Attrition in Indian BPO Industry

Attrition in Indian BPO Industry
EXECUTIVE SUMMARY
Managing attrition is not a very easy task to do in the BPO industry. It
is the route to their survival.
Turnover is of considerable concern for managers because it disrupts

normal operations and necessitates the costly selection and training
of replacements, the costly hiring and training the new employee to
regain the lost customer and supplier contacts. The employee
retention is obviously one of the most important challenges in
organization and avoids unwanted turnover. Staff attrition represents
significant costs to most organizations. It is odd, therefore, that many
organizations neither measure such costs nor have targets or plans
to reduce them.
Employee turnover or resign could disrupt normal operation

necessities the costly selection and training of replacement. Reducing
employee turnover required the management efforts of the
companies
The main objectives of the study are to understand the reasons

leading to attrition, to identify the major problems faced by employees
in the organization which lead to attrition. To understand the
problems faced by the organization due to attrition and finally suggest
ways and means to check attrition.
In this study, I have made an endeavor to highlight attrition issue

faced by BPO industry. We try to find out the various reasons for this
problem, and have proposed some ways in which this issue can be
addressed.
INTRODUCTION
Defining attrition: "A reduction in the number of employees through retirement,

resignation or death" Defining Attrition rate: "the rate of shrinkage in size or
number" Introduction: In the best of worlds, employees would love their jobs, like
their coworkers, work hard for their employers, get paid well for their work, have
ample chances for advancement, and flexible schedules so they could attend to
personal or family needs when necessary. And never leave.
But then there's the real world. And in the real world, employees, do leave, either
because they want more money, hate the working conditions, hate their
coworkers, want a change, or because their spouse gets a dream job in another
state. So, what does that entire turnover cost? And what employees are likely to
have the highest turnover? Who is likely to stay the longest?
Attrition issues in Indian BPOs are not salary oriented anymore, but due to
perceived lack of long-term career growth in the sector, according to international
risk management and business intelligence firm Hill and Associates.
However, BPOs are not prioritizing enough on solving perceptions on work and
career growth-related issues in BPO. Hiring practices in the sector are wrong and
there is a huge expectation and qualification mismatch. The aspirations of
employees are not managed well.
A good number of employees leave the sector because they feel that their long-
term career growth prospects are better in some other sector. Currently, average
attrition rate in the Indian BPO industry is over 30%.
The rapid growth of the sector left no space and time for players to take care of
³career issues´ of employees. This industry will take at least three years to settle
its issues. But the coming years are crucial because if the growth is not well
managed, the whole system will be hurt badly.
Initially, the BPO sector had focused on taking maximum advantage of lower
costs here and later the focus shifted to quality improvement. Currently, the
industry, which is expected to be major employment creator in the country, is
trying to contain its manpower issues
OBJECTIVES
• To understand the reasons for high attrition rate.

• To identify the major problems faced by employees in the
organization which lead to attrition.
• To understand the problems faced by the organization due to
attrition.
• To suggest ways and means to check attrition.
METHODOLOGY
Source: Collecting primary data from employees from the nearby

companies and use secondary data to the measures their
effectiveness and guidelines of these industries under which they
operate their daily activities.
1) I have designed the questionnaire and have taken the data by two
methods:
a) Direct Survey - Market Survey.
b) Online Survey.
2) I have taken a sample size of 100.
3) I have collected data’s from different BPOs of India.

DATA ANALYSIS
For simple calculation, I have assigned values for every scale

respectively. Just like in the questionnaire I have 6 scales of
measurement with their weightage as follows:
1) Strongly agree (6) 2) Somewhat Agree (5)
3) Strongly disagree (4) 4) Somewhat Disagree (3)
5) Neutral (2) 6) don’t know (1)
Then we count the total vote in each dimension and multiplied with
the scale value.
E.g. Let say for question no.1, we have following responses
Strongly agree = 51
Somewhat agree = 32
Strongly disagree = 3
Somewhat disagree = 6
Neutral = 4
Don’t know = 4
Hence, value of this dimension is:

(51*6)+ (32*5) + (3*4) + (6*3) + (4*2) + (4*1) = 508
Similarly, we plot graph of all the questions 1 - 10 according to their
dimensions:
600
533
508 515 512 498
500 467
432
402 403
383
400
300 Series1
Series2
200
100
0
1 2 3 4 5 6 7 8 9 10
Now coming on to each question individually we have the following

interpretations to be made:
Question1. Employee turnover/resign is a major concern for your

organization.
60
50
40
30
Series1
20
Series2
10
Series3
0
51 32 4 3 6 4
Strongly Some Neutral Strongly Disagree Don’t

Agree What Disagree Know
Agree
Interpretation: Most of the respondents strongly agrees (51%) to the

fact that employee turnover is a major concern for their organization
as it brings down the morale and confidence of the whole team.
Question2. High percentage of females in the work force adds to the

high attrition rate.
40
35
30
25
20
15 Series1
10 Series2
5 Series3
0
25 37 13 12 5 8
Strongly Som e Neutral Strongly Disagree Don’t

Agree
Interpretation: Respondents believe that high percentage of females

in the work force results in high attrition rate. This is because they
feel that female employees could not adjust themselves to the timings
of the job, leave their job soon after they get married or get any good
job with good salary package.
Question-3-Some attrition is always desirable and necessary for
organizational growth and development.
35
30
25
Series2
20
Series1
15
Series3
10
5
0
21 28 33 5 9 4

Interpretation: 28% of the respondents feel that some attrition is

always desirable and necessary for organizational growth and
development because some of the employees are there in
organization those are less productive and hence become liability for
the organization. So by removing them organization won’t be in
problem rather they would be benefited as they need not to spend
any more on them.
Question-4- B PO firms should provide career growth and higher

educational opportunities for employees as measure of retaining
them.
40
35
30
25 Series2
20 Series1
15 Series3
10
5
0
34 23 23 2 4 11

Interpretation: 34% of the respondents strongly feel that BPO firms

should provide career growth and higher educational opportunities for
their employees as a measure of retaining them.
This would be a reason for the employee to stay at the organization
as it gives them the scope.
Question-5-An employee gets sufficient promotional opportunities to
enhance his position.
35
30
25
Series2
20
Series1
15
Series3
10
5
0
27 31 24 2 7 9

Interpretation: Most of the employees at think that they get sufficient

promotional opportunities to enhance their position at the work place.
This in turn motivates them to work more and prove their talent to the
higher authorities.
Question-6-The work schedule is exploitative.
60
50
40 Series2
30 Series1
20 Series3
10
0
49 37 5 3 4 2

Interpretation: 49% of the respondents strongly agreed to the fact
that the work schedule that they are into are very much exploitative
which make them feel harassed and hence force them to quit the job.

Question-7-As job becomes repetitive; the employees find less
challenge in it and hence seek for some other job.
60
50
40
30
Series1
20 Series2
10 Series3
0
52 35 10 0 1 2

Interpretation: 52% of the respondents feel that the employees

leave the job and seek for other one after finding less challenge in the
BPO jobs which is of more repetitive kind.
Question-8-The families of BPO employees are not fully supportive

for this industry.
50
45
40
35
30
25
20 Series1
15 Series2
10 Series3
5
0
36 47 7 5 4 1

Interpretation: According to the respondents, families of BPO
employees are not supportive of the fact that they work in BPO
industry with late night shifts. They also feel that there is little respect
and recognition present in their job as they have to listen abuses from
different customers at work every day and have very less scope of
innovation.
Question-9-Training of employees lead to increase in attrition.
1
8
4
2
22
63
Strongly Agree63 SomeWhat Agree22 Neutral 2
Strongly Disagree4 Disagree8 Don’t Know1
Interpretation: This is in fact true and I have already discussed

earlier that training of employees lead to increase in attrition.
Moreover 63% of respondents also agreed to this point. The reason
that they gave is after completion of training process, employee gain
some knowledge and become eligible for some other higher post and
hence quit the organization.
Question-10-Bad selection leads to attrition.

3
5
28
718
39
Strongly Agree28 SomeWhat Agree39 Neutral 7

Strongly Disagree18 Disagree5 Don’t Know3
Interpretation: According to 39% of respondents, poor selection of
candidates leads to high attrition because if you don’t select the right
candidate for the given job then surely there would be a mismatch
and he\she would finally leave the job. At the time of recruitment, the
HR professionals should be very particular in choosing the right
candidate.
Question-11-What do you think, the reasons for an employee leaving

the organization?
When asked about the reasons for an employee leaving an

organization, the respondents ranked the parameters as per the
following according to their preference:
• No flexible work schedules

• Stress from overwork and work-life imbalance
• Lack of good working condition
• The mismatch between job and person
• Monetary Factors
• Organization is more concerned towards business
• The job or work place was not accepted
• Very few supporting colleagues
• Loss of trust and confidence in senior leaders
• Too little coaching and feedback
Interpretation: By going through this rating we can learn that

employees leave BPO sector for no flexible work schedules in the
organization. Maximum of them also quit their job for stress from
overwork and lack of good working condition. Some of them also feel
mismatch between the job as they find no challenges in it.
Question12.What would be the major concerns for an organization

after the employee quits.
When asked to rate on the factors on which the organization are most
concerned when an employee quits, maximum respondents ranked
the parameters as per the following according to their preference:
• Cost of training the employee
• Time spent in orientation
• Replacing qualified employees
• Loss of productivity
• Cost of overtime or temporary help
• Recruiting costs & interviewing costs
Interpretation: According to respondent’s organization are more

concerned about the cost and time that they have put in the
employee on training. Then they would be more worried about
replacing them with the right candidate which would prove asset to
the organization.
SUGGESTIONS
Few suggestions that could help in retaining employees are as

follows:-
• Starting from the recruitment process: it is better not to recruit

those people who will be the most difficult to retain.
• Attention to these aspects could be taken care of at the
recruitment stage itself.
• An employee would work tirelessly for the company if he is
being made aware that he is an important part of the team.
• Cooperate with competitors. Forum clubs and associations.
• Offer performance feedback and praise god efforts and results.
• Listen to employee ideas; never ridicule them.
• Awarding employees with recognition if an employee has done
something valuable.
• Nurture and celebrate organization tradition like Diwali, Holi and
Christmas etc.
• Keeping in touch with the employees and help them when in
need. Don’t wait till the last moment.
• Conducting in and out (exit) interviews properly and in
scheduled way.
CONCLUSION
As they say, happiness can be contagious. So make sure the work

place is a happy one, which every employee would love to spend
time. Human resources department along with senior management
must take steps to make sure of this.
Effective human resource management must be practiced at both

strategic and day-to-day levels. HR management practices must
reflect company policy as to how it will manage and relate to its
employees. The HR strategy should evolve from a transactional
support role to partnering in the organizations business strategy. HR
must take steps to be aware of employee problems and try to solve
them, creatively.
Employee attrition is a very big problem not only in India but outside
India too. Attrition rate is increasing day by day and it’s especially the
software industry which is affected the most. Why an Employee
leaves a company is the question asked by most of the employers.
Companies even hire Private HR professionals to study the
company's work and find out why an employee is dissatisfied.
HR department does the recruiting of new employees and then send
them for training so that they can understand work and work culture
and become better professionals. Each and every company faces
employee turnover problem whether big or small. An employee
leaves his present job for another job to get better pay package and
good working conditions. Every Company calculates Employee
attrition rate and takes measures to reduce it. The facts and figures
are not made public as it may tarnish the image of the company in
front of its own employees and its loyal customers.
A survey has found out that there are various reasons for Employee
Attrition-
1. Higher Pay Package in another company

2. Good working Conditions
3. Opportunities for growth in new company
4. Change of Place problem
5. A better Boss in new company
6. Brand Image of the new company.
Employee attrition costs a lot to the company. There are various

costs which are borne by the company at the start when the
employee is under training period. Costs such as-
1. Conveyance Cost
2. Cost of lodging of the new employee
3. Trainers cost
4. Cost of venue where training will be conducted
5. Materials to be supplied during training process
A company has a training period of 3 to 6 months. During this time an
employee is not fruitful for the company. If an employee leaves the
company when he starts working, company suffers a big loss in terms
of money as well as workforce. Every company takes measures to
hold the talented workforce by means of perks, Increments, Bonus
and extra facilities. No one wants to lose good brains to their
competitors.
Now the question is how to reduce employee attrition. What should a

company do to hold on the talent?
There are various companies like TATA's and Reliance who do a lot
to reduce attrition rate. Flexible working conditions have been given
to employees who have problem working 10AM - 5PM. Private
hospitals for employees where they can get their regular health check
up done without spending much money. Free overseas tour once in a
year when a target is achieved. Few Companies are getting more and
more work savvy and just want to get their work done by hook or by
crook. The mentality needs to be changed. Target for completion of a
work should be there but that should not hamper an employee’s
personal life. Companies should conduct various seminars on how to
balance personal and professional life. An employee can be
productive if and only if his personal life is balanced. Make
employees a part of your work culture family and see the difference.
Attrition rate cannot become completely obsolete but it can surely be
minimized.
APPENDIX
Questionnaire
Dear Respondent,
I, Ravi David Ullah student of marketing studying in St Xavier’s

College am conducting a survey on ‘ATTRITION IN THE BPO
INDUSTRY´. I assure you that the details will be kept confidential and
used for academics purpose only. Thank you in advance for sparing
your valuable time and corporation in this endeavor.
Please tick the one which is applicable for you:
1. Employee turnover/resign is a major concern for your organization.
 strongly agree
 Somewhat Disagree
 Somewhat Agree
 Strongly Disagree
 Neutral
 don’t know
2. High percentage of females in the workforce adds to the high

attrition rate.
 Strongly agree
 Somewhat Agree
 Neutral
 don’t know
3. Some attrition is always desirable and necessary for organizational

growth and development.
 strongly agree
 Somewhat Agree
 Neutral
 don’t know
4. BPO firms should provide career growth and higher educational

opportunities for employees as measure of retaining them.
 strongly agree
 Somewhat Agree
 Neutral
 don’t know
5. An employee gets sufficient promotional opportunities to enhance

his position.
 strongly agree
 Somewhat Agree
 Neutral
 don’t know
6. The work schedule is exploitative.
 strongly agree
 Somewhat Agree
 Neutral
 don’t know
7. As job becomes repetitive, the employees find less challenge in it

and hence seek for some other job.
 strongly agree
 Somewhat Agree
 Neutral
 Don’t know
8. The families of BPO employees are not fully supportive for this
industry.
 strongly agree
 Somewhat Agree
 Neutral
 don’t know
9. Training of employees leads to increase in attrition.

Strongly agree
 strongly agree
 Somewhat Agree
 Neutral
 Don’t know
10. Bad selection leads to attrition.
 Strongly agree
 Somewhat Agree
 Neutral
 don’t know
11. What do you think, the reasons for an employee leaving the
organization?
(Rate the following from 1 to 10; 1 being the top most priority and 10
being the least)
a) Monetary factors ….
b) Lack of good working condition ….
c) No flexible work schedules ….
d) Very few supportive colleagues ….
e) Organization is more concern towards business ….
f) The job or workplace was not expected ….
g) The mismatch between job and person ….
h) Too little coaching and feedback ….
i) Stress from overwork and work-life imbalance ….
j) Loss of trust and confidence in senior leaders ….
12. What would be the major concerns for an organization after the
employee quits.
(Rate the following from 1 to 8; 1 being the top most priority and 8
being the least)
a) Loss of productivity ….
b) Replacing qualified employees ….
c) Cost of overtime or temporary help ….
d) Recruiting & Interviewing costs ….
e) Time spent in orientation ….
f) Cost of training the employee ….
PERSONAL INFORMATION:
Name:
___________________________________________________
Age:
___________________________________________________
Sex:
___________________________________________________
Ph no:
___________________________________________________
Thank You

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Attrition in Indian BPO Industry

Turnover is of considerable concern for managers because it disrupts

Employee turnover or resign could disrupt normal operation

The main objectives of the study are to understand the reasons

In this study, I have made an endeavor to highlight attrition issue

Defining attrition: "A reduction in the number of employees through retirement,

• To understand the reasons for high attrition rate.

Source: Collecting primary data from employees from the nearby

a) Direct Survey - Market Survey.

2) I have taken a sample size of 100.

3) I have collected data’s from different BPOs of India.

For simple calculation, I have assigned values for every scale

1) Strongly agree (6) 2) Somewhat Agree (5)

3) Strongly disagree (4) 4) Somewhat Disagree (3)

5) Neutral (2) 6) don’t know (1)

Hence, value of this dimension is:

Now coming on to each question individually we have the following

Question1. Employee turnover/resign is a major concern for your

Strongly Some Neutral Strongly Disagree Don’t

Interpretation: Most of the respondents strongly agrees (51%) to the

Question2. High percentage of females in the work force adds to the

Strongly Som e Neutral Strongly Disagree Don’t

Interpretation: Respondents believe that high percentage of females

Strongly Some Neutral Strongly Disagree Don’t

Interpretation: 28% of the respondents feel that some attrition is

Question-4- B PO firms should provide career growth and higher

Strongly Some Neutral Strongly Disagree Don’t

Interpretation: 34% of the respondents strongly feel that BPO firms

Strongly Some Neutral Strongly Disagree Don’t

Interpretation: Most of the employees at think that they get sufficient

Question-6-The work schedule is exploitative.

Strongly Some Neutral Strongly Disagree Don’t