Advance Innovation Group - Lean Six sigma project on reducing attrition


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This Lean Six Sigma Project done by student from Advance Innovation group which is posted to provide for benchmarking and best practices sharing purposes.

This is a Student project on Reducing Attrition.

Additionally, it is advisable that you also visit and subscribe Advance Innovation Group Blog ( for more Lean Six Sigma Project, Case Studies on Lean Six Sigma, Lean Six Sigma Videos, Lean Six Sigma Discussions, Lean Six Sigma Jobs etc.

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Advance Innovation Group - Lean Six sigma project on reducing attrition

  1. 1. Provide on-timequality solutionsManpower Quality Technical knowledgeControlAttritionDiscipline•Reduce Absenteeism•Improve PerformanceIntroduceFinal Q-checkDLCMultiplereviewsCTSCTQsCTPsProvidingresources(Library, etc.)Training(arranginginternal/externaltrainingDefine : Identifying CTQs
  2. 2. Project CharterBusiness Case- XYZ is leading BPO since last 10 years andsupporting various services like IT, customer service, FMCG, telecometc. In XYZ at XXX process is facing the problem to high attrition ratefollowing problems are faced by the organization1. The communication channels break2.Information transfer is incomplete3. Replacement is not always available4. Replacement demands training and timeThese problems dissatisfy the customers thereby slowingdown the business momentumChampion: Sanjay singhBlack belt: GeetaMember: Salim, Prem, SheetalHR personnel:HR executive : To provide data.HR head: Solve constraints and supportmake improvements.Problem Statement- With the help of data analyzed of last 3 months.Attrition rate is very high as comparison to client SLA. It causes hugecustomer dissatisfaction and are paying penalty for the sameGoal Statement-To reduce Attrition to 1% by 5thDecemberIn Scope :Reducing Attrition at XXX process of XYZ BPOOut Scope- Everything ElseMilestones Target Date Actual dateD till 15 OctM 16 Oct - 30 OctA 1 Nov - 15 NovI 16 Nov - 05 DecC 06 Dec - 20 Dec
  3. 3. RASICResponsibleRoles VP Manager AM memberApproveSupportInformConsultActivityProject Tile A R I ISignoff Date A R I ICriterion for Project Selection A R I IProject Charter I A R IProject Planning A R I ICommunication Plan A R I IVOC I I A RIdentifying CTQ characteristics A R I ISIPOC I A R IData collection plan for Y I A I IOperational definition I A R I
  4. 4. CTQ TreeHigh levelCustomer needfrom VOB AttritionHigh levelCustomer needfrom VOB AttritionCTQsProject Y : ReduceAttrition from 3.43%to 1%Project Y : ReduceAttrition from 3.43%to 1%Project Y Metrics :AttritionProject Y Metrics :AttritionDefect Definition : IfAttrition is greaterthan 1%Defect Definition : IfAttrition is greaterthan 1%Target : 1%Target : 1%
  5. 5. SIPOCAgents selected ininterviewGo though trainingGo for certificationHit on floorCustomer repliedback on FAQ askedAgentsI E Joined theOrgIETrainingconductedIEAgentAgentTrainingconducted
  6. 6. Data Collection PlanKPI Operational Definition Defect Def Performance StdSpecification LimitOpportunityLSL USLReducing Attrition rateAn employee is assumed to have left theorganization w.e.f his/ her date ofrelieving. The replacement is generallysearched for when his resignation letteris accepted by HRIf Attrition isgreater than 3%Attrition rate shouldbe less than 3%NA 1%One (Attrition)KPI Data Type Data Items NeededFormula to beusedUnitPlan to collect DataPlan tosampleWhat Databaseor Container willbe used torecord this data?Is this anexistingdatabaseor new?If new, Whenwill thedatabase beready for use?When is theplanned startdate for datacollection?ReducingAttrition rate DiscreteNo of Employeesjoined and resignedfrom theorganisationNo. of personsleft/ Number ofemployeesPercentage Excel Existing NA NA NA
  7. 7. Data Collection
  8. 8. Validate Measurement SystemLogical ValidationLogical Validation ::The data is released by HR recruitment executiveand authenticated by HR head.Data needs no further validation.
  9. 9. Establish BaselineDPMODPMODefect per million opportunities :Average number of attrition in a month = 3.43DPMO = 3.43*1,000,000 / 100= 34,300 ppmYieldYield = 96.57%
  10. 10. Establish BaselineCalculating Sigma level* :Calculating Sigma level* :Zlt = 1.82Zst = 1.82 + 1.5 = 3.32Zbest = 3.53 (June month- 2.11%)Zworst = 3.04 (March month- 6.19%)Zgoal = 3.82 (Goal is to achieve 1% rate of attrition)
  11. 11. Process Map
  12. 12. Function Deployment MatrixCustomerKeyProcessOutputVariableResignationTerminationCustomerPriorityRank # >>9 7S. NoKey ProcessInput VariableRank % Rank1 8 0 72 16.712 9 0 81 18.793 7 0 63 14.624 6 0 54 12.535 1 0 9 2.096 4 0 36 8.357 1 0 9 2.098 1 0 9 2.099 0 5 35 8.129 0 9 63 14.62Stressful environmentRelationship with managerAssociation TablePoor growth prospectsPoor CompensationLong Working hoursLocation of the facilityNon performanceIntegrity violationPoor infrastructureSpouse relocatingLessPotentialX’s
  13. 13. Potential XsList of Potential Xs* :• X1 : Poor growth prospects• X2 : Poor Compensation• X3 : Long Working hours• X4 : Stressful environment• X5 : Integrity violation
  14. 14. Analyze : Data
  15. 15. Analyze : DataTime Series Plot Attrition12 133018 171005101520253035MayJuneJulyAugustSeptemberOctober# AttritionsTime Series Plot Termination1215020123456MayJuneJulyAugustSeptemberOctoberTerminationsTime Series Plot Resignation11 11291317805101520253035MayJuneJulyAugustSeptemberOctoberResignationsData suggests:Maximum resignations have happened inJuneMaximum terminations in AugustMaximum attrition in July
  16. 16. Analyze : DataEmployees/ Attritions and NewRecruitments94.2%3.2%2.6%#Employees#Attritions#NewRecruitmentsResignations versus Terminations89.0%11.0%ResignationsTerminationsInvestigations revealed that since increments and promotions aredeclared in July, the dissatisfied employees tend to resign.Some other dissatisfied employees were caught doing unfairactivities (accessing restricted sites in a group) and were terminatedin August.
  17. 17. Analyze : DataParetosuggests thatmaximumresignationsoccur for L1ResignationsL1 L2 L1 L3 L2 L1 L2 L2 L1 L1 L1 L1 L1 L2 L1 L1 L2 L4 L2 L2 L1L1 L1 L1 L1 L1 L2 L1 L1 L1 L2 L1 L2 L2 L1 L2 L3 L1 L1 L1 L1 L1L1 L1 L1 L1 L3 L1 L1 L1 L1 L1 L1 L1 L2 L2 L1 L1 L1 L1 L1 L1 L1
  18. 18. AnalyzeX1 : Poor growth prospectsX1 : Poor growth prospectsThe team managed to contact the HR executive ofthe competitors and got the following data of the averagenumber of years taken to be promoted to the next level:Index RAT Competitor 1 Competitor 2Level 1 to Level 2 2 1 1.5Level 2 to Level 3 2 2 2Level 3 to Level 4 3 3 2
  19. 19. AnalyzeX1 : Poor growth prospectsX1 : Poor growth prospectsLevel 1 to Level 2 Promotion Time Data was collected forcomparison.Applying 2- sample t test to compare the promotionsNull Hypothesis Ho : µRAT = µCompetitor1Alternate Hypothesis Ha : µRAT ≠ µCompetitor1P<0.05, test shows thepromotion is different fromthat of the competitor 1
  20. 20. Analyze• Applying 2- sample t test to compare the promotions• Null Hypothesis Ho : µRAT = µCompetitor2• Alternate Hypothesis Ha : µRAT ≠ µCompetitor2P<0.05, test showsthe promotion isdifferent from that ofthe competitor 2
  21. 21. AnalyzeX2 : Poor CompensationX2 : Poor CompensationComparison of compensation with the competitorThough the average compensation of the organization is highcompared to the competitors, the maximum attrition occurs inlower levels where during initial years of employment wherethe compensation is less.Position RAT Competitor 1 Competitor 2Level 1 1.5 2.1 2.25Level 2 4 4.5 4.25Level 3 7.5 7 7.2Level 4 12 11 11.25Average 6.25 6.15 6.24Average Annual Gross Compensation/ EmployeeNo. ofResignations
  22. 22. AnalyzeX3 : Long Working hoursX3 : Long Working hoursThe IN- time and OUT- time of employees was recorded andanalyzedEmployeeCode IN- Time OUT- Time DiffE1021 8:15 16:50 8:35E1024 8:10 19:20 11:10E1054 7:10 16:50 9:40E1056 8:15 19:30 11:15E1057 8:20 20:10 11:50E1086 8:15 21:07 12:52E1124 9:05 22:02 12:57E1145 8:15 16:50 8:35E1243 8:10 18:06 9:56E1245 8:17 20:40 12:23E1246 8:15 17:50 9:35E1252 8:40 20:04 11:24E1257 8:07 16:50 8:43E1275 8:15 21:50 13:35E1287 8:15 17:55 9:40Average 8:14 19:03 10:48AverageIndustrystandard is9 hours
  23. 23. AnalyzeThe Time format was converted into Numeric (no. of days)EmployeeCodeAvg IN- Time Avg OUT- Time Difference DaysE1021 8:15 16:50 8:35 0.358E1024 8:10 19:20 11:10 0.465E1054 7:10 16:50 9:40 0.403E1056 8:15 19:30 11:15 0.469E1057 8:20 20:10 11:50 0.493E1086 8:15 21:07 12:52 0.536E1124 9:05 22:02 12:57 0.540E1145 8:15 16:50 8:35 0.358E1243 8:10 18:06 9:56 0.414E1245 8:17 20:40 12:23 0.516E1246 8:15 17:50 9:35 0.399E1252 8:40 20:04 11:24 0.475E1257 8:07 16:50 8:43 0.363E1275 8:15 21:50 13:35 0.566E1287 8:15 17:55 9:40 0.403The Time 0.403 Days is considerably higherthan Industry Average of 3.75.Long Working Hours was considered as a Vital X
  24. 24. AnalyzeX4 : Stressful environmentX4 : Stressful environmentThe factor is accounted for based on thefeedback by employees to HR which includedcomplaints against their immediate boss andsometimes against the clients and their behavior.Conclusion : It is a subjective factor and needsimprovement to reduce attrition.
  25. 25. AnalyzeX5 : Integrity violationX5 : Integrity violationThis is the cause responsible for terminations inthe organization. It includes:•misuse of infrastructure,•accessing restricted sites,•stealing,•over- issuing office stationery,•producing fake bills.Conclusion : Terminations account for 0.38% of theaverage of 3.43% in a month. To achieve the goal of 1%,terminations should also be reduced.
  26. 26. AnalyzeList of Vital Xs:• X1 : Poor growth prospects• X2 : Poor Compensation• X3 : Long Working hours• X4 : Stressful environment• X5 : Integrity violationResignationsTerminations
  27. 27. ImproveX1 : Poor Growth ProspectsX1 : Poor Growth Prospects• HR decided to reduce the promotion period of level 1 to level 2from an average of 2 years to 1.5 years as maximum resignationsoccurred during the initial years of service. Policy was made andapproved from the management.• HR started conducting awareness programs on the growthprospects an employee could expect in the organization andcomparison with the competitors. Frequency : Once for allemployees, During Induction of new recruits; Responsibility : HRMgr.
  28. 28. ImproveHR created policies for the employees in consultation with themanagement to• Identify new growth opportunities,• Give additional responsibilities and rewards henceforth,• Encourage inter- departmental transfers through internal jobpostings, and• Promote up-gradation of skills through training.Policy was made by HR and approved by the management
  29. 29. ImproveX2 : Poor CompensationX2 : Poor CompensationRaising Compensation could be an extra cost to the organization.Hence, HR decided to restructure the compensation across theboard during the next half- yearly Performance review in Dec,11. The compensation at RAT was as competitive as its competitorsbut since the maximum resignations occur for level 1 and then level2, the restructuring was done as shown
  30. 30. ImproveAvg. % of Tot. Avg. % of Tot. Avg. % of Tot. Avg. % of Tot.Level 1 1.5 6% 2.5 9% 2.1 9% 2.25 9%Level 2 4 16% 5.1 18% 4.5 18% 4.25 17%Level 3 7.5 30% 8 28% 7 28% 7.2 29%Level 4 12 48% 12.6 45% 11 45% 11.25 45%Total 25 100% 28.2 100% 24.6 100.0% 24.95 100.0%PositionBeforeAverage Annual Gross Compensation/ EmployeeBefore After BeforeRAT Competitor 1 Competitor 2HR restructured the compensation for the nextPerformance review in December, 11 which rationalizedthe % compensation for all levels as per the benchmarkindustry. Management approved the proposal.
  31. 31. ImproveX3 : Long Working HoursX3 : Long Working HoursBefore : After conducting one-to-one sessions with employees, it was foundthat employees had to stay after office hours or work on weekends regularly.Reasons for this were:• Excess work due to non- uniform work distribution• Late teleconferencing with clients• Avail extra benefits provided by the company such as claiming money forcommuting etc.• Impress the immediate manager who works for late hours.
  32. 32. ImproveAfter :• First, each individual was made to list down his job responsibilities.Then, HR interviewed the middle/ upper management to gauge non-uniformity in work load. Next, the managers were asked to uniformlydistribute the work load amongst the employees.• A new communication system was installed using which employeescould attend conference calls from home to avoid night stays• Leverage to come late to the office the next day was given to employeeswho stayed late nights.• HR circulated a note whereby any L1/ L2 employee who wishes to stay backafter the office hours or work during weekends should get an approval fromhis immediate manager and inform the HR department
  33. 33. Improve34X4 : Stressful EnvironmentX4 : Stressful EnvironmentBefore :This factor was revealed during a survey conducted by HR with theemployeesAfter :The survey which was conducted especially for the project was made aregular feature with the frequency of once in 3 months where eachemployee was interviewed to check their satisfaction level.Exit Interviews and feedback sessions were introduced.HR was made responsible to solve each of the raised issues from theinteractions and monitor the proposals regularly.
  34. 34. ImproveBefore :Integrity violations suchas• misuse of infrastructure,• accessing restricted sites,• stealing or sharingconfidential information,• over-issuing office stationery,• producing fake bills etc.caused terminations in theorganization.After :Security department along with theIT department:– banned access to the restrictedsites,– disabled and removed CD andfloppy-disc drives from PCs,– employees were made to sign anIntegrity policy agreement to makethem aware of the consequences ofindulging in any integrity-relatedactivityHR issued a note to all employeessaying all the bills and vouchersneed to be approved by theimmediate manager and also HRbefore they got cleared.X5 : IntegrityX5 : IntegrityViolationViolation
  35. 35. ControlControl Plan :Each of the Xs for which mistake- proofing was notdone, were controlled and responsibilities wereassigned to the concerned persons.
  36. 36. ControlX1 : Poor growth prospectsX1 : Poor growth prospects• HR started conducting awareness programs• Frequency :– Once for all employees,– During Induction of new recruits– In case of change in the policies– Introduction of any new policy• Strength : 20 or less employees in one session• Material : Distribution of handouts and information through e- mails
  37. 37. ControlX3 : Long Working hoursX3 : Long Working hoursFirst, each individual was made to list down his job responsibilities.Then, HR interviewed the middle/ upper management to gauge non-uniformity in work load. Next, the managers were asked to uniformlydistribute the work load amongst the employees.Frequency : Once/ quarterResponsibility : HR manager and respective department heads
  38. 38. ControlX4 : Stressful environmentX4 : Stressful environment• Employees were interviewed to check their satisfaction level.– Frequency : Once/ Quarter– Responsibility : HR manager• Exit Interviews and feedback sessions– Frequency : When an employee is relieved– Responsibility : HR manager
  39. 39. Control : I- MR Chart
  40. 40. Final StepsThe final steps were executed in the ProcessThe final steps were executed in the Process• Process Instructions• Impart Training• Preventive Maintenance• Documentation• Translation
  41. 41. Post - Completion• Project was transferred to the process owner (HR).• The project completion was authenticated by the customerfollowed by a project presentation by the team to allstakeholders and Six Sigma team.
  42. 42. Thanks