18752760 Employee Retention Project2

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Employee Retention : A Challenge

A Project in Human Resources Management

Semester V

T. Y. B. M. S.



Index

1. Introduction

2. Reasons for its Increasing Relevance

3. A Challenge

1) 10 Reasons why Employees Leave

4. Employee Retention Strategies

1) Retention Focused Recruitment

2) Retention Focused Orientation

3) Job Sculpting

4) Retention Focused Managing

5) Retention Focused Career Support6) Work – Life Balance Measures

7) Retention Focused Reward

8) Retention Focused Communication

5. Benefits of Investing in Employee Retention

6. Benefits offered by the BPO Companies

7. Compensation and Benefits provided by IT, ITES

Companies

8. Bibliography



Introduction

“Employee retention.” Ask 10 managers what they mean by the term andyou’ll receive 10 (sometimes very) different answers.

Answers like these:

• “Employee retention? You mean stopping people from leaving this

organization?”

• “Employee retention is all about keeping good people.”

• “Getting our compensation and benefits into line with the marketplace.”

• “Stock options, crèche facilities, and other perks.”

• “It’s got to do with our culture and how we treat people.”

• “Staunching the high employee turnover we have in department x or job

function y.”

Now what u all will be wondering is which one of these is the right definition

or is it a combination of these or is it something that we have not yet spoken

of?

Well it is a combination of all of this and something that we have not yet

spoken of.

You may be thinking to yourself, “Oh great, employee retention. Yet another

supervisory challenge.” Employee retention is one of the hottest management

topics in the United States for good reason; it is impacting employers on a

daily basis. The number of qualified applicants available for vacant positions

is currently in decline and employers are finding it difficult to hire new

employees and to keep employees over the long run.

Let Us see what “Employee Retention” used to mean

This entails understanding just a little history. The term “employee retention”

first began to appear with regularity on the business scene in the 1970s and

early ’80s. Until then, during the early and mid-1900s, the essence of the

relationship between employer and employee had been (by and large) a

statement of the status quo: You come work for me, do a good job, and, so

long as economic conditions allow, I will continue to employ you. It was not

unusual for people who entered the job market as late as the 1950s and ’60s to

remain with one employer for a very long time—sometimes for the duration

of their working life. If they changed jobs, it was usually a major career and



life decision, and someone who made many and frequent job changes was

seen as somewhat out of the ordinary. As a natural result of this “status quo”

employer-employee relationship, an employee leaving his or her job

voluntarily was seen as an aberration, something that shouldn’t really have

happened. After all, the essence of “status quo” is just that little or nothingshould change in the relationship—and leaving was a pretty big change!

What is Employee Retention Today?

According to The HR Priorities Survey from ORC Worldwide an HR

consulting and data services firm, nearly 62 percent of respondents to their

survey opined that talent management will be the most pressing strategic

issue they face in year. The findings of the survey also indicated that 33

percent of talent management programs include workforce acquisition,

assessment, development, and retention as areas that will consume most of

the survey respondents' time this year 2007 (see Anonymous, 2007). Retention

has emerged as the focus of much time and attention in recent years,

particularly as part of talent management programs, and so much is known

about it that the HR practitioner who tries to integrate it into a talent program

may grow bewildered by the huge volume of research about it

Employee retention is more than just keeping employees on the job. It is also about sustaining

employees, primarily by enhancing their job satisfaction. Job satisfaction, in turn, can increase

productivity and keep employees energized and motivated to give their best. Job satisfaction can equate to employees who stick with their current

employer and strive to perform at or above expectations and

standards.Employee retention is commonly considered to mean the ability to

maintain a stable workforce. It is often linked to morale and to organizational

productivity. Retention is thus the opposite of turnover , a well-known

concept.

In addition the perception of having a job for life in a public sector role no

longer exists. The trend for the younger generation of workers is to shift from job to job and this is becoming a norm of society. Companies that can recruit the

best talent and retain them will have an edge in the long run.

“Today talented persons are like frogs in a wheelbarrow, which can jump at

any point of time when they sense opportunities”



Reasons for its Increasing Relevance

•Average employee turnover is 14.4% annually, according to the Bureau ofNational Affairs. And, turnover rates are on the rise, the Bureau now

reports; turnover also varies widely among different industries.

• The blow to morale and increased job stress when remaining employees

are burdened with the distribution of the departed employee’s workload,

the negative impact on customer service is a direct result of their high

turnover.

•

Replacement costs for a departing employee are estimated at one-third ofhis or her salary. Even at the former minimum wage, the cost to replace an

employee is $3,700. The US Department of Labor’s Bureau of Labor

Statistics estimates average costs to replace a worker in private industry at

$13,996. (To determine an organization’s annual turnover costs, simply

multiply turnover cost by the number of annual new hires.*) This also

leads to future turnover of employees who are lured to other organizations

by their friends who have departed.

• Estimates have determined that lost knowledge that leaves with the

departing employee can be as high as 50% of the exiting employee’s salary

for one year of service; and, this figure grows by 10% for each year of

employment.

• On average, 30% of a financial advisor’s clients will move with their

advisor if he or she changes firms.

• The total cost of turnover is estimated to be somewhere between 30

percent of the annual salary of hourly employees (Cornell University) and

150 percent as estimated by the Saratoga Institute (Price Waterhouse

Coopers). Taking a fairly conservative estimate that the financial loss from

one employee is equal to his or her annual salary, the negative financial

impact of turnover to the bottom line can be substantial.

• In-depth interviews by the Gallup Organization of over 80,000 managers

in over 400 organizations and offers the following finding: “…It tells us

that people leave managers, not companies. So much money has been

thrown at the challenge of keeping good people—in the form of better pay,

better perks, and better training— when, in the end, turnover is mostly a



manager issue. If you have a turnover problem, look first to your

managers.”

• Most of the HR functions of IT organizations spend more than 50 % their

time and energy in hiring new resources without investing much time inthe way their human resources can be retained. Fact is, it takes 25 to 30 %

more for organization to retain the existing qualified resource as compare

to spending more than 50 % in getting new resource as a replacement of

an existing resource.

And the recent turnover figures about U.S. are

Overall U.S. voluntary turnover increased slightly to 23.4% annually, up from

22.7% the previous year. The highest turnover by far is still in theAccommodation and Food Services sector at 56.4% and the Leisure and

Hospitality sector at 52.2%. Sectors that saw the highest increase in turnover

were Accommodation and Food Services, up 7% from the previous year,

Leisure and Hospitality, up 5.4% and Information, up 4.5%. The only sectors

seeing a (slight) decrease in turnover were Real Estate, Natural Resources and

Mining, and Professional and Business Services.

In the Government sector, turnover was up slightly at 8.2% with the Federal

sector increasing the most to 9.3% up from 5.7%. Regionally, all areas were up

slightly except the Northeast which saw a slight decrease.



A Challenge

10 Reasons Why Employees Leave

1. Expectations not met:

Expectations play a large part in determining whether an employee is

satisfied or dissatisfied with the current state of affairs.

On joining the firm the individual will have a range of expectations covering

areas such as the style of management, the working hours, holidays, pay, bonus and so on.

It is not unusual for employees to leave within the first six months when they

discover that things aren’t quite as they imagined they would be.

Their expectations may have been unrealistic from day one, but each

departure is yet more disruption, harming productivity, adding extra

unnecessary costs and making it more difficult to reach goals for sales,

revenue and profitability.

Few firms seem to appreciate the importance of expectations. They don’t ask

candidates about their expectations, giving them the opportunity to select

someone who is unlikely to be disappointed, and therefore, more likely to

stay.

2. Mismatch between the person and the role

Employees who find themselves in roles that do not suit their individual

strengths, tend not to stay around that long.

A productive employee gets promoted into a position that requires skills that

they do not possess. A role that exposes their weaknesses, and as a result, a

role that they do not enjoy.

Faced with the prospect of having to spend many months, perhaps years, in a

job that is a struggle, a job that they find difficult, a job that is a mismatch for

their specific talents, most of them choose to leave the company and go.



3. Mismatch between person and the culture of the firm

It is not so much that there is a single ideal culture, more that cultures vary,and as many departures show, not everyone is likely to be ideally suited to

culture of your firm.

Some workplaces are high pressured, fast paced, dynamic. Ideal for people

who thrive on adrenaline, who enjoy this tempo, constantly being on the go.

Others are caring, emotional, long discussions, shared views. Endless

dialogue before action is taken. Everyone’s opinion counts.

Put an employee in a culture that suits their temperament and they feel athome. It is an environment in which they can function to the best of their

abilities. But put an employee in a firm whose culture does not suit their

personality, their style or their approach and it rarely works. They don’t settle,

they under-perform, they miss the feel of previous employers where they

were able to contribute more. They leave.

4. Insufficient opportunities for growth and advancement

Employees want to make progress, to get ahead. They want to make that next

step up the career ladder. They think about where they would like to be in 5

years time, in 10 years time.

Their loyalty is largely to themselves, to make the most out of the natural

talents, the skills, and determination they possess.

They recognize the importance of building new skills, refining current ones,

getting new experiences. If the opportunities aren’t available with their

current employer, they will find look elsewhere.

5. Insufficient recognition or appreciation

The Employees that don’t receive adequate recognition for their contribution,

that get little appreciation for their efforts, start to wonder why they bother.

And it doesn’t take much to tempt them away.

Employees that did not feel valued, that felt that their efforts, their hard work,

was not appreciated. That their achievements, their contribution to the success

of the business, was not recognised.



Employees want to feel valued; as though their role is important, as though

the business needs them. They want someone to say thank you. Thanks for

that piece of work, thanks for helping out in a crisis, thanks for dealing with

that problem.

6. Problems with direct manager

The state of the relationship between an employee and their direct manager

goes a long way towards determining whether they stay or leave.

Some employees stay far longer than might otherwise be expected because of

the relationship they have with their supervisor. Others leave jobs in the first

few months because they sense their manager is not someone that brings the

best out of them.

And they need to get away. Because the daily challenge of dealing with

someone they dislike, someone that lacks basic people skills, is just too much

to bear.

Poor relationships between employees and their managers are one of the most

common reasons for employee turnover.

7. Dissatisfaction with pay

Not receiving a fair salary, a fair pay rise, a fair bonus. Dissatisfaction with

financial rewards is complex.

Much of the dissatisfaction is due to comparisons. A previously adequate

salary starts to feel insufficient when you have just learnt that a new arrival is

receiving a higher wage for performing a similar role.

Salaries rarely remain a secret. The information leaks out. If it isn’t fair, if it

isn’t equitable, if the procedure for determining pay settlements is tainted,

employees become dissatisfied. And in time many of them leave.

8. Stress

The stress of work, the stress from working long hours, the stress related to

pressure from above; employees can take only so much.

Stress drives employees into the arms of alternative employers. They simply

want to get away from the workplace, from the people involved, from the

firm.



A stressful workplace is rarely a productive one. Attrition is high, people

don’t matter; there will always be someone else to fill the vacancy. And in time

they too will probably leave for much the same reasons.

Stressful work environments tend to be high turnover environments. If thereis an alternative, people take it.

9. Lack of work life balance

Employees have responsibilities to their employer, to their families, to their

friends. There are times when the demands of work require extra hours,

staying late to get things finished, working during weekends to meet

deadlines.

For some employees the demands of work are no longer compatible with the

needs of their family, the needs that exist beyond the workplace. Perhaps they

coped better when they were younger, before they got married, before they

had a family. But now the arrangement just isn’t practical.

They need a better balance. They need to have time for themselves. Time to

take care of loved ones. Free time not devoted to work.

10. Loss of confidence in the firm, particularly leadership.

Confidence matters. Companies go bust; you just need to read the papers,

watch the news, to realize the risk involved.

When employees lose confidence in the firm’s leadership they head towards

the exit door.

They know that confidence matters, that seemingly invincible companies can

collapse in days, if not hours. They don’t want to be left without a job, should

the company go under, or be taken over.

Other factors for Retention being a challenge are:

A robust economy

Shift in how people view their careers

Changes in the unspoken "contract" between employer and employee

Corporate cocooning

A new generation of workers

Changes in social mores



of those who will have daily contact with the post holder. It is a fact of life that

many hiring failures come down to clashes of personality. When interviewing

prospective managers, consider the notion of upward feedback.

• Promote rather than hire - Internal promotions send a signal to employeesthat they too may get the chance of career advancement, if they remain with

the firm. Conversely, if strong internal candidates are not selected, it may look

like the best option is to leave, if you want to get ahead.

- save money on recruitment

- save money on signing bonuses

- signal to employees

- person - culture fit known



2) Retention Focused Orientation:

Effective orientation plays a vital role in the longer term retention of employees,

yet many orientation programs are little more than induction. The purpose of

orientation is to get the new recruit settled into position as quickly as possible.

• First impressions count.

• The time window is very small.

Common mistakes

• Not having the new employee's equipment in place

• Ignoring them or leaving them to read manuals

• Long lectures, too much information, endless form filling

• Not involving the new recruit's manager and department

• Monologue rather than dialogue

Instead,

• Make sure equipment is in position

• Show them how they can achieve

• Explain what is expected of them

• Explain how to add value

• Explain how to be a team player

• Help them to feel at home• Buddies

On their first day:

• Introduce the new employee to team members

• Give them a brief tour of the workplace, showing them where things are kept

• Explain the importance of their role in the success of the business

• Introduce them to their buddy

• Brief them on the company's business strategy, objectives, values etc

• Ask the employee to promise that they will come and talk to you before

deciding to leave the company



During the first week:

• Ask them how they like to be managed, motivated

• Give appropriate assignments

• Get them started so they can make a real contribution

• Establish medium term goals including both personal and career development

goals

• Detail available resources, schedule any training, arrange a mentor if

appropriate

• Arrange short meetings to check how they are doing

• Get colleagues to meet them to explain how best to communicate

• Invite them to the next social event

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3) Job Sculpting:

Many departures arise from frustrations due to the day to day experience of the role, rather

than the issues relating to the firm or to individuals.

• Move them internally first - If someone is unhappy in their role, see if you can

find them a new position internally, before they opt to leave.

• Match talents to the requirements of the role - Match talents to the

requirements of the role. Get employees to use their natural strengths, their

intrinsic talents. If you want people to stay, get them to use their natural talents.

Most people enjoy doing what they are good at. They like being able to excel.

• Increase job variety - Sometimes the lack of variety involved in their role can

frustrate employees to the extent that they decide to leave. Some people likeroutine, others like change. Again, a little imagination, a small adjustment, can be

the difference between losing them and retaining them.

• Tailor roles to suit individuals - If you have individuals you wish to retain, it

makes sense to tailor roles to suit them. This way they get far more value from

work and it is more difficult for other firms to attract them away. Customizing

roles to suit individuals can be a winning retention strategy for some firms.

• Enriching jobs - Enriched jobs have long been shown to offer extra value to

many employees

The keys to job enrichment: Skill variety, Task completion, Task significance,

Autonomy and Feedback

• Intrinsic motivation - Understand why people want to work in the first place

• Passions - Individuals that get to focus on their passions are far more difficult

to tempt away. Connecting to passions is a great way can be a great way to

improve retention. Most alternatives will start to look far less attractive once an

employee gets the chance to focus on something they are passionate about.

• Meaningful work - Some employees find it difficult to connect their day to day

work with the end product. In a sense their work appears to lack meaning. By

explaining how their job fits into the big picture, you can create meaning, thus

increasing their motivation, and perhaps their willingness to stay.

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4) Retention focused managing:

People join companies, but leave managers. It’s one of those common sayings

that are mentioned in almost every book on retention.

• Select managers with good people skills - The selection of managers is crucial.

Don’t promote individuals into people management roles when their strengths

lie elsewhere.

• Use incentives, recognition and support to encourage retention - Use

incentives, recognition and additional support to encourage managers to adopt

behaviour that reduces the push factor

• Ask managers to help you - Asking managers to help you. Sometimes the

smart tactic is to explain the problem and ask managers to help.

• Do reassign poor people managers so they can use their strengths - Do

reassign poor people managers into areas where they can use their strengths. It is

far easier to build on natural strengths than to fix weaknesses.

• Pay careful attention to the way you assess and reward managers - If you

assess managers on the numbers, that is what they are likely to focus on. If their

pay is determined solely by results, don’t expect them to pay much attention to

retaining employees.Think about ways in which their assessment, and perhaps even reward, can be

designed to encourage behaviour that will assist retention. Focus on creating

value for employees.

• Consider upwards feedback - To encourage managers to pay attention to

employee development, get employees to provide upwards feedback.

• Explain why their work issignificant

• Work life balance guide

• Performance agreement

• Development plan

• Dialogue

• Goal setting• Provide the resources they need to

the job

• Delegation, autonomy and

initiative

• Encourage ideas

• Provide challenging work

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5) Retention Focused Career Support:

The new psychological contract between employee and employer appears to be

largely focused around career development.

• Coaching and mentoring

• Career development interviews - Annual career development interviews are a

sensible retention measure. Examine a wide range of options from new work

assignments, job enrichment, special projects, additional responsibilities, job

sculpting, training, to internal and external moves. Make sure the focus is on

what is best for the employee.

• Development plans

• Qualifications: professional and educational

• Upwards feedback on manager as employee developer

• Internal job banks - Create new options so that employees can move internally,

rather than having to leave the firm, not necessarily at the managerial level.

• Alternative career paths

• Filling unmet needs

Build a culture that promotes learning.

Not something that can be achieved overnight, but a few low cost strategies that

encourage learning can have an impact in situations where employees are

unhappy about the amount of career support they are getting.

If opportunities for genuine career advancement are limited, the best you canhope for is to extend the length of time an employee stays. Though this sounds a

strange way to improve retention, it can work as employees are willing to stay

while they are developing new skills that will benefit their career in the longer

term.

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6) Work – Life Balance Measures:

Offering a range of flexible working options can have a dramatic impact on

employee turnover in certain circumstances.

Giving employees more control over the hours they work can be the difference

between retaining them and having to spend a fortune trying to find a

replacement.

Try to move towards focusing on productivity and results rather than hours

worked.

• Part time work

• Flexi-time

• Job sharing

• Compressed workweek

• Working from home

7) Retention Focused Reward:

Profit sharing, or gain sharing, appears to be the most effective reward strategy

from a retention perspective.

Of all the various reward strategies to have been implemented over recent years,

profit sharing appears to be the most effective from a retention perspective.

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8) Communication:

Recent years have seen firms place emphasis on communicating their message to

employees. Communication in the opposite direction is rarely as effective.

It is possible to improve lines of communication should employee insight reveal

this to be an issue that needs to be addressed.

Some firms use schemes that encourage employees to contribute their ideas on

potential improvements. Others appoint people in roles specifically designed to

listen in to employee opinion.

Annual employee attitude surveys are a common occurrence in many sectors.

While a few firms choose to conduct pulse surveys to measure the temperature

on certain key issues.

Conducting retention focused interviews every six months is a sensible way to

keep track of the current state of play.

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Benefits of Investing in Employee Retention

• Money invested in the “100 Best Companies to Work for”® would have

returned almost three times more than the same amount of a portfolio in the

S&P 500 during the past six years

• The Number 1 “Best Company” for 2007 is Google, where turnover is 2.6%

-- a record low. Keep in mind that Google has a fast-paced, stressful and

demanding work culture!

• The 2006/2007 Work USA® survey of more than 12,000 US workers across

all job levels and in all major business sectors shows that financial

performance of organizations is strongly related to employee engagement.

• This same study found that, for the typical S&P 500 organization, a

significant improvement in employee engagement is associated with a $95

million increase in revenue.

• Additionally, the Watson Wyatt Human Capital Index® study of 147

employers found that firms that fill vacancies quickly (within a month) have

financially outperformed those that take longer by 48 percentage points

over a three-year period.

• A study by Cornell University professor Christopher Collins found that

small businesses that implement employee-management strategies

experience 22.1% higher revenue growth, 23.3% higher profit growth and a

66.8% reduction in turnover over companies that do not use similar

practices.

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Benefits Offered by BPO Companies

The average attrition rate in this sector is still 35-40%.

Employee Benefits Provided By Majority of the BPO Companies

A part from the legal and mandatory benefits such as provident-fund and

gratuity, below is a list of other benefits…BPO professionals are entitled to the

following:

1. 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 orspouse 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

2. 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.

3. Subsidized Food and Transportation: The organizations provide

transportation facility to all the employees from home till office at subsidized

rates. The lunch provided is also subsidized.

4. 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.

5. 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.

6. Corporate Credit Card: The main purpose of the corporate credit card is

enable the timely and efficient payment of official expenses which the employees

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

etc

7. 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.

8. Personal Health Care (Regular medical check-ups): 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.

9. 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 assistthem in their initial settlement at the work location.

10. 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.

11. Performance based incentives: In many BPO companies they have plans for,performance based incentive scheme. The parameters for calculation are process

performance i.e. speed, accuracy and productivity of each process. The Pay for

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

12. 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 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

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13. Flexible Salary Benefits: Its main objective is to provide flexibility to the

employees to plan a tax-effective 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, Medical Reimbursement, Special Allowance

14. Regular Get together and other cultural programs: The companies organizes

cultural 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

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.

15. Employee Referral Scheme: In several companies employee referral schemeis implemented to encourage employees to refer friends and relatives for

employment in the organization.

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Compensation & Benefits in the IT and ITES Sector

Compensation:

1. 91 per cent of IT and 97 per cent of ITES companies have a stated philosophy

of benchmarking compensation against the market; 48 per cent companies

position their compensation above the market median.

2. IT and ITES industry companies have a very high cash orientation compared

to other traditional industries, with a Cash to Benefits ratio of 75:25.

3. Bangalore is the most expensive in terms of compensation for IT - 17 per cent

higher than the national average.

4. An 18 percentage point increase was reported in variable pay plans in the

industry, when compared with last year.

5. Performance-based increases in the IT industry rose by 23 percentage points

when compared with last year.

6. A jump in the average salary increases from 12.2 per cent in 2002 to 15.4 per

cent in 2003 in the ITES companies and from 12.9 per cent to 14.5 per cent in the

IT companies for the Professional/Supervisor/Technical Level (i.e. JuniorManagement). The ITES and IT companies are currently in a high-growth phase,

and this supports the high salary increases.

7. Cash based components (base salary, cash emoluments and variable pay) have

gone up from last year, whereas Benefits (loans, conveyance and housing) have

gone down. More and more companies are now using a higher proportion of

their total employee budget towards variable pay to drive business results.

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Benefits:

Organizations in both the IT and ITES industry are consolidating benefits, with a

greater focus on employee attraction and retention.

Company Cars: An 18-20 percentage point reduction was reported in company

car programs in the IT and ITES industry, as more companies moved towards

cash-based programs.

Loan Programmes: A 5 to 15 percentage point decrease was reported in the

various loan schemes (housing, vehicle, and other loans) from last year.

Stock Options: Stock options are losing their charm in the IT and ITES industry.

A 10 percentage point drop was reported in the prevalence of stock option

programs between 2002 and 2003.

Non-Statutory Retirement Benefits: There was a 5 to 10 percentage point

decrease in the number of companies offering non-statutory retirement benefits,

such as superannuation programs.

People Practices:

Recruitment: A 7 - 14 percentage point reduction was reported in the allocated

budget for recruitment, hiring, and orientation from 2002 to 2003.

Training: Training hours in the IT industry decreased by 13 per cent, whereas the

ITES industry reported a 4.3 per cent increase in training hours over last year.

Career Paths: ITES organizations are focusing on more long-term orientation for

employees. A 14 percentage point increase was reported in the number of

organizations offering employees a formalized career path.

Workforce: 41 per cent of the IT companies saw a significant workforce reduction

(affecting 5 per cent or more employees). This figure for the ITES industry stood

at 11.5 per cent.

Rewards and Recognition: There has been a 4 percentage point increase in the

number of organizations offering special recognition awards to their employees,

with 95 per cent of the ITES companies having these awards in place.

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Bibliography

Textbook:

Human Resources Management - Ashwathappa

Websites:

- www.orcworldwide.com

- www.entrepreneur.com/encyclopedia/term/82184.html

- www.employeeretentionstrategies.com

- www.bpoindia.org/research/retention-strategies-call-center-industry.shtml

- www.employee-retention-guide.com

http://www.orcworldwide.com/

http://www.orcworldwide.com/

18752760 Employee Retention Project2

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