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Attrition Solutions
 
Human Resource Management has become the most important factor in assessing a company's growth potential. Although, most of the companies have their in house HR management teams, but due to the exorbitant growth observed in the Indian markets in past few years, the resources of so called 'HR management team' are highly stretched and are absorbed in carrying out recruitments and administration only, thereby overlooking equally important other factors of Human Resource Management. Initially, one tends to over look such factors but later on these factors cause a greater damage to one's organization as they are responsible for Rising Stress levels, Decrease in Productivity / Man Hours, Absence of a buffer / mediator / understanding medium leads to discontentment, violence at the work place and finally causes attrition of a worthy employee. As an HR thumb rule, an alarm should be sounded when the attrition reaches 25%.

BPO industry in India is growing at a pace of 40 - 50 % annually. The sector is said to generate one million jobs by the year 2009. But, although the sector is growing so is the job market in the sector. The Human Resource teams instead of hiring new candidates to fill up the new vacancies are busy reinstating the vacancies which have been left vacant due to the attrition, which is as high as 30 - 40 %.


Fig 2. The graph shows 'the rise in revenues Vs rise in forecasting of employees


There are various justifications given by the management at all levels for rising attrition, some of them are listed below:-

a. Hike in pay package.
b. A better job opening.
c. Unsuitable commuting distance to the office / time.
d. Personal problems / issues.

Whatever the reason maybe, the cost of attrition and loss of brand image i.e. 'being a poor employer', has to be borne by the employer company as it reflects a discontented and a de-motivated team.

Where we always this ways ?

Looking back into our yester years, it has been observed by the psychologists that Indians, unlike westerners, have a tendency of developing a brand loyalty and a loyalty towards an organization. A survey conducted for over 1000 employees suggest that more than 80 % of the employees who join an organization in India, joins in with zeal of working and growing within the same organization. This trait has been observed strongly in youngsters during their first 10 yrs of their experience. But unfortunately, only 8% of the people in an organization have worked for more than 8 yrs, rest 92% have under went a job turnover. Mattox helps you track reasons for this query as it leads to an important possible cause for attrition.

Why do employees leave?

A question which arises is why do employees leave and what is the reason that the companies are not able to hold them back. Well, the most obvious reasons that comes to our minds are

higher pay {Click here to read more}
Most employees in BPO are approached with two or three job offers every week, and sometimes it gets very tempting to resist. The deterring factor for this would be moving from one location to another with the family as housing and relocation are two major concerns of the employees. Though this problem is being taken care to a certain extent by a salary rise of 10-15% annually on an average basis, but still it prevails.

work timings {Click here to read more}

The work timings in BPO are very odd. This affects the family life of the employee. Moreover, the male to female ratio in BPO is quiet low. The number of females in BPO can be as large as 35 %.This means that working hour problem is quiet acute in their case especially after they get married, as after marriage comes social and family pressure to adjust work timings and take care of families.
career growth {Click here to read more}
Only 2 out of 10 employees on an average go on to be at the senior level. This means that other employees look forward to change their job at other places where they can get better opportunities to progress. Also, another problem arises with the mis-match of expectations and qualifications of the employees. Along with that, some employees see no career growth in this sector, so they move on to other companies in search of changing the sector.

higher education{Click here to read more}
This is a problem as most of the employees in this sector are pretty young and aspiring. They join the firm because of lucrative salary. But with time, they try to move on to other sectors or top management and one of the ways to do this is higher education.

But, the above mentioned factors constitute only 20% of the reasons that people identify while leaving an organization. The most important reason that a person quit an organization is because of their immediate management. The theory is further unraveled by in one of the largest studies undertaken by the Gallup Organization. The study surveyed over a million employees and 80,000 managers and was published in a book called 'First Break All The Rules'.

It came up with this surprising finding: If you're losing good people, look to their immediate supervisor. More than any other single reason, he is the reason people stay and thrive in an organization. And he's the reason why they quit, taking their knowledge, experience and contacts along with them. Often, straight to the competitors.

" People leave managers not companies. If you have a turnover problem, look first to your managers. Are they driving people away? " write the authors Marcus Buckingham and Curt Coffman Read the case study further... Of all the workplace stressors, a bad boss is possibly the worst, directly impacting the emotional health and productivity of employees.

"We do not require good soldier to win us a war, We require a motivated soldiers and good officers / leaders" General Moshe Dayan, but definitely identification and recruitment of a 'Soldier' is extremely important. Hence, to help our client managers to identify the team compatible recruit, we provide them with recruitment tools such as Pre and Post Employment Screening under our Attrition Control Program.

What do companies loose, monetarily, when an employee quits? 

For better assimilation we have taken an employee who wants to quit an organization and his current Cost to the Company is INR 10 LPA.

Turnover cost for in employee = Separation cost + Replacement Cost + Training cost {Click here to read more}

S. No

Event

Individual Cost (INR)

Total Cost (INR)

1.

Separation cost
            Exit Interview = cost for salary on per day and benefits of both the interviewer ( CTC - 15 LPA) and departing employee ( CTC - 10 LPA) during the exit interview

4166 + 2777

6943

 

Separation cost
           One months notice period amount

83333

83333

 

Separation cost
            Administrative and record keeping action

5000

5000

 

Total Separation cost

 

95276

 

 

 

 

2.

Replacement cost
            Advertising cost + Consultants Fee ( 1 months salary for the employee)

10000 + 80000

90000

 

Replacement cost
            Pre-Employment administrative cost

5000

5000

 

Replacement cost
            Selection interview cost for interviewing 3 candidates - Calculated as per hourly salaries of HR Manager (CTC - 10 LPA) + Business Head (CTC - 40 LPA) + HR Head (CTC - 30 LPA)

1041 + 4166 + 3124

8331

 

Replacement cost
            Meeting to discuss the candidates compensation benefits ( hourly salaries of HR Manager + HR Head + Business Head)

1041 + 3124 + 4166

8331

 

Replacement cost
            Salary benefits to new employee 20 - 30 % hike as per industry standards

300000

300000

 

Total Replacement Cost

 

411662

 

 

 

 

3.

Training cost
            Orientation for 3 days (Employers cost + employees cost)

10000

10000

 

Training cost
            Books, Manuals

1000

1000

 

Training cost
            One to One coaching

5000

5000

 

Training cost
            Extra cost ( incl a hike of 30 %) for the employee for six months till he / she comes at par with the previous employee

150000

150000

 

 

 

166000

 

 

 

 

 

Turnover Cost

 

6,72,938

Keeping the above figure in mind it costs a company a whopping INR 6,72,938. At the same amount a company could provide its employees all kinds of services / stress buster activities as an employee would desire Read more for Twenty Best Stress Busting Points ...Hence, it is always recommended that the current employee should be retained at all costs. We at Mattox help you over come this problem. For balancing both the theories, i.e. employees version as well as the employers version, Mattox offers Pre-Employment Screening.. and The Attrition Control Program.
 
 
 
   
     
  "People leave managers not companies,"
 
     
   
     
 
Marcus Buckingham and Curt Coffman