what could be the attrition issues in a software co, or general attrition issues everywhere.
From India, Bangalore
From India, Bangalore
54
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"
Attrition is beginning to significantly affect offshore ROI. Just as businesses faced a scarcity of talented IT resources during the dotcom era, organizations in offshore countries such as India are experiencing similar pains. Skilled employees are hopping from job to job and taking with them the customer knowledge and technical expertise that any company needs. Their salaries are increasing, along with their perks, benefits, and bonuses.
Defining the attrition problem
Global outsourcing and the astounding amount of foreign direct investment pouring into China, Russia, and India have created tremendous opportunities and competition for talented IT professionals in those countries. The downside of this increased competition is a rising rate of attrition, particularly in India. Fiscal third-quarter 2005 (ended December 2004) results filed by Infosys, Wipro, Satyam, and TCS listed attrition rates between 7.6% and 17.7%. Vendors that we have interviewed place the numbers much higher, at 25%–60%, while an April 2005 BusinessWeek article estimated an attrition rate of 60%, with some India service providers experiencing up to 80% turnover.
To put these attrition numbers into perspective, if a company has 100 programmers and an attrition rate of 25%, then 25 of its IT staff will leave each year. Think about the time and money it took to find, interview, hire, train, and coach those 25 people. Now think about losing them and starting the hiring and training processes anew.
How do the hiring and training processes break down in terms of total costs in India? The typical time for advertising, interviewing, screening, negotiating, and hiring a new employee is about two weeks. Companies usually allot one week for programmers to become familiar with the new business, two more weeks for technical training, and one last week for customer training. Now imagine a 25% attrition rate and replacing 25 of these programmers each year. Based on a yearly salary of $15,000 for the human resource person and $25,000 for the programmer, it would cost an additional $63,000 annually in acquisition and employee training costs. After considering these figures, it quickly becomes apparent why companies are investing in strategies to prevent attrition.
Reasons for attrition
It is not easy to find out as to who contributes and who has the control on the attrition of employees. Various studies/survey conducted indicates that every one is contributing to the prevailing attrition. Attrition does not happen for one or two reasons. The way the industry is projected and speed at which the companies are expanding has a major part in attrition.
For a moment if we look back, did we plan for the growth of this industry and answer will be no. The readiness in all aspects will ease the problems to some extent. In our country we start the industry and then develop the infrastructure. All the major IT companies have faced these realities. If you look within, the specific reasons for attrition are varied in nature and it is interesting to know why the people change jobs so quickly. Even today, the main reason for changing jobs is for higher salary and better benefits. But in call centers the reasons are many and it is also true that for funny reasons people change jobs. At the same time the attrition cannot be attributed to employees alone.
• Organizational matters:
The employees always assess the management values, work culture, work practices and credibility of the organization. The Indian companies do have difficulties in getting the businesses and retain it for a long time. There are always ups and downs in the business. When there is no focus and in the absence of business plans, non-availability of the campaigns makes people to quickly move out of the organization.
• Working environment:
Working environment is the most important cause of attrition. Employees expect very professional approach and international working environment. They expect very friendly and learning environment. It means bossism; rigid rules and stick approach will not suit the call center. Employees look for freedom, good treatment from the superiors, good encouragement, friendly approach from one and all, and good motivation.
• Job matters:
No doubt the jobs today bring lots of pressure and stress is high. The employees leave the job if there is too much pressure on performance or any work related pressure. It is quite common that employees are moved from one process to another. They take time to get adjusted with the new campaigns and few employees find it difficult to get adjusted and they leave immediately. Monotony sets in very quickly and this is one of the main reasons for attrition. Youngsters look jobs as being temporary and they quickly change the job once they get in to their own field. The other option is to move to such other process work where there is no pressure of sales and meeting service level agreements (SLA). The employees move out if there are strained relations with the superiors or with the subordinates or any slightest discontent.
• Salary and other benefits:
Moving from one job to another for higher salary, better positions and better benefits are the most important reasons for attrition. The salary and offered from MNC companies in Bangalore, Delhi and Mumbai have gone up very high (Rs 15000 to Rs 18000 per month) and it is highly impossible for Indian companies to meet the expectation of the employees. The employees expect salary revision once in 4-6 months and if not they move to other organizations.
• Personal reasons:
The personal reasons are many and only few are visible to us. The foremost personal reasons are getting married or falling in love or change of place. The next important personal reason is going for higher education. Most of the BE, MCA and others appear for GATE examination or other examinations and once they get cleared they quickly move out.
Health is another aspect, which contributes for attrition. Employees do get affected with health problems like sleep disturbances, indigestion, headache, throat infection and gynecological dysfunction for lady employees. Employees who have allergic problems and unable to cope with the AC hall etc will tend to get various other health problems and loose interest to work.
• Poaching:
The demand for trained and competent manpower is very high. Poaching has become very common. The big companies target employees of small companies. The placement agencies have good days for doing more business.
The employees with 4-6 months experience have very good confidence and dare to walk out and get a better job in a week's time. Most of the organizations have employee referral schemes and this makes people to spread message and refer the know candidates from the previous companies and earn too.
• Employee’s advocate:
One of the main reasons why employees leave companies is because of problems with their managers. An HR professional can be termed an employee’s advocate and a bridge between top management and employees at all levels. There is a huge gap between HR professionals and employees in terms of understanding challenges and delivering requirements. HR has not really understood the problems associated with employees’ careers and jobs. The company’s overall plans and strategies also depend on HR professionals as they voice employees’ problems and requirements. The HR department should have genuine interest in the employees’ welfare…it is responsible for making sure that their expectations are met. By doing this it is easier to meet the company’s business targets.
From India, New Delhi
Defining Attrition rate: "the rate of shrinkage in size or number"
Attrition is beginning to significantly affect offshore ROI. Just as businesses faced a scarcity of talented IT resources during the dotcom era, organizations in offshore countries such as India are experiencing similar pains. Skilled employees are hopping from job to job and taking with them the customer knowledge and technical expertise that any company needs. Their salaries are increasing, along with their perks, benefits, and bonuses.
Defining the attrition problem
Global outsourcing and the astounding amount of foreign direct investment pouring into China, Russia, and India have created tremendous opportunities and competition for talented IT professionals in those countries. The downside of this increased competition is a rising rate of attrition, particularly in India. Fiscal third-quarter 2005 (ended December 2004) results filed by Infosys, Wipro, Satyam, and TCS listed attrition rates between 7.6% and 17.7%. Vendors that we have interviewed place the numbers much higher, at 25%–60%, while an April 2005 BusinessWeek article estimated an attrition rate of 60%, with some India service providers experiencing up to 80% turnover.
To put these attrition numbers into perspective, if a company has 100 programmers and an attrition rate of 25%, then 25 of its IT staff will leave each year. Think about the time and money it took to find, interview, hire, train, and coach those 25 people. Now think about losing them and starting the hiring and training processes anew.
How do the hiring and training processes break down in terms of total costs in India? The typical time for advertising, interviewing, screening, negotiating, and hiring a new employee is about two weeks. Companies usually allot one week for programmers to become familiar with the new business, two more weeks for technical training, and one last week for customer training. Now imagine a 25% attrition rate and replacing 25 of these programmers each year. Based on a yearly salary of $15,000 for the human resource person and $25,000 for the programmer, it would cost an additional $63,000 annually in acquisition and employee training costs. After considering these figures, it quickly becomes apparent why companies are investing in strategies to prevent attrition.
Reasons for attrition
It is not easy to find out as to who contributes and who has the control on the attrition of employees. Various studies/survey conducted indicates that every one is contributing to the prevailing attrition. Attrition does not happen for one or two reasons. The way the industry is projected and speed at which the companies are expanding has a major part in attrition.
For a moment if we look back, did we plan for the growth of this industry and answer will be no. The readiness in all aspects will ease the problems to some extent. In our country we start the industry and then develop the infrastructure. All the major IT companies have faced these realities. If you look within, the specific reasons for attrition are varied in nature and it is interesting to know why the people change jobs so quickly. Even today, the main reason for changing jobs is for higher salary and better benefits. But in call centers the reasons are many and it is also true that for funny reasons people change jobs. At the same time the attrition cannot be attributed to employees alone.
• Organizational matters:
The employees always assess the management values, work culture, work practices and credibility of the organization. The Indian companies do have difficulties in getting the businesses and retain it for a long time. There are always ups and downs in the business. When there is no focus and in the absence of business plans, non-availability of the campaigns makes people to quickly move out of the organization.
• Working environment:
Working environment is the most important cause of attrition. Employees expect very professional approach and international working environment. They expect very friendly and learning environment. It means bossism; rigid rules and stick approach will not suit the call center. Employees look for freedom, good treatment from the superiors, good encouragement, friendly approach from one and all, and good motivation.
• Job matters:
No doubt the jobs today bring lots of pressure and stress is high. The employees leave the job if there is too much pressure on performance or any work related pressure. It is quite common that employees are moved from one process to another. They take time to get adjusted with the new campaigns and few employees find it difficult to get adjusted and they leave immediately. Monotony sets in very quickly and this is one of the main reasons for attrition. Youngsters look jobs as being temporary and they quickly change the job once they get in to their own field. The other option is to move to such other process work where there is no pressure of sales and meeting service level agreements (SLA). The employees move out if there are strained relations with the superiors or with the subordinates or any slightest discontent.
• Salary and other benefits:
Moving from one job to another for higher salary, better positions and better benefits are the most important reasons for attrition. The salary and offered from MNC companies in Bangalore, Delhi and Mumbai have gone up very high (Rs 15000 to Rs 18000 per month) and it is highly impossible for Indian companies to meet the expectation of the employees. The employees expect salary revision once in 4-6 months and if not they move to other organizations.
• Personal reasons:
The personal reasons are many and only few are visible to us. The foremost personal reasons are getting married or falling in love or change of place. The next important personal reason is going for higher education. Most of the BE, MCA and others appear for GATE examination or other examinations and once they get cleared they quickly move out.
Health is another aspect, which contributes for attrition. Employees do get affected with health problems like sleep disturbances, indigestion, headache, throat infection and gynecological dysfunction for lady employees. Employees who have allergic problems and unable to cope with the AC hall etc will tend to get various other health problems and loose interest to work.
• Poaching:
The demand for trained and competent manpower is very high. Poaching has become very common. The big companies target employees of small companies. The placement agencies have good days for doing more business.
The employees with 4-6 months experience have very good confidence and dare to walk out and get a better job in a week's time. Most of the organizations have employee referral schemes and this makes people to spread message and refer the know candidates from the previous companies and earn too.
• Employee’s advocate:
One of the main reasons why employees leave companies is because of problems with their managers. An HR professional can be termed an employee’s advocate and a bridge between top management and employees at all levels. There is a huge gap between HR professionals and employees in terms of understanding challenges and delivering requirements. HR has not really understood the problems associated with employees’ careers and jobs. The company’s overall plans and strategies also depend on HR professionals as they voice employees’ problems and requirements. The HR department should have genuine interest in the employees’ welfare…it is responsible for making sure that their expectations are met. By doing this it is easier to meet the company’s business targets.
From India, New Delhi
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Attrition-rate. xls