Employee Retention

Employee Retention
A Project report submitted in partial fulfillment of the
requirement for the award of the degree of
Bachelors of Management Studies
Mumbai !ni"ersity
Submitted by#
$AR!%&A&'(()BBER
Roll no& **+,
SEMES-ER# V
Parle -ila. $idyalaya Associations
Mulund College of Commerce
+,,/ 0 +,,1
University of Mumbai


1
Employee Retention

Declaration
I, Varun.A.Chhibber , a student of Mulund College of Commerce T.Y.BMS (semester
V
th
) hery de!lare that I ha"e !ompleted this pro#e!t on Employee Retention in the
a!ademi! year $%%&'$%%(. The information sumitted is true and ori)inal to the est of
my *no+led)e

ignature of student

!Varun.A.Chhibber"
$
Employee Retention
'ertificate
I M#.R$$%A&#.MA'(&E)AR herey !ertify that
Varun.A.Chhibber a student of Mulund College of Commerce TYBMS (Semester &)
has !ompleted the pro#e!t titled Employee Retention in the a!ademi! year $%%&'$%%(.
The information sumitted is true and ori)inal to the est of *no+led)e
Si)nature of the ,ro#e!t Si)nature of ,rin!ipal of the
-oordinator -olle)e.Institution
Si)nature of the E/aminer
Ac.nowledgement
0
Employee Retention
I ta*e this opportunity +ith )reat pleasure to present efore you this pro#e!t on
1Employee Retention +hi!h is a result of !ooperation, hard +or* and )ood +ishes
of many people. I +ould li*e to than* my +ith deep sense my pro#e!t )uide 2 *M
Coordinator Miss.Roopali Mandle+ar for her *ind appre!iation, friendly
)uidan!e, !onstant en!oura)ement, in"ol"ement in my pro#e!t +or* and for her "alued
)uidan!e throu)hout my study.
I o+e the det to our %rincipal Mr. (., (eshpande for )i"in) me an
opportunity to present a !reati"e out!ome in form of a pro#e!t.
I e/press my sin!ere than*s to the lirary staff +ho ha"e pro"ided me ri)ht information
and study material at the ri)ht time. 3o +ords !an ade4uately e/press my det of
)ratitude to all my BMS friends for their !ontinuous support +hile the +or* +as in
pro!ess. I must also put on re!ord my )ratitude to my Institute Mulund -olle)e of
-ommer!e for all that I learnt as a student. I also +ish to than* my 5amily Memers
+hose efforts and !reati"ity helped me in )i"in) the final stru!ture to the pro#e!t.

6astly needless to say I am also than*ful to all those seen and unseen hands and
minds, +hi!h ha"e een of dire!t or indire!t, help in the !ompletion of my pro#e!t.
E2ecuti"e Summary
7
Employee Retention
The pro#e!t e)ins +ith the si)nifi!an!e of 8uman Resour!e Mana)ement in today9s
!orporate +orld. It si)nifies the in!reasin) importan!e of 8RM.
Then it leads o"er to the employee turn o"er prolem fa!ed y the !ompanies. It
hi)hli)hts the resour!e for the hi)h turno"er rate and the !ost that this a!t adds up to the
!ompany.
Then the pro#e!t hi)hli)hts the si)nifi!an!e of employee retention to o"er!ome the
employee turno"er prolem.
The pro#e!t riefly !o"ers the "arious areas +here employee retention strate)ies are
implemented namely re!ruitment, trainin) and de"elopment, +or* !ulture, salary
ne)otiation, !ompensation mana)ement, re+ards and re!o)nition and e/it inter"ie+s.
:nd at the end the report finally hi)hli)hts "arious aspe!ts +hi!h are to e !onsidered for
impro"ement of employee retention strate)ies.
3bjecti"e of Study
&
Employee Retention
1) To *no+ the importan!e atta!hed to employee retention in today9s !orporate
+orld.
$) Strate)ies employed y the !ompany to impro"ise on the rate of employee
turno"er rates.
0) ;eneral prolems fa!ed y the !ompanies +hile pra!ti!in) employee retention.
Scope of study
This pro#e!t has een prepared +ith an intention to ma*e one reali<e and understand the
si)nifi!an!e of employee retention.
(
Employee Retention
Employee retention has e!ome a ma#or )oal of the or)ani<ation.
Initially re!ruitment +as only tal*ed aout, ut no+ in today9s !orporate +orld,
re!ruitment has e!ome #ust a part of 8RM. Ma#or importan!e is atta!hed to employee
retention.
This pro#e!t not only aims to present the theoreti!al aspe!ts, ut the pra!ti!al aspe!ts as
+ell. : sur"ey has een done to understand the strate)ies follo+ed y "arious
or)ani<ations to ensure Employee Retention.
Methodology
The information pro"ided in this pro#e!t has een !olle!ted from "arious sour!es. These
in!lude ma#or information9s do+nloaded from "arious arti!les throu)h the Internet. :nd
=
Employee Retention
the matter +as also a!4uired from the oo* 18uman Resour!e and ,ersonal
Mana)ement' 0 edition> +ritten y ?. :s+athappa.
The information !olle!ted has een diluted and presented in a "ery simple and lu!id
manner. This +as done +ith an o#e!ti"e that e"en a layman should e ale to understand
the topi!s that I ha"e dealt +ith.
)nde2
Sr&%o 'ontents Page
%o
-. )ntroduction
.. Significance of (RM in 'orporate 4orld
5& Employee -urno"er
a) Measuring Employee Turnover
b) Why do People Leave Organizations???
c) When does Employee Turnover Become
@
Employee Retention
Problematic???
6& Employee Retention
/. Recruitment7 Selection 8 )nduction
1& Remuneration %egotiation
*& 4or. En"ironment
9& Significance of -raining 8 :e"elopment
;& Performance Appraisal
<,& 'ompensation Management 8 Reward
--. E2it )nter"iews
<+& =uestionnaire
<5& Analysis of Sur"ey
<6& Managing )- Retention 8 -urno"er
</& Employee Retention Problems faced by
'all 'enters
<1& Retention Stratagem
<*& 'onclusion
<9& Bibliography 8 4ebliography
)ntroduction
Employee Retention
Employee retention is not a 4uestion or deate ut rather it9s the most important
thin) for any !on!ern if its serious in lon) term usiness.
Ahat9s a usiness +ithout people and ho+ is it )oin) to +or* if the re4uired people
aren9t there. The only and most important resour!e for any !ompany is its people. Some
people mi)ht ha"e this mis!on!eption that this resour!e is less important than the other
resour!es li*e money, materials and ma!hinery. But +e ha"e all learned from all
B
Employee Retention
su!!essful !ompanies around the +orld that their su!!ess +as and is due the most
important M of all the other M9s and that9s the manpo+er.
Aell if +e all *no+ that people are the most important resour!e then +hy do +e
ha"e this 4uestion that is Employee Retention re4uired or not. I )uess this 4uestion arised
all around the +orld e!ause of a "ery hi)h fi)ure of employee turno"er.
So if +e are ale to stop this or at least *no+ the ans+er to +hy there is su!h a
hi)h employee turnout +e +ould *no+ +hat it ta*es to retain the re4uired people. I
+ould li*e to put a lot of stress in the +ord re4uired. This +ord needs to e understood
y lot of people and espe!ially the people in the top mana)ement elie"e +ho elie"e
that there is not mu!h differen!e in manpo+er re4uirement and material re4uirement and
the irony is that in the later !ase, more emphasis is )i"en to details 2 spe!ifi!ations. The
reason I thin* +hy they are "ery parti!ular aout material spe!ifi!ations is e!ause they
!an !al!ulate the losses if they do not )et the re4uired material.
Cnfortunately and sadly they are unale to fi)ure out the deep ne)ati"e impa!t if they do
not )et the re4uired people.
So ho+ do +e spe!ify the re4uired peopleD I thin* +e !an start +ith ans+erin) a
fe+ 4uestions. Ahat is the minimum desired outputD Is it lon) term or short termD :re
+e !apale of meetin) his e/pe!tations or rather that his ta*ea+ay is ao"e or elo+
mar*et ratesD :re +e ready to spend time and ener)y in )roomin) him and in!ludin) him
in the familyD Yes, I elie"e that the employees of a !ompany are li*e a family and it
+ould enefit a lot of !ompanies if they too a)ree. :nd the most important of all that, are
+e +illin) to e transparent enou)h for him to understand the !ompany and its people.
:re +e +illin) to share +ith him the !ompanies9 !lear "ision and mission and the lon)'
term !ompany strate)ies.
Aith the ans+ers to the ao"e 4uestions +e +ould e in a position to spe!ify the
re4uired people to the 8R dept. :nd +ith the present tremendous )ap et+een demand
and supply the 8R dept. +ould not find it "ery diffi!ult to find the re4uired and ri)ht
1%
Employee Retention
person. Aell that9s assumin) that the 8R dept. is !ompetent enou)h to mat!h the
!andidate9s lon) term !areer aspirations to the !ompanies9 re4uirement. Aell that !an e
a "ery tri!*y and diffi!ult thin) for the 8R dept. But +e all *no+ that the 8R depts. are
trained and e4uipped +ith lot of tools to *no+ the !areer aspirations of a !andidate.
3o+ that +e ha"e the ri)ht and re4uired person there is no dout that +e need to
retain him. Ae need to *no+ our Er)ani<ation and the type it elon)s to.
There are three types of or)ani<ations
The Er)ani<ations thatF
G -han)e y themsel"es
G -han)e, +hen told y others
G Ho not !han)e e"en +hen told y others.
The e/!ellent or)ani<ations elon) to the !ate)ory of I!han)e y themsel"es>.
They ha"e a !lear "ision of +here they +ant to e in future 2 all their a!tions are aimed
to+ards it.
They )o"ern their o+n future and not are merely "i!tims of !ir!umstan!es.
:lso these Er)ani<ations are lo+ profile, ha"e a unified theory aout
transformation and are holisti! in approa!h. They fo!us on stren)thenin) fundamentals
and moili<e the entire or)ani<ation +ith people ali)ned.
These Er)ani<ations ha"e their !on!epts ri)ht re)ardin) people de"elopment. These
Er)ani<ations en!oura)e ,eople to a!!ept o+nership and responsiility to sol"e
prolems. In these or)ani<ations people are empo+ered to a!t and openly share
*no+led)e and e/perien!e.
11
Employee Retention
;eneral Ele!tri!(;E) is one of the finest e/amples +orld+ide and a!*
home +e ha"e the mu!h tal*ed aout Infosys 2 Aipro
Significance of (uman Resource
Management in 'orporate 4orld
8R has al+ays een seen as the 1!ost !entre> of an or)ani<ation. 8o+e"er studies
re"eal that in today9s usiness +orld, 8R pra!ti!es does !hurn re"enues. It9s all aout
ho+ you in"est in your human !apital.
Studies su))est that not only is 8uman resour!e the most "alued asset of a
!ompany, ut there also proof that in"estin) in 8R does produ!e returns.
1Employee'in"ol"ement pra!ti!es su!h as information sharin), s*ills trainin) re+ards
pro)rams, and empo+erment efforts '' all of +hi!h fall s4uarely into 8r9s domain ''
sho+ a si)nifi!ant ottom'line return>.
-ompanies +ho ha"e follo+ed the employee'in"ol"ement pra!ti!es ha"e produ!ed a 10
per!ent hi)her return on e4uity.
Thus it9s o"ious that employees form an inte)ral part. 8o+ do you sele!t and
retain talented peopleD 8o+ !an you !reate an en"ironment, +hi!h helps people thri"e at
+or*D Many su!h 4uestions form an inte)ral part of a !ompany9s 8R poli!y. In!reased
)loal !ompetiti"eness has )i"en +ay to un!ertainty, +hi!h is impa!tin) the en"ironment
+ithin an or)ani<ation. This is +here the role of a 8R mana)er is e!omin) e"en more
!ru!ial.
Traditionally the 8R department has played dual rolesJan operational fun!tion
(su!h as re!ruitment, personnel and performan!e mana)ement, employee relations and
statutory !omplian!e9s) and a human de"elopmental role (!omprisin) people
de"elopment, !ulture and or)ani<ation uildin)). Both these fun!tions ha"e al+ays een
!onsidered 1soft> roles.
1$
Employee Retention
Today the e4uation has !han)ed. The 8R department plays a *ey role in the !ompany9s
o"erall usiness strate)y. 8R mana)ers ha"e a !lear understandin) of the usiness, the
or)ani<ation, its "ision, mission, "alues and are )i"en ample freedom to rin) pro!esses
in pla!e to )et people ali)ned to these "alues and )oals.
The fo!us of 8R today is to !reate an a)ile or)ani<ation, +hi!h !an inno"ate rapidly and
e/!eed !lient e/pe!tations !onstantly, rather than #ust mana)in) people.
The asi! trait re4uired in an effi!ient 8R mana)er is his aility to )au)e the
stren)ths of his employees and put them to est use. Be a supporti"e mana)er and !reate
an en"ironment +here employees feel assured that they !an fall a!* for support in
diffi!ult situations. 8e should e ale to dele)ate responsiility, +hile al+ays retainin)
the a!!ountaility. 6astly, personal tou!h plays an important fa!tor for !reatin) a sense of
elon)in) +ith the !ompany. The person should e "ery effe!ti"e at understandin)
people, their s*ill sets and emotional intelli)en!e +hi!h +ill help in )oal settin) and
finally a!hie"in) the desired results.
ome +ey points to remember
The or)ani<ation has to ensure that !ommuni!ation is timely and open to retain employee
trust. This also means that there is !ontinuous feeda!* from employees, +hi!h helps in
etter produ!ti"ity.
There has to e a !ommon theme uilt relatin) to "ision, parti!ipation, !ontrol,
measurement of +or* pro!esses, !ommuni!ation and !ommitment. E/perts point out that
if you !reate an en"ironment +here people truly parti!ipate. You don9t need !ontrol. The
employees do +hat needs to e done.
Employee -urno"er
10
Employee Retention
Measuring employee turnover
Most or)ani<ations simply tra!* their !rude turno"er rates on a month y month or year
y year asis. The formula is simplyF
Total number o leavers over period ! "##
$verage total number employed over period
The total fi)ure in!ludes all lea"ers, e"en people +ho left in"oluntarily due to dismissal,
redundan!y or retirement. It also ma*es no distin!tion et+een fun!tional (i.e.'enefi!ial)
turno"er and that, +hi!h is dysfun!tional.
-rude turno"er fi)ures are used y all the ma#or sur"eys of employee turno"er. So they
are ne!essary for effe!ti"e en!hmar*in) purposes. 8o+e"er, it is also useful to !al!ulate
a separate fi)ure for "oluntary turno"er and to !onsider some of the more !omple/
employee turno"er indi!es, +hi!h ta*e a!!ount of !hara!teristi!s su!h as seniority and
e/perien!e.
Costing employee turnover
Estimatin) the !ost of employee turno"er is a useful startin) point +hen see*in)
to persuade line mana)ers and 5inan!e Hire!tors that money needs to e in"ested in order
17
Employee Retention
to impro"e retention rates. :t present surprisin)ly fe+ (=K) 8R departments !al!ulate
the !osts of turno"er.
It is possile to !ompute a Inot less than9 fi)ure "ery easily y +or*in) out +hat it
!osts on a"era)e to repla!e a lea"er +ith a ne+ starter in ea!h of the ma#or employment
!ate)ories. This fi)ure !an then e multiplied y the !rude turno"er rate for that staff
)roup to !al!ulate the total annual !ost of turno"er.
The ma#or !ate)ories of !osts to ta*e a!!ount of areF
G :dministration of the resi)nation
G Re!ruitment !osts
G Sele!tion !osts
G -ost of !o"erin) durin) the period in +hi!h there is a "a!an!y
G :dministration of the re!ruitment and sele!tion pro!ess
G Indu!tion trainin) for the ne+ employee.
Many of these !osts !onsist of mana)ement or administrati"e staff9s time (opportunity
!osts) ut dire!t !osts !an also e sustantial +here ad"ertisements, a)en!ies or
assessment !enters are used in the re!ruitment pro!ess.
More !omple/ approa!hes to turno"er !ostin) )i"e a more a!!urate and in"arialy hi)her
estimate of total !osts. : +idely 4uoted method in"ol"es estimatin) the relati"e
produ!ti"ity of ne+ employees durin) their first +ee*9s or months in a role and that of
resi)ns durin) the period that they are +or*in) their noti!e
4hy :o People >ea"e 3rgani?ations@
Employees resi)n for many different reasons.
Sometimes it is the attra!tion of a ne+ #o or
The prospe!t of a period outside the +or*for!e +hi!h Ipulls9 them, on other
o!!asions they are Ipushed9 due to dissatisfa!tion in their present #os to see*
alternati"e employment.
Sometimes it is mi/tures of oth pull and push fa!tors.
1&
Employee Retention
5or a fourth )roup reasons for lea"in) are entirely e/plained y domesti!
!ir!umstan!es outside the !ontrol of any employer, as is the !ase +hen someone
relo!ates +ith their spouse or partner.
Re!ent resear!h stron)ly su))ests that push fa!tors are a )reat deal more
si)nifi!ant in most resi)nations than most mana)ers appre!iate. It is relati"ely rare for
people to lea"e #os in +hi!h they are happy, e"en +hen offered hi)her pay else+here.
Most staff has a preferen!e for staility.
It is important to appre!iate that the reason people )i"e for their resi)nations are
fre4uently untrue or only partially true. The use of e/it inter"ie+s is +idespread yet they
are notoriously unreliale, parti!ularly +hen !ondu!ted y someone +ho may later e
as*ed to +rite a referen!e for the departin) employee. They are relu!tant to "oi!e
!riti!ism of their mana)ers, !ollea)ues or the or)ani<ation )enerally, preferrin) to )i"e
some less !ontentious reason for their departure.
Re!ent resear!h hi)hli)hts the importan!e of front line mana)ers and ho+ their
eha"iour relates dire!tly to the le"els of !ommitment, moti"ation and satisfa!tion
reported y employees.
: poor relationship +ith a line man)er !an e an important reason for indi"iduals lea"in)
their or)ani<ation, ut its si)nifi!an!e !an e mas*ed as a result of the diffi!ulties
asso!iated +ith e/it inter"ie+s mentioned ao"e. : la!* of trainin) and de"elopmental
opportunities is also ma#or reason "oluntary turno"er. En an a"era)e, 77K of respondents
!ited Ipromotion outside the or)ani<ation9 as a main !ause of laour turno"er, 7%L.o
hi)hli)hted I!han)e of !areer9 and 0=K Ila!* of !areer of de"elopmental opportunities.
Early leaving
In the hi)h turno"er industries in parti!ular, a )reat deal of employee turno"er !onsists of
people resi)nin) or ein) dismissed in the first fe+ months employment. Resear!h sho+s
that durin) $%%0, $EK of lea"ers left et+een % and ( months9 ser"i!e. E"en +hen
1(
Employee Retention
people stay for a year or more is often the !ase that the de!ision to lea"e sooner rather
than later is effe!ti"ely ta*en in the first +ee*s of employment. ,oor re!ruitment and
sele!tion de!isions, oth on the part of the employee and employer, are usually to lame,
alon) +ith poorly desi)ned or non'e/istent indu!tion pro)rams.
E/pe!tations are often raised too hi)h durin) the re!ruitment pro!ess leadin)
people to !ompete for and suse4uently to a!!ept #os for +hi!h they are in truth
unsuited. Er)ani<ations do this in order to ensure that they fill their "a!an!ies +ith
suffi!ient numers of +ell'4ualified people as 4ui!*ly as possile. 8o+e"er, o"er the
lon)er term the pra!ti!e is !ounter'produ!ti"e as it leads to !ostly, a"oidale turno"er and
the de"elopment of a poor reputation in lo!al laour mar*ets.
4hen :oes Employee -urno"er Become
Problematic@
There is no set le"el of employee turno"er ao"e +hi!h effe!ts on the employin)
or)ani<ation e!omes dama)in). E"erythin) depends on the type of laour mar*ets in
+hi!h the !ompany !ompetes. Ahere it is relati"ely easy to find and train ne+ employees
4ui!*ly and at relati"ely little !ost (i.e. +here the laour mar*et is loose), it is possile to
sustain hi)h 4uality le"els of ser"i!e pro"ision despite ha"in) a hi)h turno"er rate. By
!ontrast, +here s*ills are relati"ely s!ar!e, +here re!ruitment is !ostly or +here it ta*es
se"eral +ee*s to fill a "a!an!y, turno"er is li*ely to e prolemati! from a mana)ement
point of "ie+. This is espe!ially true of situations in +hi!h you are losin) staff to dire!t
!ompetitors or +here !ustomers ha"e de"eloped relationships +ith indi"idual employees
as is the !ase in many professional ser"i!es or)ani<ations.
1=
Employee Retention
Some employee turno"er positi"ely enefits or)ani<ations. This happens
+hene"er a more effe!ti"e employee repla!es a poor performer, and !an happen +hen a
senior retirement allo+s the promotion or a!4uisition of +el!ome Ifresh lood9. Moderate
le"els of staff turno"er !an also help to redu!e staff !osts in or)ani<ations +here usiness
le"els are unpredi!tale month on month. In su!h situations +hen usiness is sla!* it is
strai)htfor+ard to hold off fillin) re!ently !reated "a!an!ies for some +ee*s.
Employee Retention
Retainin) Top Talent in a -ompetiti"e Mar*et Su!!essful -ompanies
He"elop Inte)rated Retention ,ro)rams to ?eep Top Talent from 6ea"in)
for the -ompetition
1@
Employee Retention
Aith usiness oomin), it9s a sellers mar*et for #o see*ers. 5or !ompany 8R
departments, retention of *ey employees is more important than e"er, as temptin) offers
from !ompetitors see*in) to !orre!t their o+n laour shorta)e in!reases the li*elihood of
*ey employees headin) out for )reener pastures. So ho+ !an !ompanies *eep employees
happy and retention rates hi)hD
Resear!h says that top talents in or)ani<ations !annot e retained merely y hi)h
salary and a +ealth of per*s. They demand more intan)ile enefits J stimulatin) +or*,
fle/ile !areer options, and a !orporate !ulture +hi!h "alues their +or*. :s e/perien!ed
!onsultants in the area of Talent Retention, +e offer these asi! pillars of su!!ess for
!ompanies in any industryF
Employ !ompeten!y'ased re!ruitin) to impro"e sele!tion effe!ti"eness and
in!rease employee retention.
The !ompany should identify the follo+in) enefits of re!ruitin) !andidates ased
on their !ompeten!iesF impro"ed a!!ura!y in sele!tin) the est !andidates, etter person'
#o fit, redu!ed turno"er, lo+er hirin) !osts, hi)her le"els of produ!ti"ity and
!ontriution.
Effer an attra!ti"e enefits pa!*a)e.
Talented employees are hi)hly mar*etale and almost al+ays ha"e ad"an!ed
de)rees. Ahile salary and enefits !annot sustitute for defi!ien!ies in other areas,
!ompanies must also sho+ their appre!iation for *ey employees !ontriutions +ith
sustantial !ompensation pa!*a)es. 6i*e health !are enefits in the industry, an employee
sto!* pur!hase plan, and one of the lar)est !orporate'sponsored day'!are !enters in the
!ountry.
Estalish a !orporate !ulture that emphasi<es *no+led)e sharin) and
employee feeda!*.
Employees "alue a +or*pla!e in +hi!h their input is en!oura)ed and appre!iated.
:n open door poli!y en!oura)es employees at all le"els to as* 4uestions, !ontriute ideas
1B
Employee Retention
and resol"e issues. This sharin) atmosphere )i"es e"eryone a "oi!e in !reatin) the type of
!orporate !ulture in +hi!h they +ould li*e to +or*.
,ro"ide opportunities to e/plore different positions +ithin the !ompany
8ere employees parti!ipate in different types of a!ti"ities +ithin their field of
interest, ne+ hires !an e/plore their stren)ths and interest areas efore sele!tin) a #o that
est suits them. The "ariety of assi)nments also enefits ne+ employees y )i"in) them
an opportunity to learn more aout the !ompany9s di"ersity de"elop a !ompany !onta!t
net+or* and demonstrate their resear!h !apailities to a "ariety of employees.
6eadin) !ompanies loo* at talent retention as an inte)rated pro!ess, not as isolated
e"ents.
-ompanies that re!o)ni<e the importan!e of lon)'term, dedi!ated employees e)in the
retention pro!ess durin) re!ruitin) and emed retention pra!ti!es in !areer path and
employee de"elopment and pro!esses.
Today9s +or*ers are no lon)er in!lined to stay at one !ompany for the duration of their
!areers. The most talented professionals are more li*ely to e !ourted y other
usinesses, and the effe!ts of turno"er !an e !ostly. The time and money it ta*es to
re!ruit, rehire and retain !an 4ui!*ly !ut into a firm9s ottom line.
(iring smart is the first step to de"elopin) a loyal, moti"ated +or*for!e and *eepin)
turno"er at a minimum. Ether fa!tors, su!h as !ompetiti"e !ompensation and !reatin) an
employee'friendly +or* en"ironment also play a role. : study !ommissioned y our firm
amon) e/e!uti"es at the nation9s 1%%% lar)est !ompanies found that, aside from salary,
#o appli!ants in4uire #ust as fre4uently aout !orporate !ulture as they do other enefits.
The impli!ation is !learF The more enri!hin) your +or* en"ironment, the more li*ely are
to retain a staff of satisfied, produ!ti"e employees.
$%
Employee Retention
Impro"in) employee retention
G ;i"e prospe!ti"e employees a Irealisti! #o pre"ie+9 at the re!ruitment sta)e. Ta*e !are
not to raise e/pe!tations only to dash them later.
G Ma*e line mana)ers a!!ountale for staff turno"er in their teams. Re+ard mana)ers
+hose re!ord at *eepin) people is )ood y in!ludin) the su#e!t in appraisals,
G Ma/imi<e opportunities for indi"idual employees to de"elop their s*ills and mo"e on in
their !areers
G Ensure +here"er possile that employees ha"e a I"oi!e throu)h !onsultati"e odies,
re)ular appraisals, and attitude sur"eys and )rie"an!e systems.
G Ahere"er possile a!!ommodate indi"idual preferen!es on +or*in) hours. Be as
fle/ile as possile in the allo!ation of shifts.
G ,ro"ide as mu!h #o se!urity as possile. Employees +ho are made to feel that their
#os are pre!arious may put a )reat deal of effort in to impress
G Bend o"er a!*+ards to ensure that you do not and are ne"er seen to dis!riminate
a)ainst employees on any unfair )rounds.
G Hefend your or)ani<ation a)ainst penetration y headhunters and others see*in) to
poa!h your staff.
Recruitment7 Selection 8 )nduction
The human resour!es are the most important assets of an or)ani<ation. The
su!!ess or failure of an or)ani<ation is lar)ely dependent on the !alier of the people
+or*in) therein. Aithout positi"e and !reati"e !ontriutions from people, or)ani<ations
!annot pro)ress and prosper. In order to a!hie"e the )oals or the a!ti"ities of an
$1
Employee Retention
or)ani<ation, therefore, they need to re!ruit people +ith re4uisite s*ills, 4ualifi!ations and
e/perien!e. Ahile doin) so, they ha"e to *eep the present as +ell as the future
re4uirements of the or)ani<ation in mind.
Re!ruitment is distin!t from Employment and Sele!tion. En!e the re4uired numer and
*ind of human resour!es are determined, the mana)ement has to find the pla!es +here
the re4uired human resour!es are.+ill e a"ailale and also find the means of attra!tin)
them to+ards the or)ani<ation efore sele!tin) suitale !andidates for #os. :ll this
pro!ess is )enerally *no+n as re!ruitment. Some people use the term 1Re!ruitment> for
employment. These t+o are not one and the same. Re!ruitment is only one of the steps in
the entire employment pro!ess. Some others use the term re!ruitment for sele!tion. These
are not the same either. Te!hni!ally spea*in), the fun!tion of re!ruitment pre!edes the
sele!tion fun!tion and it in!ludes only findin), de"elopin) the sour!es of prospe!ti"e
employees and attra!tin) them to apply for #os in an or)ani<ation, +hereas the sele!tion
is the pro!ess of findin) out the most suitale !andidate to the #o out of the !andidates
attra!ted (i.e., re!ruited).
Recruiting mart
$$
Employee Retention
5indin) and re!ruitin) )ood people !an e a !hallen)e for any !ompany Therefore, it9s
!ru!ial to ha"e a re!ruitin) strate)y in pla!e.
Ahy are some re!ruitment9s su!!essful +hile others are disastrous failuresD The mount of
time, effort and money spent in the hirin) pro!ess "ery often !omes to nau)ht e!ause
hirin) mana)ers ma*e some ine"itale mista*es. Yes, the re!ruitment pro!ess is more
!omple/ than meets the eye, and it is this inaility to understand the sutle fa!tors of the
system that leads to hirin) the +ron) person, +hi!h often e!omes a !alamitous situation
for the !ompany. Ahy is it ne!essary for the re!ruitment pro!ess to e "ery fo!usedD
5indin) out +hether the person is the 1ri)ht fit> in the or)ani<ation !ulturally is as
important as Testin) his.her s*ill sets. 5ailure to identify the e/a!t !ompany needs is one
of the reasons that lead to +ron) hirin). :ddin) to this is the inaility to test the e/a!t
s*ills of the !andidate. :t times or)ani<ations hire out of desperation and !onse4uently
land up payin) the pri!e of indu!tin) a !andidate +ho is not suitaly 4ualified or s*illed
to ta*e !are of the responsiilities. Blindly promotin) from +ithin and hirin) e!ause a
friend referred the !andidate are the other mista*es that are often repeated.
The -V of a person is in fa!t the most !ommon lind spot as it often e/a))erates
the truth and !an e misleadin) in the sele!tion pro!ess. 5urthermore, often it is the )ood
!ommuni!ation s*ills of the !andidate that help him.her su!!eed in the inter"ie+ +ithout
the ne!essary domain *no+led)e or s*ill.
Rushed hirin) !an lead to o"erloo*in) of many fa!tors. 1Ene has to !he!* +here The
!andidate !omes fromJfrom the perspe!ti"e of suitaility to +or* in the ne+ !ulture,
+hi!h !ould e different from the earlier or)ani<ationF and from the perspe!ti"e of aility
to +or* in teams, !ustomer'fa!in) s*ills, aility to +or* under pressure, et!,> -ost
effe!ti"eness plays an important part too.
$0
Employee Retention
election
Steps in Sele!tion
The purpose of sele!tion pro)ramme 2 te!hni4ue is to !hoose the most suitale
!andidate for a )i"en #o from amon) the prospe!ti"e employees. Sele!tion pro!edures
+hi!h employees systemati! 2 s!ientifi! methods that are reliale 2 "alid !an a!hie"e
this o#e!ti"e 2 !an also sa"e !ost. In order to a!hie"e or)ani<ational o#e!ti"es
effe!ti"ely 2 effi!iently, it is important to pla!e the ri)ht man on the ri)ht #o at the ri)ht
$7
Employee Retention
time at the ri)ht pla!e. In order to a"oid the pitfalls of +ron) sele!tion 2 pla!ement, it is
ne!essary to adopt the prin!ipal of s!ientifi! sele!tion. The use of s!ien!e 2 systemati!
pro!edure in sele!tion is essential for findin) the ri)ht man for the ri)ht #o. : +ron)
man on a +ron) #o +ill mar the de"elopment 2 pro)ress of the or)ani<ation, +hereas
the ri)ht man on ri)ht #o +ill !ontriute to or)ani<ational )ro+th.
: sound sele!tion system ased on s!ientifi! methods !an )o a lon) +ay
in estalishin) an ima)e of impartiality 2 thus !an help to attra!t 2 retain the most
4ualified !andidates for in.to+ards the or)ani<ation.
#nduction
Introdu!in) the ne+ employee +ho is desi)nated as a proationer to the #o, #o lo!ation,
surroundin)s, or)ani<ation, or)ani<ational surroundin)s, and "arious employees is the
final step of employment pro!ess. This pro!ess )ains more si)nifi!an!e as the rate of
turno"er is hi)h amon) ne+ employees !ompared to that amon) senior employees. This
is mainly e!ause of the prolem of ad#ustment 2 adaptaility to the ne+ surroundin)s 2
en"ironment. 5urther asen!e of information, la!* of *no+led)e aout the ne+
en"ironment, !ultural )ap, eha"ioural "ariations, different le"els of te!hnolo)y,
"ariations in the re4uirements of the #o 2 the or)ani<ation also distur the ne+
employee. 5urther indu!tion is essential as the ne+!omer may feel inse!ure, shy,
ner"ousness 2 disturin). This situation leads to instaility 2 turno"er. 8en!e, indu!tion
plays pi"otal role in a!4uaintin) the ne+ employee to the ne+ en"ironment, !ompany
rules 2 re)ulations.
$&
Employee Retention
Remuneration %egotiation
Salary ne)otiations are a !riti!al step in the hirin) pro!ess and also atta!h a hu)e
si)nifi!an!e in retention of the employees. -andidates +ith in'demand s*ill sets may
already e e"aluatin) other opportunities y the time you ma*e an offer, so its important
to handle this sta)e effe!ti"ely. 5ollo+in) are some tips for su!!essful salary
ne)otiations.
:!t Mui!*ly
En!e you9"e sele!ted the prospe!ti"e hire, ma*e the offer as soon as possile. : delay
!an !ause you to lose the est appli!ant.
-autiously E"aluate the Employment Effer
Enter ne)otiations +ith a stron) understandin) of !ompensation trends. The offer should
e fair to the !andidate and in line +ith !urrent standards in the industry and at your firm.
Businesses that !an9t pro"ide hi)h startin) salaries should !onsider offerin) other
in!enti"es J su!h as sto!* options, profit sharin) or e/tra time off.
Elu!idate the Hetails
If possile, ma*e the offer in person. This allo+s you to e/plain all aspe!ts of the salary
and enefits pa!*a)e, and pro"ides an opportunity for the !andidate to as* 4uestions.
,ro"ide En!oura)ement
Ahen presentin) an offer, e sure to hi)hli)ht the reasons someone +ould +ant to +or*
at your !ompany. ,rospe!ti"e employees are interested in hearin) aout staff re!o)nition
and onus pro)rams, ad"an!ement possiilities and uni4ue aspe!ts of the !orporate
!ulture.
$(
Employee Retention
Set a Time 5rame
;i"e entry'le"el professionals a fe+ days to !onsider the offer, and more senior le"el
!andidates up to a +ee*. :ppli!ants +ho +ill need to relo!ate may re4uire additional
time.
?no+ Ahen to End 3e)otiations
Ahen fa!ed +ith a !andidate +ho9s relu!tant to a!!ept an offer, try to dis!o"er the sour!e
of the hesitation. -onsider the potential impa!t of any !han)es re4uired to address these
!on!erns or issues. 5or e/ample, pro"idin) a salary that e/!eeds someone9s potential
!ontriutions !an ultimately affe!t your firms o"erall !ompensation s!ale. 6i*e+ise,
persuadin) an appli!ant +ith serious reser"ations !an a!*fire if that indi"idual has
se!ond thou)hts after #oinin) your or)ani<ation.
Maintain -ommuni!ation
It9s important to stay in tou!h +ith the !andidate after the offer is a!!epted. Send rele"ant
ro!hures aout your !ompany and employment forms. :lso, !all the indi"idual to ma*e
sure he or she has all of the information needed for a su!!essful start at your firm.
4or. En"ironment
$=
Employee Retention
The top !areer !on!ern of employees today in"ol"es alan!in) family and +or*
demands J e"en ao"e earnin) a !ompetiti"e salary a!!ordin) to a resear!h study
!ommissioned y our !ompany. In!reasin)ly, employees are as*in) for !orporate
pro)rams that refle!t a more fle/ile usiness en"ironment. The !hallen)e for usinesses
is respondin) to these !on!erns +ithout sa!rifi!in) produ!ti"ity.
5ollo+in) are some strate)ies follo+ed y !ompanies for !reatin) a friendly
+or*in) en"ironment.
Buildin) a Aor*er'5riendly Reputation
En!oura)e staff to parti!ipate in de"elopin) solutions for enhan!in) your !ompany9s
+or* en"ironment. Soli!it feeda!* from employees y periodi!ally !ondu!tin)
anonymous satisfa!tion sur"eys. :s* not only for impro"ements they +ould li*e to see
ut also pra!ti!al +ays of implementin) these su))estions
,uli!i<in) ,ro)rams
:!!entuatin) out those aspe!ts of your usiness that most
:ppeal to #o !andidates. 6oo* for areas in +hi!h your !ompany e/!els and emphasi<e
them +hen you inter"ie+ appli!ants. 5or e/ample, if your firm is small, you may ha"e
more fle/iility than lar)er !ompanies +hen it !omes to offerin) nontraditional enefits,
rela/ed usiness attire or a faster tra!* to !areer ad"an!ement
Empo+erin) the Employees
Most people +or* harder and do a etter #o if they feel the !ompany "alues their
opinionsN the mana)ement trusts them to e responsile and empo+er them to ma*e their
o+n de!isions.
8ire for the 6on) Term
$@
Employee Retention
The +ay a !ompany hires, trains and re+ards employees re"eal a )reat deal aout its
"alues. 8irin) for aptitude and then trainin) for !areer ad"an!ement )oes a lon) +ay
to+ard uildin) loyalty and in!reasin) retention rates. -ompanies +ith +or*er'friendly
mana)ement pra!ti!es are at a distin!t ad"anta)e +hen it !omes to hirin) 4ualified talent.
These pro)rams help !reate a produ!ti"e, satisfyin) +or*pla!e +here employee turno"er,
as +ell as re!ruitment and trainin) !osts, is *ept to a minimum.
Significance of -raining and :e"elopment
Hoes trainin) in!rease employee retentionD
I3 MERE A:YS T8:3 E3E, employee turno"er is an important !onsideration
for mana)ers and employers ali*e. 5or starters, the monetary !ost of hirin) a ne+ +or*er
is si)nifi!antly hi)h. It is estimated that the !ost of repla!in) an employee !ould a"era)e
as mu!h as 1 year9s salary for that position. The estimate may e lo+. : pharma!euti!al
$B
Employee Retention
!ompany re!ently put the !ost of a sin)le employee turno"er at 1.& times the person9s
annual salary.
In addition to finan!ial !onsiderations, turno"er ta*es its toll in other +ays as +ell. It
lo+ers staff morale, safety, ,rodu!ti"ity, interdepartmental !ooperation, and''most
si)nifi!antly''!ustomer ser"i!e.
Ahere trainin) fits in, many employers elie"e that trainin) oosts morale,
enhan!es moti"ation, and impro"es personnel retention. Marriott hotels found, for
e/ample, that effe!ti"e trainin) of its entry'le"el +or*ers had a profound effe!t on
*eepin) these employees
6a!* of trainin) to promote !areer de"elopment en!oura)es amitious employees
to find ne+ employers +ho +ill pro"ide su!h edu!ational opportunities.
Inade4uate trainin) for multi!ultural staff results not only in hostility and
in!reased turno"er of minority )roups ut also in fe+er appli!ations from
memers of these )roups. The same holds true for +omen +hen the employers
fail to pro"ide trainin) aout se/ual harassment.
The follo+in) statements support the elief that trainin) is, indeed, li*ely to impro"e
+or*er retention.
Employees are trained to do thin)s that are appli!ale only to #os found in their
o+n or)ani<ations. Someone, therefore, s*illed in a hi)hly spe!iali<ed te!hni4ue
in forensi! patholo)y, for instan!e, mi)ht ha"e diffi!ulty findin) a similar #o
else+here (unless that s*ill +ere in short supply, in +hi!h !ase the +or*er +ould
e hi)hly sou)ht after y other employers).
Effe!ti"e, !omprehensi"e trainin) pro"ides e/perien!es that allo+ +or*ers to
reali<e su!!ess early on in their !areers, resultin) in in!reased morale and, as a
result, impro"ed employee retention. 3oteF The most su!!essful trainin) +ill e
0%
Employee Retention
that +hi!h is )i"en durin) the orientation of ne+ employees sin!e this is +hen
+or*ers are most re!epti"e to learnin) ne+ thin)s.
Trainin) in parti!ipati"e mana)ement, empo+erment, and self'dire!ted teams
produ!es si)nifi!antly in!reased #o satisfa!tion. ,eople +ho e!ome memers of
semi'autonomous +or* teams are more resistant to turno"er. (?eep in mind,
ho+e"er, that +hen su!h pro)rams are first introdu!ed, turno"er may in!rease for
a short time sin!e some employees thri"e only in paternalisti! or)ani<ations and
therefore +ill e un+illin) or unale to a!!ept more responsiility.)
3o+ lets loo* at the other side of the !oin, sin!e some people +ould ar)ue that trainin)
!an a!tually +or* a)ainst employers, en!oura)in) turno"er.
Many employers dis!o"er''unfortunately, too late''that they ha"e trained their
people for other employers, often the !ompetition. -ase in pointF
8ospital : trains student nurses. 8ospital B uses the money that it has sa"ed y not
supportin) a trainin) s!hool to enti!e 8ospital : )raduates into #oinin) B9s staff.
Ban* mana)ers are !onstantly !omplainin) that they train their employees in !omputer
operations, only to lose them as soon as they e!ome profi!ient.
Many people a!!ept positions in or)ani<ations that pro"ide hi)h 4uality edu!ation
or hi)hly spe!iali<ed trainin), *no+in) full +ell they +ill lea"e as soon as they
!omplete that trainin). This is espe!ially true in the military. In fa!t, #ud)in) from
the re!ruitin) messa)es of the armed ser"i!es, this pra!ti!e is a!tually en!oura)ed.
If trainin) is in"oluntary or must e paid for y the trainee, morale may plummet.
If trainin) pro)rams !ause hardship, for e/ample, y ein) offered only after
+or* hours or at another in!on"enient time, employees may not e ale to
syn!hroni<e their parti!ipation +ith personal oli)ations. :ny of these instan!es
spur +or*ers to loo* for a ne+ #o.
Employees e!ome upset +hen they elie"e that their trainin) a)enda is
inappropriate or that the 4uality of the trainin) sessions lea"es mu!h to e desired.
Te!hnolo)ists +ill surely e!ome frustrated if they are tau)ht thin)s !ontrary to
+hat they ha"e learned in the laoratory, or if they are unale to apply +hat they
01
Employee Retention
+ere tau)ht in the !lassroom to their +or* a!* at the en!h. 8en!e, employee
retention is on!e a)ain threatened.
: i))er 4uestion. ,erhaps rather than ponderin) o"er +hether trainin) helps to
retain employees, +e should as* oursel"es this 4uestionF 1Hoes trainin) impro"e
ser"i!eD> The ans+er is a resoundin) YESO The ri)ht *ind of trainin), )i"en to
the ri)ht employees, y the li)ht trainers, at the ri)ht time, and reinfor!ed y their
mana)ers a!* on the #o !an ha"e a si)nifi!antly enefi!ial effe!t on !ustomer
ser"i!e, produ!ti"ity, safety, turnaround time, and morale.
0$
Employee Retention
Performance Appraisal
,erforman!e appraisal may e defined as a stru!tured formal intera!tion et+een
a suordinate 2 super"isor, that usually ta*es the form of a periodi! inter"ie+ (annual or
semi ' annual), in +hi!h the +or* performan!e of the suordinate is e/amined 2
dis!ussed, +ith a "ie+ to identifyin) +ea*nesses and stren)ths as +ell as opportunities
for impro"ement 2 s*ill de"elopment.
In many or)ani<ations P ut not all P appraisals results are used, either dire!tly or
in dire!tly, to help determine re+ard out!omes. That is, he appraisal results are used to
identify the etter performin) employees +ho should )et the ma#ority of a"ailale merit
pay in!rease, onuses 2 promotions.
Employee Vie+point
5rom the employee "ie+ point the purpose of appraisal is four P fold F
1) Tell me +hat you +ant me to do
$) Tell me ho+ +ell I ha"e done it
0) 8elp me to impro"e my performan!e
7) Re+ard me for doin) +ell
Er)ani<ational Vie+point
5rom the or)ani<ations point of "ie+, one of the most important reasons for ha"in) a
system of performan!e appraisal is to estalish 2 uphold the prin!iple of a!!ountaility
00
Employee Retention
Before performan!e appraisal one must *eep the follo+in) thin)s in mindF'
Encourage :iscussion % Resear!h studies sho+ that employees are li*ely to
feel more satisfied +ith their appraisal result if they ha"e a !han!e to tal* freely 2
dis!uss their performan!e. It is also more li*ely that su!h employees +ill e etter
ale to meet future performan!e )oals.
'onstructi"e )ntention % It is "ery important that employees re!o)ni<e that
ne)ati"e appraisal feeda!* is pro"ided +ith a !onstru!ti"e intention, i.e. to help
them o"er!ome present diffi!ulties 2 to impro"e their future performan!e.
Employees +ill e less an/ious aout !riti!ism, 2 more li*ely to find it useful,
+hen they elie"e that the appraiser9s intentions are helpful 2 !onstru!ti"e.
Set Performance Aoals % it has een sho+n in numerous studies that )oal
settin) is an important element in employee moti"ation. ;oals !an stimulate
employee effort, fo!us attention, in!rease persisten!e, 2 en!oura)e employees to
find ne+ 2 etter +ays to +or*.
Appraiser 'redibility % it is important that the appraiser e +ell informed 2
!redile. :ppraiser should feel !omfortale +ith the te!hni4ues of appraisal 2
should e *no+led)eale aout the employee9s #o 2 performan!e.
Ahen these !onditions e/ist, employees are more li*ely to "ie+ the appraisal pro!ess as
a!!urate 2 fair. They also e/press more a!!eptan!e of the appraiser9s feeda!* 2 a
)reater +illin)ness to !han)e.
Motivation0 atisfaction 1 Retention
07
Employee Retention
,erforman!e appraisal !an ha"e profound effe!t on le"els of employee moti"ation
2 satisfa!tion.
,erforman!e appraisal pro"ides employees +ith re!o)nition for their +or* efforts
it also offers opportunity to fo!us on +or* a!ti"ities 2 )oals, to identify 2 !orre!t
e/istin) prolems, 2 to en!oura)e etter future performan!e. Thus, the performan!e of
the +hole or)ani<ation is enhan!ed. The po+er of so!ial re!o)nition as an in!enti"e has
een lon) noted. In fa!t, there is e"iden!e that human ein)s +ill e"en prefer ne)ati"e
re!o)nition in preferen!e of no re!o)nition at all.
If nothin) else, the e/isten!e of an appraisal pro)ram indi!ates to an employee
that the or)ani<ation is )enuinely interested in their indi"idual performan!e 2
de"elopment. This alone !an ha"e a positi"e influen!e on the indi"idual9s sense of +orth,
!ommitment 2 elon)in).
The stren)th 2 pre"alen!e of this natural human desire for indi"idual re!o)nition should
not e o"erloo*ed. :senteeism 2 turno"er rates in some or)ani<ations mi)ht e )reatly
redu!ed if more attention +ere paid to it. Re)ular performan!e appraisal, at least, is a
)ood start
'ompensation Management 8 Reward
-ompensation !onsiders +hy or)ani<ations pay people the +ay they ho+ "arious pay
strate)ies influen!e the su!!ess of or)ani<ations. -ompensation mana)ement asi!ally
starts +ith #o analysis, #o des!riptions, #o e"aluation, salary sur"eys, salary ran)es,
and !ustomi<ed performan!e e"aluations
-ompensation !ould e riefly !lassified into !ate)ories namely
0&
Employee Retention
Monetary !ompensations
3on monetary !ompensations
Benefits are any form of !ompensation that aren9t part of an employees asi! pay and
aren9t tied dire!tly to #o re4uirements or performan!e le"els. Spe!ifi! employee enefits
today ta*e a multitude of forms J from the asi!s that you find in e"ery enefits pa!*a)e
(So!ial Se!urity, +or*ers9 !ompensation and unemployment insuran!e) to hi)hly
spe!iali<ed offerin)s su!h as tuition reimursement, !hild' or elder'!are assistan!e and
in'house !on!ier)e ser"i!es. ,re!isely +hi!h enefits the !ompany offers and +hat
portion of its payroll e/pense )oes to pay for these ser"i!es +ill depend on the
!ompany9s finan!ial health, the !ompetition for talent +ithin the industry and the
strate)i! usiness plan.
-ase Study
E"ery month Sandeep Maha#an and Ramesh Borid*ar ea)erly +ait for one thin)
J the pay !he4ue. Sandeep is the dire!tor and Ramesh the offi!e oy in the same
!ompany. 6i*e them millions a+ait their pay !he4ues e"ery month. The pay has e!ome
a symol of someone9s +orth in the or)ani<ation "is'a'"is the of the +or* ein)
performed y the person. 5i)urin) out ho+ mu!h any one is really +orth has een ne"er
easy.
Re!ently +e hired a "ery senior e/e!uti"e for an IT !lient. :fter pro delierations
+e offered Rs 7% la*h per annum. Ae thou)ht +e had done a pretty )ood #o e!ause the
pay +as e4ui"alent to that of the mana)in) dire!tor. Si/ months later the e/e!uti"e
started raisin) the "ery issue of his per!ei"ed +orth and !laimed that he should e
dra+in) Rs &% Ia*h. The mana)in) dire!tor and other dire!tors had ne"er had any salary
0(
Employee Retention
hi*e for the past three years. The former had in fa!t rou)ht the or)ani<ation from its
in!eption to the !urrent le"el. The ne+ e/e!uti"e had a)reed on performan!e tar)et of Q$
million and failed to deli"er. Yet, he ar)ued that his !ompensation +as unfair and +as not
refle!tin) his +orth.
The traditional ,ay -he4ue
Traditional pay s!ales in !ompanies refle!t #o !hara!teristi!s li*e importan!e of
the +or*, de!ision.responsiility le"el. The salary has een and +ill !ontinue to represent
the positional le"el in the or)ani<ation. E"en in !ompanies, +hi!h attempted merit pay,
the 4uantum +as so small it failed to re)ister any impa!t on the performan!e.
,ay hi*es are similarly lin*ed to promotions. Employees e/pe!t not a #ump ut a
i) leap in pay ut +ould not a)ree or e"en dis!uss ho+ mu!h they performan!e +ould
)o up in the ele"ated position.
The 8R !ommunity also spends !onsiderale time in !olle!tin) mar*et and
industry data.
The mar*et ultimately de!ides pay le"els, ut it also assumes that people
o!!upyin) similar positions in or)ani<ations, or ha"in) similar e/perien!e or s*ills, must
e on the same salary irrespe!ti"e of !ontriutions.
The pay le"els for positions )o up or do+n, ased on supply and demand le"els (Ae ha"e
+itnessed pay rates )oin) up o"er Q1%% per hour durin) the Y$? !run!h). The issue
therefore isJshould +e allo+ the mar*et to di!tate pay, or the position or hierar!hy to
dri"e the pay, or should a )ood portion of the pay !ome from performan!e and
!ontriutionD
The traditional pay s!ale models are not "iale any more. 8en!e, it is time for
or)ani<ations to re'en)ineer their salary system. The meanin) of pay has to !han)e #ust
li*e the e!onomi! and so!ial orders ha"e under)one a !han)e. IT or)ani<ations are
already on the road to !han)e the meanin) of !ompensation. -omparale +orth is a
!ompli!ated issue and hen!e "ery many or)ani<ations are definin) the meanin) of +orth
itself. The asis to determine pay is )radually shiftin) from position to performan!e,
0=
Employee Retention
status to !ontriution. This +ill ha"e some re"olutionary !onse4uen!es. -ompanies are
+or*in) on the theory of doin) more +ith less. They are dri"en hard to !onser"e pre!ious
human as +ell as finan!ial !apital. The route therefore is not far a+ay from performan!e
and pay !he4ue lin*a)e. The ne+ mantra must e, 1)et paid only if there s !ontriution>.
That is remuneration a!!ordin) to the e/pe!ted le"el of !ontriution. The )uaranteed pay
syndrome must no+ end.
The ne+ order
8a"in) said all the ao"e it is +orth+hile to loo* at merit pay system also. Merit pay is
the first lo)i!al step to lin* performan!e to pay. ,ay the ase salary as per the #o ran*s,
and then do annual or semi'annual raises ased on performan!e (this is still !onser"ati"e
in my "ie+). It still prote!ts the traditional hierar!hy ased system.
Muite often this !ontradi!ts the "ie+ that the or)ani<ation9s performan!e s team +or*, as
pay raises here !ome only for indi"idual performan!e.
Many +ould a)ree that pay raises should !ome only throu)h performan!e, ut +hi!h
performan!eD That of the indi"idual or the or)ani<ationD
Indi"idual performan!e as a determinant of pay in!rease has een identified as the most
important internal e4uity. -ompanies must then lean to+ards systems +herein the etter
performers at least +ill see the lin*a)e of raises to their !ontriutions.
E"iden!e sho+s that there is positi"e asso!iation et+een or)ani<ation
performan!e and !ompensation. There is a uni"ersal a)reement amon) lo+er le"el people
that mana)ers re!ei"e unfairly e/!essi"e amounts. The 4uestion of )ettin) more y
payin) less +ill e ans+ered if there is a system of thin )uaranteed pay and fat "ariale
pay that depends on the !ompany9s performan!e. The fi/ed +a)e !ost thus !an e
rou)ht do+n.
0@
Employee Retention
:s the !ompensation mode mo"es a+ay from status or position pri!e to !ontriution and
performan!e, the +or* !ulture also under)oes !han)e. Aor* !ultures are no more
authoritarian and en!oura)e !onstant inno"ation, ris* ta*in), 4ui!* prolem sol"in), the
status as asis for pay also must "anish soon. In !on!lusion +e !an say that there is
!onsiderale merit in lin*in) !ompensation to !orporate and indi"idual performan!e.
Su!!essful introdu!tion +ill depend on stri*in) alan!e et+een the t+o.
Thus aspe!ts to e !onsidered +hile formulatin) the !ompensation plan
He"elop !ompensation strate)ies and poli!ies in line +ith le)islation and the
or)ani<ation9s usiness strate)y.
:tta!h meanin)ful monetary "alues to posts in the or)ani<ation ensurin) that the
or)ani<ation9s !ompensation is in line +ith mar*et for!es (this maye !y means of
traditional #o e"aluation or other methods su!h as s*ill or !ompeten!y ased
pay).
He"elop appropriate !ompensation systems for the or)ani<ation.
Mana)e o"erall laour !osts.
Re+ard R Retention
Re!ruitin) and retainin) the staff +ho !an deli"er the strate)i! o#e!ti"es of an
or)ani<ation are fundamental responsiilities of any mana)er. Ahilst sele!tin)
indi"iduals +ho mat!h the ethos and !ulture is !ru!ial, they +ill not #oin the or)ani<ation
if the pay and enefits pa!*a)e is not attra!ti"e.
Hefinin) Total Re+ards and a Re+ards Strate)y
Hesi)nin) a re+ard strate)y e)ins +ith the roadest "ie+ and understandin) of the
!on!ept of 1Total Re+ards.> This term in!ludes all types of re+ards indire!t as +ell
dire!t and intrinsi! as +ell as e/trinsi!. 5rom an employee9s perspe!ti"e, it is e"erythin)
the employee ta*es a+ay from his or her relationship +ith an employer. The operati"e
+ord here is e"erythin)O Yet this definition is in!onsistent +ith ho+ re+ard plan desi)n
is )enerally pra!ti!edN "ery fe+ !ompanies ta*e su!h a holisti! "ie+.
0B
Employee Retention
Total Re+ards
TR e)ins +ith ase !ash the fi/ed and re!urrin) +a)e. Buildin) on ase !ash is any
short'term "ariale pay. Short'term "ariale pay is !ompensation that s paid for the result
of +or* measured in in!rements of a year or lessN it typi!ally "aries from one period to
the ne/t.
3on'!ash Re+ards
In addition to the elements of Total Remuneration, or)ani<ations offer employees
re+ards in "arious forms that, +hile measurale, may or may not ha"e a dollar "alue. :s
the dynami!s of the laor mar*et shift, these other non' !ash re+ards ta*e on )reater
si)nifi!an!e for se"eral reasons.
3on !ash re+ards are the !omponents of the employment !ompa!t, or
employer.employee relationship that matter most to today9s +or*for!e, ,eople do not
lea"e #os for money they lea"e #os for opportunity.
:ssessin) the !ompanies9 assets all too often, the po+er of the indi"idual a
!ompany is ne)le!ted or underrated. The fa!t is, +ithout a team of indi"iduals that are
fi)htin) +ith the !ompany and for the !ompany the !ompany )oin) to e in fi"e years
timeD The !ompany may ha"e )i"en them trainin), support, ad"i!e and )uidan!e, ut
+hat aout the pa!*a)e the pay and enefitsD If the !ompany relies on their team9s
*no+led)e and talents su!!ess, ha"e they assessed the impa!t their re+ard system mi)ht
ha"e on their employeesD :fter all, the !ompanies don9t +ant their Einstein s runnin) off
to their !ompetitorsO
It doesn9t ta*e a )enius to determine the fundamentals for retainin) *ey staff, #ust
!ommon sense. ;ood remuneration pa!*a)es enefits and staff per*s, 8o+e"er, the
diffi!ulty arises in *no+in) ho+ to effe!ti"ely implement and assess it. Settin) salary
enefits pa!*a)es to attra!t and retain staff is all aout mana)in) re+ard, and mana)in)
re+ard is doin) the thin)s that needs to done to implement the re+ard strate)y. IThe
re+ard strate)y is the means of usin) pay and, or other forms of re+ard, to assist the
or)ani<ation to a!hie"e its !orporate )oals.9
7%
Employee Retention
Stoppin) employees from lea"in) e)ins efore they are re!ruited and !ontinues
e"en after they ha"e left. IIt !osts money to *eep staff, ut then re!ruitment !an !ost up to
1&% per !ent of the ad"ertised post9s salary and failin) to deal +ith staff retention !an
potentially affe!t finan!ial performan!e It is not a simple issue, ut if the !ompany +ants
to *eep their est staff then they need to ta*e a!tion.
Typi!al staff re+ards !o"er pay, enefits, trainin) and the +or*in) en"ironment.
;ettin) the asi! pay stru!ture in pla!e is of prior importan!e. 5irst of all, +hi!h type of
#o e"aluation are the !ompanies )oin) to use to stru!ture their pay pa!*a)eD :nalyti!al
J +here they !reate the #o first and then put the people in pla!eD 3on'analyti!al J
+here the +hole #o e"aluation is ased on a ran*in) s!hemeD Er usin) pay
!omparisonsD
IThe salary stru!ture should depend on the si<e, type and nature of the
or)ani<ation, and should pro"ide the fle/iility to !ope +ith mar*et and s*ills pressures.
It should also ha"e the s!ope to re+ard hi)h a!hie"ers and solid performers, and form the
asis for !areer plannin).9
In order to maintain a happy +or*in) en"ironment, it is important for employers to
identify +hat9s important to the people that ma*e up its +or*for!e. 5or e/ample, parents,
)raduates, older +or*ers, +omen and spe!ialist staff, The pay ran)es !an then e set in
relation to a)e, Ser"i!e, 4ualifi!ations, performan!e and mar*etaility.
Resear!h sho+s that payin) e/tortionate rates to attra!t and retain talent is not ne!essarily
the ans+er. -ompensation e!omes the +ea* lin* durin) un!ertainty or do+nturns.
Salary le"els ha"e een ta*en to unrealisti! le"el. Today the ratio of 1.& F 1.% !an
e seen et+een salary le"els for similar positions et+een IT and non ' IT se!tors. This
has resulted in lo+ +ithstandin) !apa!ity of !ompanies.
Ether moti"atin) fa!tors, +hi!h attra!t and retain staff, are interest in the #o,
prospe!ts in the or)ani<ation and +or*in) !onditions. Is it a Ini!e pla!e to +or*D Ahat do
71
Employee Retention
the employees li*e aout itD Ahat9s la!*in) Benefits !ould e !ate)ori<ed into salary
(fi/ed and "ariale), asset uildin), lon) term se!urity, medi!al needs, so!ial . family
needs, edu!ation . learnin) of employee and family, lon) term asso!iation and spe!ifi!
superior performan!e a+ards.
If the !ompany doesn9t *no+, +hy not as* their staff. Send a sur"ey around the offi!eN
as* for feeda!* in appraisals, re"ie+s, or in e/it inter"ie+s. Ma*e the staff feel "alued
J sho+ them that their input !ounts no+ J rather than lea"in) it too lateO9
The top three reason people lea"e #os all in"ol"e opportunities the opportunity to
)ro+ and de"elop, to learn ne+ s*ills, and to e in an en"ironment +here they are
appre!iated. En a list of the top ei)ht reasons +hy people lea"e #os, pay rants at numer
ei)ht. ,eople see* the opportunity to !ontriute, and they +ant to feel their !ontriution is
appre!iated. :t the same time, !hief e/e!uti"e offi!ers ran* !ustomer satisfa!tion and
employee retention as the top t+o measurements of "alue !reation. -ustomer ser"i!e is a
pro"en y'produ!t o employee satisfa!tion, +hi!h in turn is dire!tly lin*ed to re+ards
and re!o)nition.
In addition, non !ash re+ards are the only real +ay to differentiate your
employment offerin)s. -ash is a !ommodity, so it !annot different one !ompany9s
employment !ompa!t from anotherN it is the intan)iles that distin)uish. Besides, +hen it
!omes to money, someone +ill al+ays pay more.
It is y roadly definin) Total Re+ards to in!lude other non'!ash re+ards that
employers truly distin)uish themsel"es in the laor mar*et from the !ompetition and earn
employee !ommitment. It is a matter of fo!usin) the employment !ompa!t on the re+ards
that matter to the +or*for!e you are tryin) to !reate, not on the !ash elements
traditionally measured y !ompanies. Er)ani<ations spend a lot of time measurin) Total
Remuneration. But +hat matters to employees is the total pa!*a)e the Total Re+ards.
It is ne"er ad"isale to +ait for the ine"itale to !ome alon) J losin) staff !ould
ha"e reper!ussions on the usiness, and !lients !ould e)in to dout the aility of the
7$
Employee Retention
!ompany. :lthou)h some staff +ill e"entually mo"e on, it is important to identify the
needs of the indi"idual J +hat enefits are attra!ti"e and ho+ +ill these produ!e resultsD
: strate)i! re+ard system ' pay, enefits, !ontinual trainin) and in"estment J !an
pro"ide an e/!ellent )roundin) for a su!!essful, adept team. &'pend the money( invest in
your sta) * you get your strategy correct( you+ll be re,arded ,ith more than ten times
the amount o money invested)+
E2it )nter"iews
In traditional internal fa!e'to'fa!e e/it inter"ie+s, 1etter pay> and 1etter #o
opportunities> are often the main reasons !ited for lea"in) the or)ani<ation 8o+e"er,
relyin) on the information )athered in this +ay !an e misleadin) sin!e, in this type of
inter"ie+ situation, employees are often relu!tant to identify the true !auses for their
de!ision to resi)n and tend to pro"ide more 1so!ially a!!eptale> reasons for lea"in).
This issue of pay emphasi<es the need to e sensiti"e to oth 1push> and 1pull>
fa!tors that may ha"e influen!ed the employee9s de!ision.
The traditional method of ha"in) the employee9s super"isor or a !ompany 8R
representati"e !ondu!t an in'person inter"ie+ on an employee9s final day is frau)ht +ith
diffi!ulties and prolems, in!ludin) ein) time'!onsumin), diffi!ult to taulate, not
ne!essarily e/e!uted !onsistently and oth less reliale and "alid than usin) sur"eys to
!olle!t the data.
70
Employee Retention
It appears, then, that many or)ani<ations are failin) to re!o)ni<e the "alue of a
systemati! approa!h to !olle!tin) information from e/itin) employees, in!ludin)F
;atherin) and !ollatin) the data in a stru!tured manner
:))re)atin) the results for the or)ani<ation as a +hole
:naly<in) the findin)s to identify !onsistent trends, patterns and themes
Csin) the results to determine and implement strate)ies to in!rease retention and
redu!e turno"er.
In the most strai)htfor+ard terms, an e/it inter"ie+ is simply a means of determinin)
the reasons +hy a departin) employee has de!ided to lea"e an or)ani<ation.
Aith the use of an e/it sur"ey system that effe!ti"ely !an"asses the opinions and attitudes
of departin) employees, a +ide ran)e of operational, or)ani<ational and personal
"ariales affe!tin) the de!ision to lea"e are li*ely to e un!o"ered. It is this information
that is essential to hi)hli)htin) the areas of per!ei"ed defi!ien!y in the or)ani<ation9s
+or*in) en"ironment and !an then e used to plan effe!ti"e retention strate)ies and
a!tions.
The main reasons for lea"in) !an e !ate)ori<ed into fi"e primary 1themes>S

-areer opportunities, in!ludin)F
,er!ei"ed opportunity for ad"an!ement
,resen!e and.or !larity of de"elopment plan.
En#oyment of the +or*, in!ludin)F
8o+ +ell +or* utili<es s*ills
15it> +ith #o
Aor*.life alan!e.
-orporate leadership, in!ludin)F
-larity and stren)th of "ision and mission
77
Employee Retention
Mana)ement style
E"erall per!eption of leadership
6e"el of respe!t and support re!ei"ed.
:"ailaility of trainin), in!ludin)F
Epportunity to learn ne+ s*ills.de"elop ne+ talents
-orporate !ommitment to trainin) and de"elopment
?eepin) up +ith latest te!hnolo)y.
-ompensation.re+ards, in!ludin)F
Base."ariale pay
Benefits
Re!o)nition of !ontriutions
-ommuni!ation re)ardin) performan!e.
Thus it should e re!o)ni<ed that, in many !ases, the or)ani<ation has at least some
influen!e o"er the employee9s de!ision to "oluntarily )i"e up a #o. In fa!t, +hen all
reasons for lea"in) are !ate)ori<ed in terms of
!-" The employer9s impa!t on the de!ision to stay or )o and
!." The employee9s o+n le"el of !ontrol o"er the de!ision,
More than &%K of the reasons for lea"in) are +ithin the !ontrol of oth the
employer and the employee. These reasons for lea"in) in!lude oth the lon)er' term
!on!erns and prolems that !an lead to a )radual de!rease in satisfa!tion as +ell as the
more immediate +or*'oriented 1sho!*s> that !an prompt pre"iously'satisfied employees
to rethin* their !ommitment to the or)ani<ation and, ultimately, lea"e their #os.
5rom this analysis, it is !lear that or)ani<ations should seriously !onsider +hat strate)ies
and poli!ies are in pla!e to redu!e turno"er and retain "aluale employees. Sin!e a lar)e
7&
Employee Retention
proportion of turno"er appears to e a"oidale, it is imperati"e for or)ani<ations to
determine ho+ est to inter"ene and therey pre"ent at least some de)ree of turno"er.
The "alue of e/it sur"eys
: stru!tured system of e/it sur"eys !an play an inte)ral role in a +ell P planned
pro)ramme of employee satisfa!tion and +or* !limate resear!h. Some prin!iples for
plannin) an e/it sur"ey system in!lude ein)F
Cni"ersal J inter"ie+in) all "oluntary departures pro"ides a more !omplete
understandin) of turno"er.
Standardi<ed J usin) a !ore set of !onsistent 4uestions ensures !omparaility
throu)hout the or)ani<ation and a!ross time.
-omprehensi"e J in!ludin) feeda!* on the +or* en"ironment in addition to
reasons for lea"in) in!reases usefulness in determinin) strate)ies to redu!e
turno"er.
Independent J minimi<in) the dis!omfort in re"ealin) the true reasons for
lea"in) impro"es the reliaility of the results.
:"ailale J en!oura)in) !entrali<ed a!!ess to the findin)s in!reases the
li*elihood of ta*in) a!tion.
Monitored J settin) tar)ets for redu!tion in turno"er throu)h planned strate)ies
helps to ensure that the in"estment made in e/it sur"eys is to its ma/imum use.
7(
Employee Retention
=uestionnaire
3ame of the or)ani<ationF
3ame of the employeeF
Hesi)nation
1. :!!ordin) to you, +hi!h sour!es are reliale for re!ruitin) the ri)ht !andidateD
$. Ahat a!!ordin) to you attra!ts #o see*ers to your !ompanyD
a) Ahat *ind of indu!tion pro)ram does the !ompany desi)n for the
ne+ re!ruitD
) Huration of the pro)ram
!) Ho you thin* that the employees enefit from the indu!tion
pro)ramD If yes, to +hat e/tentD
0. Is su!!ession plannin) done for the employees if yes at +hat le"elD
7. Hoes +or* !ulture of the !ompany help in oostin) the morale of the employeesD
7=
Employee Retention
a) 8o+ do you define the !ulture of your or)ani<ationD
&. Ahat efforts are ta*en to ensure that the employees ha"e a )ood +or*in)
en"ironmentD
(. 8o+ often are performan!e appraisals !ondu!tedD
i) 0 months ii) ( months iii) :nnually i") other Tpls spe!ifyU
=. 8o+ does the result of performan!e appraisal help the employees 2 the
or)ani<ationD
@. Ahat steps are ta*en y the !ompany in order to moti"ate the employees +ho
ha"e rea!hed at a sta)nation le"elD
B. 8o+ are the trainin) needs identifiedD
1%. 8o+ often mana)ement de"elopment pro)rams or)ani<ed for mana)ersD
11. En +hat asis are the pay pa!*a)es re"isedD
7@
Employee Retention
1$. :re #o rotation, enri!hment, enhan!ement te!hni4ues adopted in your
or)ani<ationD If yes, ho+ does it enefit the employees 2 the or)ani<ationD
10. Ahat are the t+o !hallen)es fa!ed y the 8R department 2 ho+ !an it e
o"er!omeD
17. Ahat steps are ta*en for retainin) produ!ti"e 2 effi!ient +or* for!eD
1&. :!!ordin) to you ho+ !an e/it inter"ie+s pro"e to e a doule ed)ed +eapon for
de"elopin) retention strate)iesD
1(. . Ahat retention strate)ies are adopted y the !ompany so farD
:nalysis of sur"ey
5ollo+in) is the analysis of the sur"ey !ondu!ted y me of "arious !ompanies.
Ma#or information has een a!4uired y personally "isitin) the !ompanies and some
information is !ompiled +ith the material a!4uired throu)h internet.
7B
Employee Retention
The !ompanies +hose sur"ey analyses are presented are -eat, -on"er)ys, 62T
infote!h, and :irtel. Belo+ is the rief analysis of the sur"ey.
The !ompanies asi!ally under+ent the same re!ruitment9s pro!esses su!h as ads
in ne+spaper, appro"ed manpo+er a)en!ies, !ampus inter"ie+s, +al*'in inter"ie+s,
employee referrals, email et!.
:s "ery mu!h o"ious the !ompanies inter"ie+ed are 4uite reputed so it9s the rand
name that attra!ts the #o see*ers to+ards the !ompany. :nd other reasons +ere s!ope for
multifun!tional e/perien!e under one roof, +or*in) !ondition is the est, )ood housin)
and s!hoolin) fa!ilities, in"estment of time, money and ener)y in !ontinuous trainin).
Vo prospe!ts offered are mostly !omplete orientation of the or)ani<ation in all
fun!tional fa!ilities. Basi!ally durin) re!ruitment itself the s*ills needed are tested and
e"en throu)h performan!e appraisal system is underta*en to )au)e soft s*ills. :nd these
s*ills are asi!ally +or*in) in teams, interpersonal s*ills, !reati"e thin*in),
entrepreneurial s*ills et!.
Indu!tion pro)ram )enerally in!lude proper orientation and top mana)ement ta*es
part in formal indu!tion of employee and !on"ey the mission, "ision and other "alues of
the !ompany, follo+ed y feeda!*. :ttempts are ein) made to promote employees
"erti!ally and laterally.
The main re4uirements for pre"alen!e of healthy +or* !ulture are spirit of team+or*,
informal employee feeda!*, open, Informal and performan!e enalin) inno"ati"eness,
respe!t for people, empo+erment +ith a!!ountaility and entrepreneurship are the *ey
in)redients. But the ma#or prolem fa!ed is senior people feel inse!ure +ith youn)
entrants, espe!ially sin!e ne+ employees are !omfortale +ith !omputers. and the steps
ta*en to a!hie"e the ao"e stated aspe!ts are to empo+er employee to ta*e de!ision and
su))estions are en!oura)ed, ease at +or*, no ostru!tion durin) deli"erin) error free
ser"i!e, informality, fun, +or* life alan!e, employee !ommuni!ation.
The ne/t 4uestion +as aout the importan!e atta!hed to !ompensation enefits.
Aell here -on"er)ys said it is one of the most important retention strate)ies. Ahereas at
-eat it is not !onsidered as a de!isional fa!tor they elie"e more on non'monetary
enefits.
&%
Employee Retention
Re+ards and re!o)nition s!hemes underta*en are li*e employee of the month, re+ards
for a!hie"in) ao"e e/pe!tation results, e"en est performers re+ard s!hemes for
dealer9s e.). forei)n trip, than* you note et!. Buildin) trust in their minds for the
!ompany !ould rin) aout !ommitment from employees. i.e. is y ein) transparent in
the "arious poli!ies and strate)ies, y seein) to it that that the employees personal )oals
is mat!hed to that the e/pe!tation of the or)ani<ation. He"elopin) !ommitment, passion
and a positi"e attitude, uild employee !apaility
:ttrition rate is around 1&K in 62T Infote!h, 1@K in :irtel and around 1K in
-eat and 4uite normal in other !ompanies. :nd e/it inter"ie+s play a "ital role in
redu!in) attrition rates.
Some of the uni4ue 8R poli!ies follo+ed y these !ompanies are as follo+sF
1. -ontinues identifi!ation of trainin) needs (fun!tional as +ell as soft s*ills) and
or)ani<in) trainin) in a re)ular asis.
$. Re!o)nition of hi)her studies (part time) and en!oura)in) !ompany sponsored
mana)ement pro)rams.
0. 8R rea!h out, -ustomer !onta!t pro)ram
7. 5ollo+ open door poli!y
Managing )- Retention and -urno"er
The Indian soft+are industry is poised for stupendous )ro+th in the !omin) years.
Thou)h this mi)ht sound li*e )reat ne+s for the Industry stal+arts and the IT Industry as
a +hole, it has really not ein) soundin) as a s+eet musi! to the real soldiers of this
re"olution, the people +ho are in the midst of the 1Real a!tion> on the shop floor (if I
may use that +ord), yes referen!e is to the soft+are pro)rammers +ho ma*e those ar!ane
lines of !ode really +or*.
Soft+are is a +ealth and #o !reatin) industry, +hi!h has in #ust a fe+ years,
)ro+n to CS Q 1 trillion, employin) millions of professionals +orld+ide. The Indian
soft+are industry has ur)eoned, sho+in) a nearly &%K !ompounded annual )ro+th rate
&1
Employee Retention
o"er the re!ent years. Bein) *no+led)e J ased industry, a hi)h intelle!tual !apital
lends !ompetiti"e ad"anta)e to a firm. Intelle!tual !apital !omprises human !apital and
intelle!tual assets J the latter ein) any !reated it of *no+led)e or e/pertise. Aith a
)loal e/plosion in mar*et ' opportunities in the IT se!tor, the shorta)e of manpo+er
oth in numers and s*ills is a prime !hallen)e for 8R professionals. The related issues
are "aried indeedF re!ruitment of +orld'!lass +or*for!e and their retention, !ompensation
and !areer plannin), te!hnolo)i!al osoles!en!e and employee turno"er. This arti!le
presents some of the findin)s of our re!ent resear!h on the 8R !hallen)es posed y the IT
se!tor.
:s different !onsultants o!!upy themsel"es paintin) a rosy pi!ture for this
industry in the !omin) years, the industry leaders are usy !hal*in) out usiness
strate)ies, tal*in) aout the mar*ets, te!hnolo)ies, more stale Re"enue Models et!, +e
often for)et that at the !ore is the soft+are professionals +ho are ultimately )oin) to
ma*e this possile.
The more moti"ated they are !loser the )oal. But, these )uys are no <omies +ho are paid
for s+eatin) on the assemly lines instead these are the 1?no+led)e Aor*ers>, more
4ualified, more human and more e/pressi"e. They ha"e a "oi!e, and their employers
!annot afford to turn a deaf ear to them. :nother interestin) aspe!t that +e need to
identify is that these people +or* in teams and as it is, e"ery su!!essful team needs a
su!!essful leader. They need leaders at e"ery le"el, leadership is no more 1Moti"ational>,
it is a 18y)iene 5a!tor> today. -ompanies need to ma*e far more in"estments today in
produ!in) effe!ti"e leaders at all le"els. Ahile the Indian IT industry has een lessed
+ith superlati"e leadership at the "ery top (3.R.3arayanmurthy, :<im ,rem#i, :shan*
Hesai), this leadership does not al+ays per!olates do+n the line. These fa!tors ha"e
!ompelled the IT !ompanies to )i"e priority'one attention to its )reatest resour!e, the
18uman Resour!e>.
8ere employee retention and moti"ation e!omes a !riti!al !omponent of this
humon)ous !hallen)e. The turno"er rates, in the ran)e of 1&K in the past year, ha"e
mo"ed into the $%K ran)e for many or)ani<ations. Top performers are those !ompanies
&$
Employee Retention
that ha"e mana)ed to hold their turno"er elo+ 1%K, for many of them #ust arely. :n
ideal turno"er le"el, estimated y many at aout &K, is simply unattainale for most
or)ani<ations. Those !ompanies that do a!hie"e su!h le"els in the short term may )et
there y usin) "arious short term retention ta!ti!s, su!h as onus and in!enti"e plans, that
may only stem a mass e/odus for a period of time. If this is a !riti!al time on a pro#e!t, of
!ourse, it !an e +ell +orth it.
3onetheless, it is, li*e most !ompensation ased retention ta!ti!s, merely a short'
term fi/. Ene that lasts until the onus is paid, the ne/t salary sur"ey released or the ne/t
headhunter !alls. E"er the past year, +e ha"e seen many or)ani<ations re!o)ni<e that
they need to mo"e eyond the !on!ept of traditional !ompensation, to fo!us on a more
fundamental strate)y of employee de"elopment, in order to retain top IT talent.
They need to e/amine in detail the issues related to employee retention.
-ompanies need to thin* eyond !ompensation, to e/amine the nature of IT +or* and the
+or* en"ironment. They need to e/plore the importan!e of trainin), de"elopment and
ad"an!ement opportunities to mana)in) retention and turno"er. Ae also ha"e to loo* at
the impa!t of +or*'family life alan!e.
Today, an employee9s life outside the +or*pla!e !an ha"e a si)nifi!ant impa!t on
their "alue to the or)ani<ation. Ae need to e/plore areas +here or)ani<ations may in fa!t
spend less and a!!omplish more, for oth the or)ani<ation and the employee.
6et us e/amine the ta!ti!s ein) used to 1treat> the IT retention prolem in or)ani<ations
today and raise some strate)i! options for or)ani<ations to !onsider in de"elopin) a true
staffin) strate)y. This shift from ta!ti!s to strate)y is a !riti!al step in re!o)ni<in) ho+ to
approa!h the mana)ement of the most !ostly resour!e in IT departments.
&0
Employee Retention
: Ta!ti!al Vie+ of Retention and Turno"er
Retention and moti"ation of personnel are ma#or 8R !on!erns today. ,eopleJa
;artner )roup !ompany spe!iali<in) in mana)ement of human !apital in IT or)ani<ations
Jhas oser"ed that the a"era)e tenure for an IT professional is less than three years.
5urther, the use of ne+ te!hnolo)ies, the support of learnin) and trainin), and a
!hallen)in) en"ironment ran*ed hi)her than !ompetiti"e pay stru!tures as effe!ti"e
retention pra!ti!es. Eur o+n re!ent sur"ey of 1%$@ soft+are professionals from 17 Indian
soft+are !ompanies, sho+ed that +hile the professional )a"e importan!e to personal and
!ultural #o'fit, 8R mana)ers elie"ed that the *ey to retention +as salary and !areer
satisfa!tion. Money +as a prime moti"ator for Istarters9 ut for those into their third or
fourth #os, their "alue'addition to the or)ani<ation +as more important.
Monetarily, offerin) Ithe est salaries in industry9 is the minimum e"ery !ompany
is doin), apart from performan!e'ased onuses, lon)'ser"i!e a and sto!* options. Many
or)ani<ations fre4uently !ondu!t employee satisfa!tion and or)ani<ation !limate sur"eys,
and are settin) up Manpo+er :llo!ation -ells (M:-) to assi)n the ri)ht pro#e!t to the
ri)ht person9. In fa!t, some are e"en helpin) employees +ith their personal and domesti!
responsiilities to satisfy 2 moti"ate their +or*for!eO
5or most IT or)ani<ations, employees and employee retention and turno"er are
mana)ed ta!ti!ally. : +ide "ariety of ta!ti!s are employed, ea!h of +hi!h is thou)ht to
ha"e a positi"e effe!t on employee retention. 5or the most part these ta!ti!s are employed
in an e"olutionary and ad ho! +ay in response to issues that arise inside the IT
or)ani<ation.
These ta!ti!s or initiati"es are rea!ti"e in nature, its intention is merely to sol"e an
e/istin) issue and not to anti!ipate the lar)er issues and address them. Some emer)e as
part of a planned pro!ess to deal +ith staffin) issuesN others are de"eloped in response to
&7
Employee Retention
a prolem or issue fa!ed y one or more employees. Ahether they emer)e from a
systemati! re"ie+ pro!ess or as a y produ!t of some other issue, they are seldom
formulated into an o"erall strate)yN their !osts are not +ell understood and their spe!ifi!
impa!t on retention e"en less so.
The ta!ti!al approa!hes !an e or)ani<ed into ei)ht ma#or areasF
-ompensation and enefits
Re+ard and re!o)nition
The +or* en"ironment
6ifestyle support and +or* arran)ements ("ery important for the female
employee)
5le/iility and autonomy
Trainin), He"elopment and :d"an!ement
-ommuni!ation
Mana)ement 4uality
5or ea!h of these areas, a )eneral o"er"ie+ of the impa!t on retention and turno"er is
pro"idedN
They ma*e a ottom line assessment of the !riti!al "alue of ea!h area (i.e. ho+ important
is ea!h !omponent for addressin) the employee issue) and then e/plore the indi"idual
ta!ti!s, hi)hli)htin) some *ey details in ea!h area.
:nother !hallen)e that fa!es the Indian IT !ompanies is that people in India are
!ulturally di"erse, multilin)ual, and they si)nifi!antly differ in their uprin)in). Yet, in
or)ani<ations, they !ome to)ether to a!hie"e a !ommon )oal. ,eople differ in their needs,
aspirations, li*es and disli*es, e/pe!tations and preferen!es, all of +hi!h ma*e them
uni4ue. The IT !ompanies ha"e as many different people as their fin)erprints. 8uman
resour!es are !onsidered to e the most !omple/ and !hallen)in) amon) all a"ailale
resour!es in an enterprise, more so in an IT enterprise.
Thus, let us try to understand the demo)raphi!s of a typi!al IT or)ani<ation
&&
Employee Retention
:o"e 7%
: ma#ority of soft+are professional elon)s to the a)e )roup of $1'0%, !onstitutin)
almost =7K. By its "ery nature the soft+are industry is youn). The employees here ha"e
!ertain uni4ue needs and aspirations. The fa!tors that moti"ate or at sometimes
demoti"ate !an e !lustered under follo+in) headin)s, these areN
1. -ompany Hri"en
-ompany9s Brand Ima)e
6atest te!hnolo)ies to +or* on
-ompany9s ri)ht future
-ompany9s amitious )ro+th plan
The 6earnin) e/perien!e
$. ,ro!ess Hri"en
,arti!ipate mana)ement !ulture
5ast !areers )ro+th
Enhan!ement of !ompeten!ies
Transparent and effe!ti"e !ommuni!ation
0. Relationship.Beha"ior Hri"en
Hynami! 6eadership
Team en"ironment
Aell defined rolesO e/pe!tations
Sound interpersonal relationships
7. Value Hri"en
5air.Impartial treatment
Timely re+ards.re!o)nition
&(
Employee Retention
Re)ular feeda!*
Respe!t for the indi"idual
Empo+erment to ta*e de!isions
&. Sustenan!e Hri"en
6o!ation of +or*
-ompensation
5un!tional infrastru!ture
Ensite Epportunities
8R poli!ies
These fa!tors do not +or* in isolationN instead they ha"e a !umulati"e impa!t on the
employees9 performan!e at the +or* pla!e. Hependin) upon the le"el of employee in
terms of his desi)nation, e/perien!e, a)e the +ei)ht he )i"es to these fa!tors "aries. The
employees !an e further !lassified in different le"els as follo+sF
6e"el &
6e"el 7
6e"el 0
6e"el $
6e"el 1
6e"el 1F :sso!iate, Entry 6e"el.
,rimarily +or*s on pro#e!t tas*s, desi)n tas*s, desi)n spe!ifi!ations, de"elops routine
and utility ,ro)rams.
6e"el $F Intermediate 6e"el.
Cses e/perien!e and te!hni!al !ompeten!e for plannin), or)ani<in) and
!ondu!tin) different phases of soft+are pro#e!ts, ased on performan!e re4uirement.
6e"el 0F Senior 5ully E/perien!ed 6e"el
&=
Employee Retention
He"elops and applies ad"an!ed methods to !reate, desi)n, and de"elop !omple/ soft+are.
6e"el 7F -onsultant
-ondu!ts, plans and dire!ts ma#or pro#e!ts, or phases of pro#e!tsN !o'ordinates teams
staff, re!ommends te!hni!al !orre!tion.
6e"el &F Mana)er, Soft+are En)ineerin)O He"elopment.
Re"ie+s, e"aluates and appro"es soft+are de"elopment spe!ifi!ations, pro#e!ts,
proposals
He"elopin) a Strate)i! Erientation
,eople Mana)ement !annot e treated as a one off initiati"e ut it should e. It is
imperati"e that IT !ompanies re"ie+ a lar)e numer of ta!ti!s and ta*e their analysis up
to a some+hat hi)her le"el and formulate a strate)i! position around their people
mana)ement strate)ies. ,eople issues should e resol"ed +ith the same importan!e as the
IT strate)y !onsiders ar!hite!tural issues related to hard+are and soft+are and their fit to
their usiness needs. It is must that the soft+are !ompanies should ha"e an IT staffin)
strate)y that pro"ides o"erall )uidan!e in mana)in) the people in any or)ani<ation.
In short !ompanies fa!e t+o strate)i! dire!tions they mi)ht pursue in li)ht of the IT laor
shorta)e and the ine"itale turno"er that it en)enders.
Er)ani<ations need to mana)e the le"el of turno"er to+ard some desired tar)et. They
need to mana)e for turno"er y restru!turin) +or* and employment relationships to
ta*in) into a!!ount persistent hi)h le"els of turno"er.
Settin) a tar)et le"el of turno"er
Mana)in) to+ards a lo+ tar)et le"el of turno"er !an e a!!omplished throu)h a "ariety
of approa!hes y !ominin) different ta!ti!s. Three influen!e points that !an e used as
the !ore of su!h a strate)y are as follo+sF
$ -ompensation based strategy
&@
Employee Retention
$ -areer based strategy
$ ,or. environment strategy
Ef !ourse these fa!tors !an also e !omined in "arious +ays to de"elop a uni4ue
strate)i! mi/ that est fits +ith your or)ani<ation.
Employee Retention Problems Baced By 'all 'enters
Ene of the most diffi!ult !hallen)es fa!ed y !all !enter mana)ement too ho+ to
retain 4ualified +or*ers. In the !all !enter operation, +here o"er =%K of !osts are related
to staffin), turno"er is a parti!ularly troulin) prolem !ostin) or)ani<ations millions of
dollars per year. This arti!le e/plores the !ost or turno"er to a !all !enter, the reasons +hy
turno"er happens, and +hat front' line super"isors !an do to impro"e Turno"er RateF
Turno"er is at an all'time hi)h. In all types of #os, +or*ers a)ed $%'$7 stay +ith
an or)ani<ation only 1.0 years on a"era)e (!ompared to 1.& years #ust 1& years a)o), and
+or*ers a)ed $&'07 stay $.= years
The !ost of e"en lo+ le"els of turno"er is sustantial and should e tra!*ed
!arefully in plannin) a retention strate)y. There are t+o important numers to understand
in this turno"er !al!ulation. Ene is the statisti!al rate of turno"er and the other is the
a!tual !ost of turno"er to the !all !enter and the or)ani<ation as a +hole. Both numers
&B
Employee Retention
should e !al!ulated and tra!*ed on a re)ular asis for trendin) purposes and usiness
!ase #ustifi!ation for pro)rams to assist +ith retention.
This turno"er rate should then e re"ie+ed to analy<e internal (employees lea"in)
for other positions +ithin the !ompany) "ersus e/ternal (employees lea"in) the
or)ani<ation) turno"er.
Both are !ostly to the !all !enter or)ani<ation, ut o"iously some enefits to the
or)ani<ation if 4ualified people are lea"in) to fill other roles +ithin the !ompany.
Turno"er -osts
There are many !osts asso!iated +ith !all !enter staff turno"er. Some are o"ious,
dire!t, measurale !osts, +hile others are indire!t !osts or)ani<ation. The measurale
!osts of turno"er )enerally fall into the follo+in) !ate)oriesF
/ecruiting -osts0 The !ost of print or other ad"ertisin), #o fairs, and other
promotions to attra!t 4ualified staff.
1iring -osts0 The !ost of the human resour!e department to pro!ess appli!ations
and s!reen employees, as +ell as !all !enter staff time inter"ie+ !andidates,
Training -osts0 The !ost of trainin) fa!ilities, trainer time, and student trainin)
materials, oth for initial and on)oin) trainin).
'upervision -osts0 The !ost of additional super"isory time to assist ne+ staff in
their early learnin) sta)es.
2nproductive Paid Time0 The !ost of +a)es durin) the initial trainin) period
+hen staff are not yet a"ailale to pro!ess !alls.
Overtime -osts0 The !ost of payin) o"ertime to e/istin) staff to !o"er !all
+or*load durin) understaffed periods.
(%
Employee Retention
Reasons for Turno"er
There are many reasons +hy turno"er in the !all !enter industry. Some of these
reasons are under the !ontrol of the !all !enter and are 1fi/ale> +hile some must e
!hal*ed up as simply !ost of doin) usiness.
Ene of !all !enter mana)ement9s responsiilities is to !onsistently assess the reasons +hy
people lea"e the !enter (and !on"ersely, +hy they stay) so that prolems in the !enter9s
!ontrol !an e addressed. The main reasons for !all !enter turno"er fall into these four
!ate)oriesF
1. 'ompensation# Inade4uate !ompensation is a reason often sited in a)ents e/it
inter"ie+s. This +ill e a !ommon fa!tor for !all !enters lo!ated in hi)hly
saturated !all !enter laor mar*ets su!h as ,hoeni/ or Hallas +here !ompetition
for 4ualified !all !enter staff is hi)h. -all !enters should do periodi!
!ompensation en!h mar*in) studies to ensure their +a)es are !ommensurate
+ith the +a)es or neary !enters for the same type of +or*, parti!ularly in hi)hly
!ompetiti"e areas.
$. Cob Bit# Many times the reason an indi"idual lea"es the !enter is simply due to a
poor #o fit. This type of turno"er !an e redu!ed si)nifi!antly y definin) and
ad"ertisin) the #o a!!urately and doin) proper s!reenin) and assessment on the
front end to ma*e sure the #o is a )ood !hoi!e for the !andidate and "i!e "ersa.
More effort durin) the sele!tion phase +ill pay for itself many times o"er in
impro"in) retention, ,art of this s!reenin) pro!ess +ill assess +hether or not the
!andidate is li*ely to e happy +ithin the uni4ue +or*in) !ondition found in most
!all !entersF solo +or*, !onfined spa!e, repetiti"e tas*s, !onstant monitorin), and
infle/ile +or* s!hedules.
(1
Employee Retention
0. >imited CobD'areer 3pportunities# Many indi"iduals lea"e
!enter due to limited possiilities for !areer )ro+th or opportunities for
ad"an!ement. Some or)ani<ations ha"e multi'le"el #o ladders +ith numerous
le"els of a)ent positions and multiple !areer paths to many areas.
Cnfortunately, others are se"erely limited in )ro+th potential and see turno"er as
a result. In a sur"ey !ondu!ted y !all!enter!areers.!om, $=K of people had left
one !all !enter #o and +ere loo*in) for another !ited la!* of promotional
opportunities as their primary reason to lea"e. Re'definin) le"els and loo*in) for
!areer ad"an!ement opportunities +ithin the !all !enter should e e"aluated often.
7. Super"isory Problems# :ssumin) !ompensation is in a reasonale ran)e and
there is at east a reasonale affinity for !all !enter +or*, the main reason a)ents
lea"e the !all !enter is due to ineffe!ti"e super"ision. 5or the most part, the ada)e
Ipeople don9t lea"e !ompaniesN they lea"e leaders> is !ertainly true in the !all
!enter en"ironment. In the ma#ority of !ases, a super"isor !an e either the
)reatest !ontriutor to staff retention or the primary !ause of turno"er.
Retention Stratagem
The ne+ a)e e!onomy, +ith its attendant paradi)m shifts in relation to the human
!apital, in terms of its a!4uisition, utili<ation, de"elopment and retention has pla!ed a
hea"y demand on today9s 8R professional. Today 8R is sele!ted to !omprehend,
!on!eptuali<e, inno"ate, implement and sustain rele"ant strate)ies and !ontriute
($
Employee Retention
effe!ti"ely to+ards )i"in) the !orporation its +innin) ed)e. Aith a dynami!ally !han)in)
and "olatile demand'supply e4uation, espe!ially a)ainst errati! attrition trends and
!utthroat !ompetition no lon)er restri!ted to lo!al or re)ional oundaries, a need for
strate)i<in) and puttin) in pla!e a roust me!hanism for attra!tin) and retainin) top
talent e!omes "ital for the !ompany9s "ery sur"i"al and )ro+th.
The ne+ a)e +or*for!e !omprises mostly of *no+led)e +or*ers, +ho are te!hno
P sa""y a+are of mar*et realities, are materially fo!used and ha"e hi)her propensity to
s+it!h #os. They prefer to e/periment and e/plore ne+ opportunities, are hi)h ris*
ta*ers +ith hi)her aspirations and e/pe!tations and )enerally ha"e a totally different
mind'set aout #o and !areers.
In the !urrent s!enario, does supply really outstrip demandD Supply of +hat and
demand of +hatD Ahat *ind of people )et the pin* slip and +hom do the !ompanies rin)
fen!eD In any or)ani<ation the employees may e roadly !lassified into four road
!ate)ories in terms of their performan!e and potential.
(0
Employee Retention
There are people +ho are +oefully inade4uate in oth dimensions, +ho +e may
!all Istru))lers9 and there are the Iunder'performers9, +hose performan!e falls elo+
their potential. This !onstitutes aout one fifth of the total human !apital at our disposal
and these people o"iously 4ualify to e the first !andidates for the pin* slip.
The other t+o se)ments !omprise of the solid pro9s9 and the stars9 +ho are at the
hi)her end of the performan!e !ontinuum. The former may e relati"ely lo+er in their
potential as !ompared +ith the latter, ut !ontriute immensely to the !ompany9s o"erall
performan!e. Ae !ould !all this as the Italent9 se)ment. This is the se)ment +e do not
+ant to lose. Ae9"e )ot to prote!t this )roup from the pull of all non'retenti"e for!es and
that needs effe!ti"e retention strate)ies that ha"e to e *i!*ed into hi)h )ear.
Retention strate)ies ha"e to e "ie+ed holisti!ally a)ainst the total systemi!
frame+or* of talent mana)ement that en!ompasses the Italent the I!orporation9 and the
Ien"ironment9. :ttrition and retention should e seen as re!ipro!al phenomena, +hi!h
ha"e an in"erse relationship +ith ea!h other, re!ruitment and needs for do+nsi<in) must
also e !onsidered in !on#un!tion.
(7
Employee Retention
:s understandin) of the inherent !onsiderations of an indi"idual +ho +ishes to #oin a
!ompany and !ontinue to stay, and potential !ompulsions, +hi!h push him a+ay, +ould
help.
The !ompany9s rand ima)e !ro+ns the list of the priorities for the #o see*er,
other important !onsiderations ein)N the pay pa!*a)e and other pe!uniary enefits, the
!lass and 4uality of people that +or* in the !ompany, the !hallen)es of the #o and
attra!ti"eness of the position 2 desi)nation, the opportunities for !areer )ro+th and
professional de"elopment and the *ind of te!hnolo)y, he +ould e e/posed to.
Hissatisfa!tion in any of these aspe!ts !auses se"ere !ra!*s to appear in the ondin).
:n/ieties and apprehensions arisin) from restru!turin), mo"ements, mar)inali<ation,
po+er politi!s, !han)e of oss, !han)e of tas*s and responsiilities, mer)ers and
a!4uisitions et!. !ould e instrumental in ta*in) de!isions to lea"e. Ether fa!tors !ould e
to e/plore etter prospe!ts else+here, to start one9s o+n "enture, to ta*e up hi)her studies
or !ertain pri"ate !ompulsions.
5rom the !ompany9s perspe!ti"e, its rand e4uity, philosophy, "ision, mission,
!ulture, "alues and e!olo)y ha"e a dire!t earin) on talent attra!tion and retention. Ether
!ompany ' related attriutes that impa!t employee retention in!lude hi)h demand on
performan!e, need for ne+ !ompeten!ies, roader, deeper and di"erse #o e/pe!tations,
need for re's*illin) and re'deployment, !areer offerin)s and )ro+th prospe!ts, )oal 2
role !larity, poli!ies 2 pro!esses and or)ani<ational !ommuni!ation.
,uttin) in pla!e an effe!ti"e sensin) me!hanism to )au)e !omfort, !ontentment
and !ommitment le"els e!omes a pre're4uisite to desi)nin) and implementin) any
+orth+hile retention strate)y.
Many su!h instruments ha"e e"ol"ed o"er the years and in!lude employee
satisfa!tion sur"eys, or)ani<ation !limate audits, open forums, one'to'one sessions, e/it
inter"ie+s, e/'employee inter"ie+s, )rape "ines, informal so!ial intera!tions, !ase
studies and a multitude of trend analyses ased on hard attrition data. Ahate"er may e
(&
Employee Retention
the instrument, +hether used sin)ly or in !omination, the su!!ess depends on !olle!tion
and !ollation of uniased responses, !atalo)uin) of dire!t and pro/imate !lues, their
effe!ti"e analysis and dra+in) sound inferen!es.
In order to appre!iate the push and pull effe!t on the indi"idual in the !onte/t of
attrition and retention a 4ualitati"e for!e field listin) may e helpful.
Ahile on the one hand, a !ompellin) rand ima)e, astute leadership +ithin the
or)ani<ation, an endurin) !ulture and an en"ironment that is trustin), !arin) and
nurturin), !rediility, transparen!y, empo+erment, responsi"eness and !reati"e poli!ies
on !ompensation, re!o)nition et! +ould e/ert a positi"e influen!e on the su#e!t talent,
on the other hand, !omplian!e, !ontrol, ri)id po+er stru!ture, *nee'#er* !han)es,
une/!itin) and dra #os, un#ust dis!rimination, unrealisti! deadlines, lure of lu!re and
poa!hin) +ould e deilitatin).
The retention strate)ies should e desi)ned su!h that the retenti"e for!es are
ma/imi<ed and the deilitatin) for!es minimi<ed. Retention strate)ies should not e
or!hestrated in isolation ut must form part of the o"erall strate)ies for stren)thenin) the
pull on the talent, +hi!h in fa!t in!lude sour!in), staffin) and de"elopment strate)ies li*e
impro"in) the pay stru!tures 2 le"el on part +ith those of similar or)ani<ations,
pro"idin) the opportunities for self de"elopment 2 promotional a"enues, maintainin)
sound industrial 2 human relations, adoptin) effe!ti"e te!hni4ues of re!ruitment,
sele!tion, indu!tion 2 pla!ement, pro"idin) !on)enial +or*in) !onditions, !reatin) the
fa!ilities 2 en"ironment to satisfy he employee9s needs for pride, se!urity, re!o)nition,
!hallen)in) +or*, autonomy, a!hie"ement, appre!iation, status, po+er to !ontrol et!. in
addition. : roust sour!in) strate)y is !ru!ial to the e/er!ise sin!e the type of people one
sele!ts should not only fit into the #o in terms of s*ill set ut should mat!h the !ompany
!ulture in terms of attitude, personality and !ommitment. :n effe!ti"e sele!tion pro!ess
ensures the entry of the ri)ht *ind of people into the or)ani<ation, +ith the desired loyalty
and sense of elon)in) that )oes a lon) +ay in restri!tin) attrition in the lon) run.
((
Employee Retention
'onclusion
-riti!al human resour!e a!ts that need to e introdu!ed and altered for
effe!ti"e mana)ement of employees turn o"er ratio.
-" Employees change 2ob for a variety of reasons
:!!ordin) to a resear!h paper y an IIT ' Mumai professor, there is a si)nifi!ant )ap
et+een 8R mana)ers9 per!eption of +hy employees !han)e #os and the real reasons as
!ited y the employees themsel"es.
The paper9s resear!h findin)s sho+ that people lea"e for different reasons
dependin) on the sta)e in their !areer. 5or e/ample employees ne+ to the
+or*for!e tend to lea"e for more money, to +or* +ith ne+ te!hnolo)y and to mo"e from
small to lar)e !ompanies. More senior le"el employees lea"e +hen the +or* is not
!hallen)in) and +hen they are unhappy +ith the !ompany "ision.
Ene solution presented is for !ompanies to e !areful in their hirin) 2 sele!tion pro!ess
to find employees +ith the Iri)ht9 !ultural fit +ith the !ompany. Employers should also
a"oid presentin) too rosy a pi!ture of the !ompany +ithout in!ludin) a realisti! loo* at
the #o and the +or* re4uirements
(=
Employee Retention
." %er+s that 3or+
Vo satisfa!tion may e at an all time lo+ ut not for many !ompanies that ha"e found a
+ay to su!!essfully in!orporate per*s into their +or*pla!e !ulture. Ahile some e/perts
stress that per*s are less important than interestin) 2 !hallen)in) +or* or)ani<ations
findin) that enefits do ma*e a differen!e in employee retention.
4" Employee5s first days are critical for retention success
Studies ha"e sho+n that an employee9s e/perien!es durin) his or her first fe+ +ee*s on a
ne+ #o are !riti!al in the employee9s later de!ision +hether to stay or lea"e. 6astin)
impressions aout the !ompany9s standards, the +or*load, )ro+th opportunity, the +or*
ethi! of !ollea)ues and !ommuni!ation from upper mana)ement are all formed durin)
this early time period
The follo+in) are some tips to ensure that ne+ employees )et off to a )ood start +ith
your !ompany or or)ani<ationF
aE Anticipate the first day. The ne+ employee +ill ha"e lots of 4uestions u<<in)
around in his mind as his first day approa!hes. :nti!ipate those 4uestions and put the
ans+ers in a letter or handout for ea!h employee. Muestions mi)ht in!lude thin)s li*e
'Ahat is the dress !odeD
'Ahere should you par*D
'Ahere do +or*ers eat lun!hD
bE Pro"ide a warm welcome& The ne+ employee should e +el!omed on her first day
y a friendly fa!e. This !an e someone assi)ned to )reet the ne+ employee or a friendly
person +hom the ne+ employee met durin) inter"ie+ pro!ess. Remind staff to say hello
and if you +ant to )o all out ' pla!e fresh flo+ers on the ne+ employee9s des*.
(@
Employee Retention
cE Assign a friend& To help the ne+ employee feel +el!ome durin) the first +ee* or
more assi)n a friend +ho !an meet the employee for rea*s and lun!h and ans+er any
4uestions that one mi)ht hesitate to as* the oss.
dE Pro"ide a schedule& 6ist tas*s and.or meetin)s that the ne+ employee +ill e
+or*in) on and attendin) durin) his or her first fe+ +ee*s.
eE -each the job& Be prepared +ith trainin) to help the ne+ employee su!!essfully learn
the spe!ifi!s of the #o. Ma*e sure files and e4uipment are a"ailale if ne!essary 2
!onsider pro"idin) a !ollea)ue tutor +ho !an assist +ith learnin).
fE -ouch base& Hurin) the first +ee*, e sure to !he!* in daily +ith the ne+ employee
to find out ho+ thin)s are )oin). This should !ontinue at least +ee*ly for the first month
or t+o.
g" Pro"ide hope for the future& E/plain the or)ani<ational stru!ture to the ne+
employee 2 let him see ho+ his #o fits in +ith the !ompany9s mission. If ad"an!ement
opportunities are a"ailale, e/plain ho+ the pro!ess +or*s and the steps for )ro+th 2
trainin).
Employee retention is important e"en in an employer9s mar*et +here +or*ers are
plentiful. Ea!h employee represents a si)nifi!ant in"estment that is lost if the employee
lea"es prematurely. You !an ta*e steps to minimi<e this ris* y ma*in) sure ea!h
employee )ets a )reat orientation to the !ompany.
0) Effe!ti"eness of E/it Inter"ie+s
(B
Employee Retention
Many or)ani<ations use e/it inter"ie+s to find out +hy employees are departin). They
say that +hen an employee is lea"in) it is the est time to )et honest information. The
employee at that point has nothin) to lose and the or)ani<ation !an )ather "aluale
insi)ht into +or*pla!e issues
E/it inter"ie+ 4uestions )enerally in!lude ho+ the employee felt aout his or her
+or*load, ad"an!ement opportunities, !ompensation and reason for lea"in). Some
or)ani<ations also see* to find out if the employee is lea"in) for another or)ani<ation and
if so +hat ma*es the ne+ #o more appealin).
Information )athered from e/it inter"ie+s !an also e useful in !raftin) #o des!riptions.
Employees often state that they a!!epted the #o +ithout a !lear understandin) of +hat
the #o entailed.
Results from e/it sur"eys may also re"eal +hi!h positions are underpaid and +hi!h
super"isors la!* )ood leadership s*ills.
E/perts re!ommend that someone other than a dire!t super"isor !ondu!t the e/its. If the
or)ani<ation is lar)e enou)h to ha"e a 8uman Resour!es person, he or she +ould e the
most appropriate person to handle the e/it inter"ie+.
Some !haritale or)ani<ations say they don9t ha"e time to !ondu!t e/it inter"ie+s ut it
is re!ommended for those +ith a stron) need or interest in *eepin) turno"er lo+.
7) To/i! osses and more on +or*pla!e ullies
There are many ane!dotes aout osses +ho rant and ra"e, insult and elittle employees
in front of others, )i"e employees the silent treatment, )lare at them, spread false rumors,
+ithhold information and ta*e !redit for employee9s +or*. This *ind of psy!holo)i!al
"iolen!e often lea"es employees physi!ally and mentally +ea*.
=%
Employee Retention
Some+here et+een 1$K ' &%K of +or*ers are ullied. Both men and
+omen do the ullyin) ut @%K of ully "i!tims are female. They tend to e +omen
in their 7%9s +ith many years of +or* e/perien!e.
Ahy is ullyin) so in)rained in our +or*pla!eD It mi)ht e a matter of !ulture. Ae as a
so!iety "alue a))ression, tou)hness and enduran!e to pain. In many +ays these *inds of
eliefs !ome !lose to endorsin) the to/i! oss pain. In many +ays these *inds of eliefs
!ome !lose to endorsin) the to/i! oss. Thus it is time that these ullies not to e
re!o)ni<ed.
&) Stress relie"ers redu!e turno"ers in !all !enters
-all -enter employees +or* an a"era)e of B ' 1% hours per day +ith a half hour for lun!h
and t+o 1&'minute rea*s. They handle appro/imately @& !alls per shift. They are tied to
their headsets and are monitored for !all "olume, len)th of !alls and ho+ lon) they are
)one for athroom rea*s.
It9s not surprisin) that staff turno"er in !all !enters looms at 00K per year. ,hone
representati"es are four times more li*ely to miss +or* e!ause of stress related
!onditions. To impro"e their retention of !all !enter representati"es, some !ompanies are
institutin) enefits desi)ned to relie"e the stress that uilds up on the #o.
Stress relief enefits in!ludeF
' Employee )ym
'Muiet room +ith !omfortale !hairs for nappin) and readin)
' Eutdoor +al*in) trails
' Video ar!ade +ith free )ames
' Effi!e 6un!heons
' Stress mana)ement and time mana)ement trainin)
' -ompany sponsored theme e"ents
' Er)onomi! +or* stations
=1
Employee Retention
:llo+in) representati"es to fo!us on the 4uality of the !all rather than the speed of the
!all has also sho+n to oost produ!ti"ity and redu!e the numer of employee +ho 4uit y
&%K
() @0K of the mana)ers +ill #ump ships +hen #o mar*et impro"es
E/perts in the industry +arn that if the #o mar*et heats up, 8R Mana)ers should e/pe!t
to see hu)e in!reases in staff turno"er. Ei)hty'three per!ent of CS mana)ers and
e/e!uti"es said they +ill li*ely see* +or* else+here +hen the opportunities e!ome
a"ailale.
Ahy are +or*ers so an/ious to #ump shipD :!!ordin) to re!ruiters, employees are fed up
+ith feelin) underappre!iated and doin) the #o of $ or 0 or 7 people due to !orporate
layoffs. Employees are dissatisfied +ith la!* of promotions and pay raises and feelin)s of
ein) under"alued and o"er+or*ed.
Employees that na"e e/pressed unhappiness +ith their +or* has in!rease from 1&K in
$%%% to $&K at the end of $%%0.
=) Business !oa!hes help sol"e +or* pla!e !hallen)es
8irin) a usiness !oa!h !an help !ompany de"elop a more produ!ti"e and pleasant
+or*pla!e.
Business !oa!hes help !ompanies impro"e !ommuni!ation, uild etter relationships oth
on 2 off the #o and mana)e stress. :lthou)h they are neither usiness !onsultants nor
therapists they often fun!tion in similar roles. Their )oal is to 1rin) perspe!ti"e,
a!!ountaility, fo!us and dis!ipline to +or* en"ironments and relationships.>
=$
Employee Retention
Bibliography
3ame of the Boo* :uthor
1uman /esource $nd
Personnel Management
3) $s,athappa
Essentials o 1uman /esource
Management 4 *ndustrial
/elations
P) 'ubba /ao
4ebliography
=0
Employee Retention
The follo+in) Aesites ha"e een used for referen!eF
+++.retentionsystems.!om
+++.-areermosai!india.!om
+++.hrfol*s.!om
+++.e/pressitpeople.!om
+++.the!all!enterss!hool.!om

=7