RETENTION STRATEGIES IN BPO SECTOR

A PROJECT STUDY SUBMITTED IN PARTIAL FULFILLMENT FOR THE REQUIREMENT OF THE THREE YEAR POST GRADUATE DIPLOMA IN MANAGEMENT (EVENING)

LAL BAHADUR SHASTRI INSTITUTE OF MANAGEMENT, DELHI

INDEX
SR NO. TOPIC PAGE

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

EXECUTIVE SUMMARY PROJECT OVERVIEW WHAT IS BPO? WHY INDIA? RETENTION AN INTRODUCTION IMPORTANCE OF RETENTION THE A WORD WHY PEOPLE ARE MOVING? WHY EMPLOYEES STAY? RESEARCH FINDINGS EMPLOYEE BENEFIT INITIATIVES INNOVATIVE INITIATIVES RECOMMENDATIONS LIMITATIONS REFERENCES AND BIBLIOGRAPHY ANNEXURE - QUESTIONNAIRE

4 7 11 23 32 36 42 48 50 53 61 68 71 77 79 82

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY
This project is a reflection of the findings of the survey that was conducted to understand what different BPO Companies are doing towards the retention of their employees.

The project overview encompasses the objective, rationale and methodology adopted for the survey. Its a snapshot of why and how the project was carried out.

The brief profile of the BPO Companies aims not only to introduce the companies but also to impart a better understanding of the BPO Sector as a whole. The companies Vision, Mission, Values and Beliefs are mentioned in a nutshell.

The introduction to retention provides the theoretical base to build the project upon, and also to better understand the significance of the subject, highlighting the need for the

organizations today to be more proactive in retaining their employees. The focus has been on why employees stay so that precautionary approach adopted by different

organizations can be understood.

The survey has also brought out the attempts made by the organizations towards building up of work environment focusing on employees, their morale, motivation, satisfaction and ability and willingness to be highly productive. At the same time, several reward and recognition initiatives have been developed to encourage desired employee behaviour benefiting the organizations. The money factor has also been considered towards to understand their the organizations retention approach strategy

developing

employee

around compensation, bonus and incentives etc.

PROJECT OVERVIEW

OBJECTIVE

This research was undertaken to understand the various strategic initiatives adopted by different companies towards the retention of their employees; with an ultimate objective of analyzing the retention practices that are adopted by some BPO Companies.

RATIONALE

Having recognized that human assets are the only true differentiator that an organization has, the retention of these valuable resources have become and area of major concern for every organization. Be it any stage of business cycle or economic condition; top performers, strategic employees and the whole lot of the employees cargo who are capable of taking the organization to the ambitious heights, are always the focus of attention for their employees.

METHODOLOGY

A 9-step approach was adopted which is as follows: 1. A clear understanding of the information required and the approach to be adopted. 2. Development of the schedule of questions to be asked keeping them precise yet capable of generating

relevant information. 3. Short-listing of the companies. 4. Identification of the key personnel to be interviewed for acquiring relevant information. 5. Scheduling of personal and in depth interview with these key personnel. 6. Collection of data 7. Processing of date and generation of information. 8. Analysis of the findings. 9. Recommendations.

SOURCES OF INFORMATION
PRIIMARY SOURCE o PERSONAL INTERVIEWS AND DISCUSSIONS SECONDARY SOURCE o WORLD WIDE WEB o MAGAZINES AND JOURNALS

RESEARCH PLAN
DATA SOURCE: o PRIMARY AND SECONDARY DATA RESEARCH APPROACH: o INTERVIEWS AND DISCUSSIONS RESEARCH INSTRUMENT: o QUESTIONNAIRE CONTACT METHOD: o VISITING HR PERSONNEL

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BUSINESS PROCESS OUTSOURCING

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WHAT IS BUSINESS PROCESS OUTSOURCING (BPO)?

BPO is the act of transferring some of an organization's repeated non-core and core business processes to an outside provider to achieve cost reductions while improving service quality. Because the processes are repeated and a long-term contract is used, outsourcing goes far beyond the use of consultants. If done well, BPO results in increasing

shareholder value. The main difference between BPO and more traditional IT outsourcing is that BPO offers companies a way of achieving transformational outcomes much more quickly. In a typical BPO contract, a service provider takes over a specific much corporate more function. just Effective BPO is

encompasses

than

changing

who

responsible for performing the process. In BPO, the outside provider not only takes on the responsibility to manage the function or business process, but also re-engineers the way the process has been traditionally done.

12

The next generation of Business Process Outsourcing has emerged as a priority for businesses looking to better options in managing their application portfolios. The first wave offered low-cost, offshore development labor, but today firms are demanding new, less risky options for applications that are strategic, complex, or mission-critical, while still taking cost into consideration. Outsourcing has moved from a niche technology management tool to a mainstream strategic weapon. Business Process Outsourcing leverages process driven efficiencies responsiveness customer in & terms of

organizational financial

excellence, and

branding, BPO is

efficiency

relationship.

emerging as a powerful and flexible approach that business leaders can use to achieve a wide range of tactical and strategic aims. The most common business process that gets outsourced is call centers. Call centers and Help Desks of many multi national and fortune 500 companies are being outsourced to low waged, English speaking countries such as Philippines

13

and India. Countries like India with vast IT human resources are also attracting outsourcing from American IT/Technology companies to outsource their IT Help Desks. Many of these help desks are state of the art with latest Help Desk software and help desk hardware with technical savvy IT graduates behind them answering your questions.

ADVANTAGES OF BPO
An important aspect of business process outsourcing is its ability to free corporate executives from some of their dayto-day process management responsibilities. Once a process is successfully outsourced, they get more time to, explore new revenue streams, accelerate other projects, and focus on their customers. By outsourcing their back office operations to third world countries, companies have the following advantages:

Achieve cost reductions this is made possible through process improvements, reengineering, and use of

14

technologies that reduce and bring administrative and other costs under control.

Key in on company's main business with the day-today back office operations taken care of, the

management is free to impart more time to building the company's core businesses

Obtain outside expertise Rather than recruiting and training personnel, BPO ensures that domain experts from another company provide the needed guidance and skills.

Meet constantly changing customer demands many BPO vendors provide the management with flexible and scalable services to meet the customers changing requirements, and to support company acquisitions, consolidations, and joint ventures

Achieving revenue increases by outsourcing non-core processes, companies can focus on increasing their sales

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and market share, develop new products, expand into new markets, and enhance customer service and satisfactions.

WHAT IS OUTSOURCING?
Outsourcing could be defined as the shifting or delegating a companys day to day operations or business process to an external service provider, done in anticipation of a better quality, lower rates and in a sense getting an edge over ones competitors. When a companys operations or business processes are outsourced to firms in foreign countries, often to take advantage of cheap skilled labor, it is referred to as offshore outsourcing or Offshoring. Where functions previously performed by an organization are supplied under contract from a third party. Buying goods or services instead of producing or providing them in-house. While outsourcing is not exactly a new innovation, the shifts that have occurred recently in this space are worth noting.

16

As the need for e-learning moves higher up on the IT and corporate training agendas, organizations are wont to take on the IT management burden of implementing a learning management system (LMS). The concept of taking internal company functions and paying an outside firm to handle them. Outsourcing is done to save money, improve quality, or free company resources for other activities. Outsourcing was first done in the data-processing industry and has spread to areas, including tele messaging and call centers. Outsourcing is the wave of the future. A long-term, results-oriented relationship with an external service provider for activities traditionally performed within the company. Outsourcing usually applies to a complete business process. It implies a degree of managerial control and risk on the part of the provider. The transfer of components or large segments of an organizations internal IT infrastructure, staff, processes or applications to an external resource such as an Application Service Provider

17

TYPES OF OUTSOURCING
Offshore outsourcing services can be mainly divided into Technology outsourcing. Technology Services Outsourcing Companies that utilize technology require sophisticated, quick-responding computer systems and software that are flexible enough to respond to the increasing capabilities of technology and the rapid changes in business models. Selecting the right technology partner is an integral part of many successful ventures. Following are the specific types of technology services.

services

outsourcing

and

business

process

Electronic Commerce ("eCommerce") Infrastructure ("Networks") Software ("Applications") Telecommunications Website Development & Hosting

18

Business Process Outsourcing With globalization, enterprises have been challenged to find the niches where they add the greatest economic value to the world's economy. As a result, enterprises have looked for ways to avoid making investments in employees and infrastructures that do not have a high yield. As service providers witnessed this development, they began to create whole enterprises based on narrow business processes. The term "BPO" (Business Process Outsourcing") was coined in about 1995 and became popular a few years later,

accelerated by the explosion of Internet business.

Customer Contact (Customer Relations Management) Equipment Finance / Accounting Human Resources Logistics Procurement / Supply Chain Management Security

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Human

Resources,

is

becoming

another

sought

after

outsourcing area. Other areas of what is being outsourced are Document, Utility, Insurance, Secretarial, Consulting, Healthcare, Manufacturing, News and Media outsourcing.

ADVANTAGES OF OUTSOURCING
Proponents of outsourcing cite a variety of reasons for "letting others do it. Here are some of the most important Cost savings By outsourcing functions that were

previously performed in house, companies are often able to reduce their employee levels and related costs, such as recruitment, supervision, salary and benefits. By outsourcing a capital-intensive function, you can also reduce the costs of equipment obsolescence and depreciation. A portion of your cost savings will go to the outsourcer, but outsourcing vendors have a tighter control of fringe benefits and run leaner overhead structures. They also know how to deal with vendors serving the function they are providing and

20

therefore, are able to pass on to your company the benefits derived from bulk purchasing and effective leasing. Quality of service - Because your company is the

outsourcer's customer, you will likely experience a "can-do attitude," which may not always be exhibited by an in-house staff. More capital funds - Outsourcing reduces the need to invest capital in non-core business functions, thereby freeing capital to invest in profit-making aspects of the business. State-of-the-art technology - Outsourcers have to spend time and money on the most current equipment and on employee training to remain competitive. By outsourcing certain areas, you are assured of receiving the most efficient services and the latest technological advances within that particular function. Price stability - By signing a contract to outsource, you will likely be able to obtain stable pricing, eliminating the future need to shop around. Stable pricing allows the company to

21

budget operating expenses and capital purchases more accurately, while potentially preventing the likelihood of surprise expenses. New business partners - Outsourcers clearly wish to be viewed as your business partner. And as a business partner, they share in the desire to keep your company operating at its maximum potential. Through this business partner arrangement, outsourcers are eager to introduce you to other outsourcers to assist in that goal. More time to focus on core business activities - You cannot overlook this intangible benefit of outsourcing. If a company is to be successful and profitable, management is needed to spend time planning and directing the company's business strategies and not wasting time worrying about managing certain administrative or ancillary functions.

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WHY I N D I A?

23

Just as the Gulf has its natural resources in crude oil and South Africa in diamonds, India's natural resource lie in its abundant technically skilled manpower. India is the world's second largest exporter of software (after the U.S.), and is the source of management and technical talent for over 40 per cent of new start-ups in Silicon Valley. Thanks to its large English-speaking scientific and higher education institutions, specialist computer institutes, and low costs of software talent, India has more software companies with ISO 9000 certification than any other country in the world. There is more than enough evidence of the superlative role that Indians play in the progress of the Net. The impact of India's success abroad is also being felt. The stars of the Indian Internet industry are the Web solutions and Webware companies, many of whom have made the transition from offshore turnkey and services companies to full-fledged ecommerce service providers and Web strategy consultants. IT heavyweights like Microsoft, Intel, Cisco and Compaq always feature India prominently in their itineraries.

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Benefits of Outsourcing in India

India offers many advantages that make it the favorite of 82 percent of US software export market (Nasscom).

Large pool of computer literate and English speaking professionals

Well recognized Information technology skills Wide gap between personnel costs in India and developed countries.

Work practices largely comply with ISO and SEI CMM standards. Three out of every four SEI-CMM 5

companies worldwide are located in India.

Quality standards meet the approval of the world. India exports software to more than 95 countries.

India has a stable political environment and pro-IT government.

Reliable satellite and submarine communication links facilitate good broadband connectivity with the rest of the world.

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According to the National Association of Software & Service Companies, the Indian software industry lobby, almost half the Fortune 500 companies now use Indian Software services. With over 4 million highly trained English speaking technical personnel (second only to the USA), heavy government support and leading world class software companies, India is set to become the software giant of the new Millennium. Furthermore, a World Bank funded study in the United States confirmed that vendors rated India as their number one choice for outsourcing. Other industry sectors have benefited greatly from their decision to outsource to India: The U.S. and India have an average 12-hour time zone difference, but this kind of use of datacom can provide a virtual 24-hour office to a client in the U.S. Lately, this concept has worked wonders for large projects and also for projects involving remote software maintenance using video conferencing. Offshore projects mean immense time and cost savings.

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TOP 15 BPOS IN INDIA

27 Top 15 BPOs in India

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

WNS WIPRO BPO HCL TECHNOLOGY BPO SERVICES IBM DAKSH EXL SERVICES MPHASIS BPO (FORMERLY MSOURCE) INTELENET GLOBAL ICICI ONESOURCE GTL PROGEON 24/7 CUSTOMER.COM DATAMATICS TECHNOLOGIES HINDUJA TMT TRANSWORKS TRACMAIL

28

Highlights of the Indian BPO Sector: BPO Exports ($bn) Domestic ($bn) 2002-03 2.5 0.2 2003-04 3.6 0.3 2004-05 2005-06 E 5.2 0.6 7.3 0.8

29

Total employment

171,000

245,000

348,000

470,000

BPO employee base has grown at a CAGR of 52.6 per cent, from 42,000 in 2001-02 to 348,000 in FY 2004-05.

As of March 2005, there were around 410 ITES-BPO players in India, up from 285 in FY 2003-04.

Captive units continue to dominate the segment, accounting for over 65 per cent of the value of work offshored to India.

The

domestic

market

for

BPO

also

witnessed

significant increase in demand with the estimated value of work outsourced (by domestic clients) rising from $300 million in FY 2003-04 to $600 million in FY 200405.

Key drivers of growth in domestic demand for BPO include the high degree of competition in the domestic telecom and BFSI verticals with companies laying increased emphasis on customer fulfillment and other CRM activities.

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Integration of IT-BPO contracts is becoming more common.

The BPO companies are gaining significant traction in transaction processing, with more and more firms balancing voice and non-voice business portfolios to diversify revenue and raise seat utilization.

While the leading global services firms scramble to ramp-up offshore operations in India, Indian vendors are developing multi-location delivery capabilities. Apart from India, firms are setting up facilities in China, Eastern Europe, Ireland, and Philippines. Within the country they are expanding to tier-II cities such as Mysore, Nasik, Vizag, Jaipur, Chandigarh and

Trivandrum.

The year gone by was a period of significant market activity for the BPO sector in India. Coupled with the growing stock of firms expanding their offshore

initiatives in India, was the wave of consolidation as several large M&A deals were scripted in the industry

31

like GECIS-Oak Hill/General Atlantic Partners, DakshIBM, e-serve-Citigroup, etc. Emerging opportunity areas for the BPO sector:

The previous year witnessed a significant pickup in global interest for HR BPO. Global potential for HR outsourcing in 2004 was estimated at $10.8 billion -offshore-able potential estimated to be over $5 billion. Value of HR BPO offshored to India in FY 2004-05 was $165 million, up 120 per cent from $75 million in the previous year.

A new breed of high-end knowledge based BPO called Knowledge Process Outsourcing emerged. This

comprises of vendors providing higher-end research and analytic based services - in traditional service lines as well as new business areas.

Areas with significant latent potential for KPO include healthcare -pharmaceuticals and biotechnology, legal support - intellectual property research, design and development for automotive and aerospace industries,

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and animation and graphics in the entertainment sector.

F&A (Finance and Accounting) outsourcing is emerging as one of the fastest growing BPO segments. While earlier, the majority of F&A outsourcing deals were focused on transaction processing; now customers want BPO solutions providers to manage almost the entire business process.

Procurement outsourcing is an emerging area as more and more firms are seriously investigating this option.

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RETENTION
AN INTRODUCTION

RETENTION

34

It

is

no

wonder

that

in

todays

aggressive

business

environment, the challenge of sustaining a competitive advantage preoccupies the minds of many business leaders. Todays businesses are more dependent than ever before on their top performer to innovate and provide services that differentiate a company from its fierce competitors. In other words, organizations are reliant upon their human assets to survive and thrive. All this leads to understanding of one of the pressing issues of business today: Retention of

Employees Retaining talent was less of an issue in the past, but the shifting tides of the unspoken employee / employer

relationship settings have created new currents in the workplace. The old relationship demanded employees to: Work hard Be loyal Give their all In return, they would have:

35

A job security A home away from home Regular salary increases A good chance for a promotion The new relationship setting is substantially different. It implies that employees must now work harder, doing not only their jobs, but the jobs of their former coworkers who were right-sized. In return, job security is extinct. Salary increases are modest at best, and the constant uncertainty of change is almost guaranteed. Leaving no room to wonder why employees loyalty is on the demise and talented individual contributors and managers feel less bonded to their organizations. In this era, employees are more ambitious, equipped with knowledge, well informed about the industry trends and economic scenario, are willing to give what it takes to make the organization reach to the sky, but it is equally crucial for organizations to understand and appreciate that this calls for a proactive stand to be taken by the organizations to keep

36

these talented employees happy, productive and loyal. With an ever-lasting dearth of talent I the labour force market, an opportunist competitor, and an employee force clearer about what they want in terms of their association with their employer, it is imperative for organizations to think of devising strategic initiatives to retain its true essence of survival and success their employees.

37

IMPORTANCE OF RETENTION

Though employee turnover is a matter of great concern to all the organizations, but some amount of employee turnover is healthy to keep the fresh blood coming into the organization

38

system. However beyond a certain point it acquires a manifold dimension, which needs a serious attention. Employee retention is very crucial as today; it is well known fact that an organization is an entity because of its employees. Considerable time and efforts have gone into the subject of employee retention at strategic level for its sheer importance. Lets look at various dimensions, which emphasize the significance of retaining employees: Cost of losing an employee: o The loss to the firm when an employee leaves is to the effect of 2 to 2 times his annual salary (according to expert Robert Granno in his

Employee Retention Survey of 2001) o Explicit costs are: Loss of productivity Funds required to refill the position

39

Set up time for a new employee to work efficiently. o Implicit costs are: Cost of knowledge lost and information about the company practices and other vital

functions now available to the new employer the firms competitor. Reduced productivity from departing

employee who is inevitable distracted during his job search and therefore contributes less during this period. Disruption in the customer relationships. Talent is only differentiator: o In a global marketplace driven by ideas and changed by the technology, brainpower is the real source of competitive advantage. It is well

recognized fact that no organization can seems to survive and differentiate itself on technology, the competitors soon follow the pursuit at the same time in a market economic set up, and price as

40

well cannot be a true differentiator with out cutting margins for the ones own bottom line profits. Thus it is these talented employees who stand to offer an organization a USP or an edge on their competitors. A shift in the employee mindset: o Today the employees overall expectations have changed, meaningful if their and work focused isnt on challenging, growth and

development they would move on to associating themselves with the firms which offers them all of this which had been missing in its present firm. Blind loyalty to an organization is a thing of the past. Workaholics are there but they are a minor segment of work force who is striving for a work/life balance, demanding a quality life outside the office premise as well. o Employees needs a boss who is understanding, allows opportunities for employee development, provides guidance, is fair in his dealings and

41

attempts at synergizing employees goals with the organizations goals and objectives. A discrepancy in these expectations from a boss leads to employees accepting an attractive offer coming his way with the hope of working for a boss who matches his expectations. Risk of losing employees at the time of

downsizing:
o In the on-going era of recession, it has been

observed that the downsizing survivors the workers who remain in their jobs after the cutback announcements and departures begin to flow out the door 6 to 2 months after the initial layoffs. Overworked and downtrodden, they hold little hope for the company and themselves within it and, in turn, look elsewhere and leave. This phenomenon is also referred to as the Second Wave of departures and it often includes the kind of talent that a downsized company cant afford to lose: the best and the brightest.

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Employees always have an option: o Employees always competitors offering an

attractive job profiles in an attempt to lure these employees to join them. With such lucrative offers at hand at all times, employees are under no compulsion to work for an organization where they are not satisfied.

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THE

A
WORD

44

ATTRITION
A rubbing away or wearing down by friction. A gradual diminution in number or strength

because of constant stress. A gradual, natural reduction in membership or as through retirement, resignation, or

personnel, death.

Repentance

for

sin

motivated

by

fear

of

punishment rather than by love of God. Total Number of Resigns per month (Whether

voluntary or forced) divided by (Total Number of employees at the beginning of the month plus total number of new joinees minus total number of

resignations) multiplied by 100. The business process outsourcing (BPO) industry in the country which is expected to employ around one million people by 2008 is facing the challenge of finding quality

45

human resources given the current attrition rate of around 50 percent. Analysts say attrition rates vary by 20%-40% in some firms, while the top ones averages at least 15%. Nasscom in a report said the outsourcing industry was expected to face a shortage of 262,000 professionals by 2012. The size of the Indian BPO market is likely to be around $912 billion by 2006 and will employ around 400,000 people, ICRA said in its Indian BPO industry report. Mercer India said the industry should look beyond the traditional areas of recruitment and some thought should be given to employ physically challenged people and

housewives. The reasons for the high rate of attrition was due to various factors like salary, work timings, other career options, adding that there is always the danger of costs increasing while billing rates decline. With 245,100 people employed at the end of March 31, 2004 against 171,100 last year, the industry witnessed a hiring

46

growth rate of about 40-42 percent. On the hiring front, the industry absorbed about 74,000 people in 2003 despite the attrition rate of 45-50 percent being a matter of concern. Attrition rates in IT-enabled business process outsourcing sector have come down from the 30-33 per cent being witnessed of late to about 25 per cent now, according to statistics compiled by the National Human Resource

Development Network.

ATTRITION RATES US AUSTRALIA EUROPE INDIA GLOBAL AVERAGE

% 42% 29% 24% 18% 24%

*SOURCE-TIMES NEWS NEW YORK (2005) If you compare attrition rates for a Voice and Non-voice process, then attrition rates are significantly lower in a nonvoice process. As the industry moves up the value chain and

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becomes a full-scale BPO player, attrition rates will further decrease. For BPO service providers, moving up the value chain is critical, given the attrition rates in the industry, which are on an average higher in low value-added segments (in call centers) as compared to higher value-added segments like engineering. It will not be possible for the industry to arrive at a blanket agreement on poaching but bilateral agreements between companies are being signed. Basic norms are being put in place and code of ethics is being stressed upon by industry. Companies are being encouraged to adopt responsible behavior in order to ensure that the industry does not become a victim of its own actions. Industry needs to go aggressive but not cannibalistic. In order to ensure a consistent flow of trained manpower in the future, the industry needs to work with the government to introduce courses at a school and college level, which are in line with the requirements of the ITES-BPO industry. India

48

has one of the largest pool of English speaking graduate workforce. The challenge for the industry is not in

employment but employability. The industry is also hiring professionals from outside the industry in order to meet its steady supply of manpower. Honest corporate managers will tell you that to make offshoring work; you need at least a 300% to 400% wage spread between American software writers, engineers,

accountants, and call-center employees and their Indian and Chinese counterparts. Labor costs have to be very, very low overseas -- not just lower -- to compensate for time-shifting, managing over such long distances, and decreased

productivity. High attrition rate, price wars, poor infrastructure and lack of data protection laws could derail India's booming outsourcing industry.

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WHY PEOPLE ARE MOVING?

50

Is it only MONEY that matters or anything else as well?? Below are few reasons for a BPO professional to change his/her job.

No growth opportunity/lack of promotion For higher Salary For Higher education Misguidance by the company Policies and procedures are not conducive No personal life Physical strains Uneasy relationship with peers or managers

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WHY EMPLOYEES STAY?

Career growth, learning and development

52

Exciting and meaningful work, making a difference and a contribution Participation in decision making process Great interpersonal relationship with peer groups An understanding and nurturing Boss- Subordinate relation Transparent systems Recognition for work well done Respect and dignity for work and employees across all levels Autonomy and sense of control over work Flexible working hours Fair pay and benefits Inspiring leadership Pride in organization, its mission and quality of product Great work environment and settings Job security Scope for work-life balance Cutting edge technological support

53

Access to knowledge and databank These findings provide any organization with a clear scope and a framework to formulate the retention strategy specific to employees of a particular organization.

54

RESEARCH FINDINGS

55

The organizations surveyed adopted the following approaches: GENPACT Genpact takes a three-pronged approach to people

management--hiring right, training right, and rewarding right. The approach aims to achieve three goals critical to the success of Genpact: Get the right people on board Continuously deepen and widen the knowledge pool Retain the knowledge within the company Genpacts rewards philosophy is to provide career-path to make people dream and careers, knowledge fulfill and aspirations provide to retain

continuous

improvement in professional value Genpact identifies and grooms talent early across all levels of the organization through various programs. Programs such as Session C identify talent for future growth. Also Genpacts variable compensation programs reward

56

outstanding performance, which on average works out to 30 percent of the total compensation.

Conventional monetary and career growth is complemented by rewards on a personal level. The rewards are based on empowerment at the lowest level, cheers and spot

recognitions to reward people, internal job rotations and global placements, performance management through

career development and succession planning, training to provide global certifications and professional and leadership development, mentoring, flexible working hours

Empowerment is a key reward at Genpact. This is achieved through idea generation and implementation programs such as EnerGE and LEAN that engage and empower employees in deciding how operations run. EnerGE and LEAN programs encourage and reward employees that suggest and

implement process improvements. SAFFRON

57

Saffron implements work-life balance initiatives to reinforce the retention strategies. Innovative and practical employee policies pertaining to flexible working schemes, granting compassionate and urgency leave, providing healthcare for self, family and dependants, etc. Work-life balance policies would have a positive impact on: Attracting high calibre recruits Retaining skilled employees Reduce recruitment costs Improve employee morale Maintain a competitive edge Employee Satisfaction Survey is institutionalized to ensure that the voice of employees is formally captured. The results of these surveys are discussed by the management team and action plans formulated.

Besides entertainment and other welfare activities, Saffron conduct various motivational outdoor activities like nature

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camping, sports events etc. Employees are rewarded for quality performance through incentives and recognition.

WNS WNS opted for a competency-based framework for selection and promotion of its key personnel. About 700 people have been put through this programme, which targets customer service associates and goes up to service delivery managers. The idea is to fill up a majority of the leadership positions from within WNS instead of importing talent from outside. It is also an attempt to keep out bias in the system and increase transparency. The programme is performancedriven and puts in place a scientific process, which matches employees knowledge, skills and attributes with the role requirements. WNS now has a more scientific and robust basis for selection of employees. It ensures a better personrole fit that benefits the employee and the organization.

59

Apart from compensation, developing managerial talent from within the organization is considered to be an important retention tool. Skills of the middle management level would be critical as operations are ramped up. Identifying talent and building capabilities to enable them to handle larger teams and develop new skill-sets that drive business dealing capability is needed.

VERTEX VERTEX has implemented a number of employment

retention strategies based on the feedback of an employee satisfaction survey. On the other side, VERTEX continuously has incentive programs such as a pay-for-performance programme. There is also a perfect attendance week, at the end of which there is a lottery and the winner wins exotic prizes. VERTEX is also recruiting 40-50 years old people, housewives and disabled people for part-time jobs to control high

60

attrition rates and increase stability. It brings in domain skills as well as access to new customers. In addition for professionally qualified employees like CA and MBA, an individual can choose from managing quality, get into training, Six Sigma process, problem solving equations, relationship management, HR and workflow activities or business development.

WIPRO In WIPRO Innovation Trip is Trip a new adds concept people and

management.

Innovation

excitement

effectiveness to the training by combining it with visit to places, which will inspire executives to implement the topics, that employee, learned.

Innovation Trip facilitates this by provoking the power of imitation, seeing those things in action that have been formed by practical implementation of skills learned.

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Using Innovation Trip, leaders, managers and bright staff can take away the culture of innovation from various places and apply it back to their companies. Innovation Trip will energize their staff, unleash the true needs of their customers with customer-centric innovation methodologies (without actually asking them) and enhance process

innovation as teamwork in their organizations to better serve their customers abroad.

WIPRO encourages the best performers to share their experiences with others and mentor others.

The emphasis is to create the desire to learn, enjoy and be passionate about the work they do. Meditation Room or deep breath exercises for Associates & Team Leaders are there to emphasize that they should never be in the stress mode or upset while attending calls of a customer.

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EMPLOYEE BENEFIT INITIATIVES

63

Employee Benefits Provided By Majority Of the BPO Companies

Group

Medi-claim

Insurance

Scheme:

This

insurance scheme is to provide adequate insurance coverage of employees for expenses related to hospitalization due to illness, disease or injury or pregnancy in case of female employees or spouse of male employees. All employees and their dependent family members are eligible. Dependent family

members include spouse, non-earning parents and children above three months

Personal

Accident

Insurance

Scheme:

This

scheme is to provide adequate insurance coverage for Hospitalization expenses arising out of injuries sustained in an accident. This covers total / partial disablement / death due to accident and due to accidents.

Subsidized

Food

and

Transportation:

The

organizations provide transportation facility to all the

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employees from home till office at subsidized rates. The lunch provided is also subsidized.

Company Leased Accommodation: Some of the companies provides shared accommodation for all the out station employees, in fact some of the BPO companies also undertakes to pay electricity/water bills as well as the Society charges for the shared accommodation. The purpose is to provide to the employees to lead a more comfortable work life balance.

Recreation,

Cafeteria,

ATM

and

Concierge

facilities: The recreation facilities include pool tables, chess tables and coffee bars. Companies also have well equipped gyms, personal trainers and showers at facilities.

Corporate Credit Card: The main purpose of the corporate credit card is enable the timely and efficient payment of official expenses which the

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employees undertake for purposes such as travel related expenses like Hotel bills, Air tickets etc

Cellular Phone / Laptop: Cellular phone and / or Laptop are provided to the employees on the basis of business need. The employee is responsible for the maintenance and safeguarding of the asset.

Personal Health Care (Regular medical checkups): Some of the BPO'S provides the facility for extensive health check-up. For employees with above 40 years of age, the medical check-up can be done once a year.

Loans: Many BPO companies provide loan facility on three different occasions: Employees are provided with financial assistance in case of a medical emergency. Employees are also provided with

financial assistance at the time of their wedding. And, The new recruits are provided with interest free loans to assist them in their initial settlement at the work location.

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Educational Benefits: Many BPO companies have this policy to develop the personality and knowledge level of their employees and hence reimburses the expenses incurred towards tuition fees, examination fees, and purchase of books subject, for pursuing MBA, and/or other management qualification at India's top most Business Schools.

Performance based incentives: In many BPO companies they have plans for, performance based incentive scheme. The parameters for calculation are process performance of each i.e. speed, accuracy The Pay and for

productivity

process.

Performance can be as much as 22% of the salary.

Flexi-time: The main objective of the flextime policy is to provide opportunity to employees to work with flexible work schedules and set out conditions for availing this provision. Flexible work schedules are initiated by employees and approved by

management to meet business commitments while

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supporting employee personal life needs .The factors on which Flexi time is allowed to an employee include: Child or Parent care, Health situation, Maternity, Formal education program

Flexible Salary Benefits: Its main objective is to provide flexibility to the employees to plan a taxeffective compensation structure by balancing the monthly net income, yearly benefits and income tax payable. It is applicable of all the employees of the organization. The Salary consists of Basic, DA and Conveyance Allowance. The Flexible Benefit Plan consists of: House Rent Allowance, Leave Travel Assistance, Allowance Medical Reimbursement, Special

Regular

Get

together

and

other

cultural cultural

programs:

The

companies

organizes

program as and when possible but most of the times, once in a quarter, in which all the employees are given an opportunity to display their talents in

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dramatics, singing, acting, dancing etc. Apart from that the organizations also conduct various sports programs such as Cricket, football, etc and regularly play matches with the teams of other organizations and colleges.

Wedding Day Gift: Employee is given a gift voucher of Rs. 2000/- to Rs. 7000/- based on their level in the organization.

Employee Referral Scheme: In several companies employee referral scheme is implemented to

encourage employees to refer friends and relatives for employment in the organization. Employee Stock Option Plan

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INNOVATIVE INITIATIVES

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ICICIOneSource, one of the Indias largest third-party BPO outfits, offers employees whove been with the company for 18 months the opportunity to move across the ICICI group. Of course, they need to be suitably qualified and pass all the necessary tests, but the opportunity works as a huge incentive. Not only does it help retain trained talent within the group, it also sends the critical message down the line that employees are being trained in skills that have a market value. Training and higher education opportunities are also

significant carrots companies dangle in front of their employees. e-Serve, Citigroups captive BPO center, tied up with MBA ICFAI in 2004 for to offer its a three-year

programme

employees.

Classes are held on weekends and the top 10 students will have their fee reimbursed by the organisation. Intelenet and OneSource, too, offer on-site education programs, apart from the regular on-the-job training.

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In most cases, the courses are loyalty rewards and offered to employees whove lasted at least six to 12 months. Intelenet has promised to reimburse the fees of all students who graduate from its on-site MBA course by Narsee Monjee Institute of Management Studies only, of course, if they are still employed with the organisation. More than a quarter of Wipros 33,000 employees are women. They have the flexibility to work from home and relocate to Wipro offices in other cities.

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RECOMMENDATION S

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Though, it is impossible to scrap problems totally, there are certain ways by which BPO managements can tackle attrition. Since the BPO environment is unique, these companies need to develop innovative ways to tackle them. Human Resources department of a BPO must address these issues, and along with the management need to evolve strategies to retain employees at all levels.

At the time of Recruitment

Select the right people through competency screening. Use psychometric tests to get people who can work at night and handle the monotony.

Offer an attractive, competitive, benefits package. Make clear of performance enhanced incentives and other benefits. Keep these promises, later.

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BPOs can set up offices in smaller towns, or recruit from there, where opportunities are few.

At the office

An employees work must be communicated to him clearly and thoroughly. The details of the job, its importance, the way it should be done, maximum time that can be allotted to complete it etc., must be made clear. If there are changes to any of these, let the

employee know at the earliest

Give the employees necessary tools, time and training. The employee must have the tools, time and training necessary to do their job well - or they will move to an employer who provides them.

Have a person to talk to each employee at regular intervals. Listen and solve employee complaints and problems, as much as possible. Fairness and impartial treatment by seniors is important. Help employees

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manage stress, both at work and if possible, off work too. Give them special concessions, when in need. Treat the employees well & provide dignity of job.

The quality of the supervision an employee receives is critical to employee retention. Frequent employee complaints arise on this issue.

Provide the employees a stress free work environment. People want to enjoy their work. Make work and work place cheerful and fun-filled as possible.

Make sure that employees know that their work is important for the organisation. Feeling valued by their employer is key to high employee motivation and morale. Recognize their strengths and help them to improve those they lack.

Employees

must

feel

rewarded,

recognised

and

appreciated. Giving periodical raise in salary or position helps to retain staff.

Offer excellent career growth prospects. Encourage & groom employees to take up higher positions/openings.

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If they dont get opportunity for growth within the organisation, they will look elsewhere for it.

Work-life balance initiatives are important. Innovative and practical employee policies pertaining to flexible working hours and schemes, granting compassionate and urgency leave, providing healthcare for self, family and dependants, etc. are important for most people.

Work-life balance policies would have a positive impact on retaining skilled employees, as well as on attracting high-calibre recruits.

Implement integrated,

competency with HR

models,

which like

are

well & and

processes

selection appraisal

recruitments,

training,

performance

potential appraisal.

Night shifts

Have doctors to advise them about health problems and the ways and means to deal with them. Provide dietary

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advice: - Dos and Donts. Help them to maintain their health. Organise programs who where night people shifts from talk to other BPO

professions,

have

employees about their experiences. Other organisations like Army, Railways, Hospitals and various government services etc., also have night shifts.

Organise

training,

counseling

and

development

programs for employees. Tell them that their work is important. Encourage the best performers to share their experiences with others and guide others. The

emphasis is to create the desire to learn, enjoy and be passionate about the work they do.

If needed, provide special lights in the office/workplace to ensure that their bodies get sufficient vitamin D.

One distinct disadvantage of night shifts is the sense of disorientation with friends and family members.

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Concentrate on this problem and develop innovative solutions and ways to deal with it. Additional holidays for work on national holidays and festivals, holidays for family functions etc., can go a long way.

LIMITATIONS

79

As its related to human behaviour and needs, the survey has its own limitations in terms of its implications. One retention strategy may not work with the various organizations. It leaves an onus on HR to examine and analyze the organisations needs and recruit people according to it. There is a constant need to innovate the HR practices to keep the employees hooked to the organization as the evolving nature of BPO sector can pose a serious threat to the organization workforce.

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REFERENCES AND BIBLIOGRAPHY

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In-depth interviews and discussions with HR personnel Magazines and journals World Wide Web

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ANNEXURES

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QUESTIONNAIRE What do you feel are the major causes for employees leaving your organization? How are the retention finalized upon? techniques identified and

How would you differentiate your employee retention patterns from your competitors? What are the practices adopted by your firm in order to retain the employees? Are there any innovative retention practices adopted by your firm? What are the various employee benefits initiatives your firm has in practice? Do you have any exit interview or any other tool to facilitate organizational exit and to identify the cause behind the employee leaving the organization?