Stemming the Tide of Attirtion

Stemming the Tide of Attrition in India: Keys to Increasing Retention
Executive Overview
l e a d e r s h i p
i n s i g h t s

Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
KEY FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Recommendations for Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Address Practices That Affect Employee Engagement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Implement Effective Performance Management Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Develop Management Skills Through Coaching. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Create Structured Career Paths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Provide Development Opportunities for All Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Consider Culture Differences. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Nurture Employees Before the 3-5 Year Mark. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Highlight Organizational Commitment to the Community. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
About this Study. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Contributors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
The Right Management Story. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Table of Contents
A b o u t t h i s R e p o r t
This report is an executive-level summary of a
comprehensive talent management and HR practices study
conducted in 4th Quarter 2007 by Right Management
and Villanova School of Business. It is based on the
results of a survey of 4,811 individuals from 28 Indian
companies in five industries: Business Process Outsourcing,
Information Technology, Engineering and Manufacturing,
Pharmaceuticals, and Banking and Financial Services.
If you are interested to learn more about the study, please
contact your local Right Management office.

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S te m m i n g the T i d e of attritio n i n i n d iaExecutive Summary
© 2008 Right Management. All rights reserved.
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This research examines factors affecting high employee turnover in India and steps HR professionals
can take to increase retention. As a leader of HR practices in your company, we trust the findings and
analysis contained in the following pages will provide valuable insights and help guide you in your talent
management practices.
Right Management conducted this study in Q4 2007. One of the first comprehensive investigations of talent
management in an emerging market context, it spans data gathered from more than 4,800 employees in 28
Indian companies in five broad industry groupings.
This research is part of a series of thought leadership initiatives that Right Management conducts to ensure
we maintain our industry leadership responsibilities and, as a trusted partner, inform you about relevant and
timely trends related to your area of expertise.
I would like to thank each of you who participated in this groundbreaking study. Your insights and
experiences are of tremendous value to your peers throughout the world. My colleagues and I look forward
to continuing to equip you with the essential resources and solutions you need to excel in your profession.
Douglas J. Matthews
President and Chief Operating Officer
Right Management
What is the biggest and most intractable hindrance to growth faced by companies doing business in India
today? For many organizations, the answer is employee retention. The reason: As more organizations have
expanded their operations, their need for talent has increased significantly. But there isn’t enough skilled
labor to fill the demand—and when employees feel dissatisfied with their current job, they often jump ship
to join another organization waiting to offer something a little better.
Even during turbulent market conditions, retention still remains an issue. While some organizations are
restructuring or reducing their workforce, they will need to take extra care to retain top talent, because high
performers tend to look for other opportunities in downturns. In fact, the best employees usually remain in
demand during difficult economic times. In addition, it’s especially vital that organizations keep their best
talent to maintain business continuity. The good news for companies is that the situation may also pose an
opportunity to woo top performers they might not otherwise be able to attract and retain.
The bottom line, however, is that the retention problem has the makings of a potentially disastrous
situation. High attrition levels can impair an organization’s ability to build relationships with clients and to
run its operations efficiently. What’s more, multinationals may experience the ultimate irony: due to the high
cost of hiring and retraining, they may not be able to reap the cost savings that led them to India in the
first place.
While companies have started to identify ways to address the problem, they face many challenges. With
that in mind, Right Management and Villanova School of Business launched a major study in 4th Quarter
2007. One of the first comprehensive explorations of talent management in an emerging market context,
its goal was to determine variables leading to greater retention in India, surveying thousands of employees
from over two dozen companies across a variety of industries, including IT, business process outsourcing,
pharmaceuticals, and manufacturing. In the process, researchers pinpointed a number of key human
resource (HR) practices affecting retention and employee engagement.
A Word from the President EXECUTIVE SUMMARY
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Among other findings, the study uncovered a significant gap in basic management skills. For example,
respondents expressed dissatisfaction with their manager’s ability to provide support and constructive
criticism and to lead their teams effectively.
It also pinpointed employee engagement as critical to retention and highlighted four key HR practices—
performance management, professional development, manager support, and an organizational
commitment to a larger social purpose—as playing a particularly critical role in forging strong feelings
of engagement.
Employees who felt their companies offered clear prospects for immediate growth were more likely to
indicate a willingness to remain at their current employer. There was a strong relationship between retention
and a positive assessment of a company’s performance management systems. Surprisingly, compensation
was not as strong a predictor of intent to stay in an organization as popular wisdom might suggest.
For HR practitioners, these findings have clear implications for how to tackle the problem of attrition
in India. Specifically, organizations need to: (1) address HR practices that most directly affect employee
engagement; (2) develop management
and supervisory skills through training and
coaching; (3) create systems to support
career success that are appropriate to
the local culture; and (4) demonstrate an
organizational commitment to a larger
social purpose.
Most important is the matter of
management development. Only by
developing managers who are able
to provide effective career guidance,
constructive feedback, developmental
experiences, and appropriate growth
opportunities can companies
decrease attrition.
HR professionals in multinational
companies may need to take a somewhat
different approach from those in local
organizations. While common factors affecting recruitment and retention exist in both Indian and Western
cultures, there may be more subtle variations that need to be reflected in HR practices.
The message is clear: While employee attrition is a growing challenge for organizations in India employers
are not powerless. Indeed, there are many actions managers and their companies can take to retain talent—
and maintain a competitive edge in the marketplace.
Most industries and organizations in India today face a common formidable challenge: double-digit rates
of attrition among employees. Running at an average of 15% to 20% annually, turnover is as high as 50%
to 100% per year in some sectors. The reason has to do with a recent explosion of business growth. As
an increasing number of multinational companies have stepped up their presence, and local firms have
expanded their operations, the need for talent—and the opportunities for employees—have skyrocketed. At
the same time, there are not enough skilled, educated workers to fill the demand. Indeed, as many as 25%
of recent engineering graduates may still lack the interpersonal and language skills needed for employment.
Even when undergoing restructuring or reductions in workforce, organizations will need to continue
addressing the issue of retention. Your company may be particularly vulnerable to attrition during times of
change and should continue to engage and develop high performers to ensure they feel valued. In fact, top
performers remain in demand in all economic conditions, and it’s especially vital that companies keep their
best talent to maintain business continuity and service quality when managing an organizational change.
For those companies that want to increase the strength of their talent pool, this can also be an opportunity
to woo top performers they might not otherwise be able to attract and retain.
But for organizations trying to do business in India, low retention rates can have dire consequences—
ranging from poor customer service to slower than planned growth. In fact, high attrition can impair a
company’s ability to reap the rewards that attracted them to India in the first place.
The implications may be particularly severe for a handful of industries. In IT, for example, it is important
for clients to develop close relationships with employees working on projects. Frequent turnover means
continually building new relationships with replacements, thereby slowing down projects and harming both
efficiency and client trust. In manufacturing, high attrition results in the expensive and time-consuming
exercise of training recent hires about new technologies. In business process outsourcing, low retention
often eats into the very cost savings that initially led companies to enter the market.
Addressing this challenge—developing ways to attract, develop and retain employees—is of vital strategic
importance to the growing number of multinational companies doing business in India, as well as local
businesses. But, at the front line of these efforts is a company’s talent management process—in particular,
a handful of critical HR practices that have a profound impact on employees’ pride in and satisfaction with
their organization, and, in turn, on their intention to stay with an organization. (See Figure 1)
INTRODUCTION
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aliquis alissectem

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graphic 1
Drivers of
Retention
Social
Responsibility
Manager
Support
Professional
Development
Practices
Performance
Management
Practices
Intention
to Leave
Pride in
Organization
Satisfaction
with Organization
HR Practices
Employee Attitudes
and Beliefs
Retention
Years of Service, Age, Gender, Position, Education
Our findings suggest that HR professionals need to take a tailored approach with a keen eye for nuances
and points of differentiation. The practices that may work in traditional Western countries may need to be
tailored to fit cultural expectations and behaviors that are unique to India. Indeed, while common factors
affecting recruitment and retention exist in both Indian and Western cultures, there are several subtle
differences that will need to be reflected in HR practices.
Certainly, companies in India have started to take steps to address the problem. The primary focus thus
far has been on compensation—for example, awarding bonuses based on tenure. In addition, drawing
from best practices used in multinational companies, organizations have tried a wide range of innovative
methods, from giving employees the opportunity to travel to different locations, to creating management
development centers and introducing coaching. They are
also focusing on the first crucial 30 days of employment,
so that quick action can be taken to address potential
issues during the on-boarding process.
Much more needs to be done. To analyze the factors
leading to greater retention in India, as well as to
understand how best to address those issues and how
solutions might differ from practices used in developed
economies, Right Management embarked on this ambitious
study—one of the first comprehensive explorations of
talent management in an emerging market context. We
included more than 4,800 employees from 28 companies
in 32 separate operating entities across a variety of
industries, including IT, business process outsourcing,
pharmaceuticals and manufacturing. In the process,
researchers were able to pinpoint key factors leading to
higher retention and employee engagement. In addition,
management experts at Right Management have studied
the results to identify steps that organizations can take to
reduce attrition.
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delenim nos num
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The study uncovered a number of important factors that can lead to higher retention, as measured by
intent to stay for two or more years in an organization, as well as other critical issues to consider. The
absence of these retention factors, of course, tends to accelerate turnover. The data also revealed that
many organizations fall short when it comes to delivering on these areas.
These key findings include:
There is a gap in management skills. The study found that the employee’s manager plays a vital role in
the desire to remain at a company. Our results revealed a significant deficit in the skills exhibited by these
supervisors. Indeed, responses indicated that people are being put into management positions before they
are ready for the job. As a result, they may not be adequately prepared for their duties. For example, many
respondents expressed a lack of satisfaction with their manager’s ability to engage with their team. Only
47% of respondents agreed that their immediate supervisor was able to provide support and develop his or
her team effectively.
Employee engagement is the most important
variable contributing to higher retention. We defined
engagement according to a four-factor model, including
satisfaction on the job, commitment to the job and
organization, pride and advocacy. And our findings
showed that lack of engagement was by far the strongest
single factor leading to intent to leave an organization.
The lesson is clear: The more engaged an employee, the
likelier he or she will stay. Interestingly, employees who
were in the “Meet expectations” category of performance reported higher levels of engagement than those
in the “Exceeds expectations” category. The implication is that top performers have higher expectations for
their organizations, and organizations will need to work harder to retain them.
Specifically, our findings pinpointed a significant relationship between four important HR practices—
performance management, professional development, manager support, and an organizational
commitment to a larger social purpose—and a resulting feeling of pride and satisfaction with the
organization. Those two sentiments, in turn, are related to a stronger intention to stay, indicative of a higher
level of employee engagement. For example, of employees who were in the top third of those who rated
their company’s performance management practices highly, 56.1% had strong pride in the organization,
65.9% had strong satisfaction with the organization, and only 23.5% indicated a strong intention to
leave. On the other hand, of the bottom
third, only 17.3% had strong pride in the
organization, 11.1% strong satisfaction,
and 48.8% expressed a strong intention
to leave. Similar responses were made to
assessments of professional development
practices, manager support, and corporate
social responsibility. (See Table 1)
Response Placed
Person in Top 3rd
or Bottom 3rd of All
Respondents
Strong
Pride in the
Organization
Strong
Satisfaction
with the
Organization
Strong
Intention to
Leave
Performance
Management
Practices
Top 3rd 56.1% 65.9% 23.5%
Bottom 3rd 17.3% 11.1% 48.8%
Professional
Development
Practices
Top 3rd 52.0% 61.0% 18.7%
Bottom 3rd 16.8% 11.0% 52.3%
Manager Support Top 3rd 55.5% 63.0% 21.0%
Bottom 3rd 21.0% 15.3% 50.3%
Social
Responsibility
Top 3rd 65.8% 62.9% 20.6%
Bottom 3rd 10.4% 10.5% 47.6%
Pride in the
Organization
Top 3rd — — 19.7%
Bottom 3rd — — 47.5%
Satisfaction with
the Organization
Top 3rd — — 12.0%
Bottom 3rd — — 55.1%
TABLE 1
The Effects of
Organizational
HR Practices on
Employee Pride,
Satisfaction, and
Intention to Leave
Note: All results were statistically significant at the p < .001 level. N = 4,809. Responses in the bottom 3rd represent survey responses of
disagreement to a statement plus neutrality and slight agreement. The middle 3rd reflects responses of somewhat agree. The top 3rd
reflects strong agreement.
KEY FINDINGS
Top performers – those identified as
“exceeds expectations” have higher
expectations for their organizations than
those identified as “meets expectations.”
A gap in management skills
led many respondents to
express a lack of satisfaction
with their manager’s ability
to engage with their team.
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By considering employee perceptions as a useful index of actual company practices, we were able to
categorize the 28 companies into one of four clusters. Again, a positive rating of most or all of the factors
led to higher engagement. For example, in cluster #1, employees rated all four factors but one highly, had
high pride and satisfaction with their organization, and low intention to leave. On the other hand, in cluster
#4, employees gave three out of four factors a low assessment, reported low pride and satisfaction, and a
high intention to leave. (See Table 2)
Company
Information
Organizational
Practice Ratings
Employee
Affect
Intention
to Leave
Cluster 1
1 BPO, 1 BFSI,
1 IT, 2 Pharma
N = 884
Avg. Performance Management
High Professional Development
High Manager Support
Avg. Social Responsibility
High Pride
High Satisfaction
Low
Cluster 2
4 MFG, 2 BPO,
1 Pharma
N = 1291
High Performance Management
Avg. Manager Support
High Social Responsibility
High Pride
High Satisfaction
Average
Cluster 3
1 BFSI, 1MFG,
1 BPO
N = 260
Avg. Performance Management
Avg. Social Responsibility
Average Pride
Average Satisfaction
Average
Cluster 4
2 MFG, 3 BPO,
8 IT
N = 1621
Low Performance Management
Low Professional Development
Low Social Responsibility
Low Pride
Low Satisfaction
High
Note: All reported results reflect a significant multiple R’s (p < .001) and significant semi-partial correlations (p < .002, two-tailed)
comparing each company to the average of all companies. Industry classification labels are Business Process Outsourcing (BPO),
Information Technology (IT), Engineering and Manufacturing (MFG), Pharmaceuticals (Pharma), and Banking and Financial Services (BFSI).
TABLE 2
Company
Differences on
Workplace
Study Variables
Employees who see opportunities for growth stay for longer periods of time. Employees who felt
their employers offered clear prospects for immediate on-the-job growth were more likely to indicate a
willingness to remain at their current company. Those opportunities included strong talent management
practices for all employees, not just those chosen as high potentials. For example, of those respondents
who did not like the professional development practices at their companies, 52.3% indicated intent to leave
within 12 months vs. 18.7% in organizations that strongly supported those practices.
Effective performance management systems are key to employee retention. There was a strong
relationship between intent to stay and employees’ perception that their employers used performance
management systems as a tool for reward and recognition. Almost 50% of employees who did not support
or slightly supported the quality of their organization’s performance management system indicated an
intention to leave, compared to 23.5% who strongly supported the system. Most companies, however,
seemed to fall short in the area of providing performance management systems, as a minority agreed or
strongly agreed that their organization’s performance management practices reward and
recognize performance.
Compensation is less important than some other factors. Compensation was rated considerably lower
than other factors in rank order as a predictor of intent to stay and employee engagement. Indeed, while
the common perception is that pay is the key element in attracting and retaining talent in India, as well as
other emerging countries, our results showed a more complex array of factors played a significant role.
Most notably, they included the value of intrinsic rewards – the employees’ sense of progress, competence,
influence/choice and opportunity to do meaningful work. Compensation was not the most significant factor
in either retention or engagement, a phenomenon that held true across all industries. Among respondents
who indicated an intent to stay, only 30% were “very satisfied” with their compensation.
There is the most danger of attrition at the six month and three- to five-year marks. Respondents who
had been with their organizations for three to five
years indicated the most significant tendency to be
dissatisfied with performance management systems
and opportunities for development. That’s potentially a
highly expensive trend for employers. Indeed, there is a
learning curve of six months to several years for most
professionals, during which the organization generally
invests more in employees than they are able to give back. Only after that time period will a company
experience a return on its attraction and development costs. As a result, if employees leave at the critical
three- to five-year mark, employers will be less likely to make a return on their labor investment and, in fact,
must spend even more money to recruit and bring new hires up to speed. (See Figure 2)
Compensation was not the
most significant factor in either
retention or engagement.

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Graphic 2
Value and Cost
Curves for
Human Capital
Compensation and Training/
Development Costs
Plateaued
Value
Curve
Investment
A
6 Months
up to 3 Years
C is competitive $ offer
(C-E) may be as little as a 10% $
increase or valued PERK
E
C
$
D
3 to 5 years
B
Between
15 and 40 Years
Time
Return on Investment
Our findings have implications for the HR practices needed to increase employee retention. Most
important is the issue of management development. Only by developing managers who are able to guide
their employees, providing constructive feedback, developmental assignments, and appropriate growth
opportunities can companies decrease attrition. To be effective, organizations must define what qualities
and skills they need in their workforce and focus their resources on the most valuable segments of the
employee population.
We recommend that organizations take the following steps:
Address Practices That Affect Employee Engagement. The more engaged employees are, the more likely
it is they will stay with the organization. And in India, creating a more-engaged workforce requires focusing
on four key HR practices—performance management, professional development, manager-employee
relationships, and the organization’s commitment to socially responsible policies.
Improving these practices will require a comprehensive effort—providing training that shows managers how
to provide feedback, lead teams, and communicate effectively with employees, as well as implementing
organization-wide systems for employee development, review, and assessment. While many of the
recommendations that follow elaborate more fully on these challenges, one effective approach worth
noting here was recently used by Right Management, working with Philips Innovation Campus in Bangalore.
After an employee survey indicated that its managers needed to improve their own engagement with
their teams around their leadership and coaching skills. Philips Innovation Campus partnered with Right
Management to create an accelerated learning event to create impact with managers. Right Management
designed a exclusive learning event for about 120 people managers using Open Space methodology. The
program christened “PeopleSym” had speakers from varied fields including a tennis coach to draw parallels
from the sports field to the corporate world. This program was followed up with a focused program on
career management These follow-up workshops for managers covered such topics as nurturing employee
development and growth, mastering new listening skills, and learning how to encourage team-member
participation. The accelerated learning event and follow-up sessions helped in (1) increasing managers’
awareness to their own impact on employee engagement and (2) provided them with skills to manage
employee expectations in a competitive labor market.
Implement Effective Performance Management Systems. These systems should be designed to drive
accountability throughout the company, based on the organization’s overall vision and mission. In general,
that should start at the top, by having senior management define how each senior team member will move
the organization forward. Then, those objectives and goals should be cascaded throughout the business,
ensuring that everyone is working toward the same end.
At the same time, multinationals need to be sensitive to the local culture when setting up their performance
management systems or face a doomed effort. In India, particular attention needs to be paid to managers’
ability to give feedback. The reason: Many managers are resistant to provide criticism, fearing their
employees will leave for what they perceive to be greener pastures. Companies need to provide their
managers with coaching in how to provide feedback that is direct, constructive, and supportive of
individual development. They can also use a more inclusive process, with a joint setting of goals, ensuring
that employees feel ownership of the process, as well as more frequent informal reviews.
RECOMMENDATIONS FOR ACTION

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As part of the development process, organizations
also need to include employee assessments. The right
techniques can ensure that companies hire the right
people for the right jobs and that there is a critical
alignment between employee skills and behaviors, and
the organization’s strategy, culture and values. They will
also help to pinpoint those people with the potential to
move into management roles.
For example, partnering with the Ingersoll Rand Engineering Center, part of Ingersoll Rand, Right
Management worked with technical employees who were in the early stages of their career, to identify
individuals with the potential to become business and technical leaders. As part of the process, Right
Management worked with IREC to create a 360º degree online tool, manage the assessment and feedback
process, and provide consultative advice on mentoring and coaching. By doing so, they were able to find
the best candidates as early as possible to jumpstart the development process. In addition, employees were
assigned mentors, drawn from the ranks of global leadership, to provide support in implementing individual
development plans. This combination of leadership assessment and mentoring was recognized as one of
the top five global best practices at the company’s global forum on Talent Management and Employee
Engagement in Chicago, USA in May 2008.
Develop Management Skills Through Coaching. A key to improving retention lies in making sure
managers have the skills needed to motivate, guide, and assess their employees. The most effective tool
for achieving success is to provide coaching and to do so at each level. For employees who recently have
been put in management positions, there is a special problem: Due to the urgent need for managerial level
personnel, employees in India are often promoted to supervisory roles before they’re ready to assume such
responsibilities. In these cases, organizations need to focus on accelerating the ability to manage others
using coaching that covers a wide range of issues and competencies, including mentoring, managing
expectations, conducting performance reviews, reaching team objectives, and providing
effective feedback.
But, organizations also need to support more-experienced managers with coaching. Consider an effort
conducted in 2005 by Right Management for Infosys Technologies Limited, an IT company headquartered
in Bangalore, India. With revenues in excess of $4 billion and more than 100,000 employees, Infosys is one
of India’s largest IT companies. To help managers learn how to engage more effectively with their teams
and develop such skills as giving constructive feedback and career coaching, Right Management developed
“Performance Engagement Skills,” a coaching program for 108 selected leaders from across the Infosys
Development Centres. The 12 workshops included role-playing exercises, a development matrix based
on the Infosys competency model, and an interactive electronic refresher course with key concepts for
use after the program was over. These 108 managers were tasked with cascading the skills to over 1,000
managers throughout the organization for integration into their respective Development Centres.
As Nandita Gurjar. Group HR Head for Infosys, explains, “Performance coaching is a key capability required
in our senior managers to strengthen the high performance work ethic. Tools such as ‘appreciate inquiry’
and ‘coaching’ help sustain employee engagement throughout the year rather than a one-time intervention.
This helps us to focus more on the ‘how’ of getting results rather than just the results themselves.”
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consunum, strarbist in vis, perevis ines
host? Iliu si int, ut esena, Cuppliena,
Create Structured Career Paths. It is essential that organizations identify clear opportunities for personal
development and growth that go beyond the Western path, which typically involves climbing a career
ladder and mastering a set of skills before climbing to the next rung. Instead, Indian companies should
consider providing a less linear progression by giving employees opportunities to move laterally, do project-
based work, and/or take on additional responsibilities. This is a useful way of engaging employees while
providing development, but without promoting them to jobs for which they are not yet ready.
The bottom line: Organizations need to know their talent—understanding the skills required in various roles
throughout the organization and the status of talent currently employed. Without that knowledge, it is
impossible to foster an employee’s sense of career success.
Companies also need to understand the role of the manager in an individual’s career progression. This
is especially true for multinationals which may be accustomed to a more Western approach. In Western
cultures the expectation often is that the individual employee is accountable and responsible for his or her
career progression. The leader generally acts as mentor and advisor. In India, the manager is expected and
needed to play a more hands-on role in development, coaching and mentoring.
Provide Development Opportunities For All Employees. Although it is important to create opportunities
for different segments of the employee population, our results show that companies need to demonstrate
they are interested in the development of all employees. That includes those employees who perform in
the “meets expectations” category, the vast bulk of the workforce who keeps the organization going. Best
practices include providing stretch assignments, as well as implementing a development center through
which coaches can provide feedback and identify areas of strength.
Consider Cultural Differences. Multinationals entering India and local companies may face different
considerations. While, on the whole, organizations in India address similar challenges, there are subtle
differences between Indian and non-Indian firms. For instance, people assuming leadership roles who
are relocating to the country may lack the necessary knowledge of key cultural norms. They may not
understand that their role in an employee’s career progression must be more “hands on” than in Western
cultures or consider opportunities for a less-linear path. They may also not realize the vital importance of
coaching managers—who may be afraid to alienate direct reports by being too critical—in how to listen and
provide empathetic feedback and constructive criticism.
Multinationals may have to pay particular attention both to selecting and hiring people who are likely to
stay longer, as well as to practices that will help retain employees after they’ve joined. HR professionals in
multinationals who assume that they will increase retention simply by offering more money to employees
will be sorely disappointed.
Nurture Employees Before The 3 to 5-Year Mark. These are highly valuable individuals whose tenure means
they have a unique understanding of the organization’s culture. Many of the same practices discussed
above need to be tailored to employees’ cumulative experiences with the organization. Motivation and
organizational awareness are especially important. Employees with three-to-five years of tenure typically
have a more developed understanding of how the organization really operates and a clearer sense of
their motivations for taking on different tasks. This knowledge needs to be defined and incorporated into
developmental plans to have maximum meaning for employees and effectiveness for the organization.
Provide managers with
coaching in how to give direct,
constructive and supportive
developmental feedback.

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Highlight Organizational Commitment To The Community. Commitment to the community is highly valued
by many employees in India. Organizations should consider board level appointments or assigning senior
managers to oversee such activities. They can also provide opportunities for employees to participate in
initiatives and special interest groups around such issues as hunger and poverty, and create forums and
communities on company web sites for individuals involved in these efforts to share information. Such
activities should also be highlighted in annual reports.
Consider Tata Steel, a global firm that is part of the Tata
Group. Partnering with Right Management, Tata Steel
created a leadership competency framework, to help
identify high-potential managers to deploy in the company’s
development centers. Understanding the importance
employees placed on the organization’s commitment
to corporate social responsibility, they included such
competencies as “Shows sensitivity and genuine concern
for the eco system” in the mix. As a result, they were able to assess the potential of managers around these
dimensions and pinpoint those who could be groomed for more-responsible roles. One outcome: Tata Steel
ranked highest of companies in the study on having a larger purpose.
The issue of employee attrition in India is challenging and has far-reaching economic implications if
organizations do not have the skilled talent they need to operate effectively. Whether they are growing,
restructuring, or reducing their workforce, companies still need a strong talent pool to help meet their
business objectives. But the problem is not insurmountable. Our findings show that, with the right HR
practices in place, there is a great deal organizations can do to improve the retention and engagement of
their employees in India. That means offering top-notch development opportunities, fostering a sense of
career success via intrinsic rewards, and institutionalizing effective performance management systems, as
well as providing coaching to managers.
Other steps can also be taken. For example, there is the matter of education. Many engineering students
graduate still needing further development and experience to make an immediate contribution in the
workplace. Companies have an opportunity to partner with Indian universities to improve the quality of
education, thereby increasing the pool of available entry-level talent. Already, the National Association of
Software and Services Companies (NASSCOM) has developed a standardized assessment of employability
for engineering and computer science graduates. The association has also presented to the Ministry of
Human Resources Development a proposal to start 20 new Indian Institutes of Information Technology over a
five-year period.
Organizations will not succeed unless they
tailor whatever they do to the unique cultural
characteristics of India, a message especially
important to multinationals. Applying Western-
style management practices to the problem of
retention may result in exacerbating the situation.
By implementing a clear-cut program to address
attrition levels, and doing so with sensitivity to the
larger culture, companies can reduce turnover.
There is no quick fix to the retention crisis. To the contrary, addressing these challenges requires that
companies make significant investments in employee development—and adopt a long-term view. Ultimately,
those organizations willing to go the extra mile will find the rewards to be substantial.
CONCLUSION
In India, managers must
play a hands-on role in the
development, coaching and
mentoring of employees.
Multinational organizations will not
succeed unless they tailor their HR
processes to the unique cultural
differences in India.
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uisiscillan erat.
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This report presents key findings and insights of a rigorous study of talent management and HR practices,
employee satisfaction, and retention in India conducted in Q4 2007 by Right and faculty at the Villanova
School of Business. The project involved a comprehensive survey of 4,811 employees of 28 Indian
companies in five broad industry groupings: Business Process Outsourcing (BPO), Information Technology
(IT), Engineering and Manufacturing (MFG), Pharmaceuticals (Pharma), and Banking and Financial Services
(BFSI). The companies included both Indian subsidiaries of foreign firms and indigenous firms.
Each company identified a sponsor who, in collaboration with Right Management, oversaw the study.
A random sample of employees was identified by the sponsor who then invited them to participate in
the research. The size of each company’s random sample was determined by the sponsor with the goal
of obtaining at least 40 responses for every ‘cell’ they might want to examine (e.g., different functions,
age groups, gender, or geographic unit). Employees were directed to the survey by an email from
LearningBridge.com, a web-based survey design firm.
Tony Bhattacharjee. At Right Management Mr. Bhattacharjee has been involved in a variety of projects,
including organizational structure design for a multinational software company and a leadership
development workshop design for a global logistics company. He received his Bachelor of Engineering in
automobile engineering from Shivani University and Post Graduate Degree in Personnel Management from
the International School of Business & Media, Pune.
Jonathan Doh, Ph.D. Dr. Doh is the Rammrath Chair in International Business, founding Director of the
Center for Global Leadership, and Associate Professor of Management at the Villanova School of Business.
He teaches, does research, and serves as an executive instructor and consultant in the areas of international
strategy and corporate responsibility. Dr. Doh is author or co-author of more than 60 referred articles and
chapters and co-author or editor of five books, including Multinationals and Development (Yale University
Press. 2009), and International Management: Culture, Strategy and Behavior (McGraw-Hill/Irwin, 7th edition,
2009), the best-selling international management text. He has been a consultant or executive instructor to
ABB, ADP, Anglo American plc, China Minsheng Bank, Deutsche Bank, the Government of Thailand, HSBC,
Medtronic, SCG Group, Shanghai Municipal Government, and Deloitte Touche, where he served as senior
advisor to the Global Energy Resource Group. He received his Ph.D. from George Washington University in
strategic and international management.
Michael Haid. Mr. Haid is Senior Vice President, Global Leader for the Attract & Assess Center of Excellence
for Right Management. Mr. Haid directs a team focused on the area of individual, team and organizational
assessment. Combining his consulting expertise with his prior global leadership experience, Mr. Haid ensures
that service quality, along with sound delivery methodology, form a solid foundation for every client’s
Attract & Assess engagement. He earned an M.B.A. in Finance and Marketing, Beta Gamma Sigma, from
Duquesne University, a B.A. in Sociology from Colorado State University, and a degree in Applied Business
Programming from the School of Computer Technology.
J. Karthikeyan. Mr. Karthikeyan is Vice President Consulting Services and Practice Leader for the Engage and
Align for Right Management in India. He has more than 16 years of experience in consulting and operational
HR, with a focus on restructuring, organizational transformation, and leadership and organizational
assessment. At Right Management, Mr. Karthikeyan’s consulting experience has focused primarily on
automotive, IT and business process outsourcing, and utilities and logistics industries. He has a Bachelor of
Technology from National Dairy Research Institute and Masters in Personnel Management from Tata Institute
of Social
Sciences, Mumbai.
Priyanka Malhotra. Ms. Malhotra is a Project Leader and a Product Manager for the Engage and Align
Practice for Right Management in India. As Project Leader, she has led engagements in such areas as
leadership development, talent management, and change management. She received a B.A. from University
of Delhi and a Masters in Psychology with a specialization in Organizational Behavior from the University of
Delhi.
Sampurna Sonowal. At Right Management, Ms. Sonowal has worked in Career Transition Services for
outplacement candidates, as well as the design and audit of HR processes. She received her Masters Degree
in Psychology (specialization in Organizational Behavior) from North Campus, Delhi University, India.
ABOUT THIS STUDY CONTRIBUTORS

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Stephen A. Stumpf, Ph.D. Dr. Stumpf is professor of management at Villanova School of Business and he
holds the Fred J. Springer Chair in Business Leadership. Dr. Stumpf has served as interim dean of VSB
and as its Management Department Chair. Before joining VSB, Dr. Stumpf was chief learning officer of
professional development at Booz|Allen|Hamilton where he worked with clients in the creation of corporate
universities, and designed and delivered leadership programs for the firm’s client staff, principals, and
partners. Prior to this, he was dean at The University of Tampa, a Fulbright Scholar in Brazil, and professor
at the Leonard N. Stern School of Business at New York University. He received the David L. Bradford
National Award for outstanding teaching from the Organizational Behavior Teaching Society and the S.
Rains Wallace Award from the American Psychological Association for his research. He has served as
adjunct professor in the Graduate School of Business Administration-Zurich, Switzerland, EMBA program.
Dr. Stumpf is often a speaker and facilitator on the topics of leadership and relationship building. Dr.
Stumpf has authored and/or edited 10 books, 15 in-basket simulations, and 136 journal articles including
The Ultimate Consultant: Building Long Term, Exceptional Value Client Relationships, Career Development
International, 21st-Century Leadership: Redefining Management Education, Strategy & Business, 1999;
Learning Theory in the Practice of Management Development, Quorum Books. Dr. Stumpf earned a B.S.
degree in chemical engineering from Rensselaer Polytechnic Institute, an M.B.A. from the University of
Rochester, and a M. Phil. and Ph.D. in organizational behavior and industrial psychology from New York
University.
Walter G. Tymon, Jr. Ph.D. Dr. Tymon is an Associate Professor of Management and a past Chair of
the Management Department in the Villanova School of Business. He has published numerous articles
and chapters on motivation, engagement, careers, and strategic management. His work has appeared
in such publications as the Academy of Management Review, Research in Organizational Change and
Development, Career Development International, Journal of Business Communication, and the Journal of
Executive Education. His employee development publications have been used throughout the United States
and internationally, and have been translated into a number of languages. Among his professional activities,
he currently teaches strategic management in the Villanova School of Business Executive MBA program. He
received his Ph.D. in Business Administration from Temple University.

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The Right Management Story
Right Management is the leading global provider of integrated consulting services and solutions across the
employment lifecycle. We help our clients maximize the return on investment in their people, while assisting
individuals to achieve their full potential.
The world of work is constantly changing; our services and solutions address the organizational and
people issues that result from this change. During events such as mergers and acquisitions, restructuring,
leadership changes, deregulation, new technology introductions, or new strategy implementations, Right
Management helps you understand what is happening to your organization; assists in designing customized
solutions; and helps prepare individuals to embrace their personal, business and organizational future.
Our success in customizing appropriate solutions to our clients comes from our ability to draw on the
expertise of our people, as well as proven processes, methodologies and tools from any or all areas of the
employment lifecycle.
For over 25 years, business people around the world have chosen to work with Right Management because
of our expertise, flexibility, global access and local knowledge, combined with a credible professional
relationship based on trust and responsiveness. We dedicate ourselves to helping our clients “manage the
human side of change” in ways that produce powerful, positive and lasting results.
www.right.com

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