summary

© 2008 Right Management. All rights reserved.

3

This research examines factors affecting high employee turnover in India and steps HR professionals

can take to increase retention. As a leader of HR practices in your company, we trust the findings and

analysis contained in the following pages will provide valuable insights and help guide you in your talent

management practices.

Right Management conducted this study in Q4 2007. One of the first comprehensive investigations of talent

management in an emerging market context, it spans data gathered from more than 4,800 employees in 28

Indian companies in five broad industry groupings.

This research is part of a series of thought leadership initiatives that Right Management conducts to ensure

we maintain our industry leadership responsibilities and, as a trusted partner, inform you about relevant and

timely trends related to your area of expertise.

I would like to thank each of you who participated in this groundbreaking study. Your insights and

experiences are of tremendous value to your peers throughout the world. My colleagues and I look forward

to continuing to equip you with the essential resources and solutions you need to excel in your profession.

Douglas J. Matthews

President and Chief Operating Officer

Right Management

What is the biggest and most intractable hindrance to growth faced by companies doing business in India

today? For many organizations, the answer is employee retention. The reason: As more organizations have

expanded their operations, their need for talent has increased significantly. But there isn’t enough skilled

labor to fill the demand—and when employees feel dissatisfied with their current job, they often jump ship

to join another organization waiting to offer something a little better.

Even during turbulent market conditions, retention still remains an issue. While some organizations are

restructuring or reducing their workforce, they will need to take extra care to retain top talent, because high

performers tend to look for other opportunities in downturns. In fact, the best employees usually remain in

demand during difficult economic times. In addition, it’s especially vital that organizations keep their best

talent to maintain business continuity. The good news for companies is that the situation may also pose an

opportunity to woo top performers they might not otherwise be able to attract and retain.

The bottom line, however, is that the retention problem has the makings of a potentially disastrous

situation. High attrition levels can impair an organization’s ability to build relationships with clients and to

run its operations efficiently. What’s more, multinationals may experience the ultimate irony: due to the high

cost of hiring and retraining, they may not be able to reap the cost savings that led them to India in the

first place.

While companies have started to identify ways to address the problem, they face many challenges. With

that in mind, Right Management and Villanova School of Business launched a major study in 4th Quarter

2007. One of the first comprehensive explorations of talent management in an emerging market context,

its goal was to determine variables leading to greater retention in India, surveying thousands of employees

from over two dozen companies across a variety of industries, including IT, business process outsourcing,

pharmaceuticals, and manufacturing. In the process, researchers pinpointed a number of key human

resource (HR) practices affecting retention and employee engagement.

A wORd FROm THE PRESIdEnT ExEcuTIvE SummARy

Sandre mincipit amcon henim

dolorper si bla

4



5

Among other findings, the study uncovered a significant gap in basic management skills. For example,

respondents expressed dissatisfaction with their manager’s ability to provide support and constructive

criticism and to lead their teams effectively.

It also pinpointed employee engagement as critical to retention and highlighted four key HR practices—

performance management, professional development, manager support, and an organizational

commitment to a larger social purpose—as playing a particularly critical role in forging strong feelings

of engagement.

Employees who felt their companies offered clear prospects for immediate growth were more likely to

indicate a willingness to remain at their current employer. There was a strong relationship between retention

and a positive assessment of a company’s performance management systems. Surprisingly, compensation

was not as strong a predictor of intent to stay in an organization as popular wisdom might suggest.

For HR practitioners, these findings have clear implications for how to tackle the problem of attrition

in India. Specifically, organizations need to: (1) address HR practices that most directly affect employee

engagement; (2) develop management

and supervisory skills through training and

coaching; (3) create systems to support

career success that are appropriate to

the local culture; and (4) demonstrate an

organizational commitment to a larger

social purpose.

Most important is the matter of

management development. Only by

developing managers who are able

to provide effective career guidance,

constructive feedback, developmental

experiences, and appropriate growth

opportunities can companies

decrease attrition.

HR professionals in multinational

companies may need to take a somewhat

different approach from those in local

organizations. While common factors affecting recruitment and retention exist in both Indian and Western

cultures, there may be more subtle variations that need to be reflected in HR practices.

The message is clear: While employee attrition is a growing challenge for organizations in India employers

are not powerless. Indeed, there are many actions managers and their companies can take to retain talent—

and maintain a competitive edge in the marketplace.

Most industries and organizations in India today face a common formidable challenge: double-digit rates

of attrition among employees. Running at an average of 15% to 20% annually, turnover is as high as 50%

to 100% per year in some sectors. The reason has to do with a recent explosion of business growth. As

an increasing number of multinational companies have stepped up their presence, and local firms have

expanded their operations, the need for talent—and the opportunities for employees—have skyrocketed. At

the same time, there are not enough skilled, educated workers to fill the demand. Indeed, as many as 25%

of recent engineering graduates may still lack the interpersonal and language skills needed for employment.

Even when undergoing restructuring or reductions in workforce, organizations will need to continue

addressing the issue of retention. Your company may be particularly vulnerable to attrition during times of

change and should continue to engage and develop high performers to ensure they feel valued. In fact, top

performers remain in demand in all economic conditions, and it’s especially vital that companies keep their

best talent to maintain business continuity and service quality when managing an organizational change.

For those companies that want to increase the strength of their talent pool, this can also be an opportunity

to woo top performers they might not otherwise be able to attract and retain.

But for organizations trying to do business in India, low retention rates can have dire consequences—

ranging from poor customer service to slower than planned growth. In fact, high attrition can impair a

company’s ability to reap the rewards that attracted them to India in the first place.

The implications may be particularly severe for a handful of industries. In IT, for example, it is important

for clients to develop close relationships with employees working on projects. Frequent turnover means

continually building new relationships with replacements, thereby slowing down projects and harming both

efficiency and client trust. In manufacturing, high attrition results in the expensive and time-consuming

exercise of training recent hires about new technologies. In business process outsourcing, low retention

often eats into the very cost savings that initially led companies to enter the market.

Addressing this challenge—developing ways to attract, develop and retain employees—is of vital strategic

importance to the growing number of multinational companies doing business in India, as well as local

businesses. But, at the front line of these efforts is a company’s talent management process—in particular,

a handful of critical HR practices that have a profound impact on employees’ pride in and satisfaction with

their organization, and, in turn, on their intention to stay with an organization. (See Figure 1)

InTROducTIOn

Cum iusto odoloreet ametum nos accum in ullut aliquis alissectem

6



7

graphic 1 Drivers of Retention

Social Responsibility

Manager Support

Professional Development Practices

Performance Management Practices

Intention to Leave

Pride in Organization

Satisfaction with Organization

HR PracticesEmployee Attitudes and Beliefs

Retention

Years of Service, Age, Gender, Position, Education

Our findings suggest that HR professionals need to take a tailored approach with a keen eye for nuances

and points of differentiation. The practices that may work in traditional Western countries may need to be

tailored to fit cultural expectations and behaviors that are unique to India. Indeed, while common factors

affecting recruitment and retention exist in both Indian and Western cultures, there are several subtle

differences that will need to be reflected in HR practices.

Certainly, companies in India have started to take steps to address the problem. The primary focus thus

far has been on compensation—for example, awarding bonuses based on tenure. In addition, drawing

from best practices used in multinational companies, organizations have tried a wide range of innovative

methods, from giving employees the opportunity to travel to different locations, to creating management

development centers and introducing coaching. They are

also focusing on the first crucial 30 days of employment,

so that quick action can be taken to address potential

issues during the on-boarding process.

Much more needs to be done. To analyze the factors

leading to greater retention in India, as well as to

understand how best to address those issues and how

solutions might differ from practices used in developed

economies, Right Management embarked on this ambitious

study—one of the first comprehensive explorations of

talent management in an emerging market context. We

included more than 4,800 employees from 28 companies

in 32 separate operating entities across a variety of

industries, including IT, business process outsourcing,

pharmaceuticals and manufacturing. In the process,

researchers were able to pinpoint key factors leading to

higher retention and employee engagement. In addition,

management experts at Right Management have studied

the results to identify steps that organizations can take to

reduce attrition.

San eum ex exer secte conse delenim nos num dolenim inisim

8



9

The study uncovered a number of important factors that can lead to higher retention, as measured by

intent to stay for two or more years in an organization, as well as other critical issues to consider. The

absence of these retention factors, of course, tends to accelerate turnover. The data also revealed that

many organizations fall short when it comes to delivering on these areas.

these.key.findings.include:

there.is.a.gap.in.management.skills . The study found that the employee’s manager plays a vital role in

the desire to remain at a company. Our results revealed a significant deficit in the skills exhibited by these

supervisors. Indeed, responses indicated that people are being put into management positions before they

are ready for the job. As a result, they may not be adequately prepared for their duties. For example, many

respondents expressed a lack of satisfaction with their manager’s ability to engage with their team. Only

47% of respondents agreed that their immediate supervisor was able to provide support and develop his or

her team effectively.

employee.engagement.is.the.most.important.

variable.contributing.to.higher.retention . We defined

engagement according to a four-factor model, including

satisfaction on the job, commitment to the job and

organization, pride and advocacy. And our findings

showed that lack of engagement was by far the strongest

single factor leading to intent to leave an organization.

The lesson is clear: The more engaged an employee, the

likelier he or she will stay. Interestingly, employees who

were in the “Meet expectations” category of performance reported higher levels of engagement than those

in the “Exceeds expectations” category. The implication is that top performers have higher expectations for

their organizations, and organizations will need to work harder to retain them.

Specifically, our findings pinpointed a significant relationship between four important HR practices—

performance management, professional development, manager support, and an organizational

commitment to a larger social purpose—and a resulting feeling of pride and satisfaction with the

organization. Those two sentiments, in turn, are related to a stronger intention to stay, indicative of a higher

level of employee engagement. For example, of employees who were in the top third of those who rated

their company’s performance management practices highly, 56.1% had strong pride in the organization,

65.9% had strong satisfaction with the organization, and only 23.5% indicated a strong intention to

leave. On the other hand, of the bottom

third, only 17.3% had strong pride in the

organization, 11.1% strong satisfaction,

and 48.8% expressed a strong intention

to leave. Similar responses were made to

assessments of professional development

practices, manager support, and corporate

social responsibility. (See Table 1)

Response Placed

Person in Top 3rd

or Bottom 3rd of All

Respondents

Strong

Pride in the

Organization

Strong

Satisfaction

with the

Organization

Strong

Intention to

Leave

Performance

Management

Practices

Top 3rd 56.1% 65.9% 23.5%

Bottom 3rd 17.3% 11.1% 48.8%

Professional

Development

Practices

Top 3rd 52.0% 61.0% 18.7%

Bottom 3rd 16.8% 11.0% 52.3%

Manager Support Top 3rd 55.5% 63.0% 21.0%

Bottom 3rd 21.0% 15.3% 50.3%

Social

Responsibility

Top 3rd 65.8% 62.9% 20.6%

Bottom 3rd 10.4% 10.5% 47.6%

Pride in the

Organization

Top 3rd — — 19.7%

Bottom 3rd — — 47.5%

Satisfaction with

the Organization

Top 3rd — — 12.0%

Bottom 3rd — — 55.1%

TaBLE 1 The Effects of

Organizational HR Practices on Employee Pride, Satisfaction, and

Intention to Leave

note: All results were statistically significant at the p < .001 level. n = 4,809. Responses in the bottom 3rd represent survey responses of

disagreement to a statement plus neutrality and slight agreement. The middle 3rd reflects responses of somewhat agree. The top 3rd

reflects strong agreement.

KEy FIndInGS

Top performers – those identified as “exceeds expectations” have higher expectations for their organizations than those identified as “meets expectations.”

A gap in management skills led many respondents to express a lack of satisfaction with their manager’s ability to engage with their team.

Loreet ullutpat. Obor sed min vel iusto euissi estions enismol umsandre

1 0



1 1

By considering employee perceptions as a useful index of actual company practices, we were able to

categorize the 28 companies into one of four clusters. Again, a positive rating of most or all of the factors

led to higher engagement. For example, in cluster #1, employees rated all four factors but one highly, had

high pride and satisfaction with their organization, and low intention to leave. On the other hand, in cluster

#4, employees gave three out of four factors a low assessment, reported low pride and satisfaction, and a

high intention to leave. (See Table 2)

Company

Information

Organizational

Practice Ratings

Employee

Affect

Intention

to Leave

Cluster 1

1 BPO, 1 BFSI,

1 IT, 2 Pharma

N = 884

Avg. Performance Management

High Professional Development

High Manager Support

Avg. Social Responsibility

High Pride

High SatisfactionLow

Cluster 2

4 MFG, 2 BPO,

1 Pharma

N = 1291

High Performance Management


Avg. Manager Support

High Social Responsibility

High Pride

High SatisfactionAverage

Cluster 3

1 BFSI, 1MFG,

1 BPO

N = 260

Avg. Performance Management



Avg. Social Responsibility

Average Pride

Average SatisfactionAverage

Cluster 4

2 MFG, 3 BPO,

8 IT

N = 1621

Low Performance Management

Low Professional Development


Low Social Responsibility

Low Pride

Low SatisfactionHigh

note: All reported results reflect a significant multiple R’s (p < .001) and significant semi-partial correlations (p < .002, two-tailed)

comparing each company to the average of all companies. Industry classification labels are Business Process Outsourcing (BPO),

Information Technology (IT), Engineering and manufacturing (mFG), Pharmaceuticals (Pharma), and Banking and Financial Services (BFSI).

TaBLE 2 Company

Differences on Workplace

Study Variables

employees.who.see.opportunities.for.growth.stay.for.longer.periods.of.time ..Employees who felt

their employers offered clear prospects for immediate on-the-job growth were more likely to indicate a

willingness to remain at their current company. Those opportunities included strong talent management

practices for all employees, not just those chosen as high potentials. For example, of those respondents

who did not like the professional development practices at their companies, 52.3% indicated intent to leave

within 12 months vs. 18.7% in organizations that strongly supported those practices.

effective.performance.management.systems.are.key.to.employee.retention . There was a strong

relationship between intent to stay and employees’ perception that their employers used performance

management systems as a tool for reward and recognition. Almost 50% of employees who did not support

or slightly supported the quality of their organization’s performance management system indicated an

intention to leave, compared to 23.5% who strongly supported the system. Most companies, however,

seemed to fall short in the area of providing performance management systems, as a minority agreed or

strongly agreed that their organization’s performance management practices reward and

recognize performance.

Compensation.is.less.important.than.some.other.factors . Compensation was rated considerably lower

than other factors in rank order as a predictor of intent to stay and employee engagement. Indeed, while

the common perception is that pay is the key element in attracting and retaining talent in India, as well as

other emerging countries, our results showed a more complex array of factors played a significant role.

Most notably, they included the value of intrinsic rewards – the employees’ sense of progress, competence,

influence/choice and opportunity to do meaningful work. Compensation was not the most significant factor

in either retention or engagement, a phenomenon that held true across all industries. Among respondents

who indicated an intent to stay, only 30% were “very satisfied” with their compensation.

there.is.the.most.danger.of.attrition.at.the.six.month.and.three-.to.five-year.marks . Respondents who

had been with their organizations for three to five

years indicated the most significant tendency to be

dissatisfied with performance management systems

and opportunities for development. That’s potentially a

highly expensive trend for employers. Indeed, there is a

learning curve of six months to several years for most

professionals, during which the organization generally

invests more in employees than they are able to give back. Only after that time period will a company

experience a return on its attraction and development costs. As a result, if employees leave at the critical

three- to five-year mark, employers will be less likely to make a return on their labor investment and, in fact,

must spend even more money to recruit and bring new hires up to speed. (See Figure 2)

Compensation was not the most significant factor in either retention or engagement.

1 2



1 3

graphic 2 Value and Cost

Curves for Human Capital

Compensation and Training/ Development Costs

Plateaued

Value Curve

Investment

A

6 Monthsup to 3 Years

C is competitive $ offer

(C-E) may be as little as a 10% $ increase or valued PERK

E

C

$

D

3 to 5 years

B

Between 15 and 40 Years

Time

Return on Investment

Our findings have implications for the HR practices needed to increase employee retention. Most

important is the issue of management development. Only by developing managers who are able to guide

their employees, providing constructive feedback, developmental assignments, and appropriate growth

opportunities can companies decrease attrition. To be effective, organizations must define what qualities

and skills they need in their workforce and focus their resources on the most valuable segments of the

employee population.

We.recommend.that.organizations.take.the.following.steps:

address.practices.that.affect.employee.engagement ..The more engaged employees are, the more likely

it is they will stay with the organization. And in India, creating a more-engaged workforce requires focusing

on four key HR practices—performance management, professional development, manager-employee

relationships, and the organization’s commitment to socially responsible policies.

Improving these practices will require a comprehensive effort—providing training that shows managers how

to provide feedback, lead teams, and communicate effectively with employees, as well as implementing

organization-wide systems for employee development, review, and assessment. While many of the

recommendations that follow elaborate more fully on these challenges, one effective approach worth

noting here was recently used by Right Management, working with Philips Innovation Campus in Bangalore.

After an employee survey indicated that its managers needed to improve their own engagement with

their teams around their leadership and coaching skills. Philips Innovation Campus partnered with Right

Management to create an accelerated learning event to create impact with managers. Right Management

designed a exclusive learning event for about 120 people managers using Open Space methodology. The

program christened “PeopleSym” had speakers from varied fields including a tennis coach to draw parallels

from the sports field to the corporate world. This program was followed up with a focused program on

career management These follow-up workshops for managers covered such topics as nurturing employee

development and growth, mastering new listening skills, and learning how to encourage team-member

participation. The accelerated learning event and follow-up sessions helped in (1) increasing managers’

awareness to their own impact on employee engagement and (2) provided them with skills to manage

employee expectations in a competitive labor market.

implement.effective.performance.Management.systems . These systems should be designed to drive

accountability throughout the company, based on the organization’s overall vision and mission. In general,

that should start at the top, by having senior management define how each senior team member will move

the organization forward. Then, those objectives and goals should be cascaded throughout the business,

ensuring that everyone is working toward the same end.

At the same time, multinationals need to be sensitive to the local culture when setting up their performance

management systems or face a doomed effort. In India, particular attention needs to be paid to managers’

ability to give feedback. The reason: Many managers are resistant to provide criticism, fearing their

employees will leave for what they perceive to be greener pastures. Companies need to provide their

managers with coaching in how to provide feedback that is direct, constructive, and supportive of

individual development. They can also use a more inclusive process, with a joint setting of goals, ensuring

that employees feel ownership of the process, as well as more frequent informal reviews.

REcOmmEndATIOnS FOR AcTIOn

1 4



1 5

As part of the development process, organizations

also need to include employee assessments. The right

techniques can ensure that companies hire the right

people for the right jobs and that there is a critical

alignment between employee skills and behaviors, and

the organization’s strategy, culture and values. They will

also help to pinpoint those people with the potential to

move into management roles.

For example, partnering with the Ingersoll Rand Engineering Center, part of Ingersoll Rand, Right

Management worked with technical employees who were in the early stages of their career, to identify

individuals with the potential to become business and technical leaders. As part of the process, Right

Management worked with IREC to create a 360º degree online tool, manage the assessment and feedback

process, and provide consultative advice on mentoring and coaching. By doing so, they were able to find

the best candidates as early as possible to jumpstart the development process. In addition, employees were

assigned mentors, drawn from the ranks of global leadership, to provide support in implementing individual

development plans. This combination of leadership assessment and mentoring was recognized as one of

the top five global best practices at the company’s global forum on Talent Management and Employee

Engagement in Chicago, USA in May 2008.

develop.Management.skills.through.Coaching . A key to improving retention lies in making sure

managers have the skills needed to motivate, guide, and assess their employees. The most effective tool

for achieving success is to provide coaching and to do so at each level. For employees who recently have

been put in management positions, there is a special problem: Due to the urgent need for managerial level

personnel, employees in India are often promoted to supervisory roles before they’re ready to assume such

responsibilities. In these cases, organizations need to focus on accelerating the ability to manage others

using coaching that covers a wide range of issues and competencies, including mentoring, managing

expectations, conducting performance reviews, reaching team objectives, and providing

effective feedback.

But, organizations also need to support more-experienced managers with coaching. Consider an effort

conducted in 2005 by Right Management for Infosys Technologies Limited, an IT company headquartered

in Bangalore, India. With revenues in excess of $4 billion and more than 100,000 employees, Infosys is one

of India’s largest IT companies. To help managers learn how to engage more effectively with their teams

and develop such skills as giving constructive feedback and career coaching, Right Management developed

“Performance Engagement Skills,” a coaching program for 108 selected leaders from across the Infosys

Development Centres. The 12 workshops included role-playing exercises, a development matrix based

on the Infosys competency model, and an interactive electronic refresher course with key concepts for

use after the program was over. These 108 managers were tasked with cascading the skills to over 1,000

managers throughout the organization for integration into their respective Development Centres.

As Nandita Gurjar. Group HR Head for Infosys, explains, “Performance coaching is a key capability required

in our senior managers to strengthen the high performance work ethic. Tools such as ‘appreciate inquiry’

and ‘coaching’ help sustain employee engagement throughout the year rather than a one-time intervention.

This helps us to focus more on the ‘how’ of getting results rather than just the results themselves.”

Rit? Cae, til videre muroximus, P. Cas consunum, strarbist in vis, perevis ines host? Iliu si int, ut esena, Cuppliena,

Create.structured.Career.paths . It is essential that organizations identify clear opportunities for personal

development and growth that go beyond the Western path, which typically involves climbing a career

ladder and mastering a set of skills before climbing to the next rung. Instead, Indian companies should

consider providing a less linear progression by giving employees opportunities to move laterally, do project-

based work, and/or take on additional responsibilities. This is a useful way of engaging employees while

providing development, but without promoting them to jobs for which they are not yet ready.

The bottom line: Organizations need to know their talent—understanding the skills required in various roles

throughout the organization and the status of talent currently employed. Without that knowledge, it is

impossible to foster an employee’s sense of career success.

Companies also need to understand the role of the manager in an individual’s career progression. This

is especially true for multinationals which may be accustomed to a more Western approach. In Western

cultures the expectation often is that the individual employee is accountable and responsible for his or her

career progression. The leader generally acts as mentor and advisor. In India, the manager is expected and

needed to play a more hands-on role in development, coaching and mentoring.

provide.development.opportunities.For.all.employees . Although it is important to create opportunities

for different segments of the employee population, our results show that companies need to demonstrate

they are interested in the development of all employees. That includes those employees who perform in

the “meets expectations” category, the vast bulk of the workforce who keeps the organization going. Best

practices include providing stretch assignments, as well as implementing a development center through

which coaches can provide feedback and identify areas of strength.

Consider.Cultural.differences ..Multinationals entering India and local companies may face different

considerations. While, on the whole, organizations in India address similar challenges, there are subtle

differences between Indian and non-Indian firms. For instance, people assuming leadership roles who

are relocating to the country may lack the necessary knowledge of key cultural norms. They may not

understand that their role in an employee’s career progression must be more “hands on” than in Western

cultures or consider opportunities for a less-linear path. They may also not realize the vital importance of

coaching managers—who may be afraid to alienate direct reports by being too critical—in how to listen and

provide empathetic feedback and constructive criticism.

Multinationals may have to pay particular attention both to selecting and hiring people who are likely to

stay longer, as well as to practices that will help retain employees after they’ve joined. HR professionals in

multinationals who assume that they will increase retention simply by offering more money to employees

will be sorely disappointed.

nurture.employees.before.the.3.to.5-Year.Mark . These are highly valuable individuals whose tenure means

they have a unique understanding of the organization’s culture. Many of the same practices discussed

above need to be tailored to employees’ cumulative experiences with the organization. Motivation and

organizational awareness are especially important. Employees with three-to-five years of tenure typically

have a more developed understanding of how the organization really operates and a clearer sense of

their motivations for taking on different tasks. This knowledge needs to be defined and incorporated into

developmental plans to have maximum meaning for employees and effectiveness for the organization.

Provide managers with coaching in how to give direct, constructive and supportive developmental feedback.

1 6



1 7

highlight.organizational.Commitment.to.the.Community . Commitment to the community is highly valued

by many employees in India. Organizations should consider board level appointments or assigning senior

managers to oversee such activities. They can also provide opportunities for employees to participate in

initiatives and special interest groups around such issues as hunger and poverty, and create forums and

communities on company web sites for individuals involved in these efforts to share information. Such

activities should also be highlighted in annual reports.

Consider Tata Steel, a global firm that is part of the Tata

Group. Partnering with Right Management, Tata Steel

created a leadership competency framework, to help

identify high-potential managers to deploy in the company’s

development centers. Understanding the importance

employees placed on the organization’s commitment

to corporate social responsibility, they included such

competencies as “Shows sensitivity and genuine concern

for the eco system” in the mix. As a result, they were able to assess the potential of managers around these

dimensions and pinpoint those who could be groomed for more-responsible roles. One outcome: Tata Steel

ranked highest of companies in the study on having a larger purpose.

The issue of employee attrition in India is challenging and has far-reaching economic implications if

organizations do not have the skilled talent they need to operate effectively. Whether they are growing,

restructuring, or reducing their workforce, companies still need a strong talent pool to help meet their

business objectives. But the problem is not insurmountable. Our findings show that, with the right HR

practices in place, there is a great deal organizations can do to improve the retention and engagement of

their employees in India. That means offering top-notch development opportunities, fostering a sense of

career success via intrinsic rewards, and institutionalizing effective performance management systems, as

well as providing coaching to managers.

Other steps can also be taken. For example, there is the matter of education. Many engineering students

graduate still needing further development and experience to make an immediate contribution in the

workplace. Companies have an opportunity to partner with Indian universities to improve the quality of

education, thereby increasing the pool of available entry-level talent. Already, the National Association of

Software and Services Companies (NASSCOM) has developed a standardized assessment of employability

for engineering and computer science graduates. The association has also presented to the Ministry of

Human Resources Development a proposal to start 20 new Indian Institutes of Information Technology over a

five-year period.

Organizations will not succeed unless they

tailor whatever they do to the unique cultural

characteristics of India, a message especially

important to multinationals. Applying Western-

style management practices to the problem of

retention may result in exacerbating the situation.

By implementing a clear-cut program to address

attrition levels, and doing so with sensitivity to the

larger culture, companies can reduce turnover.

There is no quick fix to the retention crisis. To the contrary, addressing these challenges requires that

companies make significant investments in employee development—and adopt a long-term view. Ultimately,

those organizations willing to go the extra mile will find the rewards to be substantial.

cOncLuSIOn

In India, managers must play a hands-on role in the development, coaching and mentoring of employees.

Multinational organizations will not succeed unless they tailor their HR processes to the unique cultural differences in India.

Ci blandreros erat vel ipisseq uisiscillan erat.

Non venim

1 8



1 9

This report presents key findings and insights of a rigorous study of talent management and HR practices,

employee satisfaction, and retention in India conducted in Q4 2007 by Right and faculty at the Villanova

School of Business. The project involved a comprehensive survey of 4,811 employees of 28 Indian

companies in five broad industry groupings: Business Process Outsourcing (BPO), Information Technology

(IT), Engineering and Manufacturing (MFG), Pharmaceuticals (Pharma), and Banking and Financial Services

(BFSI). The companies included both Indian subsidiaries of foreign firms and indigenous firms.

Each company identified a sponsor who, in collaboration with Right Management, oversaw the study.

A random sample of employees was identified by the sponsor who then invited them to participate in

the research. The size of each company’s random sample was determined by the sponsor with the goal

of obtaining at least 40 responses for every ‘cell’ they might want to examine (e.g., different functions,

age groups, gender, or geographic unit). Employees were directed to the survey by an email from

LearningBridge.com, a web-based survey design firm.

tony.bhattacharjee . At Right Management Mr. Bhattacharjee has been involved in a variety of projects,

including organizational structure design for a multinational software company and a leadership

development workshop design for a global logistics company. He received his Bachelor of Engineering in

automobile engineering from Shivani University and Post Graduate Degree in Personnel Management from

the International School of Business & Media, Pune.

Jonathan.doh,.ph .d . Dr. Doh is the Rammrath Chair in International Business, founding Director of the

Center for Global Leadership, and Associate Professor of Management at the Villanova School of Business.

He teaches, does research, and serves as an executive instructor and consultant in the areas of international

strategy and corporate responsibility. Dr. Doh is author or co-author of more than 60 referred articles and

chapters and co-author or editor of five books, including Multinationals and Development (Yale University

Press. 2009), and International Management: Culture, Strategy and Behavior (McGraw-Hill/Irwin, 7th edition,

2009), the best-selling international management text. He has been a consultant or executive instructor to

ABB, ADP, Anglo American plc, China Minsheng Bank, Deutsche Bank, the Government of Thailand, HSBC,

Medtronic, SCG Group, Shanghai Municipal Government, and Deloitte Touche, where he served as senior

advisor to the Global Energy Resource Group. He received his Ph.D. from George Washington University in

strategic and international management.

Michael.haid . Mr. Haid is Senior Vice President, Global Leader for the Attract & Assess Center of Excellence

for Right Management. Mr. Haid directs a team focused on the area of individual, team and organizational

assessment. Combining his consulting expertise with his prior global leadership experience, Mr. Haid ensures

that service quality, along with sound delivery methodology, form a solid foundation for every client’s

Attract & Assess engagement. He earned an M.B.A. in Finance and Marketing, Beta Gamma Sigma, from

Duquesne University, a B.A. in Sociology from Colorado State University, and a degree in Applied Business

Programming from the School of Computer Technology.

J ..Karthikeyan ..Mr. Karthikeyan is Vice President Consulting Services and Practice Leader for the Engage and

Align for Right Management in India. He has more than 16 years of experience in consulting and operational

HR, with a focus on restructuring, organizational transformation, and leadership and organizational

assessment. At Right Management, Mr. Karthikeyan’s consulting experience has focused primarily on

automotive, IT and business process outsourcing, and utilities and logistics industries. He has a Bachelor of

Technology from National Dairy Research Institute and Masters in Personnel Management from Tata Institute

of Social

Sciences, Mumbai.

priyanka.Malhotra . Ms. Malhotra is a Project Leader and a Product Manager for the Engage and Align

Practice for Right Management in India. As Project Leader, she has led engagements in such areas as

leadership development, talent management, and change management. She received a B.A. from University

of Delhi and a Masters in Psychology with a specialization in Organizational Behavior from the University of

Delhi.

sampurna.sonowal ..At Right Management, Ms. Sonowal has worked in Career Transition Services for

outplacement candidates, as well as the design and audit of HR processes. She received her Masters Degree

in Psychology (specialization in Organizational Behavior) from North Campus, Delhi University, India.

ABOuT THIS STudy cOnTRIBuTORS

2 0



2 1

stephen.a ..stumpf,.ph .d . Dr. Stumpf is professor of management at Villanova School of Business and he

holds the Fred J. Springer Chair in Business Leadership. Dr. Stumpf has served as interim dean of VSB

and as its Management Department Chair. Before joining VSB, Dr. Stumpf was chief learning officer of

professional development at Booz|Allen|Hamilton where he worked with clients in the creation of corporate

universities, and designed and delivered leadership programs for the firm’s client staff, principals, and

partners. Prior to this, he was dean at The University of Tampa, a Fulbright Scholar in Brazil, and professor

at the Leonard N. Stern School of Business at New York University. He received the David L. Bradford

National Award for outstanding teaching from the Organizational Behavior Teaching Society and the S.

Rains Wallace Award from the American Psychological Association for his research. He has served as

adjunct professor in the Graduate School of Business Administration-Zurich, Switzerland, EMBA program.

Dr. Stumpf is often a speaker and facilitator on the topics of leadership and relationship building. Dr.

Stumpf has authored and/or edited 10 books, 15 in-basket simulations, and 136 journal articles including

The Ultimate Consultant: Building Long Term, Exceptional Value Client Relationships, Career Development

International, 21st-Century Leadership: Redefining Management Education, Strategy & Business, 1999;

Learning Theory in the Practice of Management Development, Quorum Books. Dr. Stumpf earned a B.S.

degree in chemical engineering from Rensselaer Polytechnic Institute, an M.B.A. from the University of

Rochester, and a M. Phil. and Ph.D. in organizational behavior and industrial psychology from New York

University.

Walter.g ..tymon,.Jr ..ph .d . Dr. Tymon is an Associate Professor of Management and a past Chair of

the Management Department in the Villanova School of Business. He has published numerous articles

and chapters on motivation, engagement, careers, and strategic management. His work has appeared

in such publications as the Academy of Management Review, Research in Organizational Change and

Development, Career Development International, Journal of Business Communication, and the Journal of

Executive Education. His employee development publications have been used throughout the United States

and internationally, and have been translated into a number of languages. Among his professional activities,

he currently teaches strategic management in the Villanova School of Business Executive MBA program. He

received his Ph.D. in Business Administration from Temple University.

2 2


THE RIGHT mAnAGEmEnT STORy

Right Management is the leading global provider of integrated consulting services and solutions across the

employment lifecycle. We help our clients maximize the return on investment in their people, while assisting

individuals to achieve their full potential.

The world of work is constantly changing; our services and solutions address the organizational and

people issues that result from this change. During events such as mergers and acquisitions, restructuring,

leadership changes, deregulation, new technology introductions, or new strategy implementations, Right

Management helps you understand what is happening to your organization; assists in designing customized

solutions; and helps prepare individuals to embrace their personal, business and organizational future.

Our success in customizing appropriate solutions to our clients comes from our ability to draw on the

expertise of our people, as well as proven processes, methodologies and tools from any or all areas of the

employment lifecycle.

For over 25 years, business people around the world have chosen to work with Right Management because

of our expertise, flexibility, global access and local knowledge, combined with a credible professional

relationship based on trust and responsiveness. We dedicate ourselves to helping our clients “manage the

human side of change” in ways that produce powerful, positive and lasting results.

www.right.com

stemming the tide of attirtion

Documents