Attrition in Indian BPO Industry

Attrition in Indian BPO Industry

EXECUTIVE SUMMARY

Managing attrition is not a very easy task to do in the BPO industry. It is the route to their survival.

Turnover is of considerable concern for managers because it disrupts

normal operations and necessitates the costly selection and training

of replacements, the costly hiring and training the new employee to

regain the lost customer and supplier contacts. The employee

retention is obviously one of the most important challenges in

organization and avoids unwanted turnover. Staff attrition represents

significant costs to most organizations. It is odd, therefore, that many

organizations neither measure such costs nor have targets or plans

to reduce them.

Employee turnover or resign could disrupt normal operation

necessities the costly selection and training of replacement. Reducing

employee turnover required the management efforts of the

companies

The main objectives of the study are to understand the reasons leading to attrition, to identify the major problems faced by employees in the organization which lead to attrition. To understand the problems faced by the organization due to attrition and finally suggest ways and means to check attrition.

In this study, I have made an endeavor to highlight attrition issue

faced by BPO industry. We try to find out the various reasons for this

problem, and have proposed some ways in which this issue can be

addressed.


INTRODUCTION

Defining attrition: "A reduction in the number of employees through retirement, resignation or death" Defining Attrition rate: "the rate of shrinkage in size or number" Introduction: In the best of worlds, employees would love their jobs, like their coworkers, work hard for their employers, get paid well for their work, have ample chances for advancement, and flexible schedules so they could attend to personal or family needs when necessary. And never leave.

But then there's the real world. And in the real world, employees, do leave, either because they want more money, hate the working conditions, hate their coworkers, want a change, or because their spouse gets a 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?

Attrition issues in Indian BPOs are not salary oriented anymore, but due to

perceived lack of long-term career growth in the sector, according to international

risk management and business intelligence firm Hill and Associates.

However, BPOs are not prioritizing enough on solving perceptions on work and

career growth-related issues in BPO. Hiring practices in the sector are wrong and

there is a huge expectation and qualification mismatch. The aspirations of

employees are not managed well.

A good number of employees leave the sector because they feel that their long-

term career growth prospects are better in some other sector. Currently, average

attrition rate in the Indian BPO industry is over 30%.

The rapid growth of the sector left no space and time for players to take care of

³career issues´ of employees. This industry will take at least three years to settle

its issues. But the coming years are crucial because if the growth is not well

managed, the whole system will be hurt badly.

Initially, the BPO sector had focused on taking maximum advantage of lower

costs here and later the focus shifted to quality improvement. Currently, the

industry, which is expected to be major employment creator in the country, is

trying to contain its manpower issues


OBJECTIVES

To understand the reasons for high attrition rate. To identify the major problems faced by employees in the

organization which lead to attrition. To understand the problems faced by the organization due to

attrition. To suggest ways and means to check attrition.

METHODOLOGY

Source: Collecting primary data from employees from the nearby companies and use secondary data to the measures their effectiveness and guidelines of these industries under which they operate their daily activities.

1) I have designed the questionnaire and have taken the data by two

methods:

a) Direct Survey - Market Survey.

b) Online Survey.

2) I have taken a sample size of 100.

3) I have collected data’s from different BPOs of India.


DATA ANALYSIS

For simple calculation, I have assigned values for every scale respectively. Just like in the questionnaire I have 6 scales of measurement with their weightage as follows:

1) Strongly agree (6) 2) Somewhat Agree (5)

3) Strongly disagree (4) 4) Somewhat Disagree (3)

5) Neutral (2) 6) don’t know (1)

Then we count the total vote in each dimension and multiplied with the scale value. E.g. Let say for question no.1, we have following responses Strongly agree = 51 Somewhat agree = 32Strongly disagree = 3 Somewhat disagree = 6 Neutral = 4 Don’t know = 4

Hence, value of this dimension is:(51*6)+ (32*5) + (3*4) + (6*3) + (4*2) + (4*1) = 508Similarly, we plot graph of all the questions 1 - 10 according to their dimensions:

508

432

383402 403

515 512 498533

467

0

100

200

300

400

500

600

1 2 3 4 5 6 7 8 9 10

Series1

Series2


Now coming on to each question individually we have the following interpretations to be made:

Question1. Employee turnover/resign is a major concern for your organization.

0

10

20

30

40

50

60

51 32 4 3 6 4

StronglyAgree

SomeWhatAgree

Neutral StronglyDisagree

Disagree Don’tKnow

Series1

Series2

Series3

Interpretation: Most of the respondents strongly agrees (51%) to the fact that employee turnover is a major concern for their organization as it brings down the morale and confidence of the whole team.

Question2. High percentage of females in the work force adds to the high attrition rate.

0

5

10

15

20

25

30

35

40

25 37 13 12 5 8

StronglyAgree

SomeWhatAgree



Series1

Series2

Series3

Interpretation: Respondents believe that high percentage of females in the work force results in high attrition rate. This is because they feel that female employees could not adjust themselves to the timings of the job, leave their job soon after they get married or get any good job with good salary package.


Question-3-Some attrition is always desirable and necessary for organizational growth and development.

0

5

10

15

20

25

30

35

21 28 33 5 9 4

StronglyAgree

SomeWhat



Series2

Series1

Series3

Interpretation: 28% of the respondents feel that some attrition is always desirable and necessary for organizational growth and development because some of the employees are there in organization those are less productive and hence become liability for the organization. So by removing them organization won’t be in problem rather they would be benefited as they need not to spend any more on them.

Question-4- B PO firms should provide career growth and higher educational opportunities for employees as measure of retaining them.

05

101520

2530

3540

34 23 23 2 4 11

StronglyAgree

SomeWhat



Series2

Series1

Series3

Interpretation: 34% of the respondents strongly feel that BPO firms should provide career growth and higher educational opportunities for their employees as a measure of retaining them.

This would be a reason for the employee to stay at the organization as it gives them the scope.


Question-5-An employee gets sufficient promotional opportunities to enhance his position.

0

5

10

15

20

25

30

35

27 31 24 2 7 9

StronglyAgree

SomeWhat



Series2

Series1

Series3

Interpretation: Most of the employees at think that they get sufficient promotional opportunities to enhance their position at the work place. This in turn motivates them to work more and prove their talent to the higher authorities.

Question-6-The work schedule is exploitative.

0

10

20

30

40

50

60

49 37 5 3 4 2

StronglyAgree

SomeWhat



Series2

Series1

Series3

Interpretation: 49% of the respondents strongly agreed to the fact that the work schedule that they are into are very much exploitative which make them feel harassed and hence force them to quit the job.


Question-7-As job becomes repetitive; the employees find less challenge in it and hence seek for some other job.

0

10

20

30

40

50

60

52 35 10 0 1 2

StronglyAgree

SomeWhat

NeutralStronglyDisagree

DisagreeDon’tKnow

Series1

Series2

Series3

Interpretation: 52% of the respondents feel that the employees leave the job and seek for other one after finding less challenge in the BPO jobs which is of more repetitive kind.

Question-8-The families of BPO employees are not fully supportive for this industry.

05

101520253035404550

36 47 7 5 4 1

StronglyAgree

SomeWhat

NeutralStronglyDisagree

DisagreeDon’tKnow

Series1

Series2

Series3

Interpretation: According to the respondents, families of BPO employees are not supportive of the fact that they work in BPO industry with late night shifts. They also feel that there is little respect and recognition present in their job as they have to listen abuses from different customers at work every day and have very less scope of innovation.


Question-9-Training of employees lead to increase in attrition.

63

22

2 4

8 1

Strongly Agree 63 Some What Agree 22 Neutral 2

Strongly Disagree 4 Disagree 8 Don’t Know 1

Interpretation: This is in fact true and I have already discussed earlier that training of employees lead to increase in attrition. Moreover 63% of respondents also agreed to this point. The reason that they gave is after completion of training process, employee gain some knowledge and become eligible for some other higher post and hence quit the organization.

Question-10-Bad selection leads to attrition.

28

39

718

5 3

Strongly Agree 28 Some What Agree 39 Neutral 7

Strongly Disagree 18 Disagree 5 Don’t Know 3

Interpretation: According to 39% of respondents, poor selection of candidates leads to high attrition because if you don’t select the right candidate for the given job then surely there would be a mismatch and he\she would finally leave the job. At the time of recruitment, the HR professionals should be very particular in choosing the right candidate.


Question-11-What do you think, the reasons for an employee leaving the organization?

When asked about the reasons for an employee leaving an organization, the respondents ranked the parameters as per the following according to their preference:

No flexible work schedules Stress from overwork and work-life imbalance

Lack of good working condition

The mismatch between job and person

Monetary Factors

Organization is more concerned towards business

The job or work place was not accepted

Very few supporting colleagues

Loss of trust and confidence in senior leaders

Too little coaching and feedback

Interpretation: By going through this rating we can learn that employees leave BPO sector for no flexible work schedules in the organization. Maximum of them also quit their job for stress from overwork and lack of good working condition. Some of them also feel mismatch between the job as they find no challenges in it.

Question12.What would be the major concerns for an organization after the employee quits.

When asked to rate on the factors on which the organization are most concerned when an employee quits, maximum respondents ranked the parameters as per the following according to their preference:

Cost of training the employee Time spent in orientation

Replacing qualified employees

Loss of productivity

Cost of overtime or temporary help

Recruiting costs & interviewing costs


Interpretation: According to respondent’s organization are more concerned about the cost and time that they have put in the employee on training. Then they would be more worried about replacing them with the right candidate which would prove asset to the organization.

SUGGESTIONS

Few suggestions that could help in retaining employees are as follows:-

Starting from the recruitment process: it is better not to recruit those people who will be the most difficult to retain.

Attention to these aspects could be taken care of at the recruitment stage itself.

An employee would work tirelessly for the company if he is being made aware that he is an important part of the team.

Cooperate with competitors. Forum clubs and associations. Offer performance feedback and praise god efforts and results. Listen to employee ideas; never ridicule them. Awarding employees with recognition if an employee has done

something valuable. Nurture and celebrate organization tradition like Diwali, Holi and

Christmas etc. Keeping in touch with the employees and help them when in

need. Don’t wait till the last moment. Conducting in and out (exit) interviews properly and in

scheduled way.


CONCLUSION

As they say, happiness can be contagious. So make sure the work

place is a happy one, which every employee would love to spend

time. Human resources department along with senior management

must take steps to make sure of this.

Effective human resource management must be practiced at both

strategic and day-to-day levels. HR management practices must

reflect company policy as to how it will manage and relate to its

employees. The HR strategy should evolve from a transactional

support role to partnering in the organizations business strategy. HR

must take steps to be aware of employee problems and try to solve

them, creatively.

Employee attrition is a very big problem not only in India but outside

India too. Attrition rate is increasing day by day and it’s especially the

software industry which is affected the most. Why an Employee

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

Companies even hire Private HR professionals to study the

company's work and find out why an employee is dissatisfied.

HR department does the recruiting of new employees and then send

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

and become better professionals. Each and every company faces

employee turnover problem whether big or small. An employee

leaves his present job for another job to get better pay package and

good working conditions. Every Company calculates Employee


attrition rate and takes measures to reduce it. The facts and figures

are not made public as it may tarnish the image of the company in

front of its own employees and its loyal customers.

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

1. Higher Pay Package in another company

2. Good working Conditions

3. Opportunities for growth in new company

4. Change of Place problem

5. A better Boss in new company

6. Brand Image of the new company.

Employee attrition costs a lot to the company. There are various costs which are borne by the company at the start when the employee is under training period. Costs such as-

1. Conveyance Cost 2. Cost of lodging of the new employee 3. Trainers cost 4. Cost of venue where training will be conducted 5. Materials to be supplied during training process A company has a training period of 3 to 6 months. During this time an employee is not fruitful for the company. If an employee leaves the company when he starts working, company suffers a big loss in terms of money as well as workforce. Every company takes measures to hold the talented workforce by means of perks, Increments, Bonus and extra facilities. No one wants to lose good brains to their competitors.


Now the question is how to reduce employee attrition. What should a company do to hold on the talent?

There are various companies like TATA's and Reliance who do a lot to reduce attrition rate. Flexible working conditions have been given to employees who have problem working 10AM - 5PM. Private hospitals for employees where they can get their regular health check up done without spending much money. Free overseas tour once in a year when a target is achieved. Few Companies are getting more and more work savvy and just want to get their work done by hook or by crook. The mentality needs to be changed. Target for completion of a work should be there but that should not hamper an employee’s personal life. Companies should conduct various seminars on how to balance personal and professional life. An employee can be productive if and only if his personal life is balanced. Make employees a part of your work culture family and see the difference. Attrition rate cannot become completely obsolete but it can surely be minimized.


APPENDIX

Questionnaire

Dear Respondent,

I, Ravi David Ullah student of marketing studying in St Xavier’s

College am conducting a survey on ‘ATTRITION IN THE BPO

INDUSTRY´. I assure you that the details will be kept confidential and

used for academics purpose only. Thank you in advance for sparing

your valuable time and corporation in this endeavor.

Please tick the one which is applicable for you:

1. Employee turnover/resign is a major concern for your organization.

strongly agree Somewhat Disagree Somewhat Agree Strongly Disagree

Neutral don’t know

2. High percentage of females in the workforce adds to the high attrition rate. Strongly agree Somewhat Disagree Somewhat Agree Strongly Disagree Neutral don’t know

3. Some attrition is always desirable and necessary for organizational growth and development.

strongly agree Somewhat Disagree Somewhat Agree Strongly Disagree Neutral don’t know

4. BPO firms should provide career growth and higher educational opportunities for employees as measure of retaining them.


5. An employee gets sufficient promotional opportunities to enhance his position.

strongly agree Somewhat Disagree

Somewhat Agree Strongly Disagree Neutral don’t know

6. The work schedule is exploitative.

strongly agree Somewhat Disagree Somewhat Agree Strongly Disagree Neutral don’t know 7. As job becomes repetitive, the employees find less challenge in it and hence seek for some other job.

strongly agree Somewhat Disagree Somewhat Agree Strongly Disagree Neutral Don’t know

8. The families of BPO employees are not fully supportive for this industry.


9. Training of employees leads to increase in attrition. Strongly agree

strongly agree

Somewhat Disagree Somewhat Agree Strongly Disagree Neutral Don’t know

10. Bad selection leads to attrition.

Strongly agree Somewhat Disagree Somewhat Agree Strongly Disagree Neutral don’t know

11. What do you think, the reasons for an employee leaving the organization? (Rate the following from 1 to 10; 1 being the top most priority and 10 being the least)

a) Monetary factors ….b) Lack of good working condition ….c) No flexible work schedules ….d) Very few supportive colleagues ….e) Organization is more concern towards business ….f) The job or workplace was not expected ….g) The mismatch between job and person ….h) Too little coaching and feedback ….i) Stress from overwork and work-life imbalance ….j) Loss of trust and confidence in senior leaders ….

12. What would be the major concerns for an organization after the employee quits.

(Rate the following from 1 to 8; 1 being the top most priority and 8 being the least)

a) Loss of productivity ….b) Replacing qualified employees ….c) Cost of overtime or temporary help ….

d) Recruiting & Interviewing costs ….e) Time spent in orientation ….f) Cost of training the employee ….

PERSONAL INFORMATION: Name: ___________________________________________________ Age: ___________________________________________________ Sex: ___________________________________________________ Ph no: ___________________________________________________ Thank You

Attrition in Indian BPO Industry

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