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Employee retention strategy in bpo industry
 

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    Employee retention strategy in bpo industry Employee retention strategy in bpo industry Document Transcript

    • EMPLOYEE RETENTION STRATEGY IN BPO INDUSTRY A PROJECT REPORT TABLE OF CONTENTSChapter-1 Broad definition of Topic 1.1 Executive Summary………….………………………………..8 1.2 Employee Retention………………………………………….10 1.3 Employee Retentions Strategies………………………….......12Chapter-2 Introduction to the Industry………………………………………..17Chapter-3 Introduction to the Organization 2.1 About Company……………………………………………...20 2.2 Analysis & Brief Study of Company………………………...23 2.3 Challenges faced by HR Professionals in Company…………28 2.4 Why People prefer to join the Company……………………..29 2.5 Why People prefer to leave the Company……………………30 2.6 BPO-HR Practices……………………………………………31 2.7 Employee Benefits by Company……………………………..32Chapter-4 Research Methodology 4.1 Steadfast Philosophy…………………………………………36 4.2 KEI’s Employee Retention Wheel…………………………...37 4.3 Center of KEI’s Employee Retentions Wheels………………39Chapter-5 Recommendation & Suggestions 5.1 Importance of Retaining Employees…………………………42 5.2 Three R’s of Employee Retention……………………………43 5.3 Factors that affect Employee Retention……………………...45 5.4 Ways to retain Employees……………………………………49 5.5 Best Practice Strategies for Driving Retention……………….53 5.6 Key Trends: Strategies at Profiled Companies……………….54 5.7 Myths about Employee Morale………………………………56 5.8 Solution for Employee Retention…………………………….62Chapter-6 Benefit/Advantage of Employee Retention 6.1 Employee Recognition increases retention…………………..66 6.2 Retention Strategy help drive revenue growth……………….68Chapter-7 Facts & Findings 7.1 ER Strategy for reducing Employee Turnover cost………….73 1
    • 7.2 Studies & Examples on Employee Retention………………..74 7.3 Observations & Findings on ERS……………………………76 7.4 Attrition rates in India………………………………………..84 7.5 Study & Suggestions on ERS………………………………...90 7.6 Effective Retention initiatives………………………………..92Chapter -8 Conclusion…………………………………………………………...99Chapter-9 Appendices…………………………………………………………100Chapter-10 Bibliography……………………………………………………….105 CHAPTER -1 BROAD DEFINITION OF TOPIC 2
    • 3
    • EXECUTIVE SUMMARYThis project is a reflection of the findings of the survey that was conducted tounderstand what BPO Companies are doing towards the retention of their employees.The project overview encompasses the objective, rationale and methodology adoptedfor the survey. It’s 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 butalso to impart a better understanding of the BPO Sector as a whole. The companiesVision, 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 forthe organizations today to be more proactive in retaining their employees. The focushas been on why employees stay so that precautionary approach adopted by differentorganizations can be understood.The survey has also brought out the attempts made by the organizations towardsbuilding 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 desiredemployee behaviour benefiting the organizations. The money factor has also beenconsidered to understand the organization’s approach towards developing theiremployee retention strategy around compensation, bonus and incentives etc. 4
    • OBJECTIVEThis research was undertaken to understand the various strategic initiatives adoptedby different companies towards the retention of their employees; with an ultimateobjective of analyzing the retention practices that are adopted by a BPO Company. RATIONALEHaving recognized that human assets are the only true differentiator that anorganization has, the retention of these valuable resources have become and area ofmajor concern for every organization. Be it any stage of business cycle or economiccondition; top performers, strategic employees and the whole lot of the employees’cargo who are capable of taking the organization to the ambitious heights, are alwaysthe focus of attention for their employees. 5
    • Employee RetentionTalented men leave. Dead wood doesnt.Philosophically, employee retention is important; in almost all cases, it is senseless toallow good people to leave your organization. When they leave, they take with themintellectual property, relationships, investments (in both time and money), anoccasional employee or two, and a chunk of your future. Employee RetentionStrategies helps organizations provide effective employee communication to improvecommitment and enhance workforce support for key corporate initiatives.Effective employee retention is a systematic effort by employers to create and fosteran environment that encourages current employees to remain employed by havingpolicies and practices in place that address their diverse needs. A strong retentionstrategy becomes a powerful recruitment tool.Retention of key employees is critical to the long-term health and success of anyorganization. It is a known fact that retaining your best employees ensures customersatisfaction, increased product sales, satisfied colleagues and reporting staff, effectivesuccession planning and deeply imbedded organizational knowledge and learning.Employee retention matters as organizational issues such as training time andinvestment; lost knowledge; insecure employees and a costly candidate search areinvolved. Hence failing to retain a key employee is a costly proposition for anorganization. Various estimates suggest that losing a middle manager in mostorganizations costs up to five times of his salary.Intelligent employers always realise the importance of retaining the best talent.Retaining talent has never been so important in the Indian scenario; however, thingshave changed in recent years. In prominent Indian metros at least, there is no dearth ofopportunities for the best in the business, or even for the second or the third best.Retention of key employees and treating attrition troubles has never been so importantto companies. 6
    • In an intensely competitive environment, where HR managers are poaching from eachother, organisations can either hold on to their employees tight or lose them tocompetition. For gone are the days, when employees would stick to an employer foryears for want of a better choice. Now, opportunities abound.It is a fact that, retention of key employees is critical to the long-term health andsuccess of any organisation. The performance of employees is often linked directly toquality work, customer satisfaction, and increased product sales and even to the imageof a company. Whereas the same is often indirectly linked to, satisfied colleagues andreporting staff, effective succession planning and deeply embedded organisationalknowledge and learning.Employee retention matters, as, organisational issues such as training time andinvestment, costly candidate search etc., are involved. Hence, failing to retain a keyemployee is a costly proposition for any organisation. Various estimates suggest thatlosing a middle manager in most organisations, translates to a loss of up to five timeshis salary. This might be worse for BPO companies where fresh talent is intensivelytrained and inducted and then further groomed to the successive stages. In thisscenario, the loss of a middle manager can often prove dear.Les Mckeown’s defined employee retention as, ‘A systematic effort by employers to createand foster an environment that encourages current employees to remain employed by havingpolicies and practices in place that addresses their driver needs.’As noted by Weinberg (1997), “…an employee survey covering topics such as compensation,benefits, safety, work rules, manager behavior, and teamwork” can have a dramatic effect inminimizing employee attrition. These types of surveys provide employees an outlet forconcerns and serve as a means for employers to identify areas in need of change before theybecome a problem of greater proportions. He notes that exit interviews given to employeesupon resignation can also give companies insight into the concerns of workers.Even a simple acknowledgement of an employee’s good work can be quite a motivator.Clarke highlights that “…a pat on the back or a word of praise after they have worked hard todeliver for the company goes a long way toward building individual and group morale”. Paris(2002) agrees, stating that “…incentives provide the ‘golden handcuffs’ that keep fromgetting away” 7
    • Employee Retention StrategiesStrategies on how to minimize employee attrition, confronted with problems of employeeattrition, management has several policy options viz. changing (or improving existing)policies towards recruitment, selection, induction, training, job design and wage payment.Policy choice, however, must be appropriate to the precise diagnosis of the problem.Employee attrition attributable to poor selection procedures, for example, is unlikely toimprove were the policy modification to focus exclusively on the induction process. Equally,employee attrition attributable to wage rates which produce earnings that are not competitivewith other firms in the local labour market is unlikely to decrease were the policy adjustmentmerely to enhance the organization’s provision of on-the job training opportunities. Giventhat there is increase in and indirect costs of labour attrition, therefore, management arefrequently exhorted to identify the reasons why people leave organization’s so thatappropriate action is taken by the management. Extensive research has shown that thefollowing categories of human capital management factors provides a core set of measuresthat senior management can use to increase the effectiveness of their investment in people andimprove overall corporate performance of business:Employee engagement: The organization’s capacity to engage, retain, and optimize the valueof its employees hinges on how well jobs are designed, how employees time is used, and thecommitment and support that is shown to employees by the management would motivateemployees to stay in organizations.Knowledge accessibility: The extent of the organization’s “collaborativeness” and itscapacity for making knowledge and ideas widely available to employees would makeemployees to stay in the organization. Sharing of information should be made at all levels ofmanagement.This accessibility of information would lead to strong performance from the employees andcreating strong corporate culture Meaghan et al. (2002). Therefore; information accessibilitywould make employees feel that they are appreciated for their effort and chances of leavingthe organization are minimal.Workforce optimization: The organization’s success in optimizing the performance of theemployees by establishing essential processes for getting work done, providing good workingconditions, establishing accountability and making good hiring choices would retainemployees. The importance of gaining better understanding of the factors related to 8
    • recruitment, motivation and retention of employees is further underscored by rising personnelcosts and high rates of employee attrition (Badawy, 1988; Basta and Johnson, 1989; Garden,1989; Parden, 1981; Sherman, 1986). With increased competitiveness on globalizations,managers in many organizations are experiencing greater pressure from top management toimprove recruitment, selection, training, and retention of good employees and in the long runwould encourage employees to stay in organizations.Job involvement: Describes an individual’s ego involvement with work and indicates theextent to which an individual identifies psychologically with his/her job (Kanungo, 1982).Involvement in terms of internalizing values about the goodness or the importance of workmade employees not to quit their jobs and these involvements are related to taskcharacteristics. Workers who have a greater variety of tasks tend stay in the job. Taskcharacteristics have been found to be potential determinants of attrition among employees(Couger, 1988; Couger and Kawasaki, 1980; Garden, 1989; Goldstein and Rockart, 1984).These include the five core job characteristics identified by Hackman and Oldham (1975,1980): skill variety, which refers to the opportunity to utilize a variety of valued skills andtalents on the job; task identity, or the extent to which a job requires completion of a wholeand identifiable piece of work - that is, doing a job from beginning to end, with visible results;task significance, which reflects the extent to which the job has a substantial impact on thelives or work of other people, whether within or outside the organization; job autonomy, orthe extent to which the job provides freedom, independence, and discretion in schedulingwork and determining procedures that the job provides; and job feedback, which refers to theextent to which the job provides information about the effectiveness of one’s performance(Tor et al., 1997). Involvement would influence job satisfaction and increase organizationalcommitment of the employees. Employees who are more involved in their jobs are moresatisfied with their jobs and more committed to their organization (Blau and Boal, 1989;Brooke and Price, 1989; Brooke et al., 1988; Kanungo, 1982). Job involvement has also beenfound to be negatively related to attrition intentions (Blat and Boal, 1989). Job satisfaction,career satisfaction, and organizational commitment reflect a positive attitude towards theorganization, thus having a direct influence on employee attrition intentions. Job satisfaction,job involvement and organizational commitment are considered to be related butdistinguishable attitudes (Brooke and Price, 1989). Satisfaction represents an effectiveresponse to specific aspects of the job or career and denotes the pleasurable or positiveemotional state resulting from an appraisal of one’s job or career (Locke, 1976; Porter et al.,1974; Williams and Hazer, 1986). 9
    • Organizational commitment: Is an effective response to the whole organization and thedegree of attachment or loyalty employees feel towards the organization. Job involvementrepresents the extent to which employees are absorbed in or preoccupied with their jobs andthe extent to which an individual identifies with his/her job (Brooke et al., 1988).The degreeof commitment and loyalty can be achieved if management they enrich the jobs, empower andcompensate employees properly.Empowerment of employees: Could help to enhance the continuity of employees inorganizations. Empowered employees where managers supervise more people than in atraditional hierarchy and delegate more decisions to their subordinates (Malone, 1997).Managers act like coaches and help employees solve problems. Employees, he concludes,have increased responsibility. Superiors empowering subordinates by delegatingresponsibilities to them leads to subordinates who are more satisfied with their leaders andconsider them to be fair and in turn to perform up to the superior’s expectations (Keller andDansereau, 1995). All these makes employees to be committed to the organization andchances of quitting are minimal.Therefore, if the above strategies are taken into account the business would be able to survivein a dynamic environment by treating their employees as one of their assets which needs a lotof attention. Employees are the backbone of any business success and therefore, they need tobe motivated and maintained in organization at all cost to aid the organization to be globallycompetitive in terms of providing quality products and services to the society. And in thelong-run the returns on investments on the employees would be achieved. Managementshould encourage job redesign-task autonomy, task significance and task identity, open bookmanagement, empowerment of employees, recruitment and selection must be donescientifically with the objective of retaining employees.Managers should examine the sources of employee attrition and recommend the bestapproach to fill the gap of the source, so that they can be in a position to retain employees intheir organization to enhance their competitiveness in the this world of globalization.Managers must understand that employees in their organizations must be treated as the mostliquid assets of the organization which would make the organization to withstand the wavesof globalization. This asset needs to be monitored with due care, otherwise their organizationswould cease to exist. Employees should be given challenging work and all managers shouldbe hired on the basis of knowhow by following laid down procedures of the organization andthis would make organization to have competent managers at all levels of management andhence good supervision. Griffeth et al. (2000) noted pay and pay-related variables have a 10
    • great effect on employee attrition. Management must compensate employees adequately.They should pay employees based on their performance and in addition they should givenemployees incentives like individual bonus, lump sum bonus, sharing of profits and otherbenefits. Hence, if these are put in place they would minimize employee attrition.Employee Retention Strategies helps organizations provide effective employeecommunication to improve commitment and enhance workforce support for keycorporate initiatives. 11
    • CHAPTER – 2INTRODUCTION TO THE INDUSTRY 12
    • BPO SECTOR INDUSTRY Business process outsourcingBusiness process outsourcing (BPO) is a broad term referring to outsourcing inall fields. A BPO differentiates itself by either putting in new technology orapplying existing technology in a new way to improve a process.Business Process Outsourcing (BPO) is the delegation of one or more IT-intensivebusiness processes to an external provider that in turn owns, administers and managesthe selected process based on defined and measurable performance criteria. BusinessProcess Outsourcing (BPO) is one of the fastest growing segments of the InformationTechnology Enabled Services (ITES) industry.Few of the motivation factors as to why BPO is gaining ground are: • Factor Cost Advantage • Economy of Scale • Business Risk Mitigation • Superior Competency • Utilization ImprovementGenerally outsourcing can be defined as - An organization entering into a contractwith another organization to operate and manage one or more of its businessprocesses.When there are so many benefits associated with BPO industry…. when there are somany privileges for the BPO employees than what makes them to change thecompany/industry?? Is it only MONEY that matters or anything else as well?? Aftertaking exit-interviews and analyzing the trend I am able to list out following reasonsfor a BPO professional to change his/her job. • No growth opportunity/lack of promotion • For higher Salary • For Higher education 13
    • • Misguidance by the company • Policies and procedures are not conducive • No personal life • Physical strains • Uneasy relationship with peers or managersIn an industry like BPO, the work can often be monotonous and opportunities forcareer growth minimal. So when opportunities beckon, the high rate of attrition is notsurprising. However, there are some common reasons that especially cause people toleave. Surveys have listed night shifts, money, inability to handle various types ofstress, monotonous work; company policies, lack of career growth, problems withthose in senior positions etc., as some of the most common reasons listed by BPOemployees, as reasons for quitting jobs. ADVANTAGES OF BPOAn important aspect of business process outsourcing is its ability to free corporateexecutives from some of their day-to-day process management responsibilities. Oncea process is successfully outsourced, they get more time to, explore new revenuestreams, accelerate other projects, and focus on their customers.By outsourcing their back office operations to third world countries, companies havethe following advantages: • Achieve cost reductions – this is made possible through process improvements, reengineering, and use of technologies that reduce and bring administrative and other costs under control. • Key in on companys main business – with the day-to-day back office operations taken care of, the management is free to impart more time to building the companys 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 14
    • Achieving revenue increases – by outsourcing non-core processes, companies canfocus on increasing their sales and market share, develop new products, expand intonew markets, and enhance customer service and satisfactions. 15
    • CHAPTER – 3INTRODUCTION TOTHE ORGANIZATION 16
    • About the company:Wipro was established in 1945 as a vegetable oil manufacturer in Amalner,Maharashtra. The company at that time was known as Western India ProductsLimited. Its main area of business was the production of Sunflower Vanaspati Oil,and later on, soaps and other consumer care products. Starting off with consumerproducts business, Wipro then diversified into newer areas including IT hardware andIT services. Such has been the dynamic power of the organization that over the past50 years, Wipro has evolved into a leading global IT company, a company which haspioneered many an innovation in the IT services, BPO and R&D services space.Wipro Limited is today a $7 billion revenue IT, BPO and R&D Services organizationwith presence in over 50 countries.Wipro BPO is uniquely positioned to service customer requirements by leveraging itstenets of quality and innovation, the best people talent, self sustaining processframework and domain knowledge. We offer customized service offerings; translatinginto the most flexible and cost effective services of the highest quality for ourcustomers.In 2002, Wipro took a quantum jump in the BPO services by acquiring the thenSpectra mind. Wipro BPO Solutions complements the services offered by WiproTechnologies, making it one of the largest BPO service players.With over 19,000 people, operating out of 9 different locations (India and EasternEurope), Wipro BPO has been a critical partner to all its customers in achieving theirbusiness goals. Wipro BPO services customers in various industries includingBanking & Capital Markets, Insurance, Travel & Hospitality, Hi-Tech Manufacturing,Telecom & Healthcare sectors. Wipro BPO also has deep expertise in deliveringprocess specific solutions in areas like Finance & Accounting, Procurement, HRServices, Loyalty Services and Knowledge Services. 17
    • Wipro BPO Solutions Ltd is India’s leading third party offshore BPO (BusinessProcess Outsourcing) provider with a full spectrum of BPO services. The CompanyHeadquarters are located in New Delhi, with six state-of-the-art facilities in Mumbai,Pune, Chennai & Kolkata and global offices in US, UK and Canada. Wipro BPOprovides a broad range of services from customer relationship management, backoffice transaction processing to industry specific solutions. The key element ofservices delivery is an integrated approach towards providing increasing value overthe entire course of our client relationships. This involves a phased approach towardsprocess standardization, process optimization and process re-engineering.Delivering strategic:BPO services and solutions that match the high stakesThe Business Process Outsourcing (BPO) industry has evolved from its earlier phasesto now become a strategic partner who can explore innovative and high-valuesolutions for customers while also handling existing processes. Customers expectBPO vendors to focus on streamlining not just the periphery but core businessfunctions which can optimize business performance and create competitivedifferentiation in the market place.Why Wipro?Other factors driving the adoption of Business process outsourcing (BPO) bycustomers include improving service levels, cost reduction, help in integrationthrough process management and gaining access to best-in-class processes withoutowning or acquiring technology and skills.Wipro BPO is a leading provider of business process outsourcing services focusing onmultiple horizontals and verticals. Our integrated solution approach provides primevalue to customers through process standardization, process simplification andprocess optimization. We can leverage our range of enterprise offerings to enablediverse domains meet existing technology and functional requirements even as wepartner with customers to go to the next level of operational excellence. 18
    • With a well-entrenched global delivery model, our BPO services are provided fromNorth America, Central and Eastern Europe, India, China and Latin AmericaWIPRO MANAGEMENT TEAMMr. Azim H. Premji – ChairmanMr. T.K. Kurien – CEO, IT Business & Executive DirectorTeam Leaders (BPO Sector):Mr. Manish Dugar – Head, Wipro, BPOMr. Tanvir Ali Khan – VP Business Strategy & New Initiative, Wipro, BPOMr. Keyur Maniar – Vice President, Wipro BPOMr. Nithya Ramkumar, Business Technology Officer, Wipro, BPOMr. Bharatendu Sureka, Associate VP, Wipro, BPOBPO Industry Expertise: Banking and Financial Services BPO Transportation BPO Insurance BPO Pharmaceutical BPO Retail BPO 19
    • ANALYSIS AND BRIEF STUDY OF THE COMPANYDifferent Types of Services Being Offered By WIPRO (BPO)1. Customer Support Services Our customer service offerings create a virtual customer service center to manage customer concerns and queries through multiple channels including voice, e-mail and chat on a 24/7 and 365 days basis. Service Example: Customers calling to check on their order status, customers calling to check for information on products and services, customers calling to verify their account status, customers calling to check their reservation status etc.2. Technical Support Services Our technical support offerings include round-the-clock technical support and problem resolution for OEM customers and computer hardware, software, peripherals and Internet infrastructure manufacturing companies. These include installation and product support, up & running support, troubleshooting and Usage support. Service Example: Customers calling to resolve a problem with their home PC, customers calling to understand how to dial up to their ISP, customers calling with a problem with their software or hardware.3. Telemarketing Services Our telesales and telemarketing outsourcing services target interaction with potential customers for prospecting like either for generating interest in products and services, or to up-sell / promote and cross sell to an existing customer base or to complete the sales process online. 20
    • Service Example: Outbound calling to sell wireless services for a telecom provider, outbound calling to retail households to sell leisure holidays, outbound calling to existing customers to sell a new rate card for a mobile service provider or outbound calling to sell credit or debit cards etc.4. Employee IT Help-desk Services Our employee IT help-desk services provide technical problem resolution and support for corporate employees. Service Example: of this service include level 1 and 2 multi-channel support across a wide range of shrink wrapped and LOB applications, system problem resolutions related to desktop, notebooks, OS, connectivity etc., office productivity tools support including browsers and mail, new service requests, IT operational issues, product usage queries, routing specific requests to designated contacts and remote diagnostics etc.5. Insurance Processing Our insurance processing services provide specialized solutions to the insurance sector and support critical business processes applicable to the industry right from new business acquisition to policy maintenance to claims processing. Service Example: New Business / Promotion: Inbound/outbound sales, Initial Setup, Case Management, Underwriting, Risk assessment, Policy issuance etc. Policy Maintenance / Management: Record Changes like Name, Beneficiary, Nominee, Address; Collateral verification, Surrender Audits Accounts Receivable, Accounting, Claim Overpayment, Customer care service via voice/email etc. 21
    • 6. Data Entry Services / Data Processing Services Service Example: o Data entry from Paper/Books with highest accuracy and fast turnaround time (TAT) o Data entry from Image file in any format o Business Transaction Data entry like sales / purchase / payroll. o Data entry of E-Books / Electronic Books o Data Entry : Yellow Pages / White Pages Keying o Data Entry and compilation from Web site o Data Capture / Collection o Business Card Data Entry into any Format o Data Entry from hardcopy/Printed Material into text or required format o Data Entry into Software Program and application o Receipt and Bill Data Entry o Catalog Data Entry. o Data Entry for Mailing List/Mailing Label. o Manuscripting typing in to word o Taped Transcription in to word. o Copy, Paste, Editing, Sorting, Indexing Data into required format etc.7. Data Conversion Services Service Example: o Conversion of data across various databases on different platforms o Data Conversion via Input / Output for various media. o Data Conversion for databases, word processors, spreadsheets, and many other standard and custom-made software packages as per requirement. o Conversion from Page maker to PDF format. o Conversion from Ms-Word to HTML format o Conversion from Text to Word Perfect. o Conversion from Text to Word to HTML and Acrobat 22
    • o Convert Raw Data into required MS Office formats. o Text to PDF and PDF to Word / Text / Doc o Data Compilation in PDF from Several Sources. o E-Book Conversion etc.8. Scanning, OCR with Editing & Indexing Services Service Example: o High speed Image-Scanning and Data capture services o High speed large volume scanning o OCR Data From Scanned page / image o Scan & OCR paper Book in to CD. o ADOBE PDF Conversion Services. o Conversion from paper or e-file to various formats9. Book Keeping and Accounting Services Service Example: o General Ledger o Accounts Receivables and Accounts Payable o Financial Statements o Bank Reconciliation o Assets / Equipment Ledgers etc.10. Form Processing Services: Service Example: o Insurance claim form o Medical Form / Medical billing o Online Form Processing o Payrol Processing etc. 23
    • 11. Internet / Online / Web Research Service Example: o Internet Search, Product Research, Market Research, Survey, Analysis. o Web and Mailing list research etc. 24
    • Challenges for a HR Professional in BPO1. Brand equity: People still consider BPO to be "low brow", thus making it difficult to attract the best talent.2. Standard pre-job training: Again, due to the wide variety of the jobs, lack of general clarity on skill sets, etc, there is no standard curriculum, which could be designed and followed.3. Benchmarks: There are hardly any benchmarks for compensation and benefits, performance or HR policies. Everyone is charting their own course.4. Customer-companies tend to demand better results from outsourcing partners than what they could actually expect from their own departments. "When the job is being done 10,000 miles away, demands on parameters such as quality, turn around timeliness, information security, business continuity and disaster recovery, etc, are far higher than at home. So, how to be more efficient than the original?5. Lack of focused training and certifications given this background, the recruiting and compensation challenges of HR departments are only understandable. 25
    • Why people prefer to join WIPROIn general a person with any graduation can join any of the BPO. Some BPOs like totake people with MBA but then again the specialization are of an individual hardlymakes any difference. Again, this is the industry; where there is no reference checksand very often people dont even specify there exact age. Lets me share with yousome of the reasons as why people prefer to join a company:• Not get a better job.• Find nothing better to do.• Education level doesnt matter.• Good work environment.• Good Benefits.• Flexibility of time.• Attractive life style.• Transport facility. 26
    • Why people leave the WIPROWhen there are so many benefits associated with BPO industry.when there are somany privileges for the BPO employees than what makes them to change thecompany/industry?? Is it only MONEY that matters or anything else as well?? Hereare some of the reasons for a BPO professional to change his/her job.1. No growth opportunity/lack of promotion2. For higher Salary3. For Higher education4. Misguidance by the company5. Policies and procedures are not conducive6. No personal life7. Physical strains8. Uneasy relationship with peers or managers 27
    • WIPRO BPO FOR HR PRACTICESWipro Spectra mind has been awarded the NHRDN (National HRD Network)Trailblazers Award 2004, during the International NHRD Conference 2004, hosted inBangalore. The award was conferred in the category of academic institutions,corporations and voluntary organizations that have created new paths and directionsfor others to emulate.According to a press release, NHRDN has specifically recognized Wipro Spectramind for its performance orientation that has become central to the company culture.The performance management system at the company is aligned to both, the businessgoals and values adherence.The company values/ operating principles are broken down into behavioral indicatorsthat are observed and measured on a regular basis, which in turn linked to the personaleffectiveness parameters in an individuals performance review. There is also anongoing emphasis on training needs assessment and people development.Wipro Spectra mind was also noted for its innovative practices in the areas ofattracting the right talent, reward and recognition, promoting fun as a written downoperating principle, learning, employee communication and compensation which areamongst the key reasons for the spectacular success of the company. 28
    • EMPLOYEE BENEFITS PROVIDED BY THE COMPANYA part from the legal and mandatory benefits such as provident-fund and gratuity,below is a list of other benefits…: 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 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 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 undertake for purposes such as travel related expenses like Hotel bills, Air tickets etc 29
    • 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 BPOS 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 assist them 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 Indias 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 program13. 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 30
    • 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. Wedding Day Gift: Employee is given a gift voucher of Rs. 2000/- to Rs. 7000/- based on their level in the organization.16. Employee Referral Scheme: In several companies employee referral scheme is implemented to encourage employees to refer friends and relatives for employment in the organization.17. Employee Stock Option Plan: 31
    • CHAPTER – 4 RESEARCH & METHODOLOGYA steadfast philosophy that sets EmployeeRetention Strategies apart:• Uses only research-based, theory-supported approaches to improving employeeengagement. Avoided are gimmicks such as employee of the month, suggestionboxes, prizes or other “carrots.” While commonly used, these short-term fixes fail toproduce genuine employee loyalty (more than 60 years’ of research tells us so!). 32
    • • Employs an easy-to-understand systems approach to ensure the root causes ofturnover are addressed and the potential for lasting change unleashed.• Customizes all activities to your organization’s unique history, current practices andstrategic objectives. Also considered are challenges unique to your industry sector,competitive marketplace issues and talent shortages.• Involves those responsible for implementing change in actually creating the change,ensuring input and improved shared understanding and support of all initiatives.• Integrates hands-on, action-oriented approaches that enable organizations to moveforward quickly and effectively• Recognizes the research-proven role of no-cost strategies in developing the “glue”that builds employee loyalty and commitment.• Brings to your organization leading-edge organization-development best practicesto effectively and quickly build a retention-rich culture. KEi’s EMPLOYEE RETENTION WHEELThe first step to improving your employee retention is to understand why employeesstay with their current employer. Many "experts" dwell on the reasons employeesleave, which is not as important or revealing as the reasons they stay. Companies havetried many different programs and perks to hold onto good employees. However,studies show that these efforts are not enough to retain good employees when thesupport that is needed to achieve job success is not adequate. 33
    • Dont Waste Your Money on Things That Dont Make a Difference...Among the countless inducements offered, only those identified in the center of KEisEmployee Retention Wheel™ are truly what give employees a consistent reason forsaying "no thank you" when tempted with a "sweeter offer." After years of study andexperience, KEi has determined, and presented in the Retention Wheel, what factorsdo have the greatest impact on keeping employees.KEi has used this information to give employers the tools to meet the core needs thatkeep employees successful at their jobs, thus reducing the high costs associated withunwanted employee turnover. 34
    • Using the Wheel to Improve Employee RetentionKEis Employee Retention Strategy is based upon two primary beliefs: (1) It is difficult for employers to retain good employees if they dont have a process to hire the right people in the first place. (2) Retention processes must directly support the reasons that successful, satisfied employees stay.KEis concentration on the center of the Employee Retention Wheel providesemployers with Internet-based tools that give employees systematic, ongoing supportto be successful in their work and satisfied with their employment.The Center of KEis Employee RetentionWheel: EIGHT FACTORSDefinition of successful: my job is helping me to grow personally, professionally andfinancially.Definition of satisfied: my employer is providing what I need to perform my jobsuccessfully. 35
    • These eight central processes of the Employee Retention Wheel are the factors thatare most critical to an employees job performance success. ATTITUDE FOR EMPLOYING A process to clearly define the way supervisors are expected to interact with employees; a process to give employees a way to express what is most important to achieve job success; and a process to give employers a way to demonstrate "Employing Values" through employment policies. This "Employer Mission Statement" is about how and who you hire, how you treat them, and the organizations values as an employer. It is about making sure that the Values for Employing™ are communicated to your employees and consistently implemented throughout your organization. It is about the total employment package that goes beyond salary and traditional benefits. FINDING CANDIDATES A process that gives employers a comprehensive way to communicate to job seekers what it takes to achieve short-term and long-term job success, and to attract the candidates who fit this criteria. SORTING APPLICANTS A process that gives employers a way to confirm whether the attitudes and behaviors of job seekers are a match for their work environment. CHOOSING EMPLOYEES A process that gives employers a way to define the specific interview questions that prove job seeker abilities to successfully perform the target skills; and a process that gives employers a way to verify the accuracy of resume/application data and interview responses. STARTING EMPLOYEES A process that provides a way for new employees (before performing the job) to understand "why the employers business exists;" "what makes the business organization successful;" "why the employees job exists;" and "what it will take for the employee to achieve job success." 36
    • INFORMING EMPLOYEESA process that gives employers a way to provide essential information (fromfive critical information sources) that is needed by employees to make dailywork decisions.IMPROVING EMPLOYEESA process that gives supervisors and employees a way to work together tobuild personalized plans for improving each employees priority job skills; anda process that gives the employer a way to "deliver skills-improving trainingcurriculum" and to "measure the learning effectiveness" from the trainingexperiences.REWARDING EMPLOYEESA process that gives employers a way to define and communicate exactly howindividual employee salaries are determined; and a process that givesemployers a way to provide employees with extra incentive income that isearned through the achievement of cash generating business goals. CHAPTER – 5 37
    • RECOMMENDATIONS & SUGGESTIONS The Importance of Retaining EmployeesThe challenge of keeping employees: Its changing face has stumped managers andbusiness owners alike. How do you manage this challenge? How do you build aworkplace that employees want to remain with … and outsiders want to be hired into?Successful managers and business owners ask themselves these and other questionsbecause—simply put—employee retention matters: 38
    • ➤ High turnover often leaves customers and employees in the lurch; departingemployees take a great deal of knowledge with them. This lack of continuity makes ithard to meet your organization’s goals and serve customers well.➤ Replacing employees costs money. The cost of replacing an employee is estimatedas up to twice the individual’s annual salary (or higher for some positions, such asmiddle management), and this doesn’t even include the cost of lost knowledge.➤ Recruiting employees consumes a great deal of time and effort, much of it futile.You’re not the only one out there vying for qualified employees, and job searchersmake decisions based on more than the sum of salary and benefits.➤ Bringing employees up to speed takes even more time. And when you’re short-staffed, you often need to put in extra time to get the work done. The Three Rs of Employee RetentionTo keep employees and keep satisfaction high, you need toimplement each of thethree Rs of employee retention: respect, recognition, andrewards. 39
    • Respect is esteem, special regard, or particular consideration given to people. As thepyramid shows, respect is the foundation of keeping your employees. Recognition andrewards will have little effect if you don’t respect employees.Recognition is defined as “special notice or attention” and “the act of perceivingclearly.” Many problems with retention and morale occur because management is notpaying attention to people’s needs and reactions.Rewards are the extra perks you offer beyond the basics of respect and recognitionthat make it worth people’s while to work hard, to care, to go beyond the call of duty.While rewards represent the smallest portion of the retention equation, they are still animportant one.You determine the precise methods you choose to implement the three Rs, but ingeneral, respect should be the largest component of your efforts. Without it,recognition and rewards seem hollow and have little effect—or they have negativeeffects. The magic truly is in the mix of the three.RewardsRecognitionRespectWhen you implement the “three Rs” approach, you will reduce turnover and enjoy thefollowing: 40
    • ➣ Increased productivity➣ Reduced absenteeism➣ A more pleasant work environment (for both employees and you!)➣ Improved profitsFurthermore, an employer who implements the three Rs will create a hard-to leaveworkplace, one known as having more to offer employees than other employers. Youbecome a hard-to-leave workplace—one with a waiting list of applicants for anyposition that becomes available—purposefully, one day at a time. 10 Factors That Affect Employee RetentionMost managers understand the importance of employee retention and its impact on theoverall health and vitality of an organization. The importance of retaining toporganizational talent will only increase over the coming years as the massive cohort ofbaby boomers begin to reach retirement age making it easy for younger employees tofind work. 41
    • In a previous article we identified some useful tips to help improve employeeretention in your organization. Given the importance of employee retention, we havecompiled another list of 10 important factors that can affect employee retention inyour organization.• Shorten the feedback loop –Do not wait for an annual performance evaluation to come due to give feedback onhow an employee is performing. Most team members enjoy frequent feedback abouthow they are performing. Shortening the feedback loop will help to keep performancelevels high and will reinforce positive behavior. Feedback does not necessarily needto be scheduled or highly structured; simply stopping by a team members desk andletting them know they are doing a good job on a current project can do wonders formorale and help to increase retention.• Offer a competitive compensation package –Any team member wants to feel that he or she is being paid appropriately and fairlyfor the work he or she does. Be sure to research what other companies andorganizations are offering in terms of salary and benefits. It is also important toresearch what the regional and national compensation averages are for that particularposition. You can be sure that if your compensation package is not competitive, teammembers will find this out and look for employers who are willing to offer morecompetitive compensation packages.• Balance work and personal life –Family is incredibly important to team members. When work begins to put asignificant strain on ones family no amount of money will keep an employee around.Stress the importance of balancing work and ones personal life. Small gestures suchas allowing a team member to take an extended lunch once a week to watch his sonsbaseball game will likely be repaid with loyalty and extended employment with anorganization.• Beware of burnout – 42
    • Staff adequately to reduce the amount of unwanted overtime a team member mustwork. Some employees enjoy the extra money that accompanies overtime hours,while others would rather spend their time with their families or doing other activitiesthey enjoy. Burnout can be a leading cause of turnover. Recognize the warning signsand give employees a break when they need it.• Provide opportunities for growth and development –Offer opportunities for team members to acquire new skills and knowledge useful tothe organization. If an employee appears to be bored or burned out in a currentposition offer to train this individual in another facet of the organization where he orshe would be a good fit. Nobody wants to feel stuck in their position will nopossibility for advancement or new opportunities.• The ability to provide input and be taken seriously –Everybody has opinions and ideas, some are better than others. However every teammember wants to feel that their input is welcome and will be taken seriously withoutridicule or condescension. Some of the greatest ideas can come from the mostunlikely of places and people. Creating a culture where input is welcome from alllevel of the organizational chart will help your organization grow and encourageemployee retention.• Management must take the time to get to know team members –Its not a big surprise that one of the greatest complaints that employees express inexit interviews is a feeling that management didnt know they existed. Nobody wantsto feel like just another spoke in a big wheel. Managers are very busy - everybody isbusy, but it is crucial that managers and supervisors take the time get to know theteam members who work under them. Learn and remember a team members name,what skills and talents they bring to the table, and what their business interests are.The time spent by management getting to know team members is well invested andcan eliminate the headaches caused by having to continually hire and re-train newemployees.• Provide the tools and training an employee needs to succeed – 43
    • Nothing can be more frustrating to an employee than a lack of training or the propertools to successfully complete his or her duties. You wouldnt try to build a housewithout a hammer, so why should an office job be any different? Providing a teammember with the tools and training she needs to be successful shows a commitmentand investment in that employee and will encourage the team member to stay with theorganization.• Make use of a team members talents, skills, and abilities –All team members have knowledge, skills, and abilities that arent directly related totheir job description, but are still useful to an organization. Utilizing a team memberstalents in areas other than their current position will indicate to an employee thatmanagement appreciates and recognizes all that an employee has to offer to theorganization. This can also provide work variety and helps to break up the everydaygrind of work.• Never threaten a team members job or income –While threatening an employee with termination or demotion might seem like asurefire way to get the results needed from him or her, doing so will likely cause theemployee to leave the organization. Put yourself in the employees shoes, what is thefirst thing you would do if your job was threatened? Odds are you would probablyupdate your resume and start checking for open job postings expecting the worst. If ateam members performance is not what you had hoped it would be, work with thatteam member on ways to improve his performance, saving termination only as a lastresort.Take some time and seriously evaluate what your organization is doing to encourage ahigh retention workforce. Having a seasoned and well trained workforce can deliver acompetitive advantage that is difficult to replicate. The best part is most of yourefforts to retain your employees come free or with little charge and offer huge returnson a mangers investment in time and resources.At The Rainmaker Group we are committed to helping organizations achieve a highretention workforce where team members truly enjoy coming to work each day. Wecan help your organization develop the strategies and programs to make this happen.Give us a shout today; wed love to hear from you! 44
    • REASON FOR EMPLOYEE TO COME TO THEORGANISATION? • Pay, • Location, • Benefits, • Advancement Possibilities, • Job Security, • Nature Of Work, • Personal/Family Time. 10 WAYS TO RETAIN YOUR EMPLOYEERetaining key personnel is critical to long term success of an organization. ARetention Strategy has become essential if your organization is to be productive overtime and can become an important part of your hiring strategy by attracting the bestcandidates who know of your track record for caring for employees. In fact, somecompanies do not have to recruit because they receive so many qualified unsolicitedsubmissions due to their history of excellence in employee retention. 45
    • How do you get your employees to "fall in Love" with your organization? This isa great question. Some recently conducted research lists these Top TenStrategies: 1. Treat your employees like you treat your most valuable clients. It is cheaper to keep your good employees than it is to hire and train new ones. Your top 20-25% should be courted as you would court and then service your top customers. 2. Get your employees to "Fall in Love" with your organization. Communicate your vision in a compelling way. Show everyone the role they have to contribute to this vision. Create opportunities for people to connect with each other for support and to improve communication in work teams. • Capture the Hearts of your workforce with: Compelling vision/Balance/Celebration-Fun • Open Communication: Internal listening is a priority, multiple lines of communication (various channels.) This is essential for managing change in a positive way with less sabotage, anger, resistance, and fear. • Create partnerships: Squash status barriers/Open the books/pay for performance (not titles), share the "bad" times the "good" times. • Drive Learning: "Guarantee Employability," Encourage Life Long Learning (Train outside of job description). Loyalty comes from trusting your employees to develop their skills for the good of the company and for their needs for personal growth and satisfaction. • Emancipate Action: Freedom to Fail, reduce bureaucracy, challenge the "status quo." Breathe life into your organization. Do not let your employees stagnate. 46
    • 3. Strong retention strategies become strong recruiting advantages.4. Retention is much more effective when you put the right person into the right job. Know the job! Know the employee and their motivations. Half of the Fortune 500 companies are now using assessments to more fully understand each job and the soft skills that are required for top production within their specific company culture. These benchmarked skills are then compared against qualified applicants to help determine who will be successful in the position and fit well within their companys culture. These assessments are also used as a powerful professional development tool to enhance the training of continuous life-long learning (which is another powerful retention strategy.) Advanced Fibre Communication is beginning to use this assessment process in hiring.5. Money is important but it is not the only reason people stay with an organization. If your compensation plan is in the top 20-30% of your industry, then money will often not be the reason why people leave.6. Employee committees to help develop retention strategies is a very effective strategy. Get their input! Ask, what do people like about working here? What would you like changed to make your company a better place to work? Some companies, such as Advance Fibre Communication (AFC), have recognized that the special engineers and technical experts that are the cornerstones of their business, require special attention. Victoria Perrault, VP of Administrative Services for AFC, says that her company has identified the top 25% of their staff and caters to these special people by meeting their financial requirements and looking for the best package of benefits that these people will find most positive as incentives to stay. They even have employee committees that work as "focus groups" to determine why people stay at AFC 47
    • and what they might want to see changed to make AFC an even better place to work.7. Leadership must be deeply invested in retention. Management must be skillful communicating company policies in a way that creates "buy-in" from their staff and be open to employee input. Help create "ownership" in your employees. The companies with the best retention percentages are the same companies that are actively committed to retention. They know that is costs less to keep good people than to continuously have to replace unsatisfied employees and managers.8. Recognition, in various forms, is a powerful retention strategy. It does not have to cost a lot. US Dept. of Labor - 46% of people leave their jobs because they feel unappreciated.9. Remember, the "Fun Factor" is very important to many employees. Greg Peters, Past President and CEO of Mahi Networks in Petaluma, is one of many executives who reported that retention is often related to interpersonal connections and amount of FUN in work teams. The FUN Factor is part of the generation of workers that use activities as stress management in highly charged production environments where long hours are required. Greg has encouraged Ping-Pong tournaments and basketball leagues for interpersonal interaction, fun, and stress management. Though not everyone can participate in physical activities, this sets the tone in a culture based on competition, health/well-being, and interactions that are inclusive beyond work.10. Know the trends in benefit packages. Do your best to offer the ones your employees need. Consider offering the best of the rest. 48
    • Best Practice Strategies for Driving Retention I. II. III. IV. COMPENSATION AND MANAGER JOB FIT AND CULTURE AND BENEFITS EFFECTIVENESS OPPORTUNITY WORK ENVIRONMENTCompensation and benefits is Manager effectiveness is the Job fit and opportunity is the Companies spend athe number one driver of second most powerful driver third driver of retention, and significant amount ofretention. of retention. Companies maintains value for high resources on their culture and experience challenges in this performers. work environment evenCompanies experience the area because they put though its ability to drivefollowing compensation and employees in management Components of the job fit retention is limited.benefits challenges: positions based on their retention driver include: 49
    • • Communicating the value performance in achieving • Recruiting the best Challenges in fostering of business goals rather than candidates and retention through culture and total rewards packages their management ability: employing work environment include:• Competing with firms • Companies reward people who fit within the • Offering the same work- offering elevated pay employees based solely culture life benefits to packages on • Promoting individual job geographically dispersed• Fairly compensating performance rather than development employees mid-level performers people skills • Providing the • Losing talent that• Offering employee • Employees assume opportunity for cutting- embodies the culture of ownership opportunities management roles without edge work the firm through equity adequate skills • Measuring the impact on Strategies to Improve retentionCompensation and Benefits Strategies to Improve Job Fit • Providing flexibilityRetention Driving Manager Effectiveness:Strategies: Strategies #7 and #8: Strategies to Improve Strategy #4: Offer Evaluate College Hires and Culture and WorkStrategy #1: Provide Management and Target Schools EnvironmentPerformance Based Leadership Development (Company A and CapitalCompensation (Company D) One) Strategy #10: Offer(Variable Options at All • Provide interactive • Monitor attrition and Innovative Work-LifeProfiled Companies) training performance metrics of Programs• Offer higher compensation to share experiences and hires (All Profiled Companies) to high performers best practices across firm • Target hiring efforts • Package offerings to• Include bonuses and stock • Use opportunity to through most effective promote a positive options within the develop channels working environment structure HIPOs • Respond to employee of compensation Strategy #9: Drive On-the- concerns Strategy #5: Conduct a Job DevelopmentStrategy #2: Flexible Quarterly Retention (Company D) Strategy #11: Foster aCompensation Philosophy Council • Monitor performance Family-Friendly Culture• (Company D) (Company A) and (Company E)• Maintain a team-oriented • Include line-leaders and satisfaction of all high- • Offer a myriad of work- approach firm-wide locations value employees life• Offer flexibility to • Provide retention updates • Offer individualized benefits differentiate by level of development action • Provide flexibility across performance Strategy #6: Provide plans the firm Retention Incentives promoted through seniorStrategy #3: Provide Equity through Targeted leadership and diversity Strategy #12: Drive Positiveto All Employees Retention Goals and offices Culture Through(Company C and Company Accountability LeadershipD) (Company A) (All Profiled Companies)• Allow ownership • Develop business unit • Require senior retention goals approved management input and• Determine the right level by the CEO ongoing culture by • Provide compensation sponsorship employee according to goal • Task the senior achievement leadership with program communication Strategy #13: Provide Services for School-Aged Children • Meet parenting needs in innovative ways • Offer structured development for school- age children Key Trends: Ownership and Differentiation of Retention Strategies at Profiled CompaniesThe current research identifies four main drivers of retention and highlights strategiescompanies use to address retention challenges. This first page provides a generaloverview of the process described in this brief and identifies the functions that track 50
    • and analyze attrition data as well as the groups that develop retention strategies. Inaddition, this section outlines the four main employee segments that companies targetthrough various retention strategies. This discussion of ownership and differentiationprecludes the main body of the brief in which the retention drivers and strategiesrelated to compensation and benefits, manager effectiveness, job fit, and culture andwork environment are outlined in further detail.At all profiled companies the corporate HR division tracks and analyzes retentionmetrics. In addition, HR functions at each business unit as well as diversity andleadership groups measure attrition rates relevant to their populations. Apart frommeasurement, HR plays three main roles at profiled companies: proposes andimplements corporate-wide retention efforts, acts as a consultant to the business unitby proposing retention-driving strategies, and supports senior management efforts todetermine the most effective retention strategies on a case-by-case basis. The figurebelow demonstrates the combination of ownership between senior management, HR,and the business units. Please refer to Appendix A for detailed information on specificcompany practices involving each group.Senior leadership team:• The CEO approves retention goals and program changes, and actively communicates goal changes and achievement to all employees.• The senior leadership team helps identify key talent and develops key retention strategies.• Senior leadership participates in leadership development programs and changes.Corporate HR• Corporate HR tracks attrition levels, analyzes voluntary and involuntary turnover data, and uses feedback from exit interviews and surveys to identify key retention issues. 51
    • • HR acts as a consultant to business units and senior leaders in developing and implementing targeted retention strategies; HR communicates retention programs to all employees.Business Units and Line Managers• Business units may implement specific retention strategies based on needs.• Unit leaders and managers consult with corporate HR to determine effective retention strategies and learn methods of implementation.• Business units and managers maintain flexibility to provide additional strategies as needed.As noted above, companies differentiate the retention focus based on need. Allprofiled companies also provide autonomy to the business units and line managers inaddressing retention on a case-by-case basis, providing a high level of flexibility tomanagers. In addition, the senior leadership, corporate HR, and business units at allcompanies target specific retention efforts on high performing and high potentialemployees, key minority employees, and those in critical customer facing positions.Only one company differentiates (from a corporate perspective) retention strategiesfor the middle performers (B-players) by offering a higher percentage ofcompensation to these employees in the coming year. The table below describes thedifferentiation of retention strategies at profiled companies. Myths about Employee Morale Prevent Companies from AchievingRetention Success: 52
    • Despite years of research that point to far different solutions, many companies use thewrong tactics when trying to improve employee morale, satisfaction and retention.These myths prevail, in part, because businesses have used these methods, howeverwrong, for a very long time and have become used to trying the same ideas.Myth #1: People most often leave a company for more pay.Exit interviews, conducted to learn why people leave an organization, contain some ofAmerica’s greatest fiction. People frequently say they’re leaving for more moneybecause it’s the easiest reason to give. More often the causes leading to departure arerelated to issues that were unsatisfying in the job or the company.Typical issues that cause dissatisfaction are company policies and procedures, qualityof supervision, working conditions, relationship with the immediate supervisor andsalary.Yes, pay does matter. While research shows most people don’t actually leave a job formore money, there are two important facts: Very-low-income workers will leave formore money because it’s a survival issue. For the rest of workers, the issue of moneyactually is about fairness. People become dissatisfied with pay when they feel it isunfair within the company, within the industry or when pay doesn’t seem to match theamount or type of work required.To increase employee satisfaction and retention, companies make more gains byworking to improve whether people feel a sense of achievement, recognition,competence and growth, whether there are choices about how work gets done andwhether employees feel respected by management..Myth #2: Incentive programs produce long-term profits and improveproductivity and morale.So, who doesn’t like free stuff? However, incentives such as gifts and cash bonusesfor meeting speed and volume goals don’t affect employee commitment. They’re 53
    • really a throwback to outdated management beliefs that workers must be coerced inorder to work hard. All the extras don’t add up to the real glue that creates employeecommitment: the chance to learn and grow, meaningful work, good supervisors andrespect and appreciation for a job well done.Incentives have been over-used particularly in the past decade, as management bookstouted the importance of improving recognition of excellent work. Yet, studies showthat carrot-and-stick motivation actually does not pay off in long-term companyprofitability or employee satisfaction or retention. To the contrary, incentives canharm quality when employees aim for speed or other goals rather than quality.Myth # 3: People don’t want more responsibility.They don’t want more work if they’re already overloaded due to lean staffing; butpeople indeed want the opportunity to grow and develop their skills, advance theircareers and have the opportunity for greater variety. Keep in mind what the researchconfirms: People do want to try new things, to feel skillful and to experience thepersonal satisfaction of higher levels of achievement.People don’t need a job promotion in order to gain more responsibility. The same jobcan be broadened to include more variety, more contact with different parts of theorganization and greater control over decisions on accomplishing work tasks.Myth #4: Loyalty is dead.Not at all, though it is ailing in many organizations. People are seeking greater work-life balance than in the past, and employers have made great strides in providing moreflexible hours and dress codes. Still, people seek to make a contribution, andorganizations that provide healthy doses of the main satisfiers enjoy significantlylower turnover and higher morale. Profits are higher, too, according to recent researchstudies.Things have changed, indeed. Today’s workers will, in fact, change careers and jobsmuch more often. When the economy is good, people have become much more at 54
    • ease in changing companies, are more likely to acquire new skills and move tocompanies that offer greater chance to use more of their knowledge and more willingto take the risks of starting anew at another organization.What has emerged in current management studies are that the same qualities that holdemployees are the ones that best serve the customers: Employees who can make quickdecisions on behalf of the customer and the company; employees who have a broaderscope of responsibility that allows them some freedom and leverage to solve customerproblems; learning opportunities that give employees the skillfulness to addresscustomer issues; and supportive management and supervisors who use any mistakesthat occur as teaching opportunities.Myth #5: Improving employee satisfaction is expensive.Research tells us the true satisfiers can’t even be bought: career growth, meaningfulwork, respect and appreciation and being able to influence how work gets done. Inthese leaner times employers have the same opportunity to gain true loyalty despitelowered budgets.The trinkets and prizes given in recognition and rewards programs aren’t necessaryingredients for developing an engaged workforce. The “glue” that holds people ismade of much different stuff: Management that listens and responds to employees’ideas about improving service, supervisors who support people’s growth andinitiative, training in how to do the job successfully, good relationships withcoworkers and genuine appreciation for a job done well. There are no costs incurredto build or enhance these motivators.Myth #6: Employee satisfaction is “fluff.”Does having engaged workers make a difference in the bottom line? Studies nowshow that lower turnover and greater levels of employee satisfaction have a definitepositive impact on customer satisfaction and profitability, which are the key factors incompany growth and sustainability. Consider these facts: 55
    • • A strong link was found in a study by PricewaterhouseCoopers between employeeretention and the quality of service as rated by companies’ customers.• According to the American Society of Training & Development, organizations thatinvested the most in training had higher gross margins and income per employee.• The cost of replacing an employee who leaves has been estimated by various studiesto be between 70 and 200 percent of that worker’s annual salary.• The Council on Competitiveness found that a 10-percent increase in education has amore positive impact on productivity than a 10-percent increase in work hours.The bottom line on the bottom line? Investing in people and using the most effectivemanagement practices increases profits.Myth #7: Supervisors are the problem.Many senior leaders express dismay about the quality and actions of their middlemanagers and front-line supervisors. The “blame game” is old, yet the solutions arestrikingly similar to those required to build an engaged workforce.In most organizations today, supervisors have more people reporting to them than inthe past, more demanding customers than ever and greater amounts of change – alloccurring at the same time. Yet, the amount of training provided to managers andsupervisors in many organizations is minimal. More importantly, the amount of timethat senior managers spend in dialogue with middle and line managers also isminimal.Middle managers and supervisors can appear resistant to improvement efforts.However, the true failure exists in our understanding of their world, the challengesthey face and the support they need in order to be successful. 56
    • Successful organizations seek to build teamwork between senior leaders and middlemanagers and line supervisors (which is a key ingredient in creating teamworkthroughout the company).Myth # 8: My company/industry/people are different!Yes, every company is unique, and every industry has its own set of unusualchallenges. However, a very costly mistake is made when we believe informationfrom other sectors doesn’t apply to us or our organization.Retention research studies cross all industries, all types of work settings and in variedeconomic conditions. Still, the same results come up time and again. We buildemployee loyalty – and, indirectly, customer loyalty – through providing people withgrowth and learning opportunities, minimizing red tape, allowing people to think andmake good choices, supporting middle managers and front-line supervisors andappreciating the efforts that people give to help our customers.It’s downright dangerous to ignore these findings – risky to the bottom line and theorganization’s future.Barriers to Success? Lack of support from management team.? Inability to provide hard numbers.? Company culture does not support change.? Back lash from single workers.? Failure of other programs due to low utilization.? Managers do not view work/life initiatives as business tools that impactemployee retention. 57
    • SOLUTION FOR THE PROBLEMFINDING THE CAUSE OF ATTRITIONHave a survey among employees to find the reasons for attrition. If possible, haveexit interviews to know the reasons for resignations. If a key employee resigns, itshould be taken up on a priority basis and the senior management should meet theemployee to discuss his reasons for leaving and evaluate whether his issues bear merit 58
    • and whether they can be resolved. Steps can be taken to avoid similar reasons fromoccurring in the case of others, in similar positions.What can be done?Though, it is impossible to scrap problems totally, there are certain ways by whichBPO managements can tackle attrition. Since the every organisation is unique, thesecompanies need to develop innovative ways to tackle their problems. HumanResources department of companies must address these issues, and along with themanagement 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. • BPOs can set up offices in smaller towns, or recruit from there, where opportunities are few.AT THE OFFICE • An employee’s 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. 59
    • • 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 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, recognized 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. If they don’t 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-caliber recruits.• Implement competency models, which are well integrated, with HR processes like selection & recruitments, training, performance appraisal and potential appraisal. 60
    • Night shifts 1. Have doctors to advise them about health problems and the ways and means to deal with them. Provide dietary advice: - Dos and donts. Help them to maintain their health. 2. Organize programmes where people from other professions, who have night shifts talk to BPO employees about their experiences. Other organisations like Army, Railways, Hospitals and various government services etc., also have night shifts. 3. Organize training, counselling and development programmes 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. 4. If needed, provide special lights in the office/workplace to ensure that their bodies get sufficient vitamin D. 5. One distinct disadvantage of night shifts is the sense of disorientation with friends and family members. 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. 61
    • CHAPTER – 6 EMPLOYEE RETENTIONBENEFIT/ADAVANTAG EEmployee Recognition Increases Retention 62
    • It seems that now more than ever employee recognition is limited at best in manyorganizations. Unfortunately many managers dont understand the importance ofrecognizing a team members hard work and a job well done. Many might even askwhy they should recognize their employees when they are "just doing their job."The truth is that recognizing employees for their hard work is one of the leastexpensive and easiest ways to improve the level of employee retention in yourorganization. The return on investment for a managers time and limited expenses canbe incredible.Recognizing an employees performance reinforces positive behavior and encouragesadditional positive behavior. If a team member feels that he or she is appreciated theywill be much more likely to repeat their behaviors in the future and even put out moreeffort than before. When a business leader understands the power of recognizing hisor her employees the culture of an organization reacts to this recognition and moves ina positive direction helping to retain more employees.Employee recognition can be as simple or as extravagant as one desire. The followingis a short list of simple ways to recognize team members for a job well done andimprove retention in your organization.• A simple "thank you" or "nice job" given in regular frequency can significantlyboost team morale. Often times a team member will greatly appreciate the time youspent to find him at his desk and deliver the message in person.• Send a thank you card or e-card. Also photocopy the thank you and document thereason for the recognition in the employees file. Let the employee know you did this -it will let her know that her hard work will not be forgotten.• Movie tickets, gift certificates, or an engraved gift are excellent rewards for anemployee who has excelled or put in the extra effort to make a project happen. 63
    • • Recognize the team members contribution in front of members of management.This can reduce the tendency for employees to feel that their supervisors take all thecredit for their hard work.• Recognize loyalty and exceeding expectations. Mention the team members hireanniversary, large contract won, or surpassing of a sales goal in the companynewsletter or at a staff meeting.• Know how to recognize your staff. Not all staff members want to be singled out at agathering of hundreds of fellow team members, while for others it would make theirweek. The approach to recognizing team members can vary greatly by generationalcohort. You might seriously embarrass a baby boomer by having them stand up infront aGroup of their peers and discuss their recent success, while a Gen X-er will relish thisopportunity. Retention Strategies Help to Drive Revenue Growth 64
    • Employee satisfaction is essential to any effective employee retention strategy - anygood HR manager knows that. However few managers think of the impact thatemployee satisfaction has on their customers and ultimately company profits. One canassume that happier, more productive employees will make more sales, treatcustomers better, and ultimately make more money for the company, but fewcompanies have analyzed this assumption to the extent that Sears, Roebuck andCompany has. Sears has put this common assumption to the numbers test and theresults are intriguing to say the very least.1992 was the worst year on record for Sears, losing almost 4 billion dollars on over 52billion dollars in retail sales. The early and mid 1990s were truly trying times for theretail giant and tested the will and resolve of managers and employees alike. Duringthis time the company was in near shambles, morale was low, revenues weresuffering, and the bottom line was hemorrhaging red ink. This was in stark contrast tonearly a century of stellar results that Sears had comfortably enjoyed. For Sears,something needed to be done, and fast!Sears began their turnaround by identifying three key objectives: Creating acompelling place to work, a compelling place to shop, and lastly creating acompelling place to invest. One of the tools used to establish these objectives was theemployee-customer-profit chain. The employee-customer-profit chain is essentially aflow chart that diagrams revenue creation starting with employee attitudes andsatisfaction, followed by its effect on customer satisfaction, and ultimately the effecton revenue and bottom line profit generation.One thing Sears realized it needed to do was exert a greater effort focusing on thecustomer. This is often times easier said than done for many organizations. HoweverSears took an innovative approach to increasing customer focus. Based on theemployee-customer-profit chain, it realized that it could not better focus on thecustomer without first focusing on its employees.For Sears 70% of its workforce was part-time status and turnover among its part-timeworkforce had become alarmingly high. Sears suspected that low morale and poor 65
    • employee attitudes towards the company were to blame. Sears began a rigorousprocess of measuring employee attitudes and satisfaction via a 70 question employeesurvey. The results of this survey were then juxtaposed to customer satisfactionsurveys and ultimately compared to revenue and profit trends for the company. Thecorrelations drawn from the data were greater than Sears could have ever imagined.Undoubtedly Sears expected to see some positive correlation between employee andcustomer satisfaction and ultimately revenue and profit generation; however theywere amazed to see just how great an impact employee satisfaction levels had on thebottom line. The data revealed that for each five point improvement on the employeeattitude scale, there was a subsequent 1.3% improvement in customer satisfaction, anda 0.5% increase in revenue growth.A 0.5% increase in revenue might sound miniscule, however when it is based onrevenues of over 50 billion dollars it adds up quickly and significantly. For Sears thiswould equate to a 250 million dollar increase in revenues a year! This revenueincrease does not require investments into advertising, new facilities, or improvedoperations, only an investment into the satisfaction and happiness of employees.There are also cost savings that can be attributed to improved levels of employeesatisfaction. It should come as no surprise that happy employees stay in their jobslonger than unhappy employees. By focusing on increasing employee satisfactionSears was able to concurrently increase revenues and reduce the costs associated withemployee turnover. Sears was also able to determine that employees with greaterlevels of satisfaction and a favorable attitude towards the company were more likelyto speak positively about the company and recommend shopping there to friends andfamily members.By increasing employee satisfaction Sears was able to generate free word of mouthadvertising spread by its employees, thus in a way reducing the reliance on paidadvertising to generate revenue. Sears realized the importance of its employees andtheir levels of satisfaction and made it a corporate goal to increase levels of employeesatisfaction throughout the company. 66
    • Sears feels that employee satisfaction levels are so important to the companys healthand vitality that it treats attitude and satisfaction numbers the same as "hard" financialnumbers. Sears is so committed to these numbers that it has them audited by anaccounting team to ensure validity and reliability just as it does with all of its internalfinancial measures.For Sears its turnaround did not take place overnight. It took several years of hardwork and dedication from managers and employees at all levels. Improving levels ofemployee satisfaction was not the sole contributing factor to Sears remarkableturnaround. However it is fair to assume that without the focus on the employee as abase to better focus on the customer the turnaround at Sears would not have been asquick or amazing as it was.As business leaders we should all pay careful attention to the approach that Sears tookto improving its bottom line. The urge to drastically cut costs through outsourcing,layoffs, reducing benefits, and streamlining operations might well be overly complexsolutions to a relatively simple problem. In lieu of cost cutting initiatives to preserveprofit margins, a customer focused approach might be a better solution. As we canlearn from Sears focusing on the customer ultimately begins by focusing on theemployees who serve the customer. Give it a shot, your employees, your customers,and ultimately your shareholders will thank you for it! 67
    • CHAPTER – 7 FACTS & FINDINGSEmployee Retention Strategies for Reducing Employee Turnover Costs 68
    • At The Rainmaker Group we are committed to helping your organization MaximizePossibility by identifying and retaining top performers to achieve a high retention andhigh performance workforce.We understand that time is money to your organization. Every minute of every daythat your employee retention problems persist your organization is losing valuabletime, energy, and resources.With the use of the powerful tools at our disposal, our employee retention experts willget to know your team and organizational culture better than you ever could haveimagined. By doing so we can get down to the real causes of employee turnover inyour organization and develop an employee retention program that is right for yourteam.Our employee retention programs deliver results - we guarantee it!Our clients always see a sizable return on investment in the form of improvedprofitability, reduced employee turnover, and enhanced employee morale.Stop unwanted employee turnover dead in its tracks and get back to doing what youdo best: growing and leading your organization. SOME EXAMPLES OF NEW AGE HR PRACTICESLG COMPANIES RETENTION POLICIES: 69
    • To retain employees it is very important to give them a feeling of belongingness in thecompany. For this they conduct many activities like: 1. There’s a weekly meeting of every dept where the employees are asked what their expectations are from the company to make the atmosphere and climate joyful. 2. After every 15 days one day FUN TRIP is conducted (within 50-70 Kms) from the company. Places like Essel world, Lonavla, Alibagh Beach, Matheran Hill Station etc where the employee can have fun and relax from their regular work. The destination of the fun trip is decided by the employee themselves. The expense is held by the company. 3. Every Employee is given a Laptop, Mobile (Rs 500 card free every month) or Landline Phone free. 4. “MY DAY”- Every week the employee can have 2 “my days”, i.e. for two days a week they can have their own time away from office after 1.30 pm. 5. Annual Day – The annual day is on 24th dec. Every employee gets a gift voucher, Lunch at some good hotel and a fun tour to Essel world or water Kingdom etc. 6. Annually they also have interdepartmental matches like Cricket Matches, Volleyball Matches etc to improve team building and feeling of belongingness. 7. Culture: On every Indian festival there’s a big celebration. a. Ex: On Sank rant they have a “BHARTIYA JEVAN”. They fly colourful kites and have competition between the employees. b. Ex: On Diwali they enjoy sweets and crackers with traditional dresses. 70
    • 8. Departmental Lunch: Everyday one dept have lunch together. Each and every member of the that Dept eat and drink together. This helps in improving the team spirit and the feeling of belongingness in the dept.9. Employee of the week- AWARD: a. Every week one worker is honoured based on the performance of the worker. This improves their moral and encourages them to work hard for the coming week. b.Every month one employee is honoured as Employee of the Month c.Annually one employee is honoured as Employee of the year. Their names are declared on the Notice board and company magazine which encourages others also to work better.10. New employees joining the company are given a training of 8-10 days.The training consists of induction and orientation program along with a 2 day trip.This is a good ice breaking session and helps them to know their colleague. Thelasts two days training is conducted in the actual job site.11. Higher education: If any employee wishes for higher education the company sends the employee to South Korea for training and encourages them to study hard.12. Car is provided to the entire manager and above. The petrol expense are taken care by the company.13. Annually every employee gets a 5 days paid leave.14. The company provides the facility of all indoor games along with a Swimming pool for the refreshment of the employee. 71
    • Ex. Table Tennis, Chess, Badminton, Snooker, etc. 15. Quarterly the MD does performance appraisal of every LINE and checks which line has achieved production as per expectation or more than that. All the members of the line are gifted and their names are displayed in their annual magazine. This encourages the Line members to work hard and efficiently.The Tesco campus at Whitefield in Bangalore also houses a learning centre whereemployees can register themselves for a retail certification course from no less thanthe Indian Institute of Management (IIM), Bangalore. “We have also done away withthe probation period because we are in the business of training people,” saysVenkatesh. OBSERVATIONS & FINDINGS ON EMPLOYEE RETENTION STRATEGIES 72
    • Employee Retention Strategies—Your Guide for the Best Employee RetentionStrategies to Retain Your Best EmployeesEmployee Turnover is an Inside JobRoss Blake, “The Employee Retention Manager”Some employee turnover is inevitable; a spouse gets a promotion in another city orstate, or capable employees decide to change careers.Many employers undertake efforts to reduce or eliminate external "pull" factors suchas inadequate benefits that prompt good employees to leave for other employers.However, most employee turnover is caused internally, by reasons employers usuallycan at least influence, if not correct.Many employers also undertake efforts to reduce or eliminate internal "push" factors,including poor work-life balance or boring assignments, that also prompt goodemployees to leave.In addition, some employers have managers whose behaviors greatly increaseemployee turnover, yet theyre unwilling to address them, even though theyre verycostly.Heres an example.A very successful mid-size advertising agency was run by a highly independententrepreneur who was also its founder.Although the agencys creative and account services were excellent, the presidentsharsh, critical, insulting, and downright abusive ways of talking to and treating mostemployees meant the firm frequently had an employee turnover problem.Capable copywriters, media directors, account executives, and secretaries left on aregular basis. As soon as a resignation was given, the president would apologize and 73
    • attempt to convince the employee to stay. Other employees were also brought into theeffort, and asked to talk individually with the resigning employee.It was never successful; not one employee decided to stay after giving theirresignation, and most went on to equal, if not better, positions at other agencies.So the agency went through the process of placing employment ads, recruiting,interviewing, testing, hiring, orienting, and training new employees again and again. Itwas time-consuming, and financially costly. Replacement costs for most of theseemployees amounted to 50% to 150% of their annual salaries. Yet, even though thepresident hated such time and financial costs, he refused to change anything abouthow he communicated with employees. In effect, he was willing to continue to "do itmy way" even though the consequences were substantial and unnecessary.As long as he was in business and paying himself a high salary, there would be nochanges.Many organizations would not tolerate such an executive.Some organizations tolerate such managers and executives as long as results,especially revenues, continue, and if they can continue to replace employees, figuringtheyre staying ahead.At some point, however, it isnt worth it. The employer gets a bad reputation;qualified people dont apply, or schedule interviews. Competitors find they can easilyoffer better work environments by making certain their managers treat employeesrespectfully.What can you do if you have a manager or executive creating employee turnover in asimilar manner?If youre an organization run by this type of founder, there often isnt much you can doas long as they continue to make a large sum of money; its what they often went intobusiness for in the first place. 74
    • Since money is a key factor, making them aware of employee turnover costs mayhelp.1. Be certain all of your supervisors and managers know how much employee turnover costs. They often assume employee turnover is "just a cost of doing business." It isnt.2. Communicate that other good or high-performing employees notice such behaviors and may decide to leave even if theyve been well-treated. Calculate the turnover costs for replacing these employees, and communicate it.3. Set up a new working agreement with them, adding the use of good retention and employee relations skills to their job descriptions, and basing at least 25% to 33% of their bonuses on good employee retention.4. Be able to immediately offer them coaching with a trusted internal or external facilitator. Having a solution in hand demonstrates that the organization cares about them, and is focused on making future improvements, not on blame.Competing with other employers for good employees is difficult enough; eliminateinternal causes for employee turnover in your organization.Remember: since most of the reasons good employees leave are things employers cando something about, this makes employee turnover an inside job more often than not.What happened to the advertising agency?Many of the most talented professionals in the area refused to consider working there,and it had to merge with several other agencies, giving the abusive boss several newand demanding partners to deal with.Ad Agencies: 5 Solutions for Hiring, Training and Retention“The average Starbucks barista gets more training than the average communications employee.” Andrew BennettAccording to a recent 4A’s and Arnold Worldwide Survey: 75
    • 90% of agency staff say they have to figure things out on their own due to the lack oftraining and 50% of talent in the marketing and communications industry feelundertrained and with no definable career path.The survey found that agencies are losing employees because they see little careerpathing, feel they’re learning on the job and find new employers that invest more intraining.Andrew Bennett, Global CEO of Arnold Worldwide, further reports on thislandmark 4A’s study on hiring, development and retention at the 4As Transformation2011 conference:The Problem – according to the recent 4A’s and Arnold survey on hiring,development and retention of agency executives: • 30% of the collective agency workforce will be gone within 12 months • 70% of employees would call a recruiter back if one reached out to them • 96% of employees surveyed said they feel they could easily get a job, in part because of the improving economy • 37% expect to stay one to five more years in the industry, 66% plan on staying more than five years in the business • 90% of employees said they learned by figuring out problems on their own. Conversely, 25% of execs said employees figured out their own issuesThe Solution - Benett’s 5 solutions to turn employee attitudes around: 1. Invest in talent in the early stages, such as schools 2. Promote cross training 3. Introduce new incentives, such as education financing or sabbaticals 4. Fix performance management 5. Engage employees in the career conversationThe Changing Role of Ad Agency RainmakersAn interesting ADWEEK article regarding the “Changing Role of Rainmakers”.Suffice to say that with a major paradigm shift for how ad agency new business is 76
    • acquired it also significantly impacts the role for those with the responsibility forbusiness development.Agency leaders say that the job has become more complex and therefore moredifficult to cast. As a result, searches for new business talent takes longer.“It’s just such a hard position to fill,” said Michael Zuna, New York managingdirector at Publicis Groupe’s Saatchi & Saatchi, whose new CMO, Benjamin Bittman,started last week. “The Mad Men-rainmaker days — that doesn’t happen anymore.It’s a tough job.”Why? These are some of the reasons given: • Because client reviews in recent years have generally become more complicated, given the expanding marketing needs of clients • The more common presence of search consultants • RFP-driven processes • Participation of procurement executives • Agencies generally are reinventing themselves for the digital age and how they market that to prospective clients and consultants has changed.“There are not a whole lot of people who have done this job in the past who know how to do it well now,”Avi Dan, a former new business executive at Euro RSCG, Berlin Cameron United andSaatchi who’s now president of Darling in New York.The agencies mentioned in this article are the large agencies. Large agencies acquirenew business differently than small-to mid-size shops. But I have no doubt small tomid-sized agencies new business development must change as well.“With over 50% of client relationships lasting less than two years and the averageCMO tenure 27 months, the role of new business at our agencies is more importantand a bigger focus than ever.Behind the closed doors of every shop there is a person or group of people whosevery jobs are to focus on the growth of the agency’s reputation, client base and skillset, not to mention revenue. But do you have the right person(s) in place to 77
    • successfully carry out your own agency marketing plans? ” Noelle Weaver,Advertising Age’s Small Agency Diary.Having a working knowledge of social media isn’t even an option any longer for anagency’s new business director. Social media is having a big impact on how agency’spromote themselves and how they are found online by their prospective clientaudiences.Here are 4 ways social media impacts ad agency new business: 1. A paradigm shift for how new business is acquired. According to a recent CMO survey, 80% of decision makers say they found the vendor, not the other way around. 2. SEO is now a critical part of new business strategy. According to Marketing Sherpa, 80-90% of business to business transactions begin with a search on the web. 3. An agency blog is a necessary component for marketing your agency. As necessary as it was for an agency to have a Website, it is now as relevant for them to have a blog. It becomes the gateway to the agency and puts a face to it. 4. The growth of new media mandates agencies participation. Social media is now mainstream, your agency’s credibility is suspect if it isn’t walking the walk, not just talking the talk.So before hiring someone responsible for your agency’s new business efforts, inaddition to the questions regarding their new business expertise, think about askingsome additional questions like these. How they answer will tell you what they reallyknow about social media. • Do you read blogs? Which ones? • Do you have a personal blog? What’s it about? • What are the social networks do you participate in? • Have you ever uploaded a video online? What program did you use to do it? • Besides making phone calls—how else do you use your mobile phone? • Have you ever registered a domain name? 78
    • • Do you use social bookmarks or tagging? • Do you use a feed reader of some sort? Which one? Why? • How do you use Twitter? • Do you have a Facebook page? LinkedIn?What you are looking for is participation, experience and credibility in social media. Attrition Rates In IndiaIndia has witnessed a constant growth in the BPO sector and this sector hascontributed consistently to the growth of Indian Economy. The Indian outsourcingindustry has its share in global outsourcing from 55% in 2010 to 58% in 2011. The 79
    • aggregate revenues of Indian IT-BPO industry is set to touch USD 100 billion in 2012and excluding hardware it is expected to touch USD 88 billion.One another interesting aspect being witnessed in this sector is the saturation of tier-Icities and the growth of tier-II and tier-III cities. As these cities start contributingmore to the outsourcing sector, the need for trained manpower will also go up. It isexpected that outsourcing industry would be employing nearly 2.8 million people in2012 directly and 8.9 million people indirectly. According to a study by NASSCOM,Tier-II cities would account for nearly 3 million BPO jobs by 2018.The BPO service providers though continue to expand to offshore locations, they arealso increasingly looking at tier-II and tier-III cities so as to tap the local talent. In astate like Karnataka, a Tier-II city like Mysore and Tier-III city like Shimoga has beencontributing immensely to this sector. India is known as an outsourcing destinationmainly because of its competitive cost proposition. The service providers are movingto these cities to leverage on this cost aspect and to neutralize the challenge of highattrition. The service providers are using different models to enter into tier-II and tier-III cities. For example, Infosys has tied up with two Bangalore based companies andworking through them to foray into these cities.As the service providers move to Tier-II and Tier-III cities, the main challenge thatthey are facing is the lack of skilled manpower. To address this issue and to give anew fillip to the growth of BPO in these states the BPO Association of India alongwith World BPO Forum is planning to train people in Tier-II and Tier-III cities. Theyare planning to give skills training in cities like • Trivandrum • Jaipur • Ranchi • Patna • Agra, etc •Bharatico Infomedia Ltd as part of its strategy to move to tier-II and tier-III cities issetting up a 4000 seater facility in Sahibabad. As part of the initiative of BPO 80
    • association and World BPO forum in providing skills training, Bharatico is setting upa training academy in Sahibabad. This will help them to have a feeder system for itsproposed new facility. This forum has also tied up with University of Rajasthan togive specialised skills training to 2500 students of the University for BPO sector.These students will be given placement assistance so as to get employed in MahindraWorld City in Rajasthan.It is widely believed that there is enough talent in tier-II and tier-III cities and what isneeded is proper grooming. As the clients are not bothered about whether an agent issitting in a tier-I city or tier-II city as far as the quality is not compromised, it makesbetter sense for BPO firms to look for greener pastures in these tier-II and tier-IIIcities.The information technology (IT) and healthcare sectors are witnessing the highestattrition rates among talented employees, making retention of critical manpowerresources a key challenge, says a survey.According to a study conducted by MyHiringClub.com, the IT and ITES sectors sawthe highest attrition rate of 23 per cent in the first quarter of 2010-11.In contrast, the banking and financial services sector witnessed an attrition rate of 18per cent, followed by healthcare (12 per cent), FMCG (11 per cent) and automobilesand manufacturing (11 per cent)."Attrition is a major problem with India Inc and it suddenly got increased in the firstquarter of the current fiscal year. The major reason behind (this) was that firms hadstarted paying more to newly hired employees."Beside pay packages, career level growth and relationships with supervisors are theother reasons for higher job attrition," MyHiringClub.com Founder and CEO RajeshKumar said.The main reason for switching a job is pay packages (21 per cent), followed by careerlevel growth (16 per cent), dissatisfaction with supervisors (15 per cent) and workpressure (14 per cent). 81
    • Employees with experience of up to five years had the highest attrition rate of 39 percent, while it was 27 per cent for those with 5-10 years of experience and 22 per centin the 10-15 years experience bracket.Interestingly, senior-level employees (experience more than 15 years) had a very lowattrition rate of 15 per cent."Entry level and young blood employees want to reach on higher pay packages assoon as possible to fulfill there need and avail good facilities of life."If they continue with the same job, they can get a 10-20 per cent salary hike, but ifthey switch jobs, they can easily get somewhere around a 25-40 per cent salary hikefrom current CTC. A higher attrition rate causes panic among employers and thedirect impact of a higher attrition rate comes in hiring costs," Kumar added.The survey was conducted by MyHiringClub -- an Asia and Gulf/Middle Eastrecruitment tendering platform -- among 11,800 employees and 249 employersbetween May and June this year.In Asia, organizations faced an overall attrition rate of 16% in 2005. Attrition rate was14% in 2004 and 10% in 2003.According to Hewitt’s Attrition and Retention Study Asia Pacific 2006, the no.1reason for this growing attrition rate is compensation unfairness. 21% of theorganizations who took part in the survey said that their employee left theorganization because they got offers from other organizations offering better paypackages. The no. 2 reason was less growth opportunities and no. 3 reason was rolestagnation.The study also revealed that the top employee retention strategy being used by theorganizations in Asia was to pay above the industry standards, providing opportunitiesto employees to learn new skills, and provide work life balance.From employee point of view 82
    • According to the employees, attrition at the professional/supervisor/technical levelwas the highest (39%) and lowest at the senior/top management level (1%approximately).The attrition rate has always been a sensitive issue for all organizations. Calculatingemployee turnover rate is not that simple as it seems to be. No common formula canbe used by all the organizations. A formula had to be devised keeping in view thenature of the business and different job functions. Moreover, calculating attrition rateis not only about devising a mathematical formula. It also has to take into account theroot of the problem by going back to the hiring stage.There is no standard formula to calculate the attrition rate of a company. This isbecause of certain factors as: • The employee base changes each month. So if a company has 1,000 employees in April 2004 and 2,000 in March 2005, then they may take their base as 2,000 or as 1,500 (average for the year). If the number of employees 83
    • who left is 300, then the attrition figure could be 15 percent or 20 percent depending on what base you take. • Many firms may not include attrition of freshers who leave because of higher studies or within three months of joining. • In some cases, attrition of poor performers may also not be treated as attrition. Calculating attrition rate:Attrition rates can be calculated using a simple formula:Attrition =(No. of employees who left in the year / average employees in the year) x 100Thus, if the company had 1,000 employees in April 2004, 2,000 in March 2005, and300 quit in the year, then the average employee strength is 1,500 and attrition is 100 x(300/1500) = 20 percent. Besides this, there are various other types of attrition thatshould be taken into account.These are: • Fresher attrition that tells the number of fresher’s who left the organization within one year. It tells how many are using the company as a springboard or a launch pad. • Infant mortality that is the percentage of people who left the organization within one year. This indicates the ease with which people adapt to the company. • Critical resource attrition which tell the attrition in terms of key personnel like senior executives leaving the organization. • Low performance attrition: It tells the attrition of those who left due to poor performance.Attrition CostsOne of the best methods for calculating the cost of turnover takes into accountexpenses involved to replace an employee leaving an organization. These expenses 84
    • are:A. Recruitment costThe cost to the business when hiring new employees includes the following sixfactors plus 10 percent for incidentals such as background screening: • Time spent on sourcing replacement • Time spent on recruitment and selection • Travel expenses, if any • Re-location costs, if any n Training/ramp-up time • Background/reference screeningB. Training and development costTo estimate the cost of training and developing new employees, cost of new hiresmust be taken into consideration. This will mean direct and indirect costs, and can belargely classified under the following heads: • Training materials • Technology • Employee benefits • Trainers’ TimeC. Administration costThey include: • Set up communication systems • Add employees to the HR system • Set up the new hire’s workspace • Set up ID-cards, access cards, etc.There are varied reasons for the same and the major reasons for attrition rateare(based on few sample study):- 85
    • • Money - 10%• Night shifts - 35%• Monotonous/boring job – 30%• Others - 25% Study Suggests Employees Leave Bosses, Not Jobs 86
    • Careful selection of employees and managers can have a huge impact on youremployee retention efforts and employee turnover costs at your organization.It has been said more than once, and for good reason, that employees leave theirbosses - not their jobs. A Florida State University study scheduled for full release inthe Fall 2007 issue of Leadership Quarterly confirms this. The study shows that 40%of employees work for bad bosses based on survey results. The reasons thatemployers score poorly are varied and many:• 39% of workers said their supervisor failed to keep promises.• 37% indicated their supervisor failed to give credit when due.• 31% said their supervisor gave them the "silent treatment" during the past year.• 27% report their supervisor made negative comments about them to other employeesor managers.• 24% indicated their boss invaded their privacy.• 23% said their supervisor blamed other to cover up personal mistakes or minimizeembarrassment.So what does this all boil down to? The effects of having bad bosses in yourorganization can be devastating. High turnover, poor employee morale, employeetheft, diminished customer service, substandard employee performance, lowerproduction, and an organizational culture of fear and mistrust can all be blamed inpart on poor bosses and managers.The costs of having poor managers and bosses can be incredible. Consider the cost ofemployee turnover, which is different for all industries and positions, but has beenroughly estimated at $15,000 - $17,000 per employee in low to moderately skilled 87
    • positions. Having a manager who drives potentially valuable employees from yourorganization can have a huge impact on your bottom line, and your customers.The Bad Boss VirusGreat people stay in bad jobs with great bosses.Great people leave great jobs with bad bosses.Most effective retention initiatives are as follows (each generation listed by priority rank): 88
    • Veterans (over age 65) 1. Additional bonuses or financial incentives (25%) 2. Additional benefits (health and pensions) (24%) 3. Flexible work arrangements (20%) - Corporate social responsibility (20%)Baby Boomers (ages 45-64) 1. Additional benefits (health and pensions) (26%) 2. Additional bonuses or financial incentives (23%) 3. Additional compensation (21%) – Strong leadership/organizational support (21%)Generation X (ages 30-44) 1. Additional bonuses or financial incentives (21%) 2. Additional compensation (19%) – Strong leadership/organizational support (19%) 3. Customized/individualized career planning (18%) – Succession planning (18%)Generation Y (under age 30) 1. Company culture (21%) 2. Flexible work arrangements (20%) 3. New training programs (19%) - Support and recognition from supervisors or managers (19%)JOB TENURE ACROSS DIFFERENTINDUSTRY SECTORS: 89
    • Employee Perceptions for Leaving and Employees’actual reason for leavingWhen do employees leave?The top 3 reasons for employees leaving are:1. Lack of opportunities for personal and career development2. Issues with working experience 90
    • 3. Salary & benefitsClosing:Retention efforts are usually started only when turnover has become an issue. Sincewe know it takes more money to replace an employee than to retain an employee,retention planning and programmes need to be proactive. Companies that understandthe importance of employee retention have a competitive advantage. INDIAN SCENARIO OF CURRENT EMPLOYEE RETENTION 91
    • OBSERVATIONS AND FINDINGS  Is your Company Facing the problem of attrition? Since how long? A) Yes, but the problem of attrition becomes serious from last 3 years.  What’s your organization attrition rate? A) Its 15%  Have you done employee satisfaction survey? What are the findings? A) Yes, we found that our employees are happy with the company  According to your survey what are the reasons for attrition? A) Competitors, better salaries,  How do u cope with attrition? A) By providing Training, personal development.  What are your retention strategies? A) Reward & Recognition  What is your company success rate in retaining employees? A) Its good, 80%  What are the HR suggestions to Top Management to reduce attrition? 92
    • A) Good Training Calendar, salary rise as per market standards, better career growth, healthy environment at work place What are the steps taken by Ur top management to reduce attrition? A) Good Training Calendar, salary rise as per market standards, better career growth, healthy environment at work place What are the difficulties you face to retain your employees? A) High salaries of competitors, unhealthy competition Does the company face with the problem of poaching? A) Not much, we have policies to reduce poaching How does u motivate your employees? A) With Concept better growth, personal development through training Which level of the organizational hierarchy results in leaving their jobs due to various reasons?? A) Middle Level What is your company’s attrition rate? Which method of calculating employee turnover do u use? A) No of the employees in the beginning of year/ no of employees in the closing year*100 93
    •  After various initiatives that the company has used, do you think that the attrition rate has come down? A) Yes, if you take correct steps, you can reduce the attrition. Any incident u would like to share concerned with retention? A) Yes, we convinced senior employee to take back his resignation Who is the one who has the responsibility to retain the employee? IS that the Hr manager or some other? A) Both HR and concerned Business Head Is there a different sub dept in HR for retention? A) As such we don’t have What is your company doing to improve retention? A) Career Development, Reward & Recognition, Which employee benefits are provided by majority of the bpo companies? A) Night Shift allowances, conveyance allowances, food coupons, incentives. transportation 94
    • CHAPTER – 8 95
    • CONCLUSIONCONCLUSION:  As to the customer, the employee serving them is the company, similarly to the employee, the manager is the employer.  Retaining the employees especially your best ones require more than Goodies and Gimmicks.  It requires understanding their needs which can drive satisfaction and high performance in them, and then use his knowledge to create an intrinsically motivating work experience, by doing this organization can become what we say in true words , Retention worthy. 96
    •  The HR professionals in BPOs are needed to be flexible in their approach of developing, motivating and retaining their talent pool. ERM(Employee Relationship Management) in BPO should be based on employee feedback received through employee surveys A BPO should implement the right mix of three Rs that will create a hard-to leave workplace. The BPO management should skillfully communicate BPO policies to their employee. CHAPTER – 9 97
    • APPENDICESQUESTIONNAIRE ON EMPLOYEE RETENTION STRATEGIES:Age:………………………. Gender: a) Male b) Female1). Do you think that employee retention helps the development of organization?a) Never b) Sometimes c) Most of the times d) All the times2. Does your company pay more attention to incentives and perks offered to you?a) Yes b) No3. You are encouraged to participate in training to improve your skills andCompetencies?a) Yes b) No4. Do you get the recognition that you deserve for your performance?a) Yes b) No5. What is your opinion regarding the work load?a) Very high b) High c) Average d) Low e) Very low6. Would you like to plan your further career in this organization?a) Yes b) No 98
    • 7. Have you ever suggested/will you suggest your friends/relatives to join thisorganization?a) Yes b) No8. Do you think that the implementation of three R’s (recognition, reward, respect)will increase employee retention?a) Never b) sometimes c) most of the times d) all the timeIndicate the extent to which each of the following statements you agree in yourorganization using the five point scale by marking a tick mark [√]9. Does your management come forward to support when you are facing with criticalsituationa) Strongly Disagree b) Disagree c) Neutral d) Agree d) Strongly Agree10. Work-life balance is supported by this organization.a) Strongly Disagree b) Disagree c) Neutral d) Agree d) Strongly Agree11. Your training program is always linked with your career development/growth.a) Strongly Disagree b) Disagree c) Neutral d) Agree d) Strongly Agree12. Organization treating you in a respectful way.a) Strongly Disagree b) Disagree c) Neutral d) Agree d) Strongly Agree13. There are no barriers of communication while you are communicating with yoursuperiora) Strongly Disagree b) Disagree c) Neutral d) Agree d) Strongly Agree14. Do you agree that you are rewarded periodically for your performance?a) Strongly Disagree b) Disagree c) Neutral d) Agree d) Strongly Agree15. Do you agree that employee retention is plays a vital role in the result ofproductivity?a) Strongly Disagree b) Disagree c) Neutral d) Agree d) Strongly AgreeIndicate the extent to which each of the following statements you satisfy in yourorganization using the five point scale by marking a tick mark [√] against thatcolumn.15. What do you feel about the working environment?a) Highly Dissatisfied b) Dissatisfied c) Neutral) d) Satisfied d) Highly Satisfied16. What is your opinion about the company rules and regulation?a) Highly Dissatisfied b) Dissatisfied c) Neutral) d) Satisfied d) Highly Satisfied17. Interpersonal relationships are encouraging in this organization.a) Highly Dissatisfied b) Dissatisfied c) Neutral) d) Satisfied d) Highly Satisfied 99
    • 18. The job you are performing is satisfactory…?a) Highly Dissatisfied b) Dissatisfied c) Neutral) d) Satisfied d) Highly Satisfied20. How is your relationship between your superiors?a) Highly Dissatisfied b) Dissatisfied c) Neutral) d) Satisfied d) Highly Satisfied21. Express your level of satisfaction regarding the welfare measures provided bythe Company.a) Highly Dissatisfied b) Dissatisfied c) Neutral) d) Satisfied d) Highly Satisfied22. Tell your opinion about major reasons for employees leaving (You can name morethan one)__________________________________________________________________________________________________________________________________23. What inspires you …………. Most in your organization?(You can name more than one)__________________________________________________________________________________________________________________________________24. Have you worked in any other organization previous to this company? [ ] Yes [ ] No If yes, for what reason you shifted to this company?__________________________________________________________________________________________________________________________________25. The awards / rewards you received in this organization:__________________________________________________________________________________________________________________________________26. Any Suggestions: ________________________________________________________________________________________________________________ 100
    • CHAPTER – 10BIBLIOGRAPHY 101
    • WEBSITES:www.wikipedia.comwww.humanresource.about.comwww.hrworld.comwww.hrindia.comwww.managementhelp.org.comwww.managementparadise.comwww.ehow.comwww.geeksgeezersgooglization.comwww.retention.naukrihub.comwww.statcan.cawww.timesofindia.indiatimes.comwww.citehr.comwww.google.comwww.bpoindia.orgBOOKS:Human Resource Management C.B.MemoriaResearch methodology C.R.KothariJournals, Newspaper and InternetAshwat ThapaL.M. Prasad.Research Methodology, Wishwa Prakashan Publishes, and second edition 2002.Cacanas, Zoe. “The Offshoring Craze: What to Think About Before You Jump.” 102
    • Human Resources Management International Digest 13 (March 2005): 36–38. 103