A STUDY TO REDUCE EMPLOYEE ATTRITION IN IT INDUSTRIES

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International Journal of Marketing and Human Resource Management (IJMHRM)
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A STUDY TO REDUCE EMPLOYEE
ATTRITION IN IT INDUSTRIES
Dr. V. Antony Joe Raja
HOD, Department of Management,
Sri Muthukumaran Institute of Technology,
Near Mangadu, Kunrathur Rd, Chikkarayapuram, Chennai,
Tamil Nadu, 600 069
R. Anbu Ranjith Kumar
Research Scholar,
Department of Management Studies,
Karpagam University, Coimbatore, India
ABSTRACT
The research project entitled ‘Reduction of Employee Attrition’ is an
attempt to understand the opinion and attitudes of the various categories of
employees of IT sector towards the reduction of employee attrition in the
organisations. Employee attrition is a serious issue, especially in today’s
knowledge-driven marketplace where employees are the most important
human capital assets, attrition directly or indirectly impacts on organization’s
competitive advantage.
The tangible costs of employee attrition would be the cost of training new
employees, the recruitment and selection costs, adjustment time, possible
product or service quality problems, costs of temporary staff, the cost of
training, the cost of loss productivity, the cost of lost knowledge and the cost
of the position remaining vacant till a suitable replacement is found.
The intangible costs, which may be even more significant than the tangible
cost, this involves the effect of attrition on organizational culture, employee
morale, social capital or organizational memory. All these costs would
significantly take away the profitability and the competitive advantage of the
firm.
It is important for every organization to understand what attracts and
retains a potential candidate and predict attrition early in the recruitment
process to curtail significant loss of productivity among hiring managers,
recruiters and eventual loss of revenue and moneys.
Employee attrition is a very big problem globally. Attrition rate is
increasing day by day, and especially the software industry is affected the

Dr. V. Antony Joe Raja and R. Anbu Ranjith Kumar
most in the present era. Why an Employee leaves a company is the question
asked by most of the employers. Companies even hire Private HR
professionals to study the company’s work and find out why an employee is
dissatisfied. The data was collected through well structured questionnaires
which contains closed end question
This survey was carried out in various departments of the Company. The
research design used for this study is descriptive in nature. The descriptive
study helps the researcher to find out various characteristics of the
population. Random sampling technique was adopted for selecting sample
units from the employees. The methods of data collection for the study include
both primary and secondary data. The primary data were collected through
questionnaire by conducting personal interview with the employees. The
source of secondary data was company profiles and websites. A sample of 300
employees helped to analyze their satisfaction level towards the organisation
and provide valuable suggestions.
The statistical tool used for analyzing and interpreting the opinions of the
employees and the tool includes simple percentage analysis and hypothesis
testing (chi square test and correlation & coefficient test). The results were
presented with the help of different charts and diagrams. Findings of the study
were drawn from the analyzing of data’s, suggestions and conclusions have
been made based on the findings.
Cite This Article: Dr. V. Antony Joe Raja and R. Anbu Ranjith Kumar, A
Study To Reduce Employee Attrition In It Industries. International Journal of
Marketing and Human Resource Management, 6(3), 2015, pp. 01-14.
http://www.iaeme.com/IJMHRM/issues.asp?JType=IJMHRM&VType=7&IType=1
ADVANTAGES AND DISADVANTAGES OF EMPLOYEE
ATTRITION
Advantage
 Attrition positively benefits organization, this happens whenever a poor performer is
replaced by a more effective employee, and can happen when a senior retirement
allows the promotion or acquisition of fresher’s.
 Moderate levels of staff attrition can also help to reduce staff costs in organizations
where business levels are unpredictable in such situations when business is slack it is
straightforward to hold off filling recently created vacancies for some weeks.
 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.
 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:

A Study To Reduce Employee Attrition In It Industries
1. It removes bottleneck in the progress of the Company.
2. It creates space for the entry of new talents.
3. 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.
Disadvantage
 Talent cost: it includes the cost of lost knowledge, skills and contacts that the person
who is leaving is taking with them out of your door.
 Recruitment cost the cost of advertisements; agency costs; employee referral costs;
internet posting costs.
 Calculate the cost of the manager who has to understand what work remains, and how
to cover that work until a replacement is found. Cost of the various candidate pre-
employment tests to help assess candidates' skills, abilities, aptitude, attitude, values
and behaviours.
 Training cost it includes the cost of orientation in terms of the new person's salary and
the cost of the person who conducts the orientation. It also consists of the training.
calculate the cost of various training materials needed including Company product
manuals, computer or other technology equipment used in the delivery of the training
 Motivational cost: it refers to the cost arises because of motivating the other
employees to retain them in the organization in terms of increasing their salary and
time.
 Lost productivity costs: as the new employee is learning the new job, the Company
policies and practices, etc. they are not fully productive.
OBJECTIVES OF THE STUDY
Primary Objective
 To evaluate the factors that influences the employee attrition in IT sector.
Secondary Objectives
 To understand the underlying factors that retains the employee in IT sector.
 To find the core attributes that focus more on working environment in IT sector.
 To analyze the steps taken to reduce attrition in IT sector.
NEED FOR THE STUDY
 The success of any IT sector depends largely on the workers, the employees are
considered as the backbone of the organization.
 The attrition rate in IT sector is 11.4%. So this study focused on why the Attrition
occurs and the possible ways to reduce it.
 The study was mainly undertaken to identify the level of employee’s attitude, the
dissatisfaction factors they face in the organization and for what reason they prefer to
change their job. Once the levels of Employee’s attitude are identified, it would be
possible for the management to take necessary action to reduce attrition level. Since

they are considered as backbone of the Company, their progression will lead to the
success of the Company for the long run.
 This study can be helpful in knowing, why the employees prefer to change their job
and which factors make employee dissatisfy.
 Since the study is critical issue, it is needed by the organizations in order to assess the
overall interest and the feelings of the employees towards their nature of job and
organization.
 This study can be helpful to the management to improve its core weaknesses by the
suggestions and recommendations prescribed in the project.
 This study can serve as a basis for measuring the organization’s overall performance
in terms of employee satisfaction.
 The need of this study can be recognized when the result of the related study need
suggestions and recommendations to the similar situation.
SCOPE OF THE STUDY
The study on REDCTION OF EMPLOYEE ATTRITION is carried out in IT
SECTOR Chennai for a period of 72 weeks. This study is carried out using
questionnaire which forms basis for data collection the target A sample of 300
employees. The tools used for analysis are
 Simple percentage method.
 Chi square method.
 Correlation coefficient method.
SIGNIFICANT OF THE STUDY
The significance of the study lies in the detonation of the IT sector in the recent years.
Where on one hand the sector is growing with leaps and bounds, on the other the
employee turnover has been alarmingly high, thus costing a lot to the company.
The middle level and low level employees are victims of dearth of motivation and
employee satisfaction also seems to be brandishing. The study is an attempt to assess
the patterns of attrition in IT sector and analyze the relationship among employee
motivation, job satisfaction and employee retention, so as to utilize employee
motivation to retain employees in an organization.
Thus, not only is it significant for academicians but also for professionals who
can exploit it to control the employee turnover.
LIMITATIONS
 Time constraint - While getting all the questionnaires filled, I faced that most of the
employee’s didn’t want to respond because of the limited time they had. I faced a lot
of problem while convincing them.
 Sample size constraint - As the employee base of the organizations was about 1000
and above in each organizations, so it was very difficult to cover all the employees in
this survey. Number of employee covered in this survey is limited to the sample size
of 100 employees only in each organization. This limits the scope of the project study
and the analysis may not represent the whole population.
 Duration constraint - The time duration for the project is limited to 72 weeks so it
was difficult to analyze the attrition at micro level.

POPULATION / SAMPLE SIZE
Population
The population size 3000 employees in IT sector.
Sample Size
Samples size is the number of items to be selected from the population to constitute
the sample for the research.
 For this research a sample of 300 employees in IT sector.
DATA COLLECTION
For any statistical enquiry the collection of data or information is done through
principle sources identically i.e., by primary sources and secondary sources of data.
Primary Data
Primary data are those which are collected a fresh and for the first time. Primary data
for the study is collected through questionnaire and questionnaire is used in closed
form.
Secondary Data
Most of the data used for the study is secondary in nature and has been collected from
the Company and from the records of IT sector.
SAMPLING TECHNIQUE
The researcher has adopted the Simple Random Sampling Technique.
QUESTIONNAIRE DESIGN
The questionnaire is well structured and it consists of closed ended questions. There
are a total of 14 questions that aims to cover all aspects of the employee attrition.
Hypothesis
Null Hypothesis
 There is no significant relationship between evaluating the factors that influences the
employee attrition in IT sector and to understand the underlying factors that retains
the employee in IT sector.
employee attrition in IT sector and to find the core attributes that focus more on
working environment in IT sector.
employee attrition in IT sector and to analyze the steps taken to reduce attrition in IT
sector.Alternative Hypothesis
 There is significant relationship between evaluating the factors that influences the
employee attrition in IT sector and to understand the underlying factors that retains
the employee in IT sector.
employee attrition in IT sector and to find the core attributes that focus more on
working environment in IT sector.

employee attrition in IT sector and to analyze the steps taken to reduce attrition in IT
sector.
TOOLS USED FOR ANALYSIS
 Simple percentage method
 Chi-square method
 Correlation & Coefficient method
These are briefly explained, in following:
Simple Percentage Method
Simple Percentage Method refers to special kind of ratio percentage that is used in
marketing for comparison between two or more series of data. Percentages are used to
describe relationship. Since the percentage reduce everything to a common base &
these by allow meaningful comparison to be made.
Chi- Square Method
Chi-square is a statistical test commonly used to compare observed data with data we
would expect to obtain according to a specific hypothesis. The chi-square test is
always testing what scientists call the null hypothesis, which states that there is no
significant difference between the expected and observed result.
The formula for calculating chi-square (2
) is:
2
=  (O-E) 2
/E
Where,
O – Observed frequency
E – Expected frequency
That is, chi-square is the sum of the squared difference between observed (o) and
the expected (e) data (or the deviation, d), divided by the expected data in all possible
categories.
Correlation Coefficient Method
Correlation can be defined as the degree of relationship between two variables. It
needs pairs of points to be available for every set of values of each of the variable. In
a two dimensional plot, the variables can be arbitrarily labelled as X and Y, where X
mostly attains the independent variable, which is used for prediction, and Y attains the
dependent variable, the value which is predicted. The correlation coefficient,
sometimes also called the cross-correlation coefficient. A measure that determines the
degree to which two variable's movements are associated. The correlation coefficient
will vary from -1 to +1. A -1 indicates perfect negative correlation, and +1 indicates
perfect positive correlation.
Formula for simple Correlation coefficient is given below,
If x & y are the two variables of discussion, then correlation coefficient r can be
calculated using the formula

N= Number of Values Or Elements
X= First Score
Y= Second Score
ΣXY= Sum of The Product of First and Second Scores.
ΣX= Sum of First Scores
ΣY= Sum of Second Scores
ΣX2
= Sum of Square First Scores
ΣY2
= Sum of Square Second Scores
QUESTIONER
General instructions for filling the questionnaire:
1. Please answer all questions.
2. Please tick mark (√ ) the most appropriate option that most closely represents
your views.
3. Please give your candid and unbiased feedback.
4. We assure you full confidentiality of your responses.
(A) Personal Information:
 Gender: a) Male b) Female
 Age (in years) a) Below 30
b)30-40
c) 40 and above
 Educational Qualification: .......................................................
 Experience: 0 – 10  10 – 20  Above 20 
 Department:
Administration  Finance  Operations/ Quality / R&D 
Product Development  Data Security  Marketing/Sale 
HR 
 Annual Income: a) Less than Rs. 2,00,000
b) Rs. 2, 00,001 to Rs.3, 00,000
c) Rs 3, 00,001 to Rs. 4, 00,000

d) Rs. 4, 00,001 and Above
 Length of service:
a) 0-2 yrs 
b) 3-5 yrs 
c) 6 yrs& more 
(B) Questions:
1) Which of the following is the greatest challenge faced by your organization?
a) Performance management b) Employee attrition
c) Employee absenteeism d) Employee training Ineffectiveness
e) Low Employee Morale f) Lack of employee engagement
2) Does your organization make it mandatory for the Employees to serve a
notice period?
a) Yes b) No
3) What is the duration of notice in your organization?
a) No notice period b) 30 days
b) 45 days c) 60 days & more
4) What is the objective of your notice period?
a) Handing over charge to the incumbent taking over
b) training the incumbent taking over
c) finishing tasks-at hand
d) all the above
e) none of the above
5) Do you think that an increasing number of industries is adversely affecting
Employee Retention in your Company & is leading to higher employee attrition?
a) Yes b) No
6) Which of the following Employees in the experience range are most
Susceptible to Attrition?
a) 0-5 Years of Experience b) 5-8 Years of Experience
c) 8-12 Years of Experience d) 12-15 Years of Experience
e) 15+ Years of Experience
7) Tick the underlying factors that retains the employees
Strongly agree (SA) Agree (A) Neutral (N) Disagree (DA) Strongly disagree (SDA)
Factors that retains employees SA A N DA SDA
I experience a sense of community in my office

I feel am valued part of this office
Promoting respect and fair treatment among all staff is a high priority of
this office
I have a clear sense of the future direction of this office
This office’s atmosphere is generally friendly
This office has policies that are supportive of its staff
This office reasonably accommodates personal needs
8) State the major reasons of attrition in your Company:
a) Employee’s expectation of the job
b) Absence of conducive workplace environment
c) Lack of career growth
d) Odd working hours
e) Stress and work-life balance
f) Lack of proper compensation
9) How do you find the salary in your office?
a) High b) Reasonable
c) Low d) very low
10) Are you looking forward to switch from current organization to other?
a) Yes b) No
c) May be
11) How is your office working environment?
Strongly agree (SA) Agree (A) Neutral (N) Disagree (DA) Strongly disagree (SDA)
Attributes focusing on working environment SA A N DA SDA
My workload and expected completion times are reasonable
This office has regular staff meetings to plan and coordinate work and to
make announcements
I know exactly what is expected of me as an employee
Conflict among staff in my office is managed effectively
12) Has your Organization adopted any creative HRM Strategy to counter
Employee Attrition?
a) Yes b) No
13) Do you conduct an Exit Interview of the employees who resign from your
Organization?
a) Yes b) No
14) Does your Organization have a Policy to Attempt to Retain the Resigning
Employee by offering increased benefit?

a) Yes b) No
c) I am not sure
FINDINGS
 Male respondents are more than female respondents in IT sector
 In the age group of 20-40 are more likely to be in IT sector.
 Experience between 0-10 years are more in IT sector.
 38% of respondents responded form operations/ quality/ R&D department in IT
sector
 51% of respondents earn 3 lakhs-4 lakhs in IT sector
 More number of respondents has served the organisation between 0-2 years, (i.e.)
53% agreed in IT sector.
 43% agreed that employee absenteeism and employee attrition is the challenge faced
by them.
 The 60% of the respondents agreed that it is mandatory for them to serve the
organization for the given notice period.
 The duration period in 45 days was also agreed by the respondents.
 All the factors must be completed within the given notice period in 42% of
respondents agreed.
 The employee retention strategy is successful and it was agreed that 68% of the
respondents in IT sector
 The individuals with 0-5 years of experiences are susceptible to leave the
organization such as 51% in IT sector
 44% of the respondents neutrally agreed that they are experiencing the sense of
community in their office.
 63% of the respondents neutrally agreed that respondents feel that they are the valued
part of organization.
 64% of the respondents neutrally agreed that they have promotion, respect and fair
treatment among all staff in the organization.
 42% of the respondents neutrally agreed that the employees has a clear sense of the
future direction in the organization.
 59% of the respondents neutrally agreed that the employees office atmosphere is
generally friendly.
 60% of the respondents neutrally agreed that the employees office policies that are
supportive of its staff.
 39% of the respondents neutrally agreed that the employees office gives reasonably
accommodates personal needs to its staff.
 37% of the employees has lack of career growth is the major reason for employee
attrition in their organization.
 41% of the employees feels that their salary is low
 54% of the employees are not looking for the switch from the current Company to
another.
 52% of the employees agree neutrally that workload and expected completion time is
reasonable.
 58% of the employees agreed neutrally that they have regular staff meetings to plan
and coordinate work and to make announcements.

 44% of the employees agreed neutrally that they exactly know what is expected from
them.
 63% of the employees agreed neutrally that the conflict among staff in their office is
managed effectively.
 43% adopted creative HRM Strategy to counter Employee Attrition
 63% of the respondents of the organization agreed that their organization conducts an
Exit Interview of the employees who resign.
 56% of the employees are not sure that organization has a policy to attempt to retain
the resigning employee by offering increased benefit.
 Here Calculated is 182.5135 is more than the Tabulated value 41.3. Hence we reject
Null Hypothesis (H0) and accept Alternative Hypothesis (H1). Hence there exists
relationship between the factors that influences the employee attrition and factors that
retains the employee in IT sector.
 Here Calculated is 16.076 is less than the Tabulated value 21.0. Hence we reject
Alternative Hypothesis (H0) and accept Null Hypothesis (H1). Hence there is no
relationship between the factors that influences the employee work environment and
factors that retains the employee in IT sector.
 The correlation coefficient is 0.96876 therefore there is perfect positive correlation
between the variables My workload and expected completion times are reasonable
(X) and I know exactly what is expected from me as an employee (Y) in IT sector.
 The correlation coefficient is 0.99820 therefore there is perfect positive correlation
between the variables This office atmosphere is generally friendly (X) and This
office has policy that are supportive of its staff (Y) in IT sector.
SUGGESTIONS
 Opportunity for Growth and Development
Fresh graduates should be provided sufficient amount of training before job is
assigned to them. The individuals should be given job rotation so they can
understand the needs of the organisation and motivate them to make their
work more effectively.
 Salary and Benefits
The pay should be given according to their grade, but there should be
increment or hike every year this will motivate the employees to stay and
work for the organisation. The employees should be give add-on benefits that
covers their family as a whole for example insurance cover to the employees
whole family. Monthly medical camps that will make the employee to realise
that how important he is to the organisation.
 A Set Schedule.
Giving them the opportunity to choose which days off they want, or at least
giving them two in a row and not working them more than five, would be
extremely beneficial in employee retention.
 Job variation.
Employees get burned out on performing the same job every hour of every
day, day in and day out for years, even months. Cross-training should be done,
especially in food service and retail, in order to avoid burnout.
 A positive attitude from superiors.

Managers and supervisors should have a positive attitude toward their
employees and never insult, criticize, or berate them.
 Proper training for management.
Managers should be trained thoroughly and consistently. The policies from
location to location should be the same, and every manager and supervisor in
the Company should be trained the same way and be in agreement and
consistent with Company policies. Managers should be trained to treat their
employees with respect, because without those employees, the business could
not operate.
 General
Opinion surveys, feedback forums, employee suggestion box or employee
suggestion committee and employee satisfaction surveys. Holding meetings
with employees on a regular basis to identify their desires and needs. This will
help them to understand the need and important is their decision to the
organisation.
RECOMMENDATIONS
Employee attrition or Turnovers can detrimental effect on an organization and its
employees if Company management allows it. There are a tool to assist in addressing
the causes of turnover is often used as a performance indicator may be preventive
measure should be as well. It is impossible to eliminate turnover altogether therefore
management must learn how to deal with it and the effect it has on a Company. In
addition management should be better prepared to take the proper action after the
turnover event occurs. All effort should be focused on maintaining job satisfaction
and managing controllable caused of turnover.
The list of recommendation to prevent turnover in companies are:
 Get involved in finding out the causes of turnover
 Bring attention to bottom fig. & how turnover affect everyone
 Have an open door policy style of managing to allow employee to comment on what
might be bothering then about the job.
 Realize there is more than one problem and pay attention to all stay alert.
 Execute periodic audits of job satisfaction.
 Have a Strict hiring standard do not just fill opening and.
 Develop and constantly update training strategies.
SUMMARY
The study of HR practices and employee attrition in the organization was a great
learning experience. It helped in understanding the intricacies of HR role in an
organization. The study helped in finding out the most critical reasons responsible for
employee attrition in the organization. It brought various concerns of the employees
to the forefront. Apart from the project there was also a lot of on-the-job training
which helped enhance HR skills and gain a better understanding of the functioning of
HR. It was an effective learning in combining the theoretical and practical aspects
relating to project. There has been immense learning in the field of employee

retention. The basics about attrition and retention, attrition calculation, cost of
attrition, consequences of high attrition rate and reasons for attrition.
The study helped in understanding the relative importance of various factors
responsible for employee attrition, also revealed the fact that that opportunity for
development and growth is most important for the employees of the organization.
There is a crisis in human capital management. We need fundamental reform in order
to address this crisis and ensure long-term ability to hire and manage a high-quality,
high-performing workforce. Most employees are not motivated solely by money.
Historically, firms have used money and financial rewards to retain employees. High
tech employees are enjoying the fastest salary progression of almost any profession,
yet they are changing jobs constantly.
Today’s employees seek more than monetary compensation. Research conducted
in the Company revealed that opportunity for development, salary, job content,
relationship with supervisor are important reasons for employee attrition. The myth
that salary is the most important reason for employee attrition was clarified as
employees are more concerned about opportunity for development. Salary is also
important, salary needs to be competitive with the market rates, and otherwise there is
a high risk of losing your employees to your competitors. I also learned that even
though the salary might be high, an employee would be willing to change job for
better development opportunity.
The IT sector’s can retain employees and reduce attrition rate by dealing with the
two important factors behind attrition, Opportunity for development and growth and
Salary. More focus on employee training and employee recognition is required. Salary
needs to be made more competitive. To retain employees it is important to provide
sufficient opportunities for development and growth, competitive salary, challenging
jobs that use employee skills efficiently and good managerial guidance, among other
things. We are in a time of manpower shortages that will not abate in the near term.
Employers have to work smarter and permit employees to work smarter.
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[27] Forbes
[28] INDIAN Industries Exclusive.

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