Topic
Employee retention
Project by
Miss. Ashwini B. Khanapure
T.Y.BMS (SEMESTER V)
2009-2010
Project guide
Prof. (Mrs) Geetha Narayan
Cosmopolitan education Society
Valia College of commerce,
B.sc (IT) and B.M.S.
D.N.Nagar, Andheri (W),
Mumbai-400053
DECLARATION
1

I, Miss. Ashwini B. Khanapure of Valia college of Commerce, B.SC (IT) &
B.M.S., D.N.Nagar,Andheri (w), Mumbai- 400053 T.Y.B.M.S. (semester V)
hereby
DECLARE THAT I HAVE COMPLETED THE PROJECT ON “EMPLOYEE
RETENTION” IN THE ACADEMIC YEAR 2009-2010. THE INFORMATION
SUBMITTED IS TRUE AND ORIGINAL TO THE BEST OF MY KNOWLEDGE.
____________
STUDENT
CERTIFICATE
This is to certify that the project titled “EMPLOYEE RETENTION” HAS BEEN
SUCCESSFULLY COMPLETED BY MISS. ASHWINI B. KHANAPURE SEAT NO.2084
OF COSMOPOLITAN’S VALIA COLLEGE OF COMMERCE IN PARTIAL FULFILLMENT
OF T.Y.B.M.S. (SEMESTER V) EXAMINATION IN THE ACADEMIC YEAR 2009-
2010. THE INFORMATION SUBMITTED IS TRUE AND ORIGINAL TO THE BEST
OF OUR KNOWLEDGE.
____________________
___________________
Project Co-ORDINATOR PRINCIPAL
2

ACKNOWLEDGEMENT
During the completion of this project I came across many people WHO HELPED ME
AND ENLIGHTENED ME IN EVERY WAY. THEY HELPED ALWAYS, LENT HELPING
HAND WHENEVER I NEEDED THEM. I OWE MY SINCERE GRATITUDE TOWARDS
THEM VALUABLE THOUGHTS, IDEAS, VIEWS AND WHOLEHEARTED CO-OPERATION.
I would like to thank PROF. (MRS.) GEETHA NARAYAN who has shown me right
approach and way to make this project and without whose guidance this project would
have been difficult to complete. We are also grateful to our institute for providing this
opportunity and providing the required material whenever needed.
A special thanks to our college library & librarian for providing various books to help us
in project.
Index
Serial
No.
contents Page
No.
1 EMPLOYEE RETENTION 7
2 EMPLOYEE RETENTION STRATEGIES 15
3 RETENTION MYTHS 19
4 BENEFIT OF ATTRITION 20
5 RETENTION SUCCESS MANTRAS 21
6 EMPLOYEE TURNOVER 27
7 ATTRITION RATES IN DIFFERENT SECTORS IN INDIA 32
8 EMPOYEE ENGAGEMENT 33
9 EMPLOYEE SCHEDULING 38
10 EMPLOYEE EMPOWERMENT 39
11 MANAGING RETENTION 40
12 RETENTION BONUS 44
13 HIRE RIGHT TALENT 45
14 MANAGERS ROLE IN RETENTION 46
15 MANPOWER RETENTION DURING RECESSION 47
16 EXIT INTERVIEW 49
17 BPO EMPLOYEE RETENTION 52
18 LG COMPANIES RETENTION POLICIES 53
19 WIPRO BPO 55
20 FINDING AND OBSERVATIONS 61
21 RECOMMENDATION 62
22 CONCLUSION 63
23 BIBLIOGRAPHY 64
3

EMPLOYEE RETENTION
Retention involves taking measures to encourage employees to remain in the
organization for the maximum period of time. Corporate is facing a lot of problems in
employee retention these days. Hiring knowledgeable people for the job is essential for
an employer. But retention is even more important than hiring. There is no dearth of
opportunities for a talented person. There are many organizations which are looking for
such employees. If a person is not satisfied by the job he’s doing, he may switch over to
some other more suitable job. In today’s environment it becomes very important for
organizations to retain their employees.
The top organizations are on the top because they value their employees and they know
how to keep them glued to the organization. Employees stay and leave organizations for
some reasons.
The reason may be personal or professional. These reasons should be understood by the
employer and should be taken care of. The organizations are becoming aware of these
reasons and adopting many strategies for employee retention. In this section we are
going to study about various topics related to employee retention, why is it needed,
basic practices, myths, etc. in detail.
4
The picture states the latest statement
that corporate believes in “Love them or lose them”

What is Employee Retention?
Employee retention is a process in which the employees are encouraged to remain
with the organization for the maximum period of time or until the completion of the
project. Employee retention is beneficial for the organization as well as the employee.
Employees today are different. They are not the ones who don’t have good opportunities
in hand. As soon as they feel dissatisfied with the current employer or the job, they
switch over to the next job. It is the responsibility of the employer to retain their best
employees. If they don’t, they would be left with no good employees. A good employer
should know how to attract and retain its employees. Retention involves five major
things:
COMPENSATION ENVIRONMENT GROWTH
Relationship SUPPORT
Employee retention would require a lot of efforts, energy, and resources but the
results are worth it.
5

I. Compensation
Compensation constitutes the largest part of the employee retention process. The
employees always have high expectations regarding their compensation packages.
Compensation packages vary from industry to industry. So an attractive compensation
package plays a critical role in retaining the employees.
Compensation includes salary and wages, bonuses, benefits, prerequisites, stock options,
bonuses, vacations, etc. While setting up the packages, the following components
should be kept in mind:
Salary and monthly wage: It is the biggest component of the compensation
package. It is also the most common factor of comparison among employees. It
includes
 Basic wage
 House rent allowance
 Dearness allowance
 City compensatory allowance
Salary and wages represent the level of skill and experience an individual has. Time to
time increase in the salaries and wages of employees should be done. And this increase
should be based on the employee’s performance and his contribution to the
organization.
Bonus: Bonuses are usually given to the employees at the end of the year or on a
festival.
Economic benefits: It includes paid holidays, leave travel concession, etc.
Long-term incentives: Long term incentives include stock options or stock grants.
These incentives help retain employees in the organization's startup stage.
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Health insurance: Health insurance is a great benefit to the employees. It saves
employees money as well as gives them a peace of mind that they have somebody to
take care of them in bad times. It also shows the employee that the organization cares
about the employee and its family.
Miscellaneous compensation: It may include employee assistance programs (like
psychological counseling, legal assistance etc), discounts on company products, use of a
company cars, etc.
II. Growth
Growth and development are the integral part of every individual’s career. If an
employee can not foresee his path of career development in his current organization,
there are chances that he’ll leave the organization as soon as he gets an opportunity.
The important factors in employee growth that an employee looks for himself are:
Work profile:
The work profile on which the employee is working should be in sync with his
capabilities. The profile should not be too low or too high.
Personal growth and dreams:
Employee’s responsibilities in the organization should help him achieve his
personal goals also. Organizations can not keep aside the individual goals of employees
and foster organizations goals. Employees’ priority is to work for themselves and later
on comes the organization. If he’s not satisfied with his growth, he’ll not be able to
contribute in organization growth.
Training and development:
Employees should be trained and given chance to improve and enhance their
skills. Many employers fear that if the employees are well rained, they’ll leave the
organization for better jobs. Organization should not limit the resources on which
organization’s success depends. These trainings can be given to improve many skills
like:
1. Communications skills
2. Technical skills
3. In-house processes and procedures improvement related skills
4. C or customer satisfaction related skills
5. Special project related skills
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Need for such trainings can be recognized from individual performance reviews,
individual meetings, employee satisfaction surveys and by being in constant touch with
the employees.
III. Support
LACK OF SUPPORT FROM MANAGEMENT CAN SOMETIMES SERVE AS A
REASON FOR EMPLOYEE RETENTION. SUPERVISOR SHOULD SUPPORT HIS
SUBORDINATES IN A WAY SO THAT EACH ONE OF THEM IS A SUCCESS.
MANAGEMENT SHOULD TRY TO FOCUS ON ITS EMPLOYEES AND SUPPORT THEM
NOT ONLY IN THEIR DIFFICULT TIMES AT WORK BUT ALSO THROUGH THE TIMES
OF PERSONAL CRISIS. MANAGEMENT CAN SUPPORT EMPLOYEES BY PROVIDING
THEM RECOGNITION AND APPRECIATION. EMPLOYERS CAN ALSO PROVIDE
VALUABLE FEEDBACK TO EMPLOYEES AND MAKE THEM FEEL VALUED TO THE
ORGANIZATION.
THE FEEDBACK FROM SUPERVISOR HELPS THE EMPLOYEE TO FEEL MORE
RESPONSIBLE, CONFIDENT AND EMPOWERED. TOP MANAGEMENT CAN ALSO
SUPPORT ITS EMPLOYEES IN THEIR PERSONAL CRISIS BY PROVIDING PERSONAL
LOANS DURING EMERGENCIES, CHILDCARE SERVICES, EMPLOYEE ASSISTANCE
PROGRAMS, COUNSELING SERVICES, ET AL.
EMPLOYERS CAN ALSO SUPPORT THEIR EMPLOYEES BY CREATING AN
ENVIRONMENT OF TRUST AND INCULCATING THE ORGANIZATIONAL VALUES INTO
EMPLOYEES. THUS EMPLOYERS CAN SUPPORT THEIR EMPLOYEES IN A NUMBER
OF WAYS AS FOLLOWS:
• BY PROVIDING FEEDBACK
• BY GIVING RECOGNITION AND REWARDS
• BY COUNSELING THEM
• BY PROVIDING EMOTIONAL SUPPORT
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IV. Relationship with Employee
Sometimes the relationship with the management and the peers becomes the
reason for an employee to leave the organization. The management is sometimes not
able to provide an employee a supportive work culture and environment in terms of
personal or professional relationships. This decreases employee’s interest and he
becomes de-motivated. It leads to less satisfaction and eventually attrition. the
management should keep the following points in mind.
Respect for the individual:
Relationship with the immediate manager: A manger plays the role of a
mentor and a coach. It is his duty to involve the employee in the processes of the
organization. So an organization should hire managers who can make and maintain
good relations with their subordinates.
Relationship with colleagues:
Promote team work, not only among teams but in different departments as
well. This will induce competition as well as improve the relationships among
colleagues.
Recruit whole heartedly:
An employee should be recruited if there is a proper place and duties for him
to perform. Otherwise he’ll feel useless and will be dissatisfied. Employees should
know what the organization expects from them and what their expectation from the
organization is. Deliver what is promised.
Promote an employee based culture:
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The employee should know that the organization is there to support him at the
time of need. Show them that the organization cares and he’ll show the same for the
organization. An employee based culture may include decision making authority,
availability of resources, open door policy, etc.
Individual development:
Taking proper care of employees includes acknowledgement to the employee’s
dreams and personal goals. Create opportunities for their career growth by providing
mentorship programs, certifications, educational courses, etc.
.
V. Organization Environment
IT IS NOT ABOUT MANAGING RETENTION. IT IS ABOUT MANAGING
PEOPLE. IF AN ORGANIZATION MANAGES PEOPLE WELL, EMPLOYEE RETENTION
WILL TAKE CARE OF ITSELF. ORGANIZATIONS SHOULD FOCUS ON MANAGING THE
WORK ENVIRONMENT TO MAKE BETTER USE OF THE AVAILABLE HUMAN ASSETS.
PEOPLE WANT TO WORK FOR AN ORGANIZATION WHICH PROVIDES:-
 Appreciation for the work done
 Ample opportunities to grow
 A friendly and cooperative environment
 A feeling that the organization is second home to the employee Organization
environment includes
o Culture
o Values
o Quality of people in the organization
o Employee development and career growth
o Risk taking
o Leading technologies
Types of environment the employee needs in an organization
 Learning environment:
IT INCLUDES CONTINUOUS LEARNING AND IMPROVEMENT OF
THE INDIVIDUAL, CERTIFICATIONS AND PROVISION FOR HIGHER STUDIES,
ETC.
 Support environment:
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Organization can provide support in the form of work-life balance.
WORK LIFE BALANCE INCLUDES:
o Flexible hours
o Telecommuting
o Dependent care
o Alternate work schedules
o Vacations
 WORK ENVIRONMENT:
IT INCLUDES EFFICIENT MANAGERS, SUPPORTIVE CO-WORKERS,
CHALLENGING WORK, INVOLVEMENT IN DECISION-MAKING, CLARITY OF
WORK AND RESPONSIBILITIES, AND RECOGNITION. LACK OR ABSENCE OF
SUCH ENVIRONMENT PUSHES EMPLOYEES TO LOOK FOR NEW
OPPORTUNITIES.
Importance of Employee Retention
NOW THAT SO MUCH IS BEING DONE BY ORGANIZATIONS TO RETAIN ITS
EMPLOYEES, WHY IS RETENTION SO IMPORTANT? IS IT JUST TO REDUCE THE
TURNOVER COSTS? WELL, THE ANSWER IS A DEFINITE NO. IT’S NOT ONLY THE
COST INCURRED BY A COMPANY THAT EMPHASIZES THE NEED OF RETAINING
EMPLOYEES BUT ALSO THE NEED TO RETAIN TALENTED EMPLOYEES FROM
GETTING POACHED.
THE PROCESS OF EMPLOYEE RETENTION WILL BENEFIT AN ORGANIZATION IN THE
FOLLOWING WAYS:
1. The Cost of Turnover: THE COST OF EMPLOYEE TURNOVER ADDS
HUNDREDS OF THOUSANDS OF MONEY TO A COMPANY'S EXPENSES. WHILE IT
IS DIFFICULT TO FULLY CALCULATE THE COST OF TURNOVER (INCLUDING
HIRING COSTS, TRAINING COSTS AND PRODUCTIVITY LOSS), INDUSTRY
EXPERTS OFTEN QUOTE 25% OF THE AVERAGE EMPLOYEE SALARY AS A
CONSERVATIVE ESTIMATE.
2. Loss of Company Knowledge: WHEN AN EMPLOYEE LEAVES, HE TAKES
WITH HIM VALUABLE KNOWLEDGE ABOUT THE COMPANY, CUSTOMERS,
CURRENT PROJECTS AND PAST HISTORY (SOMETIMES TO COMPETITORS).
OFTEN MUCH TIME AND MONEY HAS BEEN SPENT ON THE EMPLOYEE IN
EXPECTATION OF A FUTURE RETURN. WHEN THE EMPLOYEE LEAVES, THE
INVESTMENT IS NOT REALIZED.
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3. Interruption of Customer Service: CUSTOMERS AND CLIENTS DO BUSINESS
WITH A COMPANY IN PART BECAUSE OF THE PEOPLE. RELATIONSHIPS ARE
DEVELOPED THAT ENCOURAGE CONTINUED SPONSORSHIP OF THE BUSINESS.
WHEN AN EMPLOYEE LEAVES, THE RELATIONSHIPS THAT EMPLOYEE BUILT
FOR THE COMPANY ARE SEVERED, WHICH COULD LEAD TO POTENTIAL
CUSTOMER LOSS.
4. Turnover leads to more turnovers: WHEN AN EMPLOYEE TERMINATES, THE
EFFECT IS FELT THROUGHOUT THE ORGANIZATION. CO-WORKERS ARE OFTEN
REQUIRED TO PICK UP THE SLACK. THE UNSPOKEN NEGATIVITY OFTEN
INTENSIFIES FOR THE REMAINING STAFF.
5. Goodwill of the company: THE GOODWILL OF A COMPANY IS MAINTAINED
WHEN THE ATTRITION RATES ARE LOW. HIGHER RETENTION RATES MOTIVATE
POTENTIAL EMPLOYEES TO JOIN THE ORGANIZATION.
6. Regaining efficiency: IF AN EMPLOYEE RESIGNS, THEN GOOD AMOUNT OF
TIME IS LOST IN HIRING A NEW EMPLOYEE AND THEN TRAINING HIM/HER AND
THIS GOES TO THE LOSS OF THE COMPANY DIRECTLY WHICH MANY A TIMES
GOES UNNOTICED. AND EVEN AFTER THIS YOU CANNOT ASSURE US OF THE
SAME EFFICIENCY FROM THE NEW EMPLOYEE.
What Makes Employee Leave?
There are certain circumstances that lead to their leaving the organization. The most
common reasons can be:
 Job is not what the employee expected to be: SOMETIMES THE JOB
RESPONSIBILITIES DON’T COME OUT TO BE SAME AS EXPECTED BY THE
CANDIDATES. UNEXPECTED JOB RESPONSIBILITIES LEAD TO JOB
DISSATISFACTION.
 Job and person mismatch: A CANDIDATE MAY BE FIT TO DO A
CERTAIN TYPE OF JOB WHICH MATCHES HIS PERSONALITY. IF HE IS GIVEN A JOB
WHICH MISMATCHES HIS PERSONALITY, THEN HE WON’T BE ABLE TO PERFORM IT
WELL AND WILL TRY TO FIND OUT REASONS TO LEAVE THE JOB.
 No growth opportunities: NO OR LESS LEARNING AND GROWTH
OPPORTUNITIES IN THE CURRENT JOB WILL MAKE CANDIDATE’S JOB AND CAREER
STAGNANT.
 Lack of appreciation: IF THE WORK IS NOT APPRECIATED BY THE
SUPERVISOR, THE EMPLOYEE FEELS DE-MOTIVATED AND LOSES INTEREST IN JOB.
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 Lack of trust and support in coworkers, seniors and
management: TRUST IS THE MOST IMPORTANT FACTOR THAT IS REQUIRED FOR
AN INDIVIDUAL TO STAY IN THE JOB. NON-SUPPORTIVE COWORKERS, SENIORS
AND MANAGEMENT CAN MAKE OFFICE ENVIRONMENT UNFRIENDLY AND
DIFFICULT TO WORK IN.
 Stress from overwork and work life imbalance: JOB STRESS CAN
LEAD TO WORK LIFE IMBALANCE WHICH ULTIMATELY MANY TIMES LEAD TO
EMPLOYEE LEAVING THE ORGANIZATION.
 Compensation: BETTER COMPENSATION PACKAGES BEING OFFERED
BY OTHER COMPANIES MAY ATTRACT EMPLOYEES TOWARDS THEMSELVES.
 New job offer: AN ATTRACTIVE JOB OFFER WHICH AN EMPLOYEE
THINKS IS GOOD FOR HIM WITH RESPECT TO JOB RESPONSIBILITY,
COMPENSATION, GROWTH AND LEARNING ETC. CAN LEAD AN EMPLOYEE TO
LEAVE THE ORGANIZATION.
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Building a Retention Strategy
The best way to improve your employee retention is to create a strategy that
you can systematically deploy which will address all of the essential elements of staff
retention. When it comes to creating a retention strategy, there are the 5 main areas you
want to have covered. This is not meant to be an exhaustive article on each stage but
rather an overview of some of the things you want to be thinking about for each one.
1. Attraction:
Think of being single, and putting your best foot forward to attract a date. The
more attractive you appear as a place of employment, the more interested most qualified
applicants will be. The more applicants, the more choice, and the better chance you have
of picking top-notch people. The question is, how attractive are you? It doesn’t matter
how attractive you think you are. What do others think of you? What is your brand
(reputation) as an employer? Most organizations do no have a brand because they do not
put any effort into creating one. Size does not need to stop you from creating a brand as
an employer of choice. Gone are the days where the only marketing you did was for
your product. Now also you have to give thought to marketing your image as an
employer. You may be the best place to work on planet earth but if no one knows about
you, then you will not create the attraction you are looking for. First determine what you
want to be known for, then figure out how to get the word out. Many companies are
14

doing some innovative things these days to become ‘attractive’. Placing a job offering in
the classified section is not one of them.
2. Hiring:
From the moment someone interviews to the time they sign a contract is the
hiring period. Often we think the hiring process only includes those we end up hiring,
but in reality, anyone who interviews for your organization is a part of this period.
Think of the hiring stage as having multiple people over to your house for dinner, one
after another. You will have far more guests than you have spots at the table. Eventually
one will be chosen. What about the other 5 who sat down with you? As they leave your
house, what will they say about you? How you handle the applicants you rejected will
do a lot to shape your reputation as an employer. I heard of one firm offering movie
passes to anyone who took the time to come in for an interview. It’s a small touch, but it
makes an impact.
Interviews are like first dates. Both parties try to impress the other, and because a
lot is on the line, candidates have their inner radar dialed up to spot any kind of flaw,
imperfection, disorganization etc. Make sure this process is smooth, planned, and
professional. When was the last time you took a good look at your hiring process to find
ways that it could be better, faster, and more compelling?
3. On Boarding:
The first 90 days is all about connections. There are numerous studies that show
a new employee can make up their mind within the first week whether or not they will
stick around for the long haul. This is your chance to rope them in. Most companies do a
good job of supplying people with information for their role but do a poor job when it
comes to the more important connections like relationships. Emotional connections need
to be forged quickly for a new hire. You want to make sure you connect them to the
team, to their manager, and to their role, in the context of how it affects the company.
These connections naturally happen for some but for most people they need a little help.
In my workshop on retention I outline in more detail how to create an on-boarding plan
that you can use to help cement new hires to your organization. The key is to create a
step-by-step process that helps new hires make those essential connections early.
4. Length of Stay:
This is really the duration that someone stays with your organization. Your goal
is to increase the length of stay for each employee. The ultimate goal is to make your
organization their last stop before retirement. This is where the bulk of your retention
efforts need to be focused. It is always more efficient to put your energy into employee
retention than employee acquisition. Take care of what you have. This is where the
bulk of my training is focused. You want to create an engaging workplace, and you do
that with inspiring leaders who know how to lead people and manage projects. You
want to make sure you have a healthy culture of challenging and exciting work, great
teams, rewards and recognition, training and development, fun, and inspirational
leadership Inspiring leaders: know how to communicate and create a compelling vision;
solicit input; are enthusiastic about their role; set great examples; foster great culture;
and, sincerely care about their people. Equipping your mid-level managers to create
engaging workplaces is where the bulk of your training time should be spent.
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5. Departure:
Everyone will leave your organization! Even you. The best-case scenario is that
people leave to retire. But for everyone else, how we say goodbye will do a lot to affect
the first point we discussed – Reputation! When any employee decides to leave a
company it is never an easy decision. There are many fears and anxieties involved as an
employee severs ties. As a boss you may be hurt, angry, bitter or maybe even happy.
The key is emotional management. If you ever want a chance of seeing them come back
again, then let them leave on a good note. If you never want them to come back again,
let them leave on a good note. Everyone that leaves your organization on bad terms is
like negative advertising for your organization. They can be a poison that leaks into the
talent pool you so desperately want to tap into. It does not take much to create a process
that ensures almost everyone leaves on a good note.
You also want a way to keep in touch with those who have left. Treat them like
alumni, or extended family. If you can keep in touch occasionally via email news
bulletins or other means, you are able to keep your organization on their minds. This is
especially great when their new workplace is giving them grief and you just happen to
send them a cheery email that same day!
Keeping an alumni who left your company on good terms is like having unpaid
recruiters out in the field for you. When you need a spot to fill you can send word out to
your alumni asking if they know anyone who they could refer for the position. Add in
some kind of paid compensation for referrals and you can build a powerful force that is
always keeping your pipeline of new recruits full.
If you can create a strategy that eventually covers each of these stages I have
mentioned, you will begin to see a dramatic difference in your retention rate. As more
people stay in your organization longer, you will see an incredible transformation in
morale, your culture, productivity and overall fun. For starters pick something easy that
you can address like a strategy for those departing, and then move on to some of the
bigger more complex issues. If you need some ideas, give me a call.
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Employee Retention Strategies
THE BASIC PRACTICES WHICH SHOULD BE KEPT IN MIND IN THE EMPLOYEE
RETENTION STRATEGIES ARE:
1. Hire the right people in the first place.
2. Empower the employees: Give the employees the authority to get things
done.
3. Make employees realize that they are the most valuable asset of the
organization.
4. Have faith in them, trust them and respect them.
5. Provide them information and knowledge.
6. Keep providing them feedback on their performance.
7. Recognize and appreciate their achievements.
8. Keep their morale high.
9. Create an environment where the employees want to work and have fun.
These practices can be categorized in 3 levels: Low, medium and high level.
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· Low Level Employee Retention Strategies ::
 Appreciating and recognizing a well done job
 Personalized well done and thank-you cards from supervisors
 Congratulations e-cards or cards sent to spouses/families
 Voicemails or messages from top management
 Periodic days off for good performance
 Rewards ( gift, certificates, monetary and non monetary rewards)
 Recognizing professional as well as personal significant events
o Wedding gifts
o Anniversary gifts
o New born baby gifts
o Scholarships for employee’s children
o Get well cards/flowers
o Birthday cards, celebrations and gifts
 Providing benefits
o Home insurance plans
o Legal insurance
o Travel insurance
o Disability programs
 Providing perks: It includes coupons, discounts, rebates, etc
o Discounts in cinema halls, museums, restaurants, etc.
o Retail store discounts
o Computer peripherals purchase discounts
 Providing workplace conveniences
o On-site ATM
o On-site facilities for which cost is paid by employees
 laundry facility for bachelors
 Shipping services
 Assistance with tax calculations and submission of forms
 Financial planning assistance
 Casual dress policies
 Facilities for expectant mothers
o Parking
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o Parenting guide
o Lactation rooms
o Flexi timings
 Fun at work
o Celebrate birthdays, anniversaries, retirements, promotions, etc
o Holiday parties and holiday gift certificates
o Occasional parties like diwali, holi, dushera, etc
o Organize get together for watching football, hockey, cricket matches
o Organize picnics and trips for movies etc
o Sports outings like cricket match etc
o Indoor games
 Occasional stress relievers
o “Casual dress” day
o “Green is the color” day
o Handwriting analysis
o Tatoo, mehandi, hair braiding stalls on weekends
o Mini cricket in office
o Ice cream Fridays
o Employee support in tough time or personal crisis
o Personal loans for emergencies
o Childcare and eldercare services
· Medium Level Strategies for Employee Retention
 Appreciating and recognizing a well done job
 Special bonus for successfully completing firm-sponsored certifications
 Benefit programs for family support
 Child adoption benefits
 Flexible benefits
 Dependents care assistance
 Medical care reimbursement
 Providing conveniences at workplace
 Gymnasiums
 Athletic membership program
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 Providing training and development and personal growth opportunities
o Sabbatical programs
o Professional skills development
o Individualized career guidance
· High Level Strategies
 Promoting Work/Life Effectiveness
 Develop flexible schedules
 Part-time schedules
 Extended leaves of absence
 Develop Support Services
 Understand employee needs:
 Listen to the employee and show interest in ideas
o Appreciate new ideas and reward risk-taking
o Show support for individual initiative
o Encourage creativity
o Encouraging professional training and development and/or personal
growth opportunities: It can be done through:
o Mentoring programs
o Performance feedback programs
o Provide necessary tools to the employees
o Higher study opportunities for employees
o Vocational counseling
o Offer personalized career guidance to employees
 Provide an environment of trust: Communication is the most important and
effective way to develop trust.
o Suggestion committees can be created
o Open door communication policy can be followed
o Regular feedbacks on organization’s goals and activities should be
taken from the employees by:
· Management communications
· Intranet and internet can be used as they provide 24X7
access to the information
· Newsletters, notice boards, etc.
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 Hire the right people from the beginning: employee retention is not a process
that begins at the end. The process of retention begins right from the start of
the recruitment process.
o The new joinees should fit with the organization’s culture. The
personality, leadership characteristics of the candidate should be in
sync with the culture of the hiring organization.
o Referral bonus should be given to the employees for successful hires.
They are the best source of networking.
o Proper training should be given to the managers on interview and
management techniques.
o An internship program can be followed to recruit the fresh graduates.
Retention Myths
There ARE MANY MYTHS RELATED TO THE EMPLOYEE RETENTION PROCESS.
THESE MYTHS EXIST BECAUSE THE STRATEGIES BEING USED ARE EITHER WRONG
OR ARE BEING USED FROM A LONG TIME. THESE MYTHS PREVENT THE
EMPLOYER FROM SUCCESSFULLY IMPLEMENTING THE RETENTION STRATEGIES.
LET US LEARN ABOUT SOME OF THESE MYTHS.
1. Employees leave an organization for more pay:
Money may be the motivating factor for some but for many people it
is not the most important factor. Money matters more to the low-income-employees
for whom it’s a survival issue. Money can make an employee stay
in an organization but not for long. The factors more important than money
are job satisfaction, job responsibilities, and individual’s skill development.
The employers should understand this and work out some other ways to
make employees feel satisfied. When employees leave, management tries to
retain them by offering more money.
2. Incentives can increase productivity:
Incentives can surely increase productivity but not for long term. Cash
incentives, volume work targets and speed awards are old management
beliefs. They can generate work speedily and in volumes but can’t boost
employee commitment. Rather speed can hamper the quality of work
produced.
3. Employees run away from responsibilities:
It is a myth that employees run from responsibilities. In-fact
employees feel more responsible if they are given extra responsibilities apart
from their regular job. Employees look for variety, greater control on the
processes and authority to take decisions in their present job. Management
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can assign extra responsibilities to their employees and appreciate them on
the completion of these tasks.
4. Loyalty is a thing of the past:
EMPLOYEES CAN BE LOYAL BUT WHAT THEY NEED IS AN EMPLOYER FOR
WHOM THEY CAN BE LOYAL. THERE IS NO REASON FOR THE EMPLOYEE TO
HOP JOBS IF HE’S SATISFIED WITH THE EMPLOYER.
5. Taking measures to increase employee satisfaction will be expensive for
the organizations:
The things actually required improving EMPLOYEE SATISFACTION
LIKE RESPECT, CAREER GROWTH AND DEVELOPMENT, APPRECIATION,
ETC. CAN’T BE BOUGHT. THEY ARE FREE OF COST. AN EMPLOYER OR
MANAGEMENT THAT REACTS WELL TO THE EMPLOYEE’S IDEAS AND
SUGGESTIONS IS ENOUGH FOR THE EMPLOYEES TO BE RETAINED.
Benefits of Attrition
Attrition is not bad always if it happens in a controlled manner. Some attrition is
always desirable and necessary for organizational growth and development. The
only concern is how organizations differentiate “good attrition” from “bad
attrition”. The term “healthy attrition” or “good attrition” signifies the
importance of less productive employees voluntarily leaving the organization. This
means if the ones who have left fall in the category of low performers, the attrition
in considered being healthy.
Attrition rates are considered to be beneficial IN SOME WAYS:
 IF ALL EMPLOYEES STAY IN THE SAME ORGANIZATION FOR A VERY LONG
TIME, MOST OF THEM WILL BE AT THE TOP OF THEIR PAY SCALE WHICH WILL
RESULT IN EXCESSIVE MANPOWER COSTS.
 WHEN CERTAIN EMPLOYEES LEAVE, WHOSE CONTINUATION OF SERVICE
WOULD HAVE NEGATIVELY IMPACTED PRODUCTIVITY AND PROFITABILITY OF
THE COMPANY, THE COMPANY IS BENEFITED.
 NEW EMPLOYEES BRING NEW IDEAS, APPROACHES, ABILITIES & ATTITUDES
WHICH CAN KEEP THE ORGANIZATION FROM BECOMING STAGNANT.
 THERE ARE ALSO SOME PEOPLE IN THE ORGANIZATION WHO HAVE A
NEGATIVE AND DEMORALIZING INFLUENCE ON THE WORK CULTURE AND
TEAM SPIRIT. THIS, IN THE LONG-TERM, IS DETRIMENTAL TO
ORGANIZATIONAL HEALTH.
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 DESIRABLE ATTRITION ALSO INCLUDES TERMINATION OF EMPLOYEES WITH
WHOM THE ORGANIZATION DOES NOT WANT TO CONTINUE A RELATIONSHIP.
IT BENEFITS THE ORGANIZATION IN THE FOLLOWING WAYS:
o IT REMOVES BOTTLENECK IN THE PROGRESS OF THE COMPANY
o IT CREATES SPACE FOR THE ENTRY OF NEW TALENTS
o IT ASSISTS IN EVOLVING HIGH PERFORMANCE TEAMS
 THERE ARE PEOPLE WHO ARE NOT ABLE TO BALANCE THEIR PERFORMANCE
AS PER EXPECTATIONS, LACK POTENTIAL FOR FUTURE OR NEED DISCIPLINARY
ACTION. FURTHERMORE, AS THE REWARDS ARE LIMITED, BUSINESS
PRESSURES DO NOT ALLOW THE MANAGEMENT TO OVER-REWARD THE
PERFORMERS, BUT WHEN UNDESIRABLE EMPLOYEES LEAVE THE COMPANY,
THE GOOD EMPLOYEES CAN BE GIVEN THE SHARE THAT THEY DESERVE.
SOME COMPANIES BELIEVE ATTRITION IN ANY FORM IS BAD FOR AN ORGANIZATION
FOR IT MEANS THAT A WRONG CHOICE WAS MADE AT THE BEGINNING WHILE
RECRUITING. EVEN GOOD ATTRITION INDICATES LOSS AS RECRUITMENT IS A TIME
CONSUMING AND COSTLY AFFAIR. THE ONLY POSITIVE POINT IS THAT THE
REALIZATION HAS INITIATED ACTION THAT WILL LEAD TO CUTTING LOSS.
RETENTION SUCCESS MANTRS
·
Transparent Work
Culture
In today’s fast paced business environments where employees are constantly
striving to achieve business goals under time restrictions; open minded and
transparent work culture plays a vital role in employee retention.
Companies invest very many hours and monies in training and educating
employees. These companies are severely affected when employees check out,
especially in the middle of some big company project or venture. Although
23

employees most often prefer to stay with the same company and use their time and
experience for personal growth and development, they leave mainly because of
work related stress and dissatisfactions.
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.
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.
· Quality Of Work
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:
Occupational health care: THE SAFE WORK ENVIRONMENT 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.
24

Suitable working time: ORGANIZATIONS ARE OFFERING FLEXIBLE WORK OPTIONS
TO THEIR EMPLOYEES WHEREIN EMPLOYEES ENJOY FLEXI-TIMINGS FOR DEDICATING
THEIR EFFORTS AT WORK.
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
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.
· Supporting Employees
ORGANIZATIONS THESE DAYS WANT TO PROTECT THEIR BIGGEST AND
MOST VALUABLE ASSET AND THEY WANT TO DO THIS IN A WAY THAT BEST SUITS
THEIR ORGANIZATIONAL CULTURE. RETAINING EMPLOYEES IS A DIFFICULT TASK.
PROVIDING SUPPORT TO THE EMPLOYEES ACTS AS A MANTRA FOR RETRAINING
THEM. EMPLOYERS CAN ALSO SUPPORT THEIR EMPLOYEES BY CREATING AN
ENVIRONMENT OF TRUST AND INCULCATING THE ORGANIZATIONAL VALUES INTO
EMPLOYEES.
THE MANAGEMENT CAN SUPPORT EMPLOYEES DIRECTLY OR
INDIRECTLY. DIRECTLY, THEY PROVIDE SUPPORT IN TERMS OF PERSONAL
CRISES, MANAGING STRESS AND PERSONAL DEVELOPMENT. MANAGEMENT CAN
SUPPORT EMPLOYEES, INDIRECTLY, IN A NUMBER OF WAYS AS FOLLOWS:
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 Manage employee turnover:
EMPLOYEE TURNOVER AFFECTS THE WHOLE ORGANIZATION IN
TERMS OF PRODUCTIVITY. MANAGING THE TURNOVER, HENCE, BECOMES
AN IMPORTANT TASK. A PROACTIVE APPROACH CAN BE ADOPTED TO
REDUCE ATTRITION. STRATEGIES SHOULD BE FRAMED IN ADVANCE AND
IMPLEMENTED WHEN THE TIMES ARRIVES. TURNOVER COSTS SHOULD
ALSO BE TAKEN INTO CONSIDERATION WHILE FRAMING THESE
STRATEGIES.
 Become employer of choice:
WHAT MAKES A COMPANY AN EMPLOYER OF CHOICE? IS THE
BENEFIT IT OFFERS OR THE COMPENSATION PACKAGES IT GIVES AWAY TO
ITS EMPLOYEES? OR IS IT MEASURED IN TERMS OF HOW THEY VALUE
THEIR EMPLOYEES OR IN TERMS OF CUSTOMER SATISFACTION?
BECOMING AN EMPLOYER OF CHOICE INVOLVES FOLLOWING A ROAD MAP
WHICH TELLS WHERE TO GO AS A BRAND.
 Engage the new recruits:
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THE NEWLY HIRED EMPLOYEES ARE SAID TO BE LEAST
ENGAGED IN THE ORGANIZATION. KEEPING THEM ENGAGED IS AN
IMPORTANT TASK. THE FRESH TALENT SHOULD BE UTILIZED TO MAXIMUM
BEFORE THEY START FEELING BORED IN THE ORGANIZATION.
 Optimize employee engagement:
AN ORGANIZATION’S PRODUCTIVITY IS MEASURED NOT IN
TERMS OF EMPLOYEE SATISFACTION BUT BY EMPLOYEE ENGAGEMENT.
EMPLOYEE SATISFACTION ALSO COMES WITH HIGH ENGAGEMENT LEVELS.
SO, ORGANIZATIONS SHOULD AIM TO MAXIMIZE THE ENGAGEMENT
AMONG EMPLOYEES.
 Coaching and mentoring:
EMPLOYEES WHOSE WORK PERFORMANCE SUFFERS DUE TO POOR
INTERPERSONAL RELATIONSHIPS OR BECAUSE OF LACK OF
INTERPERSONAL SKILLS SHOULD BE PROVIDED PROPER COACHING BY
THEIR SUPERIORS. PLANED COACHING SESSIONS HELP AN INDIVIDUAL TO
WORK THROUGH ISSUES, MAXIMIZE HIS POTENTIAL AND RETURN TO PEAK
PERFORMANCE.
· Feedback
FEEDBACK ACTS AS A CHANNEL OF COMMUNICATION BETWEEN THE
EMPLOYEE AND HIS MANAGER. THE AMOUNT OF INFORMATION EMPLOYEES RECEIVE
ABOUT HOW WELL OR HOW POORLY THEY HAVE PERFORMED IS WHAT WE CALL
FEEDBACK. IT SUGGESTS WHERE THE EMPLOYEE PERFORMANCE IS EFFECTIVE AND
WHERE PERFORMANCE HAS TO IMPROVE.
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Positive feedback :
IT COMMUNICATES MANAGERIAL SATISFACTION. POSITIVE
RECOGNITION FOR GOOD PERFORMANCE BOOSTS UP MORALE OF EMPLOYEES
AND RESULTS IN PERFORMANCE IMPROVEMENT TO A HIGHER PRODUCTIVITY
LEVEL. IT IS BELIEVED THAT POSITIVE FEEDBACK IS THE ONLY TYPE OF
FEEDBACK THAT GENERATES PERFORMANCE ABOVE THE MINIMUM ACCEPTABLE
LEVEL.
Negative feedback :
It OBVIOUSLY COMMUNICATES MANAGER’S DISSATISFACTION.
HOWEVER, NEGATIVE FEEDBACK SOMETIMES MAKE EMPLOYEE TO PUT MORE
EFFORTS TO IMPROVE HIS PERFORMANCE. BUT SUCH TIMES ARE VERY RARE.
MOREOVER THIS IMPROVEMENT IS SHORT TERM.
SOME MANAGERS DO NOT PROVIDE ANY KIND OF FEEDBACK TO THEIR
EMPLOYEES. DUE TO NO FEEDBACK, EMPLOYEES MAY ASSUME THAT THEY ARE
PERFORMING PRODUCTIVELY OR THEY MAY FEEL THAT THE MANAGER IS
SATISFIED WITH THEIR PERFORMANCE.
Thus, feedback is necessary because:
 IT BUILDS TRUST AND ENHANCES COMMUNICATION BETWEEN MANAGER AND
EMPLOYEE.
 IT GIVES MANAGERS AND EMPLOYEES A WAY TO IDENTIFY AND DISCUSS
SKILLS AND STRENGTHS.
 POSITIVE FEEDBACK LEADS TO EMPLOYEE RETENTION AND MOTIVATION.
 IT HELPS IN IDENTIFYING PERFORMANCE AREAS THAT NEED IMPROVEMENT
AND SPECIFIC WAYS TO IMPROVE THEM.
 IT ACTS AS AN OPPORTUNITY TO ENHANCE PERFORMANCE BY IDENTIFYING
RESOURCES FOR SKILL DEVELOPMENT.
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 IT IS AN OPPORTUNITY FOR MANAGERS AND EMPLOYEES TO ASSESS AND
IDENTIFY CAREER AND ADVANCEMENT OPPORTUNITIES.
 IT HELPS EMPLOYEES TO UNDERSTAND THE EFFECTIVENESS OF THEIR
PERFORMANCE AND CONTRIBUTES TO THEIR OVERALL KNOWLEDGE ABOUT
THE WORK
 MANAGERS HAVE TENDENCY TO IGNORE GOOD PERFORMANCES OF THEIR
EMPLOYEES. PROVIDING NO FEEDBACK MAY DEMOTIVATE EMPLOYEES AND
MAY LEAD TO EMPLOYEE ABSENTEEISM. INPUT FROM MANAGER’S SIDE IS
NECESSARY AS IT HELP EMPLOYEES TO IMPROVE THEIR PERFORMANCE AND
INCREASE PRODUCTIVITY.
· Communication Between Employee and Employer
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. COMMUNICATION IS THE SOLUTION TO ALMOST EVERYTHING IN THIS
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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.
There are 3 categories of employees:
 A: Who will leave their current employer in 3 years of their employment
 B: Who have a probability of leaving their current employer in next 3 years
 C: Who will stay with their current employer in the next 3 years
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
EMPLOYEE TURNOVER
 Attrition Rate
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THE ATTRITION RATE HAS ALWAYS BEEN A SENSITIVE ISSUE FOR ALL
ORGANIZATIONS. A FORMULA HAD TO BE DEVISED KEEPING IN VIEW THE NATURE
OF THE BUSINESS AND DIFFERENT JOB FUNCTIONS. MOREOVER, CALCULATING
ATTRITION RATE IS NOT ONLY ABOUT DEVISING A MATHEMATICAL FORMULA.
Attrition rate: There is no standard formula to calculate the attrition rate of a
company. This is because of certain factors AS:
 THE EMPLOYEE BASE CHANGES EACH MONTH. SO IF A COMPANY HAS 1,000
EMPLOYEES IN APRIL 2004 AND 2,000 IN MARCH 2005, THEN THEY MAY
TAKE THEIR BASE AS 2,000 OR AS 1,500 (AVERAGE FOR THE YEAR). IF THE
NUMBER OF EMPLOYEES WHO LEFT IS 300, THEN THE ATTRITION FIGURE
COULD BE 15 PERCENT OR 20 PERCENT DEPENDING ON WHAT BASE YOU
TAKE.
 MANY FIRMS MAY NOT INCLUDE ATTRITION OF FRESHERS WHO LEAVE
BECAUSE OF HIGHER STUDIES OR WITHIN THREE MONTHS OF JOINING.
 IN SOME CASES, ATTRITION OF POOR PERFORMERS MAY ALSO NOT BE
TREATED AS ATTRITION. CALCULATING ATTRITION RATE:
Attrition rates can be calculated using a simple formula:
Attrition =(No. of employees who left in the year / average employees in the year) x
100
Thus, if the company had 1,000 employees in April 2004, 2,000 in March 2005, and
300 quit in the year, then the average employee strength is 1,500 and attrition is 100
x (300/1500) = 20 percent. Besides this, there are various other types of attrition
that should be taken into account. These are:
 Fresher attrition that tells the number of freshers who left the organization
within one year. It tells how many are using the company as a springboard or
a launch pad.
 Infant mortality that is the percentage of people who left the organization
within one year. This indicates the ease with which people adapt to the
company.
 Critical resource attrition which tell the attrition in terms of key personnel
like senior executives leaving the organization.
 Low performance attrition: It tells the attrition of those whO LEFT DUE TO
POOR PERFORMANCE.
 Attrition Costs
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ONE OF THE BEST METHODS FOR CALCULATING THE COST OF
TURNOVER TAKES INTO ACCOUNT EXPENSES INVOLVED TO REPLACE AN
EMPLOYEE LEAVING AN ORGANIZATION. THESE EXPENSES ARE:
A. Recruitment cost
The cost to the business when hiring new employees includes the following six
factors plus 10 percent for incidentals such as background screening:
Time spent on sourcing replacement
 Time spent on recruitment and selection.
 Travel expenses, if any
 Re-location costs, if any n Training/ramp-up time
 Background/reference screening
B. Training and development cost
To estimate the cost of training and developing new employees, cost of new hires
must be taken into consideration. This will mean direct and indirect costs, and can
be largely classified under the following heads:
 Training materials
 Technology
 Employee benefits
 Trainers’ Time
C. Administration COST
They include:
 Set up communication systems
 Add employees to the HR system
 Set up the new hire’s workspace
 Set up ID-cards, access cards, etc.
Employee Turnover Cost Calculation
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The following table can be helpful to calculate the cost of employee turnover per
week or per month.
Employee Detachment Cost
Exit interview (One Hour: Preparation, interview, follow up) Cost of termination
TIME COST SPENT IN ADMINISTRATIVE PROCEDURES INCREASED
UNEMPLOYMENT (BASED ON THE DEPARTMENT OF LABOR)
Cost of vacancy
Overtime
LABOR
Wages
Cost of substitution
Job advertising
PRE-EMPLOYMENT ADMINISTRATION
Cost of new hires’ interviews
Staff cost
Cost of training
Stationary cost (Books, training manuals, etc.)
FORMAL TRAINING SESSIONS (CLASS ROOM, LAB, ETC)
Informal training (Mentors, etc.)
Employee performance differential
Difference in performance (Productivity, learning, etC.)
TOTAL TURNOVER COST PER EMPLOYEE
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Ways to Reduce Employee Turnover
Let us explore some ideas to reduce employee turnover:::
 Hire the best candidate.
 Welcome new employees. Customize your induction program for new
employees according to the requirements. Same induction program can not be
applied to all the candidates. Make them feel welcomed.
 Produce quality managers who can really manage employees well.
 Provide employees with work schedules that are flexible enough to suit their
needs.
 Don’t be too demanding. You re hiring human beings who have their own life
and family commitments. Respect them.
 Provide career counseling and development.
 Discuss your future plans regarding the candidate with the candidate. Let them
know that the management is interested in retaining them and cares for them.
 Take proper feedback from employees regarding their grievances.
 Remember your ex-employees. They can be of help in future. It is also a part of
employee retention.
 Select the right people in the first place through behavior-based testing and
competency screening. The right person, in the right seat, on the right bus is the
starting point.
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Truths About Employee Turnover
It is difficult to accept when organizations say they have zero attrition rates.
Companies may have healthier turnover rates, however, there is no such thing as zero
attrition. There are other such facts about turnover, about which most of us are not
aware. Some of such facts have been highlighted below:
 Turnover always happens: Companies who believe in zero attrition rates only
fool themselves. This happens because employees keep on moving due to
reasons like marriage or further education. Nothing can top these employees
from moving on. So, rather than achieving zero attrition companies should focus
on identifying whom they want to keep so that they have healthy attrition rate.
 Some Turnover is Desirable: Zero attrition is not desirable mainly because of
two reasons. Firstly, if all employees continue to stay in the same organization,
most of them will be at the top of their pay scale which will result in excessive
manpower costs. Secondly, new employees bring new ideas, approaches,
abilities & attitudes which can keep the organization from becoming stagnant.
 Turnover includes costs: Turnover always includes some costs. Consider the
costs of replacing the key employee who falls in to the category of high
performers. This includes the costs of recruitment advertisement, referral
bonuses, selection testing, training costs, etc. Moreover, turnover results in loss
of time and efforts, low productivity, loss of morale, loss of knowledge and so
on.
 High salary doesn’t work: Most managers assume that a high salary package is
enough to keep employees loyal to their organization. Employees may face other
problems like low job satisfaction, low engagement levels, no recognition, poor
working conditions, less support from superiors and so on. Salaries are not
always the solution to attrition. Managers should try to identify the roots of the
problem and then find a feasible solution.
 The manager can reduce attrition: Managers should take primary
responsibility for retaining their employees. Much of the employee’s perception
of job satisfaction stems from the relationship they share with their immediate
supervisor. Managers should try to support their subordinates and give proper
feedback on performance. HR managers should work in collaboration to make
the key employees last in their organization.
 Reducing Turnover takes Commitment: Reducing turnover takes an
investment in coaching, developing, motivating, mentoring & listening to
people. There should be universal acceptance of the goal of reducing turnover
along with top management commitment and dedication.
35

Attrition Rates in Different Sectors In India
The Following graph describes the Attrition Rates in Different Sectors In India.
All the sectors are facing attrition. But the reasons and effects of attrition in every
sector are different. Let us discuss the attrition rates of these sectors in detail:
 FMCG Sector
 Manufacturing Sector
 Capital Goods Sector
 Construction Sector
 Non-voice BPO Sector
 IT – ITES Sector
6. Attrition Rates Of Wipro, TCS, Satyam and Infosys
· Telecom Sector
· Pharmaceuticals Sector
· Biotechnology Sector
· Services Sector
· Financial Sector
· Aviation Sector
· Retail Sector
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· Voice-based BPO Sector
EMPLOYEE ENGAGEMENT
Key Drivers of Employee Engagement
The key drivers of employee engagement are:
· Type of job: The job should be challenging enough to motivate the
employee. The employee should be interested in his/her job.
· Relationship between employee and organizational performance: The
employee should know how he and his work are contributing to the
organization’s goals.
· Growth opportunities: The employee should have ample opportunities for
his career development and growth.
· Brand name: The employee should feel proud of being associated with the
organization.
· Co-workers: The nature and type of co workers also influences the
employee engagement level.
· Skills enhancement: Employee should get ample on-the-job opportunities to
develop their skill set.
· Relationship with the boss: Employee should value his relationship with
his boss.
All these factors when combined help in increasing employee engagement
levels.
37

Attributes of Employee Engagement
There are the 10 most important attributes which lead to better employee
engagement. Let us know them in detail.
· Communicate: Project managers should clearly indicate their expectations
from and about the employee. They should also provide feedback to the
employees regarding their work and performance.
· Career: Management should provide meaningful work to the employees
along with career growth opportunities.
· Confidence: Good managers should induce and boost confidence in an
employee
· Control: Managers should let the employees utilize the control which they
have on their job and career.
· Clarity: Managers should have a clear vision of what job is to be done and
how it is to be done. Also the managers should effectively communicate
these visions and plans.
· Collaborate: Good coordination and relationships should me maintained
within a team. Managers should motivate their employees to work in and as
a team. He should also take steps to cultivate trust among the team members.
· Compliment: Give recognition to the employee for the job well done.
· Connect: Managers should make their employees feel valuable and
important. Show that you care.
· Contribute: Give opportunities to employees to contribute in the
management decision making process. Ask for suggestions, new ideas, and
ways of improvement.
· Credibility: Managers should set examples for the employee by imbibing
and teach others to practice ethical standards and practices. He should
maintain company’s reputation.
38

Increasing Employee Engagement
An organization’s productivity is measured not in terms of employee satisfaction
but by employee engagement. Employees are said to be engaged when they show a
positive attitude toward the organization and express a commitment to remain with
the organization.
Organizations that believe in increasing employee engagement levels focus on:
1. Culture: It consists of a foundation of leadership, vision, values, effective
communication, a strategic plan, and HR policies that are focused on the
employee.
2. Continuous Reinforcement of People-Focused Policies: Continuous
reinforcement exists when senior management provides staff with budgets
and resources to accomplish their work, and empowers them.
3. Meaningful Metrics: They measure the factors that are essential to the
organization’s performance. Because so much of the organization’s
performance is dependent on people, such metrics will naturally drive the
people-focus of the organization and lead to beneficial change.
4. Organizational Performance: It ultimately leads to high levels of trust,
pride, satisfaction, success, and believe it or not, fun.
Increasing employee engagement
· Provide variety: Tedious, repetitive tasks can cause burn out and boredom
over time. If the job requires repetitive tasks, look for ways to introduce
variety by rotating duties, areas of responsibility, delivery of service etc.
· Conduct periodic meetings with employees to communicate good news,
challenges and easy-to-understand company financial information.
39

· Get to know employees' interests, goals, stressors, etc. Show an interest in
their well-being and do what it takes enable them to feel more fulfilled and
better balanced in work and life.
Measuring Employee Engagement
In order to increase employee retention, the organization should know how
engaged their employee are. Here are a few questions which can be asked to the
employees to measure employee engagement levels in the organization.
10 Questions to measure employee engagement::
1. Does the employee know the organization’s expectations from him?
2. Does the employee have all the resources (material, tools, information) to do
his work right?
3. Does the employee find opportunities at work to do what he is best to do?
4. Does the employee get any recognition, praise or acknowledgement for his
work in the last seven days?
5. Does the supervisors or colleagues care about the employee as a person
6. Is the employee encouraged for his development at work?
7. Does employee’s opinion matters or counted?
8. Does the employee feel that his work is important for the organization?
9. Are your fellow employees doing quality work or are committed to do so?
10. Does the employee have a best friend at work?
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Handling Non-Engaged Employees
.
These non engaged employees focus on accomplishing a task rather
than achieving an outcome. Managers tend to believe giving targets to employees
keeps them engaged. In real terms, manager who provides only a task to an
employee reinforces not-engaged behaviors and actually move away from engaging
the heart, mind, and soul of that employee.
Actively disengaged employees aren't just unhappy at work. They
spread their discontentment to every other employee and undermine the work of
others. They are not just indifferent to company goals and mission but also express
their mistrust and animosity. Employees who are not engaged tend to feel their
contributions are being overlooked, and their potential is not being tapped. They
often feel this way because they don't have productive relationships with their
managers or with their coworkers.
Too often people have to work with others who have become actively
disengaged. The way to get people to become a part of an organization is through
relationships. Employees who feel disconnected emotionally from their coworkers
and supervisor do not feel committed to their work. They hang back and do the
minimum because they believe their contribution hardly counts.
Managers should try to interact with these non engaged employees so
as to identify the improvement areas. Providing consistent and positive feedback to
the subordinates can help in boosting the morale of non engaged employees.
By exhibiting a caring nature, manager can show his employees of
what importance they are to him. Managers can also help employees refocus on the
demands of their roles and on the skills, knowledge, and talents they bring to their
jobs.
As employees increasingly work with each other to deliver
commitments, the problems and tensions that are fostered by actively disengaged
workers cause great damage to an organization's functioning. A good manager has
to identify those who are disengaged and explore the reasons behind their
discontentment to determine if coaching or other interventions are appropriate.
In some cases, employees respond favorably to opportunities to
reconnect and rekindle their interest and enthusiasm for their jobs. However there
are some who thrive on the negativity and refuse to become part of any solution. If
they repeatedly refuse opportunities to engage again, terminating their employment
should be seriously considered in order to avoid further damage to staff morale and
organizational progress.
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Employee Scheduling
Higher employee retention rates call for innovative methods of managing
workforce. Employees are leaving their workplaces at a faster pace because of
which managers have to take corrective action to make employees stick to their
organizations. One of the reasons why employees leave is low levels of work
engagement among them. Poor scheduling of work may result in employees who
either are overloaded with work or don’t have any work at all. For the purpose of
engaging employees effectively, managers follow the workforce scheduling process.
Employee scheduling refers to the assignment of tasks between the
employees. It is a difficult and a time consuming process. It involves producing
detailed daily (or monthly) schedules for individual employees while taking the
organization’s goal into consideration.
The people scheduled are assumed to be homogeneous in terms of their
skills, that is, individual skills are not taken into account while scheduling
employees. On the other hand, employee scheduling takes into account individual
skills and distinguishes employees in terms of their skills and abilities.
How it is done
Following points are to be taken into account while scheduling employees:
· Set of skills and the level of proficiency for each employee. This allows
him/her to be assigned to simple tasks in a new skill, thus allowing a gradual
development.
· Employees’ previous assignments so as to ensure that maximum work
duration does not exceed in the current month or quarter.
· Company skills to develop, employees designated for training in these skills
· Scheduling history can also be used to produce schedules that are balanced
with respect to values of counters.
· The companies create a scheduling model which is a detailed assignment of
employees to activities or skills on each day of the week. Since employee
scheduling is a complex process, many software are available in market
which make it an easy task like VasTech's integrated workforce management
tools for scheduling. It focuses on workforce scheduling and self scheduling,
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credentialing and expiration notification, payroll, costing, and time and
attendance systems.
EMPLOYEE EMPOWERMENT
· An empowered organization is one in which individuals have the knowledge,
skill, desire, and opportunity to personally succeed in a way that leads to
collective organizational success." - Stephen Covey
· An organization’s human resource is its most valuable asset. The
employees are the repository of knowledge, skills and abilities that can’t be
imitated by the competitors. Technologies, products and processes are easily
imitated by the competitors; however, employees are the most strategic
resource of the company.
· Generally, people are a firm’s most underutilized resource. But employees
often are afraid of taking this responsibility. They fear the additional work
pressure that they will have to bear as a part of being empowered. Besides,
they also fear being held accountable for the decisions they make.
· Empowerment is the degree of responsibility and authority given to an
employee. By empowerment, the employees are supported and encouraged to
utilize their skills, abilities and creativity by accepting accountability for
their work. Empowerment occurs when employees are adequately trained
· Employee empowerment entails identifying how much responsibility and
authority an individual can effectively handle without becoming over-burdened
or distressed. Empowerment includes supervisors and employees
working together to establish clear goals and expectations within agreed-upon
boundaries.
Why Employee Empowerment Fails?
Employee empowerment means that an employee has the power to take some
decisions without consulting his boss or reporting manager. Employee
empowerment is an essential part of employee retention. But due to many known or
unknown reasons, it fails. Some of the reasons may be:
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· Managers don’t take employee empowerment seriously in the first place. It
becomes more of a prestige issue to give control to others.
· Even if managers take it seriously, they are unable to lay down proper
boundaries for the empowerment.
· Managers sometimes fail to provide a strategic framework.
· On the other hand, managers sometimes hand over all responsibilities to the
employee. This may lead to misuse of powers given to the employee.
· Some managers act like a barrier and hamper the decision making practice of
the empowered employee out of jealousy.
MANAGING RETENTION
Managing Employee Retention
The task of managing employees can be understood as a three stage process:
1. Identify the cost of employee turnover
2. Understand why employee leave
3. Implement retention strategies
Identify the cost of employee turnover:
The organizations should start with identifying the employee turnover rates within a
particular time period and benchmark it with the competitor organizations. This will
help in assessing the whether the employee retention rates are healthy in the
company. Secondly, the cost of employee turnover can be calculated. According to a
survey, on an average, attrition costs companies 18 months’ salary for each manager
or professional who leaves, and 6 months’ pay for each hourly employee who
leaves. This amounts to major organizational and financial stress, considering that
one out of every three employees plans to leave his or her job in the next two years.
Understand why employees leave:
Why employees leave often puzzles top management. Exit interviews are an ideal
way of recording and analyzing the factors that have led employees to leave the
organization. They allow an organization to understand the reasons for leaving and
underlying issues. However employees never provide appropriate response to the
asked questions. So an impartial person should be appointed with whom the
employees feel comfortable in expressing their opinions.
Implement retention strategy:
Once the causes of attrition are found, a strategy is to be implemented so as to
reduce employee turnover. The most effective strategy is to adopt a holistic
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approach to dealing with attrition. An effective retention strategy will seek to
ensure:
· Attraction and recruitment strategies enable selection of the ‘right’ candidate
for each role/organization
· New employees’ initial experiences of the organization are positive
· Appropriate development opportunities are available to employees, and that
they are kept aware of their likely career path with the organization
· The organization’s reward strategy reflects the employee drivers
· The leaving process is managed effectively
How to Increase Employee Retention
Companies have now realized the importance of retaining their quality
workforce. Retaining quality performers contributes to productivity of the
organization and increases morale among employees.
Four basic factors that play an important role in increasing employee
retention include salary and remuneration, providing recognition, benefits and
opportunities for individual growth. But are they really positively contributing to
the retention rates of a company? Basic salary, these days, hardly reduces turnover.
Today, employees look beyond the money factor.
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Employee retention can be increase by inculcating the following practices:
1. Open Communication:
A culture of open communication enforces loyalty among
employees. Open communication tends to keep employees informed on key
issues. Most importantly, they need to know that their opinions matter and
that management is 100% interested in their input.
2. Employee Reward Program:
A positive recognition for work boosts the motivational levels of
employees. Recognition can be made explicit by providing awards like best
employee of the month or punctuality award. Project based recognition also
has great significance. The award can be in terms of gifts or money.
3. Career Development Program:
Every individual is worried about his/her career. He is always
keen to know his career path in the company. Organizations can offer various
technical certification courses which will help employee in enhancing his
knowledge.
4. Performance Based Bonus:
A provision of performance linked bonus can be made wherein an
employee is able to relate his performance with the company profits and
hence will work hard. This bonus should strictly be productivity based.
5. Recreation facilities:
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Recreational facilities help in keeping employees away from stress
factors. Various recreational programs should be arranged. They may include
taking employees to trips annually or bi-annually, celebrating anniversaries,
sports activities, et al.
6. Gifts at Some Occasions:
Giving out some gifts at the time of one or two festivals to the
employees making them feel good and understand that the management is
concerned about them.
EXAMPLES:
Employers Key Drives To Attract And Retain Talent
Procter and Gamble India
o Early responsibilities in career
o Flexible and transparent organizational culture
o Global opportunities through a variety of exposure
and diverse experiences
o Performance Recognition
American Express (India)
o Strong global brand
o Value-based environment
o Pioneer in many people practices
NTPC
o Learning and growth opportunities
o Competitive rewards
o Opportunity to grow, learn and implement
o Strong social security and employee welfare
performance- oriented culture
Johnson & Johnson
o Strong values of trust, caring fairness, and respect
within the organization
o Freedom to operate at work
o Early responsibility in career
o Training and learning opportunities
o Visible, transparent and accessible leaders
o Competitive rewards
o Innovative HR programs and practices
Glaxo Smith Kline
o Performance-driven Rewards
o Its belief in “Growing our own timber”
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Consumer Healthcare
o Comprehensive development and learning
programs
o Flat organization, where performance could lead to
very quick progression
o Challenging work context
o Competitive rewards
o Exhaustive induction and orientation program
Tata Steel
o Organization philosophy and culture
o Job stability
o Freedom to work and innovate
Colgate Palmolive India
o Company brand
o Open , transparent, and caring organization
o Management according to the managing with
respect to guiding principles
o Training ad development programs
o Structured career planning process
o Global career opportunities
Wipro
o Company’s brand as an employer
o Early opportunities for growth
o High degree of autonomy
o Value compatibility
o Innovative people program
Indian Oil Corporation
o Company brand image
o Work ethics
o Learning and growth opportunities
o Challenging work assignments
o Growing organization
TCS
o The group brand equity
o Strong corporate governance and citizenship
o Commitment to learning and development
o Best in people practices
o Challenging assignments
o Opportunity to work with fortune 500 clients
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Retention Bonus
 Higher attrition rates within a particular industry have forced companies to
use some innovative strategies to retain employees. Retention Bonus is one
of the important tools that are being used to retain employees. Retention
bonus is an incentive paid to an employee to retain them through a
critical business cycle.
 According to a survey, non-management employees generally receive about
10 percent of their annual salaries in bonuses, while management and top-level
supervisors earn an additional 50 percent of their annual salaries.
While bonuses based on salary percentages are the generally used, some
companies choose to pay a flat figure.
 In some companies, bonuses range from 25 percent to 50 percent of annual
salary, depending on position, tenure and other factors. Employees are
chosen for retention bonuses based on their contributions to management
and the generation of revenue. Retention bonuses are generally vary from
position to position and are paid in one lump sum at the time of termination.
However, some companies pay in installments as on when the business
cycle completes.
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 A retention period can run somewhere between six months to three years. It
can also run for a particular project. A project has its own life span. As long
as the project gets completed, the employees who have worked hard on it
are entitled to receive the retention bonus. For example, the implementation
of a system may take 18 months, so a retention bonus will be offered after
20 months.
 Although retention bonuses are becoming more common everywhere, some
industries are more likely than others to offer them. Retail/wholesale
companies are the most appropriate to implement stay-pay bonuses,
followed by financial service providers and manufacturing firms.
Companies of all sizes use retention bonus plans to keep knowledge
employees retained in the company.
 To retain its key senior employees post merger with EDS Corporation,
Mphasis is providing cash component based retention bonus plan for its
employees. This is mainly to retain good employees and provide them a
cash incentive to keep them motivated.
Hire Right Talent
Employee retention starts with recruitment. Early departures arise from the wrong
recruitment process. Here are a few ways to ensure how to hire the right talent for a
particular job.
· Hire appropriate candidates. Hire candidates who are actually suitable for
the job. For this the employer should understand the job requirements
clearly. Don’t hire under qualified or clearly overqualified candidates.
· Provide realistic job preview at the time of hiring: Mostly employees
leave an organization because they are given the real picture of their job
responsibilities at the time of joining. Attrition rate can be reduced if a right
person is hired for a right job. Realistic preview of the job responsibilities
can be given to the employment seekers by various methods like discussions,
trial periods, internships etc.
· Clearly discuss what is expected from the employee: Before joining the
organization, tell the candidate what is expected from him. Setting wrong
expectations or hiding expectations will result in early leaving of employees.
· Discuss what the expectations of the employees are: Ask employees what
they expect from the organization. Be realistic. If their requirements can be
fulfilled only then promise them. Or tell them before hand that their
requirements can not be fulfilled. Don’t show them an unrealistic picture.
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· Culture fit: Try to judge individual’s capability to adapt to the
organization’s culture. A drastic change in the culture may give a culture
shock to the candidate.
· Referrals: According to the research, referred candidates stay longer with
the organization. There is a fear of hampering the image and reputation of
the person who referred the candidate.
Manager Role in Retention
When asked about why employees leave, low salary comes out to be a
common excuse. However, research has shown that people join companies, but
leave because of what their managers’ do or don’t do. It is seen that managers who
respect and value employees’ competency, pay attention to their aspirations, assure
challenging work, value the quality of work life and provided chances for learning
have loyal and engaged employees. Therefore, managers and team leaders play an
active and vital role in employee retention.
Managers and team leaders can reduce the attrition levels considerably by
creating a motivating team culture and improving the relationships with team
members. This can be done in a following way:
· Creating a Motivating Environment: Team leaders who create motivating
environments are likely to keep their team members together for a longer
period of time. They can also come through serious events e.g. arranging a
talk by the VP of Quality on career opportunities in the field of quality.
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· Standing up for the Team: Team leaders are closest to their team members.
While they need to ensure smooth functioning of their teams by
implementing management decisions, they also need to educate their
managers about the realities on the ground.
· Providing coaching: Everyone wants to be successful in his or her current
job. However, not everyone knows how. Therefore, one of the key
responsibilities will be providing coaching that is intended to improve the
performance of employees. Managers often tend to escape this role by just
coaching their employees. However, coaching is followed by monitoring
performance and providing feedback on the same. .
· Extra Responsibility: Giving extra responsibility to employees is another
way to get them engaged with the company. However The manager must
spend good time teaching the employees of how to manage responsibilities
given to them so that they don’t feel over burdened.
· Focus on future career: Employees are always concerned about their future
career. A manager should focus on showing employees his career ladder.
Therefore, managers should play the role of career counselors as well.
Manpower retention during recession
Focusing on employee retention at a time when companies are experiencing mass
layoffs may seem like an oxymoron. Yet, high-level players will always be in demand.
Inspiring, satisfying and retaining top players in an organization are the key business
objectives in any economic environment. The best companies are those who focus on
performance-driven reward strategies. The current US financial crisis has had quite an
impact on India as well. The Indian IT industry has witnessed a slowdown of
approximately 40 percent in recruiting new people.
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Harish Jayachandran, HR, Apsis Technologies said, “We at Apsis are not much affected
due to the economic recession as far as manpower in concerned. However, we are taking
preventive measures to address key issues, such as retaining our manpower and utilizing
maximum current resources available within the company.”
Retention during recession
 According to experts, employers, recruiters and workers are becoming
concerned about their job security as the US credit crisis is deteriorating. In most
of the companies be it an IT company or in the corporate house, the employers
are often concerned about retention.
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 IT companies, engineering firms and export-oriented industries such as textiles,
pharmaceuticals and automotive components are all likely to feel the pressure.
 Navnita Nair, Manager-HR, NewWave Computing said, “In a recession, the
challenge is not to retain employees but to motivate them to perform their 200
percent to achieve results. Being in a sales focused organization, the easiest thing
for an employee to do is to shrug his shoulders and say 'recession-no business'
and quit.
 The question here is-what makes an excelling organization different from the
others? Why do some organizations withstand pressure, while others crumble?
This is the time when employees have to understand that they need to think
different.”
 Talking about the challenges faced by most of the companies RS Shanbhag,
CMD of Value Points Systems said, “Recession purifies the system and helps in
bifurcating the best from the rest. We are gearing up from today itself to prepare
for the best to come and go cracking when markets turn around from this
recession. We are back to basics, redefining and fine-tuning every aspect of
doing business.”
 During financial turmoil cost cutting measures are inevitable for companies.
Nevertheless, employee retention remains a mystery to many companies. We
should be optimistic and hopeful to see significant positive movement by mid
2009. The job market shall deteriorate and will see much more softening. It is
the time for industry to take necessary steps before the economic headwinds take
a toll on employment. This situation would last for at least one and half year
more. The pain is not anywhere close to being over it is yet to begin
Exit Interviews
In the most straightforward terms, an exit interview is simply a means of
determining the reasons why a departing employee has decided to leave an organization.
In fact, it appears that many organizations take this definition literally... in a 1992
survey conducted by Human Resource Executive Magazine, 96% of HR managers agree
that they conduct exit interviews with employees who are leaving voluntarily.
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(1) However, in most cases, the information collected is not put to any useful purpose.
In fact, the same study showed that just 4% of companies conducting exit interviews
conduct them in a structured and systematic way.
(2) This situation does not appear to be much different than in 1975 and again in 1981
when several thorough reviews of exit survey practices indicated that the information
gathered from exit interviews is rarely used.
(3) It appears, then, that many organizations are failing to recognize the value of a
systematic approach to collecting information from exiting employees, including::
· Gathering and collating the data in a structured manner.
· Aggregating the results for the organization as a whole.
· Analysing the findings to identify consistent trends, patterns and themes
· Using the results to determine and implement strategies to increase retention
and reduce turnover.
The traditional method of having the employee’s supervisor or a company HR
representative conduct an in-person interview on an employee’s final day is
fraught with difficulties and problems, including being time-consuming, difficult
to tabulate, not necessarily executed consistently and both less reliable and valid
than using surveys to collect the data.
(4) As an alternative, there are a variety of third party methods available that can be
used to interview departing employees in a more effective and efficient manner than the
internal in-person interview. Given the proliferation of corporate Intranets, a Web-based
method of data collection can be particularly useful in meeting this need. Some
principles for the design and deployment of exit surveys will be provided in this
Knowledge Byte following a review of the most recent thinking and analysis of
employee turnover.
The value of exit survey
A structured system of exit surveys can play an integral role in a well-planned program
of employee satisfaction and work climate research. Some useful principles for
planning an exit survey system include being:
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 Universal – interviewing all voluntary departures provides a more complete
understanding of turnover.
 Standardized – using a core set of consistent questions ensures
comparability throughout the organization and across time.
 Comprehensive – including feedback on the work environment in addition
to reasons for leaving increases usefulness in determining strategies to
reduce turnover.
 Independent – minimizing the discomfort in revealing the true reasons for
leaving improves the reliability of the results.
 Available – encouraging centralized access to the findings increases the
likelihood of taking action.
 Monitored – setting targets for reduction in turnover through planned
strategies helps to ensure that the investment made in exit surveys is put to
its maximum use.
Guidelines for determining the exit interview content
As with all questionnaires, it is important to strike the right balance between information
needs and survey length when putting together an exit survey instrument. There are six
key guidelines that should be kept in mind to help ensure that the end result is a useful
and effective survey:
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1. Do not focus solely on the employee’s reasons for leaving – although this is
extremely important information, it is also critical to include broader measures
about the employee’s attitudes and experiences so as to help identify the issues
and concerns that may not surface when asking about reasons for leaving.
2. Ensure that there is more than one way for employees to express their reasons
for leaving – including several open-ended questions for them to include their
own comments – so as to get a full perspective on the decision to leave.
3. In order to get beyond a focus on the decision itself, incorporate key attitudinal
measures such as the employee’s satisfaction with the job itself, an assessment
of the organization’s work culture and effectiveness of its various lines of
communication, how well the employee’s job responsibilities were defined,
perceived opportunities for advancement and the employee’s perspective on the
amount of training, feedback and recognition received.
4. Recognize that, for maximum effect, any exit survey system needs to be
implemented consistently and in such a way as to encourage employees to share
their opinions as honestly and candidly as possible.
5. Incorporate the ability to examine results not only on the basis of individual
results but for the organization as a whole, as well as on the basis of the relevant
diagnostics, such as region, department or manager.
6. Remember that there is an important distinction to be made between
idiosyncratic reasons for leaving, over which the organization has little control,
and systemic reasons for leaving, over which the organization can exercise
substantial control.
BPO Employee Retention
Attrition is the biggest problem faced by BPOs these days.. It is very important to
control this attrition rate. Many retention schemes are applied in BPOs for retention.
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A single tool like training alone is not sufficient for employee retention. The best
results for employee retention can be achieved by applying different tools
strategically. Let us now learn about various strategies which can boost successful
employee retention in BPOs.
1. First know the cost. This is the most basic and initial part of the retention
process. A good retention plan needs all the facts. The turnover cost includes
cost of selection process, hiring, induction, training, lost productivity, etc.
2. Hire from known sources like employee referrals through trustworthy
employees.
3. Hire the right people. Retention starts with recruitment itself. Identify the
characteristics of the people you want to hire who fit in organization’s
culture. To retain employees, the people who are productive and are likely to
stay for a longer time should be hired.
4. Focus on employee orientation. It is the first impression that the employee
takes home with him. A proper welcome form the management will
encourage the employee to stay with the organization.
5. Individual development. Develop career plans for employees. Initiate
mentorship and higher education programs to keep the learning and
development moving.
6. Training for managers. An important factor that keeps the employee in the
organization is the manager. Employees need a manager who manages them
well. A manager should be a good listener and motivator. Proper training
should be given to the managers.
7. Find the reason why employees are leaving. Conduct exit interviews with the
employees after 3-4 months of leaving the job. This is because most of the
employees would not like to reveal the true reason of quitting the job as long
as they are in the organization and are associated with the job. The exit
interviews can be conducted online. Then the employees can talk straight-from-
the-shoulder.
8. Employee recognition. Star of the month, top performer, picture on bulletin
boards, appreciation cards and certificates, etc, increase employee moral and
confidence. This is a great way to retain employees of a call center.
LG COMPANIES RETENTION POLICIES:
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To retain employees it is very important to give them a feeling of belongingness in the
company. For this they conduct many activities like:
1. There’s a weekly meeting of every dept where the employees are asked what
their expectations are from the company to make the atmosphere and climate
joyful.
2. After every 15 days one day FUN TRIP is conducted (within 50-70 Kms) from
the company. Places like Essel world, Lonavla, Alibagh Beach, Matheran Hill
Station etc where the employee can have fun and relax from their regular work.
The destination of the fun trip is decided by the employee themselves. The
expense is held by the company.
3. Every Employee is given a Laptop, Mobile (Rs 500 card free every month) or
Landline Phone free.
4. “MY DAY”- Every week the employee can have 2 “my days”, i.e. for two days a
week they can have their own time away from office after 1.30 pm.
5. Annual Day – The annual day is on 24th dec. Every employee gets a gift
voucher, Lunch at some good hotel and a fun tour to Essel world or water
Kingdom etc.
6. Annually they also have interdepartmental matches like Cricket Matches,
Volleyball Matches etc to improve team building and feeling of belongingness.
7. Culture: On every Indian festival there’s a big celebration.
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 Ex: On Sank rant they have a “BHARTIYA JEVAN”. They fly colourful
kites and have competition between the employees.
 Ex: On Diwali they enjoy sweets and crackers with traditional dresses.
8. Employee of the week- AWARD:
 Every week one worker is honored based on the performance of the worker.
This improves their moral and encourages them to work hard for the coming
week.
 Every month one employee is honored as Employee of the Month
 Annually one employee is honored as Employee of the year.
9. Quarterly the MD does performance appraisal of every LINE and checks which
line has achieved production as per expectation or more than that. All the
members of the line are gifted and their names are displayed in their annual
magazine. This encourages the Line members to work hard and efficiently.
10. The company provides the facility of all indoor games along with a Swimming
pool for the refreshment of the employee.
Ex. Table Tennis, Chess, Badminton, Snooker, etc.
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WIPRO
About the company
 Wipro BPO is uniquely positioned to service customer requirements by
leveraging its tenets of quality and innovation, the best people talent, self
sustaining process framework and domain knowledge.
 They offer customized service offerings; translating into the most flexible
and cost effective services of the highest quality for our customers.
In 2002, Wipro took a quantum jump in the BPO services by acquiring the
then Spectra mind.
 Wipro BPO Solutions complements the services offered by Wipro
Technologies, making it one of the largest BPO service players.
With over 19,000 people, operating out of 9 different locations (India and
Eastern Europe),
 Wipro BPO also has deep expertise in delivering process specific solutions
in areas like Finance & Accounting, Procurement, HR Services, Loyalty
Services and Knowledge Services.
 The Company Headquarters are located in New Delhi, with six state-of-the-art
facilities in Mumbai, Pune, Chennai & Kolkata and global offices in US,
UK and Canada. Wipro BPO provides a broad range of services from
customer relationship management, back office transaction processing to
industry specific solutions.
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ANALYSIS AND BRIEF STUDY OF THE COMPANY:
Different Types of Services Being Offered By
WIPRO (bpo)
1. Customer Support Services.
2. Technical Support Services.
3. Telemarketing Services.
4. Employee IT Help-desk Services.
5. Insurance Processing.
6. Data Entry Services / Data Processing Services.
7. Data Conversion Services.
8. Scanning, OCR with Editing & Indexing Services.
9. Book Keeping and Accounting Services.
10. Form Processing Services:
11. Internet / Online / Web Research.
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Why people leave the WIPRO
1. No growth opportunity/lack of promotion
2. For higher Salary
3. For Higher education
4. Misguidance by the company
5. Policies and procedures are not conducive
6. No personal life
7. Physical strains
8. Uneasy relationship with peers or managers
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BENEFITS PROVIDED BY THE COMPANY
TO RETAIN ITS EMPLOYEE
1. Group Medi-claim Insurance Scheme: This insurance scheme is to provide
adequate insurance coverage of employees for expenses related to
hospitalization due to illness, disease or injury or pregnancy in case of female
employees or spouse of male employees. All employees and their dependent
family members are eligible. Dependent family members include spouse, non-earning
parents and children above three months
2. Personal Accident Insurance Scheme: This scheme is to provide adequate
insurance coverage for Hospitalization expenses arising out of injuries sustained
in an accident. This covers total / partial disablement / death due to accident and
due to accidents.
3. Subsidized Food and Transportation: The organizations provide
transportation facility to all the employees from home till office at subsidized
rates. The lunch provided is also subsidized.
4. Company Leased Accommodation: Some of the companies provides shared
accommodation for all the out station employees, in fact some of the BPO
companies also undertakes to pay electricity/water bills as well as the Society
charges for the shared accommodation. The purpose is to provide to the
employees to lead a more comfortable work life balance.
5. Recreation, Cafeteria, ATM and Concierge facilities: The recreation facilities
include pool tables, chess tables and coffee bars. Companies also have well
equipped gyms, personal trainers and showers at facilities.
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6. Corporate Credit Card: The main purpose of the corporate credit card is
enable the timely and efficient payment of official expenses which the
employees undertake for purposes such as travel related expenses like Hotel
bills, Air tickets etc
7. Cellular Phone / Laptop: Cellular phone and / or Laptop are provided to the
employees on the basis of business need. The employee is responsible for the
maintenance and safeguarding of the asset.
8. Personal Health Care (Regular medical check-ups): Some of the BPO'S
provides the facility for extensive health check-up. For employees with above 40
years of age, the medical check-up can be done once a year.
9. Loans: Many BPO companies provide loan facility on three different occasions:
Employees are provided with financial assistance in case of a medical
emergency. Employees are also provided with financial assistance at the time of
their wedding. And, the new recruits are provided with interest free loans to
assist them in their initial settlement at the work location.
10. Educational Benefits: Many BPO companies have this policy to develop the
personality and knowledge level of their employees and hence reimburses the
expenses incurred towards tuition fees, examination fees, and purchase of books
subject, for pursuing MBA, and/or other management qualification at India's top
most Business Schools.
11. Performance based incentives: In many BPO companies they have plans for,
performance based incentive scheme. The parameters for calculation are process
performance i.e. speed, accuracy and productivity of each process. The Pay for
Performance can be as much as 22% of the salary.
12. Flexi-time: The main objective of the flextime policy is to provide opportunity
to employees to work with flexible work schedules and set out conditions for
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availing this provision. Flexible work schedules are initiated by employees and
approved by management to meet business commitments while supporting
employee personal life needs .The factors on which Flexi time is allowed to an
employee include: Child or Parent care, Health situation, Maternity, Formal
education program
13. Flexible Salary Benefits: Its main objective is to provide flexibility to the
employees to plan a tax-effective compensation structure by balancing the
monthly net income, yearly benefits and income tax payable. It is applicable of
all the employees of the organization. The Salary consists of Basic, DA and
Conveyance Allowance. The Flexible Benefit Plan consists of: House Rent
Allowance, Leave Travel Assistance, Medical Reimbursement, Special
Allowance
14. Regular Get together and other cultural programs: The companies organizes
cultural program as and when possible but most of the times, once in a quarter,
in which all the employees are given an opportunity to display their talents in
dramatics, singing, acting, dancing etc. Apart from that the organizations also
conduct various sports programs such as Cricket, football, etc and regularly play
matches with the teams of other organizations and colleges.
15. Wedding Day Gift: Employee is given a gift voucher of Rs. 2000/- to Rs.
7000/- based on their level in the organization.
OBSERVATIONS AND FINDINGS OF WIPRO
 Wipro is facing the problem of attrition but the problem of attrition became
serious from last 3 years. The organization attrition rate is 15%
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 The reasons for attrition are competitors, better salaries provided by other
companies.
 They do the employee satisfaction survey, they found that their employees are
happy with the company.
 They cope with attrition by providing training, personal development.
 Reward & Recognition are our main retention strategies
 The company success rate in retaining employees is good, its 80%
 The HR suggestions to Top Management to reduce attrition are Good Training
Calendar, salary rise as per market standards, better career growth, healthy
environment at work place
 The company does not face with the problem of poachin, they have policies to
reduce poaching
 The company motivate the employees with concept of better growth, personal
development through training
 The method of calculating employee turnover is number of the employees in the
beginning of year/ no of employees in the closing year*100
 After various initiatives that the company has used the attrition rate has come
down.
 There is no such different sub dept in HR for retention
 Night Shift allowances, conveyance allowances, food coupons, incentives.
Transportation are the employee benefits provided by the company.
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RECOMMENDATION
There could be a few recommendations that the co. should look upon but the
nevertheless the co. is already in a good position in retaining the employee but there are
certain points which the co. should lay more importance as it may help the co. to solve
certain issues in future with regard to the employees.
I would recommend following points to retain employee
 The most important and a must is the issue of responsibility::
In today’s competitive world each and every employee of an
organization is given a lot of responsibility to do so that each and every employee
contributes to the quality and profits made by the organizations. It may affect their
morale and demotivate the employees because of a lot of responsibilities. One of the
best ways to handle this problem is a monthly or quarterly checkup of the work done
by the employees. No excess work to be given to an employee.
 Importance of training::
The training and development given to the workers are given adequate importance
in the organization. The employees are really happy and satisfied with the training
and development given by the company. The company believes, “it is a must to
realize that the expenses done on training and development would indirectly save
on the organization cost and help to retain the people in the organization.”
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