REPORT

REASONS AND
WAYS TO
CONTROL
ATTRITION

1
 Submitted by:

Anisha Aggarwal
Anubha agarwal
Kanika Arora
Pallavi Singh
Sujata
Swarna Sharma
Group 7, section E

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 ACKNOWLEDGEMENT

We would like to thank Mrs. Netra Ray HR executive at HCL Pvt.Ltd. (BPO) sector 16,
Noida for providing us with information about the reasons for attrition and the steps that
are being followed by them and for bearing with our endless questions.

We are grateful to Professor J.R Sharma for his support and guidance and for giving us an
opportunity to work on this report.

We also thank our librarian for providing us with necessary material.

At last we would like to thank our family and friends for their encouragement, motivation
and support.

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 CONTENTS

S.NO PARTICULARS
PAGE NO

1). Objective and purpose

4

2). Executive summary

5

3). Introduction
6

3.1) meaning of attrition

7
3.2) BPO industry in India
10
3.3) pharmaceutical industry in India
11

4). Cost of attrition 13

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5). Factors 15

6). Ways to control attrition

18

7). Initiatives taken by other companies.

24

8). Interpretation and analysis

26

9). Conclusion 28

10). Recommendations
29

11). Bibliography
32

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 OBJECTIVE

To find out the rate of attrition and what are the reasons for the same
and how to cope up with it.

PURPOSE

The purpose of the report is to understand the reasons of attrition in

BPO and pharmaceutical industry and what measures can be taken up
by the organization to bring the rate of attrition up to 25%. And to see
as what the other companies are doing in order to tackle this universal
phenomenon.
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 EXECUTIVE SUMMARY

In the current scenario of high economic growth and rapid

globalization, the fight for talent is becoming increasingly intense.
Talent or human resource is a major asset for any company. Company
Invest high amount of money for their recruitment, selection & training
and what happens to company if these Talents or Employees leave the
organization in short while seeking new opportunities. Plagued by
erratic attrition trends and cutthroat global competition, organizations
are now realizing the need to understand the supply-demand equation
better in order to garner strong mechanisms to attract and retain top
talent.

Employee retention is critical to the long-term health and success of

any organization; however it is becoming increasingly difficult for
companies across the globe to attract, motivate and retain key talent.
Attrition rates are still on the rise and as the war for talent becomes
more intense each year it is becoming increasingly important for
companies to ensure they have the right people in place to guide
future business success.

Overall attrition rates are continuing to rise in Asia. The aggregate rate
across all markets reached 18 percent in 2007, marking a two percent
increase on 2006. Meanwhile budgeted attrition, which remained lower
than actual attrition, rose slightly from 10 to 11 percent year on year.

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At 39 percent, overall employee turnover was highest at the
professional /supervisor/ technical level. Unsurprisingly, attrition was
lowest among senior/top management at just 0.5 percent. The Banking
and Finance sector saw the greatest employee turnover at 25 percent,
while the lowest turnover was recorded in the manufacturing industry
at 11 percent.

The facts revealed that external inequity of compensation was the

main reason for employees leaving their organization; however other
causes include limited growth opportunities and role stagnation.

Retention also remains a key challenge in BPO and pharmaceutical

industry. More than half of the employees in this sector have a
retention bonus plan or are in discussions to create one. The top three
retention measures suggested are: pay above the market; provide the
opportunity to learn new skills; and encourage a favorable work/life
balance. An overwhelming majority of companies said they house an
exit-interview policy to learn more about why employees are leaving.

Introduction

In an environment of rapid growth, globalization and expansion, the

pressure to attract and retain outstanding employees has become a
scary reality for most organizations. The new-age economies, with their
attendant paradigm shifts in human capital management, have placed
a heavy demand on today’s organizations and Attrition is emerging as
a key business concern for organizations. It is turning into a bigger
issue than attracting talent. The annual attrition rate is 20-30 per cent
(reduction in the number of employees through retirement, resignation
or death) across industries in India. It is as high as 44 per cent in BFSI

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(banking, financial services and insurance) vertical and 35 per cent in
BPO (business process outsourcing). Attracting and retaining key talent
has become one of the key drivers of overall business performance in
organizations and companies have been utilizing a diverse range of
methods to draw in new hires and ensure they stay as Attrition is an
expensive phenomenon, potentially impacting the bottom line of
businesses.
The cost of attrition is not just the loss of that employee but it includes
an array of hidden costs such as recruitment costs, selection costs,
training costs, cost of covering during the period and opportunity
costs.
The organizational costs associated with the turnover in terms of
hiring, training and productivity loss costs can add up to more than five
per cent of an organization’s operating costs.
As far as India is concerned, attrition is a serious trend, especially in
today’s knowledge-driven marketplace where people are the most
important assets. While organizations cope with attrition by devising
compelling retention strategies, it is imperative for organizations to
predict attrition early in the recruitment process to curtail loss of time,
cost and effort.

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BACKGROUND
First of all we need to know what attrition exactly is. Attrition is the
rate of shrinkage in the size or a gradual, natural reduction in
membership or personnel, as through retirement, resignation,
or death. It is Normal and uncontrollable reduction of a work force
because of retirement, death, sickness, and relocation. It is one
method of reducing the size of a work force without management
taking any overt actions. The drawback to reduction by attrition is that
reductions are often unpredictable and can leave gaps in an
organization.
The formula for calculating attrition rate is;-

Attrition Rate% =

Total no of resignation per month

(Whether voluntary or compulsory) x
100
Total no of employee in the beginning of the month + total
No of new joinees ₋ total no of resignation.

Attrition causes huge loss to the company, not only in terms of

manpower but also in monetary terms. The cost of attrition would be
explained in details later in this report. Moreover, this report will also
cover the reasons why the employees leave a company. Attrition is a
universal phenomenon and no industry is devoid of it, but the degree

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fluctuates from industry to industry and at different levels. Attrition by
Employee Group

According to the study, the overall employee turnover rate was highest
at the professional/supervisor/technical staff level, recording total and
voluntary attrition at a very high 39 percent and 33 percent
respectively. (See Figure 1)

The professional/supervisor/technical group constitutes a high

percentage of the total employee base in all organizations and high
attrition at this level impacts the business adversely. At 0.5 percent,
attrition was lowest at the senior/top management level. Employees at
this level tend to be nearing the end of their careers, which means
they are more averse to risk and more likely to move to opportunities
that are substantially better. Hence attrition is considerably low at this
level.

1)Employee attrition by group

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We have examined two important sectors in which the attrition rate is
high i.e. BPO/IT industry and pharmaceutical industry, and we have
focused basically at middle level of employees where the rate is
highest. Lastly, this report will explain what can be done to control the
attrition in both these sectors. And what are the measures that are
taken up by other companies.
2).

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13
BPO Industry in India
It is said that the Indian BPO Industry has come of age. This is very
true if we analyze both the past and present scenarios. Defying all the
permutations and combinations, the Indian outsourcing industry has
registered a massive growth over the years. India has remained one of
the most favorite offshore destinations for BPO/ITES activities. One of
the most prominent reasons for the same is cheap labor. Over the past
five years, the Indian BPO/ITES has been growing at a rate of about 50-
60%. As per NASSCOM, the Indian BPO/ITES registered a growth rate of
46% and clocked revenue of UD$ 3.6 billion in 2003-04 up from UD$
2.5 billion in 2002-03.This industry has contributed a great deal to the
export revenues of the country and is expected to do that in future too.

This industry is expected to generate one million jobs by 2009. HR

management is one of the most critical areas in this industry, so
important that it can be referred to as HR-enabled services rather than
IT-enabled services. The reason for the same is that this industry is
facing a very high rate of attrition of around 30-40%. Though this rate
is not very high as compared to US which faces an attrition rate of
around 70% though, our next main competitor in this area, China, is
facing the attrition rate as low as 12-15%. The consequence of the
same is that this results in higher costs to the company and so the
companies may lose its main competitive edge which is lower costs.
Later on, we have explained why the cost of attrition is so high. This
means that there is a very high need to control the attrition rate in the
industry.

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Pharmaceutical industry in India
The Indian Pharmaceutical Industry today is in the front rank of
India’s science-based industries with wide ranging capabilities in the
complex field of drug manufacture and technology. A highly organized
sector, the Indian Pharma Industry is estimated to be worth $ 4.5
billion, growing at about 8 to 9 percent annually. It ranks very high in
the third world, in terms of technology, quality and range of medicines
manufactured. From simple headache pills to sophisticated antibiotics
and complex cardiac compounds, almost every type of medicine is now
made indigenously.
According to the Economic Survey (2006-07), the pharmaceuticals
industry had achieved a turnover of about US$ 12 billion in 2005-06,
and is expected to grow by 13% in 2007. Its pharma export value
reached about US$ 4.7 billion during 2005-06.Pharmaceutical
industry accounts for about 2.91% of total FDI into the country. The
FDI in pharmaceutical sector is estimated to have touched US$ 172
million, thereby showing a compounded annual growth rate of about
62.6%. Drugs and pharmaceuticals sector is at 8th rank in India's
top 10 FDI attracting sectors. According to the Economic Survey for
the year 2006-07, the value of pharma output has increased ten
times over the last 15 years.

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 From Rs. 50 billion in 1990 it has grown to Rs.550 billion (US$ 12
billion) in 2005-06. Driven by growing number of pharmaceutical
units, increased knowledge skills, improved quality and increasing
national as well as international demand, India is now recognized as a
leading global pharma player.

WHY BOTH THE SECTORS ARE GROWING AT A

FAST PACE
a) Competent workforce: India has a pool of personnel with
high managerial and technical competence as also skilled
workforce. It has an educated work force and English is
commonly used. Professional services are easily available.
b) Cost-effective chemical synthesis: Its track record of
development, particularly in the area of improved cost-
beneficial chemical synthesis for various drug molecules is
excellent. It provides a wide variety of bulk drugs and
exports sophisticated bulk drugs.
c) Legal & Financial Framework: India has a 58 year old
democracy and hence has a solid legal framework and

1
Facts and figures taken from www.pharmainfo.net.
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 strong financial markets. There is already an established
international industry and business community.
d) Information & Technology: It has a good network of
world-class educational institutions and established
strengths in Information Technology.
e) Globalization: The country is committed to a free market
economy and globalization. Above all, it has a 70 million
middle class market, which is continuously growing.
f) Consolidation: For the first time in many years, the
international pharmaceutical and outsourcing industry is
finding great opportunities in India. The process of
consolidation, which has become a generalized
phenomenon in the world pharmaceutical industry, has
started taking place in India.

COST OF ATTRITION
There are a number of costs which are incurred by a BPO when they
hire any new employee. These costs can be in terms of monetary or
can be in terms of time wasted or any other intangible things. Some of
these costs can be as stated below: -
Costs Due to a Person Leaving

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I. Recruitment Costs

1. The cost of advertisements; agency costs; employee referral

costs; internet posting costs.
2. The cost of the internal recruiter's time to understand the
position requirements, develop and implement a sourcing
strategy, review candidates backgrounds, prepare for interviews,
conduct interviews, prepare candidate assessments, conduct
reference checks, make the employment offer and notify
unsuccessful candidates. This can range from a minimum of 30
hours to over 100 hours per position.
3. Calculate the cost of the various candidate pre-employment tests
to help assess candidates' skills, abilities, aptitude, attitude,
values and behaviors.
II. Training Costs
1. The cost of orientation in terms of the new person's salary and
the cost of the person who conducts the orientation. Also include
the cost of orientation materials.
2. The cost of departmental training as the actual development and
delivery cost plus the cost of the salary of the new employee.
Note that the cost will be significantly higher for some positions
such as sales representatives and call center agents who require
4 - 6 weeks or more of classroom training.
3. The cost of the person(s) who conduct the training.
4. The cost of various training materials needed including company
or product manuals, computer or other technology equipment
used in the delivery of training.

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III. Lost Productivity Costs

As the new employee is learning the new job, the company

policies and practices, etc. they are not fully productive. Use the
following guidelines to calculate the cost of this lost productivity:
1. Upon completion of whatever training is provided, the employee
is contributing at a 25% productivity level for the first 2 - 4
weeks. The cost therefore is 75% of the new employee’s full
salary during that time period.
2. During weeks 5 - 12, the employee is contributing at a 50%
productivity level. The cost is therefore 50% of full salary during
that time period.
3. During weeks 13 - 20, the employee is contributing at a 75%
productivity level. The cost is therefore 25% of full salary during
that time period.
4. Calculate the cost of mistakes the new employee makes during
this elongated indoctrination period.
IV.New Hire Costs
1. The cost of bring the new person on board including the cost to
put the person on the payroll, establish computer and security
passwords and identification cards, telephone hookups, cost of
establishing email accounts, or leasing other equipment such as
cell phones, automobiles.
2. The cost of a manager's time spent developing trust and building
confidence in the new employee's work.
V. Lost Sales Costs

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 1. Calculate the revenue per employee by dividing total company
revenue by the average number of employees in a given year.
Whether an employee contributes directly or indirectly to the
generation of revenue, their purpose is to provide some defined
set of responsibilities that are necessary to the generation of
revenue. Calculate the lost revenue by multiplying the number of
weeks the position is vacant by the average weekly revenue per
employee.
Thus we can say that if a person leaves a job company has to suffer
losses as it involves many costs.

FACTORS
The main factors of attrition in both sectors are as follows:
1) External inequity of compensation

External inequity arises when an employee realizes that some other

employee from a different organization puts in much less efforts than
he does, but receives a much higher compensation than him. This
could cause an employee to feel that maybe he is not getting
compensated fairly and can cause him to quit the job

2) Work Timings
The work timings in BPO are very odd. This affects the family life of the
employee. Moreover, the male to female ratio in BPO is quiet low. The
number of females in BPO can be as large as 35%. This means that
working hour problem is quiet acute in their case especially after they
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get married, as after marriage comes social and family pressure to
adjust work timings and take care of families.
3) Career Growth
Only 2 out of 10 employees on an average go on to be at the senior
level. This means that other employees look forward to change their
job at other places where they can get better opportunities to
progress. Also, another problem arises with the mis-match of
expectations and qualifications of the employees. Along with that,
some employees see no career growth in this sector, so they move on
to other companies in search of changing the sector.
4) Higher Education
This is a problem as most of the employees in this sector are pretty
young and aspiring. They join the firm because of lucrative salary. But
with time, they try to move on to other sectors or top management
and one of the ways to do this is higher education

5) Role stagnation

Attrition rate is higher at knowledge level (middle level) in which the

employee has to do the same work again and again, which makes his
work monotonous and due to lack of responsibility and authority his
growth is restricted to a particular role, so they move to other

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companies where they can play different roles and handle
responsibility.

6) Work life imbalance

The scientific approach towards management and organization

resulted in a rigid structural hierarchy, exhaustive specialization of
jobs, deployment of unskilled employees and an unfavorable work
environment. This led to high employee turnover, decline in
productivity, absenteeism.

7) Lack of recognition

When an employee feels that he is not getting due recognition for his
achievement, a feeling of demotivation creeps into him, and this can
cause him to consider leaving the organization. Employees have an
expectation that when they work well, they will get some recognition
from their managers in the form of a personal appreciation or an award
etc.

8) Under-utilization of skills

Proper utilization of skills has a tremendous impact on the satisfaction

of employees. If a work is given to an employee it must be supported
by adequate powers and responsibilities which enable them to move

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up the career ladder and when their skills and potential is being
overlooked they end up with leaving the job.

9) Performance assessment

An employee may feel disappointed by the performance appraisal

report and feel that he has not been appraised in an unbiased manner.
It may happen that he feels that the appraisal process itself is flawed
and the appraisers are biased. This can cause the employee to put in
his papers and leave the organization.

10)Internal inequity of compensation

Internal inequity occurs when the employee feels that the amount of
efforts he puts in to do his job are much more than what rewards he
gets in return for them. This can cause him to feel de-motivated and
nurture feelings of dissatisfaction and eventually resign from his post.

11)Business instability

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Many a times, when the organization faces some kind of instability or
uncertainty with regards to operations, an employee might quit his job
before he is asked to leave. Many a times when employees get a whim
that the organization is going to down-size or is going to be taken over
by another company, they tend to feel safer quitting the job than
worrying about whether the organization will retain them.

WAYS TO CONTROL ATTRITION

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 In an environment of rapid growth, globalization and expansion,
the pressure to attract and retain outstanding employees has become
a scary reality for most organizations. The new-age economies, with
their attendant paradigm shifts in human capital management, have
placed a heavy demand on today’s organizations. Keeping in mind that
overall turnover levels in Asia are high (this includes those who are not
only moving jobs but also shifting careers), attracting and retaining
employees becomes one of the more strategic plans an organization
can develop.
The Road Ahead
The road ahead for the BPO and pharmaceutical firms is very important
because if they are not able to control the attrition rate they will lose
their competitive edge in the global market. For these certain,
strategies and certain improvements are needed to be made in the
processes followed in order to bring down the rate of attrition to 25%
i. Providing Something Extra
It’s always about providing something extra to your employees. Good
salary is something which is a standard in the industry. So what needs
to be done is to give some perks to the employees. They need to be
given perks like rewards for their good performances. Owing to the odd
working hours, the employees have very tattered personal lives. So
perks like foreign tours or company sponsored vacations are always a
welcome gift.

ii. Honoring Performers

Performance based incentives is a must in the BPO companies as these
are generally the employees who gets picked up by the placement
hunters most often. These employees are also among the most
aspiring ones in the company so there is a need to give them ample
opportunity to rise and progress in the organization.
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 iii.Building Relationship
Relationship is something which lasts over time. So, if a company
needs to hold on to its employees, it needs to build a strong bonding
with the employees. As we will see in the case of Office-Tiger discussed
below, there is a need to instill pride in the employees. They need to
be shown that the work done by them is important. Also, work needs to
be shown in the form of challenge to the employee rather than just a
monotonous routine work. Provide employee with ESOPs, which would
give them a feeling that they are working for themselves and that they
are an inseparable part of the company.
iv. HR Practices
HR is the most critical department in any BPO. While conducting the
recruitment, it is in the hands of HR to bring the right kind of people.
HR needs to identify the employees who would stick with the company
and not get the employees solely based on the qualifications and
communication skills. Moreover, more diversity in the kind of employee
hired needs to be brought so there is a diversified culture within the
company. Companies need to look to hire from non metro cities as the
employees from these cities are more likely to stay with the company
than those from metros. Also, they need to keep an eye on good
performing employees and have a career plan in mind. Not only this,
they need to discuss it with these employees on a regular basis and
take feedback from them. They also need to give their employees
personal space to grow and adjust with social life. Moreover, in case of
employees leaving a good exit-feedback system should be in place so
as to cover the reason for which the employees leave.
v. Consider feed back
It is important to take feedback from employees through different
means and work with the HR department to iron out differences.
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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. Exit
interviews help management learn the reasons why employees leave
the company; based on their revelations, the organization can address
the problems of existing employees, thereby curb attrition.
vi.Quality of work life
The success of any organization depends on how it attracts recruits,
motivates, and retains its workforce. Organizations need to be more
flexible so that they develop their talented workforce and gain their
commitment. Thus, organizations are required to retain employees by
addressing their work life issues.

The elements that are relevant to an individual’s quality of work life

include the task, the physical work environment, social environment
within the organization, administrative system and relationship
between life on and off the job.

The basic objectives of a QWL program are improved working

conditions for the employee and increase organizational
effectiveness.
Providing quality work life involves taking care of the following
aspects:

a) Occupational health care: The safe work environment

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provides the basis for the person to enjoy working. The work
should not pose a health hazard for the person. The employer and
employee, aware of their risks and rights, could achieve a lot in
their mutually beneficial dialogue.

b) Suitable working time: Organizations are offering flexible

work options to their employees wherein employees enjoy flexi-
timings for dedicating their efforts at work.

c) Appropriate salary: The appropriate as well as attractive

salary has always been an important factor in retaining employees.
Providing employees salary at par with the other counterparts of
above that what competitors are paying motivates them to stick
with the company for long.

QWL consists of opportunities for active involvement in group

working arrangements or problem solving that are of mutual
benefit to employees or employers, based on labor management
cooperation. People also conceive of QWL as a set of methods,
such as autonomous work groups, job enrichment, and high-
involvement aimed at boosting the satisfaction and productivity of
workers. It requires employee commitment to the organization and
an environment in which this commitment can flourish.

Providing quality at work not only reduces attrition but also helps in
reduced absenteeism and improved job satisfaction. Not only does
QWL contribute to a company's ability to recruit quality people, but
also it enhances a company's competitiveness. Common beliefs
support the contention that QWL will positively nurture a more
flexible, loyal, and motivated workforce, which are essential in
28
determining the company's competitiveness.

9). Transparent work culture

A transparent work environment can serve as one of the primary

triggers to facilitate accountability, trust, communication,
responsibility, pride and so on. It is believed that in a transparent
work culture employees rigorously communicate with their peers
and exchange ideas and thoughts before they are finally matured
in to full-blown concepts. It induces responsibility among
employees and accountability towards other peers, which gradually
builds up trust and pride. More importantly, transparency in work
environment discourages work-politics which often hinders
company goals as employees start to advance their personal
objectives at the expense of development of the company as a
single entity.

Employees comprise the most vital assets of the company. In a

work place where employees are not able to use their full potential
and not heard and valued, they are likely to leave because of
stress and frustration. In a transparent environment while
employees get a sense of achievement and belongingness from a
healthy work environment, the company is benefited with a
stronger, reliable work-force harboring bright new ideas for its
growth.

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 10). Office-Tiger: A Role Model BPO to Follow
According to Office-Tiger model it tries is to instill a sense of pride
in its employees. Make the employees feel proud of doing the work
they do. Every project given to them is converted to a challenge
which drives away the monotony that creeps into the job. Every
employee is given a feel that the work given to him or her is very
important. Moreover, there should be a rigorous recruitment
process. After that the employees undergo an induction program
where they hone their various skills. Employees work on live
projects and if, during their project work, they feel that some
improvement is needed, they can go back to that stage of training.
This helps the employee continuously improve himself. Also,
employees are given encouragement to become Financial Analysts
or Research Analysts.
11) Communication

Communication is a process in which a message is conveyed to

the receiver by the sender. The message may be or may not be in
a common format or language that both the sender and receiver
understand. So there is a need to encode and decode the
message in the process. Encoding and decoding also helps in the
security of the message. The process of communication is
incomplete without the feedback
.

30
3). FEED BACK SYSTEM

Communication is the solution to almost everything in this

31
 world. Same applies to employee retention also.

Straight-from-the-shoulder communication is
what the employees need from their employers. Employees look
for organizations where communication and process are
transparent. Nothing is hidden and shared with the employees.

Communication mediums

• Open door policy: Organizations should support open door

policies so that the employees feel comfortable and are
able to express their doubts and feeling to their employers.

• Frequent meetings and Social gatherings

• Emails, Newsletters, Intranet and many more

So there should be effective communication across the
organization and this communication should be two-way.
Communication alone can lead to unimaginable heights of
employee retention.

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INITIATIVES TAKEN BY OTHER COMPANIES TO
REDUCE ATTRITION

 ICICI OneSource has introduced a career diversification

programme whereby employees who have been with the
company for more than 18 months can switch to positions in the
ICICI group after passing internal tests. Company officials point
out that the objective of this policy is to ensure that future growth
of employees is getting due consideration from the senior
management. Also it highlights that skills learnt in the BPO
industry such as customer friendliness and rapid response to
customer problems have wider applications in today's
competitive markets.

 Neil soft, they have crèche facilities within the company

premises, and they have trained teachers to look after young
children. Company officials highlight that women in the age group
28-35 are increasingly selecting the BPO industry as a preferred

33
 career choice and as these employees have young children it
becomes necessary for companies to provide adequate facilities

 Wipro's Spectra mind has introduced medical insurance for

their employees and they also provide 24-hour medical facilities
for employees.

 Tran works Information Services and Zenta Technologies

which are already providing accommodation to their senior staff
are contemplating this for lower level staff. It could also include
paying the entire deposit amount for flats or a certain percentage
of the registration fees. Apart from improving long-term work
prospects, HR managers are providing life enhancers in the form
of community or sporting activities in a bid to improve staff
morale.

 E-Funds International the company is focusing on social and

sporting events such as organizing six-a-side soccer games and
cricket matches.

 Federal Express in India believes in spotting talent early and

investing in it. Employees with leadership or management
potential are identified and training programmes are held to
improve their skills. They are then assigned senior management
positions. Rewarding merit in this way improves the image of the
workplace among the employees. Also in place at FedEx are
online platforms for employees to raise issues or complaints. This
ensures no issue takes an unpleasant shape or is blown out of
proportion.

34
 Intel Technology has a direct communication programme
running, wherein the president, Intel Technology India, is meeting
all the employees face to face in small groups. The CEO also
maintains accessibility through blogging. They have an internal
committee to ensure retention of highly qualified employees by
offering them alternative groups to work in. Also, consultants
were hired to find jobs in other organizations for the employees
who were made to leave the company.
 Adobe India promotes the spirit of research by giving moral and
financial support to employees who have business ideas. The
company then decides whether or not to approve the idea. If the
idea is successful, the company absorbs it into its business; else
the employee goes back to the usual job. The programme is
extremely popular among the employees, and fresh ideas come
in daily

 IBM executive MBA programmes and Web based learning tools

help in training the employees to be better managers. Also the
company sends the senior level employees to Wharton, Stanford
and Harvard. It also has an anonymous feedback programme
(one of the first of its kind in the country), through which the
employees can give feedback freely.

35
 INTERPRETATION AND ANALYSIS

Reason 1: Demand is more than supply: there is no dearth of

graduates and plus two pass but the supply of people with English
speaking ability in this category is not adequate.
Strategy: Constantly identify talent, recruit and train either in-house if
scale of operations permit that or through an outsourced training
agency in case of smaller operations.
Reason 2: People are joining with a short-term view and as a stepping
stone to something else.
Strategy: Create a culture and work environment that encourages
people to think of a call center job as a long-term career option. Use
counseling by HR and line management. This has to be backed up by
demonstrated and perceived efforts by the management to move up
the value chain so that employees can clearly see that the
management is making efforts to create opportunities for upward
mobility among employees.
Reason 3: A lot of young people are taking up call center jobs just to
earn some money on the side and not as a serious and long-term
career option.
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Strategy: Create a culture and work environment that encourages
people to think of a call center job as a long-term career option. Use
counseling by HR and line management. Again this has to be backed
up management efforts to move up the knowledge continuum in terms
of the processes handled.
Reason 4: Long-term or intangible or contingency benefits such as PF
or medical coverage do not have much attraction for call center
employees as they want everything in cash.

Strategy: Redesign the compensation package for call center

employees and try to pay as much as possible in hard cash. Work out if
necessary a new pay structure highly skewed towards cash benefits.
Reason 5: Call center employees have an average age profile of 20-24
years, so they are highly emotional, impulsive and immature when
taking career decisions.
Strategy: Constant counseling.
Reason 6: low company morale.
Strategy: following steps can be taken up by the HR department in
order to satisfy their employees.
4). MOTIVATING EMPLOYEES

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 Conclusion

With the strong growth expected in the Indian economy going ahead, it
is clear that human resources will be the key competitive advantage if
the country has to sustain this robust growth. Tackling attrition is not
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an easy task and the strategies suggested in the report 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, but it
can only become effective when both employee & employer
understand the importance of these precautionary measures &
continuously follow them only then this emerging & growing sector
will give its proper results.

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 Recommendations

After a detailed analysis of both the industries we find that a key step
in designing an effective retention strategy is to ensure you have the
right tools to gauge employee engagement. Investing in the
measurement of employee engagement is a key element of building
the type of high-performance culture that drives business. According to
the study, regular or formal employee interaction with managers and
interaction with human resources are the two most common ways of
gauging engagement levels in organizations. We recommend the
following points to be followed:

➢ Good organizational behavior

Recognizing the contribution of outstanding achievers also inspires
others to try hard and put in their best. A good organizational behavior
also focuses on areas like training, career development and believe in
equipping workforce better on the professional front. Good
organizational behavior is instrumental in extending the tenure of
employees in the organization as it increases their self-esteem,
confidence, morale and motivation. A substantial growth of employee's
self-esteem is as important as the concept of learning in the industry.
Otherwise, pharmaceutical organizations will meet a sorry fate as far
as retention policies are concerned.

➢ Salary structure

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  Basic (54%),
 HRA (26%),
 Medical Reimbursement (8%),
 Management Supplement (12%),
 PF Contribution (actual),
 Tiffin Allowance (Rs 25-30 per day of attendance),
 Attendance Bonus (Rs 500-1000 per month),
 Loyalty Bonus (1 months’ salary after completion of each year in
the company),
 Performance Incentives (linked to specific performance criteria),
 Referral Allowance (Rs 2000-3000 per candidate referred and
recruited).

➢ The EEE-Model
Exposure, Experience and Education are three things which are vital to
any employee in any sector or industry. These needs of the employees
are needed to be taken care of for an employee to feel motivated
An employee expects the company to give him good exposure in the
kind of work he is doing. Not only this, he needs to get a good
experience working in the company from its top management and
colleagues. Monthly dinner with CEO of bonding programs with the
other employees of the BPO would be a good idea.

Also, some employees aspire for higher education to increase their

knowledge base. Some partnership with management institutes for
short courses needs to be provided. Alternatively, company can bear
all the cost of further education for its good performing employees.
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5). EEE MODEL

➢ Methods to relieve stress

Stress is important from the point of view of retention and
productivity. Consequently, company can:
• Organize events such as picnics, dance parties, get-
togethers, cultural evenings, quizzes and games and
outdoor sports and games.
• Appoint professional agencies to organize regular stints of
aerobic exercises and dancing sessions for employees as
part of stress management.

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 BIBLIOGRAPHY

➢ www.citeman.com
➢ www.naukrihub.com
➢ www.pharmainfo.net
➢ www.pharmaceutical-drug-manufacturer.com
➢ www.investopedia.com
➢ The Hindu 14 July 2008, Monday, business (newspaper).
➢ Hewitt’s attrition and retention report 2006...
➢ Stephens Robbins, Organizational behavior, Pearson education
( 2008) ,page 234.

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