Employee Retention in ITes Industry: A Case Study of North India

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1 2010 I Vol. 1 I Issue 1 I 1-19 Available online at RESEARCH ARTICLE Employee Retention in ITes Industry: A Case Study of North India Sharma GD 1 ( ), Mahendru M 2, Singh S 1 1 Department of Management Studies, BBSB Engineering College, Fatehgarh Sahib, Punjab, India 2 Department of Management Studies, Gian Jyoti Institute of Management, Mohali, India ( ) Corresponding author; gagan.is.sharma@gmail.com Abstract The retention of knowledge worker has become extremely critical for the success of a business organization in the present scenario especially in the service sector with lot of people interface. HR department has to play a key role in designing the policies, practices and strategies, which can enable an organization to retain the human resources contributing significantly to the business. The present study examines the phenomenon of Employee Retention in the ITeS sector in the Tri-City of Chandigarh, Mohali and Panchkula in order to develop appropriate strategies, which can help the organizations in this sector to retain their valuable talent. The major objectives of the research are to study: employee retention strategies followed in the ITeS industry in the Tri-city of Chandigarh, Mohali and Panchkula; significance of select HR practices in the attainment of job satisfaction amongst the employees of the industry; extent of employee attrition prevalent; significance of individual, organizational and industry related factors in determining employee retention; correlation between job satisfaction and employee retention; prevalence of Talent Management System and identify different strategies adopted to reduce the monotony of work for the executive positions. The t-test, chi square test and correlation test is used for evaluation of the data. Keywords: Employee Retention, ITeS sector, Job satisfaction, Employee attrition, T-test, Chi square test. Scientia Publication 2010, Received on: ; Revised on: ; Accepted on: Introduction The competencies and skills of knowledge worker have become extremely vital competitive advantage in the present day business scenario. All the professionally managed organizations make an all-out attempt to acquire, retain and develop the talent pool that they encompass. Importance of human resources has increased manifold, firstly because of their scarce availability and secondly due to an increasing demand by the growing number of business units seeking quality talent. In this context the ability of an organization to keep hold of its vital and skilled manpower becomes extremely critical. HR department has to play a key role in designing the policies and practices which can enable an organization to retain the human resources contributing significantly to the business. Employee Retention Employee Retention refers to retaining the employee in the company. This is done either directly or indirectly in the company. An employee can be directly retained when a company signs a legal Bond with the employees for a certain period of time. This might reduce the attrition rate to an extent but increases the Recruiting rate of keeping the position vacant for a long time. Res Manageria Nov.-Dec Vol. 1 Issue 1 Sharma et al. 1

2 Employee retention involves taking measures to encourage employees to remain in the organization for the maximum period of time. Employee retention is a systematic effort by employers to create & foster an environment that encourages current employees to remain employed by having policies &practices in place that address their diverse needs. Retention is the process for members or volunteers remain active with the organization. Retention is not a particularly formal process. Instead it focuses on maintaining a welcome environment, member morale, and organizational process. (Source: Duke University-Student Affairs-Multicultural centre) Thus, Employee Retention is a systematic and organized effort by the management of an organization to retain the skilled and competent manpower acquired thereof. Importance of Employee Retention When an organization has hired good people, trained them, built them into high-performing teams, it does not want to loose them. Given below is some of the rationale that describes the importance of the same: A happy organizational community. A pool of members who can on to help when needed. A pool of members who could potentially be future leaders. A strong indicator of organizational success. Reasons behind Employee Attrition There are certain circumstances that lead to employees leaving their organization. The most common reasons can be:- Job is not what the employee expected to be: Sometimes the job responsibilities don t come out to be same as expected by the candidates. Unexpected job responsibilities lead to job dissatisfaction. Job and person mismatch: A candidate may be fit to do a certain type of job which matches his personality. If he is given a job which mismatches his personality, then he won t be able to perform it well and will try to find out reasons to leave the job. No growth opportunities: No or less learning and growth opportunities in the current job will make candidate s job and career stagnant. Lack of appreciation: If the work is not appreciated by the supervisor, the employee feels de-motivated and loses interest in job. Lack of trust and support: Trust is the most important factor that is required for an individual to stay in the job. Non-supportive coworkers, seniors and management can make office environment unfriendly and difficult to work in. Stress from overwork and work life imbalance: Job stress can lead to work life imbalance which ultimately may lead to employee leaving the organization. Compensation: Better compensation packages being offered by other companies may attract employees towards themselves. New job offer: An attractive job offer which an employee thinks is good for him with respect to job responsibility, compensation, growth and learning etc. can lead an employee to leave the organization. ITeS Industry ITeS refers to Information Technology Enabled Services. BPO or Business Process Outsourcing is the arm of ITES, which facilitates delivery of services through the use of information technology. ITeS services are diverse in nature. It's easier to understand by segregating it as customer interactive services and back office operations for remote customers. India based service providers can deliver services in diverse areas such as finance, HR, administration, healthcare, telecommunication and manufacturing. Services ranging from customer care, call centers and claims processing to medical transcription, HR hiring, biotech research, Web sales/marketing and back-office operations such as accounting, data processing, and data mining harness the power of IT. ITeS industry in India IT services and software continues to be the mainstay of Indian IT-ITeS, accounting for nearly 60 percent of industry revenues. Res Manageria Nov.-Dec Vol. 1 Issue 1 Sharma et al. 2

3 Table 1: Structure of IT/ITeS industry Type Revenue Key Characteristics of business models Large cap >US$250 million Mainly concentrated on Application Development& Maintenance, BPO etc. Well positioned to bag large IT contracts with scalable capabilities. Strong delivery capabilities across multiple verticals. Low client concentration. Competes with global IT vendors such as Accenture, IBM etc. Mid cap US$ million Mainly concentrated on specific domain capabilities. Scale and margin pressures. Increasing competition from both large & small cap players. Niche players Focused on key niche areas of operations Focused on developing capabilities, a specific niche domain & aspire to be a leader in that domain. Scale and growth pressures; limited growth available in niche areas. High client concentration. Exports account for a majority share of the segment revenue with the US and Western Europe as the key markets. There has also been a steady growth in domestic demand, which further contributes to this segment's standing in the Indian ITeS industry. India s supplies constitute 53 percent of the global offshore market for IT and business services. India's edge in the off shoring domain is based on factors such as availability of skilled manpower, a conducive business environment, focus on information security and operational excellence by leading IT-ITeS vendors and relevant financial structures. A market research conducted jointly by The National Association of Software and Service Companies (NASSCOM) and leading business Intelligence Company, McKinsey & Co. suggests the robust growth of IT, IT-enabled services in India is poised for greater heights. Major ITes Companies in India Tata Consultancy Services Wipro Technologies Infosys Technologies HCL GE IBM Dell Established and emerging IT/ITeS hubs in India (a) (b) Fig. 1: (a) Established and (b) Emerging IT hubs in India ITes industry in tri-city of Chandigarh, Mohali and Panchkula The development of RGCTP has been anchored by Infosys, which has completed its state of the art campus. DLF is also offering ready to use built up space and is already housing 14 IT Companies. These state of the art buildings are already providing directly employment to more than 4000 professionals. IT majors like Wipro, Bharti Airtel, Tech Mahindra, esys along with Res Manageria Nov.-Dec Vol. 1 Issue 1 Sharma et al. 3

4 Table 2: Indian IT/ ITeS industry size Particular Rs. in Crore CAGR Domestic IT 20,920 25,330 30,519 36,691 43,834 51, % Services Domestic ITES 11,970 17,357 23,431 29,758 34,817 40, % Domestic IT/ ITES 90, , , , , , % Market IT/ ITES Exports 156, , , , , , % Revenue India IT/ ITES Industry Size 246, , , , , , % 13 other companies are in the process of developing their respective sites allotted to them. Already an investment of more than Rs 650 Cr has poured in , the total software exports from RGCTP alone were Rs 200 Cr out of Rs 600 Cr for the tricity. Similarly it is estimated that once completed, Phase I and Phase II would provide direct employment to more than professionals, and an equivalent number would be directly Rajiv Gandhi Chandigarh Technology Park (RGCTP) is an important project for the Union Territory of Chandigarh to provide world class integrated infrastructure necessary for the setting up of facilities/campuses by leading Technology Companies and other IT/ITES/BPO companies for the first time in this region. Quark city, Mohali: Quark Media House, a subsidiary of Quark Inc. USA, which is already operating in Mohali with more than 700 professionals. Quark is now developing a 40 lac Sq. Ft. State-of-the-Art Integrated Special Economic Zone Park through its affiliate- F.I Associates at a cost of 447 Crores in the first Phase. This infrastructure would attract fresh investments by the Knowledge Industry creating employment potential for more than Construction work has already been started in an area of 46 acres in Mohali. QUARK will develop about 5,000 acres of Industrial Park and Township in Phase- II. Data Connectivity and STPI Centres: The Corporation has facilitated laying of OFC in the state through telecom operators and a reliable telecom infrastructure has been established to cover almost all of the districts of the state to provide data connectivity. Fifteen mbps bandwidth has been added to the existing capacity of 40 mbps at STPI, Mohali which is operational since October, 1998 to provide regulatory services and Datacom facilities to the software export units located in this region. In addition, another 8 mbps bandwidth is available for software exporters through VSNL- PUNCOM project. IT and ITES industry in Panchkula, Haryana, has companies Intelligeshia, and Webart have started up. All these confirm the intention of the three administrations to develop the region as an IT hub. This in turn has drawn in real estate majors. Objectives of the Study To identify the employee retention strategies followed in the ITeS industry in the Tri-city of Chandigarh, Mohali and Panchkula. To determine the significance of select HR practices in the attainment of job satisfaction amongst the employees of the industry. To study the significance of different: individual, organizational and industry related factors in determining the employee retention. To examine the correlation between job satisfaction and employee retention in the industry. To identify the different strategies adopted by the ITeS industry to reduce the monotony of work for the executive positions. Review of Literature To develop a thorough understanding of the conceptual constructs and empirical research for the present study, extensive review of literature was undertaken. This has not only Res Manageria Nov.-Dec Vol. 1 Issue 1 Sharma et al. 4

5 helped in identification of the gaps in the existing body of knowledge but has also enabled to establish a relationship of the present study with what already exists. A number of researchers examine the effect of advertisement on sales and consumption. The studies of various researchers showed the effect of organizational culture on the employee retention [1-14]. Among these studies, the talent management in organizations was examined [1]. Customer satisfaction and service quality measurement practices in call centres in India was evaluated [2]. Talent management and its relationship to levels of employee engagement was also investigated [3]. One of the study dealt with the people management issues in Indian KPOs [4]. human resource management (HRM) systems of call centres in India was also studied [5]. The factors affecting State Government IT employee turnover intentions were also reported [6]. The burgeoning Indian software services industry by focusing on one of its critical challenges: human resource management was also studied [8]. Tapia et al. evaluates assessment of the relevant literature addressing retention issues for women and minorities in IT workforce [7]. The problem of employee retention in the field of radiology was explored and discussed [10]. Some of the strategies and techniques that organizations are using to attract and retain talent was also reported [11]. Gering and Conner [9] examined the strategic approach to employee retention. Sheridan revealed on the impact of organizational culture on employee retention [12]. The area and scope of the studies concerning the employee retention has been mixed. In majority of the studies, the focus has remained on the different sectors but few of the studies concentrated on the ITES Sector as well. Jaiswal conducted his research on call centre s in India [2]. Bhatnagar investigated BPO/ITeS of India [3]. Raghu and co-workers examined Indian KPOs for their research [4]. Budhwar, et al. [5] done his research on Indian call centre s. Kim examined the Indian government it industries [6]. Aggarawal et al. explored the burgeoning Indian software services industry [8]. Tapia and Kvasny examined IT workforce women of Africa, America and native America [7]. Sheridan focused on college graduates hired in 6 public accounting firms over a 6-yr period [12]. Researchers used a variety of techniques and model for collection and evaluation of data like interviews and archival data as shared by the organization [1], qualitative methodology involving in-depth interviews [2]. The respondents were senior managers belonging to quality or operation divisions in four large call centre s in India. Bhatnagar analyzed focus group interview discussion based on reasons for attrition and the unique problems of employee engagement [3]. Raghu et al. [4] evaluated insights into the HR challenges involved and the ways in which they are addressed by KPOs through an in-depth case study of a KPO organization in India which specialized in offering complex analytics, accounting and support services to the real estate and financial services industries. Budhwar et al. examined the nature and pattern of HRM systems and phase two the emerging issue of attrition [5]. A mixed research approach comprising in-depth interviews and questionnaire survey was adopted to conduct the investigation. Kim used survey questionnaires filled from IT employees to analyze how job characteristics, work environment, and human resource management practices influence their turnover intentions [6]. Aggarawal and Thite studied indepth interviews of various stakeholders from a representative range of Indian software services organizations [8]. Sheridan observed the retention rates of 904 college graduates hired in 6 public accounting firms over a 6-yr period [12]. Varied results have been produced by the empirical researches regarding the employee retention in the organizations. Bhatnagar revealed that a good level of engagement may lead to high retention and grooming of future leaders for the organization [1]. Jaiswal concluded that call centre managers overly depend on operational measures [2]. Customer orientation in assessing service performance is either low or absent in most call centre s. Res Manageria Nov.-Dec Vol. 1 Issue 1 Sharma et al. 5

6 Bhatnagar observed that a good level of engagement may lead to high retention, but only for a limited time in the ITeS sector [3]. The need for a more rigorous employee engagement construct is essential. Raghu and co-workers highlighted the differences in the nature of work characteristics in such organizations as compared to call centre s [4]. The study also highlighted some of the key people management challenges that these organizations faced like attracting and retaining talent. The case company adopted formal, structured, transparent and innovative human resource practices and the study indicated that such enlightened human resource practices stand on the foundations laid by an open work environment and facilitative leadership. Budhwar et al. found the existence of formal, structured and rationalized HRM systems [5]. Kim revealed that work exhaustion, an emphasis on participatory management, and opportunities for advancement were statistically significant variables affecting state government IT employee turnover intentions, and that salary satisfaction was not a statistically significant factor [6]. Aggarawal and Thite reveals the characteristics of Indian software professionals and some of the key human-resource related issues and challenges in the industry: namely, voluntary attrition, reluctance to make a transition from technical to management positions, lack of managerial skills, difficulties with teamwork, work preferences and maintaining work-family balance [8]. Tapia and Kvasny observed the need to deepen an understanding of retention issues for women and minorities in order to form intervention strategies [7]. Gerson revealed that there were staff shortages in radiology because not enough people were entering the profession; too many people were leaving the profession for retirement, higher-paying jobs or jobs with less stress; and there were not enough opportunities for career advancement. He also found that much of the work has been focused on recruitment and getting more people "in the front door," but he suggested that the bulk of future efforts should be focused on employee retention and "closing the back door." Employee retention must be an ongoing process, not a program. The employee retention processes must focus on what the employee gets out of the job. The process must be a benefits-based approach. He pointed out that the best way to retain the employees is to treat them like customers and, there is a service/satisfaction link between employee retention and higher levels of customer satisfaction. Customers prefer dealing with the same employees over and over again. Employee turnover destroys a customer's confidence in the company. So, the key is to keep employees so they in turn will help you keep your customers [10]. Hiltrop observed that high performance organizations are consistently outperforming their competitors on a number of human resource factors, including the level of teamwork and openness between co-workers, the training and development opportunities they offer to employees and the degree of pro-activity in HR planning. Developing this capability begins with the realization that effective human resource management underpins the competitiveness of organizations [11]. Gering and Conner found that the best managers require accountability, rewarding employees for their successes and taking corrective action as necessary. Retention rate targets must be at a level that will achieve a competitive advantage in the served market [9]. The cultural effects were found to be stronger than the combined exogenous influences of the labor market and the new employees' demographic characteristics [12]. Researchers have studied the Employee Retention in different countries. However, not much research has been undertaken on the employee retention in the case of Indian ITES companies and especially in the north India like. The present study will investigate the said topic with respect to the ITES companies working in north India: Chandigarh, Panchkula and Mohali. Research Methodology Research methodology is a design or plan as a guide for conducting research and to systematically solve the research problem. It Res Manageria Nov.-Dec Vol. 1 Issue 1 Sharma et al. 6

7 includes research design, sampling procedures, data collection method and analysis procedure. Research Design Research design is a blue print or framework which specifies the details of the procedures necessary for obtaining the information needed to structure or solve research problems. Descriptive Research Design has been employed in the present study to define the answers to what, why and how of the different dimensions of the employee retention in the ITeS industry in the Tri-City of Chandigarh, Mohali and Panchkula. Sources of Data Both primary and secondary data has been collected and analyzed to present a comprehensive analysis of the phenomenon of employee retention in the ITeS industry. Primary sources: HR Managers of the select organizations of the ITeS industry in the Tri- City of Chandigarh, Mohali and Panchkula were personally interviewed by administering the standard questionnaire as schedules, to collect data for the present study to have first hand account of different dimensions of employee retention in the ITeS industry. Secondary sources: Comprehensive review of existing literature i.e., Journals, Books, Magazines, Internet and Newspapers was undertaken to know the contemporary employee retention scenario and the research undertaken in the field so far. It enabled identification of the prevalent gaps in the existing literature. Data Collection Tools Data collection tools include the various methods used by the researcher in the project. The application of method for collecting the data mainly depends upon the type of project the researcher is going to undertake. In case of survey project, standardized questionnaire is the best tool for collecting the data. Primary data has been collected through standardized questionnaires for the purpose of the study. These questionnaires were administered to HR Managers of the select organizations of the ITeS industry in the Tri- City of Chandigarh, Mohali and Panchkula as the schedules. Data Analysis Tools To arrive at pertinent analysis, the collected data was put to planned and rigorous statistical analysis. For this purpose, following statistical tools: Descriptive statistics chisquare test, t-test, Karl Pearson s Coefficient of Correlation were employed to test the drafted hypotheses and statistically validating the analysis. Averages, percentage, ratios were also used to analyze and present the data in a clear and understandable manner. T-test: The One-Sample T Test procedure tests whether the mean of a single variable differs from a specified constant. The One-Sample T Test procedure: Tests the difference between a sample mean and a known or hypothesized value Allows you to specify the level of confidence for the difference Produces a table of descriptive statistics for each test variable Chi-square test: Chi-square is a statistical test commonly used to compare observed data with data we would expect to obtain according to a specific hypothesis. The formula for calculating chi-square ( X 2 ) is: X 2 = (o-e) 2 /e That is, chi-square is the sum of the squared difference between observed (o) and the expected (e) data (or the deviation, d), divided by the expected data in all possible categories. Carl Pearson Coefficient of correlation: Carl Pearson Coefficient of correlation is a measure of linear relationship between two variables. It lies between -1 and 1. The closer it is to 1( or -1), the stronger the positive(or negative) linear relationship between the two variables. If it is close to 0, there is no linear relation. r = ( XY - X Y / n ) / SQRT { [ X^2 - ( X)^2 / n] [ Y^2 - ( Y)^2 / n]} Res Manageria Nov.-Dec Vol. 1 Issue 1 Sharma et al. 7

8 Findings and Analysis To conduct the present study, the following organizations in the ITeS industry were examined to know their HR practices that affect the phenomenon of Employee Retention. The names of the organizations are presented below in the Table 3. Organizations in the ITes Industry As it is evident from the information reported in Table 3, a cross-section of ITeS organizations have been examined in the present study. The findings from such a wide range of organizations would enable a comprehensive analysis of the employee retention phenomenon in the ITeS Sector. Employee Retention Strategies Practiced by Respondent Organizations The HR managers of the select ITeS organizations were enquired to outline the various employee retention strategies that were being currently implemented in their organizations. The responses for the same are tabulated in Table 4. Table 3: Respondent organizations from ITeS industry S. Organization Services Offered No 1. Dr. IT Planets Call Center Services 2.. Excel Callnet Call Center Services 3. Pugmarks Interweb Design Development and Web Support 4. OSI-Info- Solutions (I) BPO Services in Finance Domain 5. Vismaad Mediatech Media and Animation 6. Kinerk Direct Marketing Solutions (KDMS) BPO Services 7. Seasia Consulting Technical Support Services 8. Omnia BPO Call Center Services Services 9. Tata Business Call Center Services Support Solutions 10. Competent Call Center Services Synergies 11. Techno Beez Technical Support 12. Ecologic Corporation Services Web Support Services Table 4: Employee retention strategies practiced by respondent organizations S. No. Organization Employee Retention Strategies 1. Dr. IT Planets a) Performance Appraisal. b) Incentives. c) Career growth. 2. Excel Callnet a) Best Salary Packages b) Regular Employee feedback sessions. c) Regular Rewards and Recognitions. 3. Pugmarks Interweb a) Salary Hikes. b) Better Work 4. OSI-Info- Solutions (I) 5. Vismaad Mediatech Environment. a) Salary Hike. b) Incentives. c) Get Together. a) Public Recognition of achievements. b) Periodic Entertainment & Excursions. c) Rewards. 6. KDMS a) Motivational Atmosphere. b) Incentives Oriented Targets. 7. Seasia NA 8. Omnia BPO Services 9. Tata Business Support Solutions 10. Competent Synergies a) Friendly Environment for New Joiners. b) Weekly Feedback from Employees. a) Exit Interviews. b) Incentives. c) Monthly Tracking of Employees. a) Exit Interviews. b) Incentives. c) Training programs. 11. Techno Beez a) Exit Interviews. b) Salary hike. c) Job rotation. 12. Ecologic Corporation a) Job Rotation & Job Enrichment. b) Transparency. c) Participation in Management. d) Fringe Benefits. Factors Related with Individual Affecting Employee Retention It has been observed that the demographic profile of the employees can have an impact on Res Manageria Nov.-Dec Vol. 1 Issue 1 Sharma et al. 8

9 the retention of the employees. Thus, an attempt has been made to understand the impact of different individual related factors in determining the employee retention in the ITeS sector. The HR managers of the select ITeS organizations were asked to highlight the significance of factors related with individuals that have an impact on Employee Retention. The responses of the same are presented below in the Table 5. It is evident from the data that as the employee gains more and more experience of working in this sector, the probability of his attrition rises significantly. Age and Educational Qualifications were also reported to be relatively more significant factors affecting the employee retention in this industry. Contrary to the prevalent belief, Marital Status was reported to be as highly insignificant factor by one-third of the respondents. Statistical analysis The relationship amongst different individual factors: Age, Work Experience, Educational Qualification and Employee Retention were examined to determine the statistical significance of the relationship amongst them. The primary data in Table 5 was put to hypothesis testing process by applying onetailed T-Test to know whether there exists a significant relationship between the two select variables. The test statistics are as following: (A) Significance of relationship between age and employee retention (by applying T-Test) In order to statistically examine the significance of relationship between Age and Employee Retention amongst the respondents, the following hypotheses were developed. Ho: There exists an insignificant relationship between Age and Employee Retention and both are independent of one another. (Ho: Xs 4) H1: There exists a significant relationship between Age and Employee Retention and both are dependent on one another. (H1: Xs > 4). The findings of the statistical test of hypotheses are presented as Table 6 and 7. Statistical Inference: The value of t calculated is less than standard table value. Therefore, H1 is rejected and Ho is accepted. Thus, we can statistically conclude with 95% confidence level that there exists statistically an insignificant relationship between Age and Employee Retention and both are independent of one another. (B) Significance of Relationship between Experience in the Job and Employee Retention (Applying T-Test) In order to statistically examine the significance of relationship between Experience in the Job and Employee Retention, the following hypotheses were developed. H0: There exists an insignificant relationship between Experience in the Job and Employee Retention and both are independent of one another. (H0: Xs 4) H1: There exists a significant relationship between and Experience in the Job and Employee Retention and both are dependent on one another. (H1: Xs > 4). The findings of the statistical test of hypotheses are presented as Table 8 and 9. Statistical Inference: The value of t calculated is more than standard table value. Therefore, H0 is rejected and H1 is accepted. Thus, we can statistically conclude with 95% confidence level that there exists statistically a significant relationship between Experience in the Job and Employee Retention and both are independent of one another. (C) Significance of relationship between educational qualification and employee retention (by applying T-Test) In order to statistically examine the significance of relationship between Educational Qualification and Employee Retention, the following hypotheses were developed. Ho: There exists an insignificant relationship between Educational Qualification and Employee Retention and both are independent of one another. (Ho: Xs 4) H1: There exists an insignificant relationship between Educational Qualification and Employee Retention and both are dependent on one another. (H1: Xs > 4). The findings of the statistical test of hypotheses are presented as Table 9 and 10. Res Manageria Nov.-Dec Vol. 1 Issue 1 Sharma et al. 9

10 Table 5: Number of respondents reporting level of significance of factors related with individual affecting employee retention. Number of Respondents Reporting Particular Level of Significance Factors Related with Individual Highly Insignificant Somewhat Insignificant Neither Insignificant Somewhat Significant Highly Significant Nor Significant Age Gender Job experience Educational Qualification Marital Status Family Circumstances Desire for Change Table 6: Data for significance of relationship between age and employee retention. X ƒ ƒx ƒx² Total ƒ=12 ƒx=48 ƒx²=202 Table 7: Significance of relationship between age and employee retention by applying T-test. Parameter Value a) N 12 b) Level of Confidence (LOC) 95% c) Level of Significance (LOS) 5% d) One/Two-Tailed Test One-Tailed T-test. e) Degree of freedom (n-1) 11 f) Sample mean(xs)= ƒx/ ƒ 4 g) Standard Deviation (σ )= ƒx²/n-( ƒx/n)² 0.89 h) Standard Error= σ/ n i) tc= Xs-4 / Standard Error 0 j) t Result tc < t 0.05 Table 8: Data for significance of relationship between experience in the job and employee retention. X ƒ ƒx ƒx² Total ƒ=12 ƒx=53 ƒx²=243 Res Manageria Nov.-Dec Vol. 1 Issue 1 Sharma et al. 10

11 Table 9: Significance of relationship between job experience and employee retention by applying T-Test. Parameter Value a) N 12 b) Level of Confidence (LOC) 95% c) Level of Significance (LOS) 5% d) One/Two-Tailed Test One-Tailed T-test. e) Degree of freedom (n-1) 11 f) Sample mean(xs)= ƒx/ ƒ 4.42 g) Standard Deviation (σ )= ƒx²/n-( ƒx/n)² 0.85 h) Standard Error= σ/ n i) tc= Xs-4 / Standard Error 5.25 j) t Result tc > t 0.05 Table 10: Data for significance of relationship between educational qualification and employee retention. X ƒ ƒx ƒx² Total ƒ=12 ƒx=48 ƒx²=202 Table 11: Significance of relationship between educational qualification and employee retention by applying T-Test. Parameter Value a) N 12 b) Level of Confidence (LOC) 95% c) Level of Significance (LOS) 5% d) One/Two-Tailed Test One-Tailed T-test. e) Degree of freedom (n-1) 11 f) Sample mean(xs)= ƒx/ ƒ 4 g) Standard Deviation (σ )= ƒx²/n-( ƒx/n)² 0.89 h) Standard Error= σ/ n i) tc= Xs-4 / Standard Error 0 j) T Result tc > t 0.05 Statistical Inference: The value of t calculated is less than standard table value. Therefore, H1 is rejected and Ho is accepted. Thus, we can statistically conclude with 95% confidence level that there exists statistically an insignificant relationship between Educational Qualification and Employee Retention and both are independent of one another. Employee Retention and Organizational Factors The HR managers of the select ITeS organizations were enquired to report the Significance of factors related with organization that have an impact on Employee Retention. The responses of the same are presented in the Table 12. As per the observations mentioned in Table 12, it can be inferred that the provision of Fair and Competitive salaries and Performance related Incentives emerged as the leading factors of Employee Retention in the present study. Statistical analysis The relationship amongst Employee Retention and Job satisfaction was examined on the basis Res Manageria Nov.-Dec Vol. 1 Issue 1 Sharma et al. 11

12 of Fair and Competitive Compensation and Nature of Supervision to determine the statistical significance of the relationship amongst them. The relationship between the select variables of the primary data in Table 12 and 13 were put to statistical testing process by applying Karl Pearson s Coefficient of Correlation to know whether there exists a significant relationship between them. The findings of the statistical analysis are presented as following: (A) Significance of Relationship between Employee Retention and Job Satisfaction on the basis of Fair-Competitive Salaries as a constituent of Employee Retention and Fair Compensation as a constituent of Work Environment. (Using Karl Pearson s Coefficient of Correlation) In order to statistically examine the significance of relationship between Employee Retention and Job Satisfaction on the basis of Fair-Competitive Salaries as a constituent of Employee Retention and Fair Compensation as a constituent of Work Environment, Karl Pearson s Coefficient of Correlation was calculated. The findings are presented below as Table 13: Karl Pearson s Coefficient of Correlation: r = N dx dy - dxdy/ N dx 2 ( dx) 2 N dy 2 ( dy) 2 = Statistical Inference: The Karl Pearson s Coefficient of Correlation calculated above indicates that there is a very low degree of positive correlation between Employee Retention and Job Satisfaction on the basis of Fair-Competitive Salaries and Compensation. (B) Significance of Relationship between Employee Retention and Job Satisfaction on the basis of Nature of Supervision as a constituent of Employee Retention as well as Work Environment. (Using Karl Pearson s Coefficient of Correlation) In order to statistically examine the significance of relationship between Employee Retention and Job Satisfaction on the basis of Nature of Supervision as a constituent of Employee Retention as well as Work Environment, Karl Pearson s Coefficient of Correlation was calculated. The findings of the same are presented as Table 14. Karl Pearson s Coefficient of Correlation, r = N dx dy - dxdy/ N dx 2 ( dx) 2 N dy 2 ( dy) 2 = Statistical Inference: The Karl Pearson s coefficient of Correlation calculated above indicates that there is a very low degree of negative correlation between Employee Retention and Job Satisfaction an the basis of Nature of Supervision as a constituent of Employee Retention as well as Work Environment. Perceived Relationship between Employee Retention and Job Satisfaction An attempt has been made to determine the extent to which employee retention and job satisfaction were perceived by select HR managers to be related to one another by enquiring their response on a five point scale. The responses of the same are tabulated as Table 15. As per the frequencies tabulated in Table 15, it can be said that two-third of the respondents perceive the Employee Retention and Job Satisfaction to be highly related and the other one-third perceive it to be somewhat related. Thus, we can conclude that the select HR managers believe that these two factors of HR management are related to a great extent with one another. Statistical analysis The perceived relationship among Employee Retention and Job Satisfaction was examined to determine the statistical significance of the relationship among them. The primary data in Table 15 was put to hypothesis testing process by applying onetailed T-Test to know whether there exists a significant relationship between the two select variables. The findings of the statistical test are presented as following: (A) Significance of perceived relatedness between job satisfaction and employee retention (by applying T-Test). In order to statistically examine the significance of relatedness between Job Satisfaction and Employee Retention, the following hypotheses were developed. Res Manageria Nov.-Dec Vol. 1 Issue 1 Sharma et al. 12

13 Table 12: Number of respondents reporting level of significance of factors w.r.t. organization affecting employee retention. Number of Respondents Factors Related with Highly Somewhat Somewhat Highly Organization Neutral Insignificant Insignificant Significant Significant Fair & Competitive salaries Fringe Benefits (free transportation, subsidized lunch) Career Growth & Advancement Performance Related Incentives Rewards and Recognition Provision of Job Related Training Opportunities for Higher Education Open Channels of Communication Nature of Supervision by the Boss Job Rotation and New assignments Recognition of Work/Life balance Employee Suggestion Program Organization Values & Beliefs Table 13: The relationship amongst employee retention and job satisfaction on the basis of fair and competitive compensation. S. No. Fair Compensation as Fair-Competitive Salaries as dx2 dy dxdy constituent of Work Environment (X) constituent of Employee Retention (Y) dx (X X ) dy ( Y- Y) Total X= X/N Y= Y/N dx dy dx2 dy2 dxdy Res Manageria Nov.-Dec Vol. 1 Issue 1 Sharma et al. 13

14 Table 14: The relationship amongst employee retention and job satisfaction on the basis of nature of supervision S. No. Nature of Supervision as constituent of Work Environment (X) Nature of Supervision as a constituent of Employee Retention (Y) dx (X X ) dy (Y- Y) dx2 dy 2 dxdy Total X= X/N 4.17 Y= Y/N 4.17 dx dy dx dy dxdy Table 15: Extent of perceived relatedness of employee retention and job satisfaction by the respondents S. No. Organizations Number of Respondents Reporting Extent of Relatedness of Employee Retention and Job Satisfaction Highly Unrelated Somewhat Unrelated Neutral Somewhat Related Highly Related 1. Dr. IT Planets 2. Excel Callnet 3. Pugmarks Interweb 4. OSI-Info-Solutions (I) 5. Vismaad Mediatech 6. KDMS 7. Seasia 8. Omnia BPO Services 9. Tata Business Support Solutions 10. Competent Synergies 11. Techno Beez 12. Ecologic Corporation Total Ho: There exists an insignificant relationship between Job Satisfaction and Employee Retention and both are independent of one another. (Ho: Xs 4) H1: There exists a significant relationship between and Job Satisfaction and Employee Retention and both are independent of one another. (H1: Xs > 4). The findings of the statistical test of hypotheses are presented as Table 16 and 17. Statistical Inference: The value of t calculated is less than standard table value. Therefore, H1 is rejected and Ho is accepted. Thus, we can statistically conclude with 95% confidence level that there exists statistically an insignificant relationship between Job Satisfaction and Res Manageria Nov.-Dec Vol. 1 Issue 1 Sharma et al. 14

15 Employee Retention and both are independent of one another. Extent of Employee Attrition in Select ITes Organizations The HR managers of the respondent organization were asked to provide the percentage of the employee attrition for Call Centre/Tech Support employees. The responses of the same are presented as Table 18: As per the observations, it can be inferred that the %age of Employee Attrition in the select ITeS organizations varies between 5-70%. Thus, we can say that the %age of Employee Attrition varies considerably across select ITeS organizations which could be the result of the different Employee Retention strategies followed by these organizations. Level of Employee Attrition in Select ITes Organizations The HR managers of the select ITeS organizations were interviewed to know about their perception regarding the level of employee attrition in their organizations: less than industry average or same as industry average or more than industry average. The responses of the HR managers are mentioned in Table 19. As per the responses of the HR managers tabulated, it can be said that the perception of the HR managers across the select ITeS organizations w.r.t. level of Employee Attrition varies considerably as around 40% of them perceive that the level of Employee Attrition is Less than Industry Average, other 40% think that it is Same as Industry Average and only 16.6% believe that the level of Employee Attrition is More than the Industry Average. These findings are based on the perceptions of the HR managers of the respondent organizations and are not based on any factual data collected by the researcher. Exit Interviews in Respondent Organizations The HR managers were surveyed in the present study to report whether their respective organizations conduct exit interviews or not. The responses are presented as Table 20. As per the responses tabulated, it is evident that all the select ITeS organizations conduct Exit Interviews. Thus, it can be inferred that Exit Interviews is a highly effective tool for improving the level of Employee Retention. Role of Exit Interviews in Improving Employee Retention In order to ascertain the role of Exit Interviews, the HR managers of the select ITeS organizations were asked to describe the extent to which exit interviews are beneficial in reducing the employee attrition and improving employee retention in their respective organizations. The responses of the HR managers are mentioned in Table 21. As per the findings mentioned, it can be inferred that around 40% of the respondent organizations reported that the Exit Interviews were highly advantageous in reducing the level of Employee Attrition and improving the level of Employee Retention. This response was closely followed by other one-third of the respondents who briefed that the Exit Interviews were somewhat advantageous in improving Employee Retention. Thus, it can be said that around three-fourth of the respondents believe in the utility of Exit Interviews as a tool to reduce Employee Attrition and improve Employee Retention. Table 16: Significance of Perceived Relatedness between Job Satisfaction and Employee Retention. (Applying T-Test) X ƒ ƒx ƒx² Total ƒ=12 ƒx=56 ƒx²=264 Res Manageria Nov.-Dec Vol. 1 Issue 1 Sharma et al. 15

16 Table 17: Significance of Perceived Relatedness between Job Satisfaction and Employee Retention. (Applying T-Test) Parameter Value a) N 12 b) Level of Confidence (LOC) 95% c) Level of Significance (LOS) 5% d) One/Two-Tailed Test One-Tailed T-test. e) Degree of freedom (n-1) 11 f) Sample mean(xs)= ƒx/ ƒ 3.33 g) Standard Deviation (σ )= ƒx²/n-( ƒx/n)² 3.33 h) Standard Error= σ/ n i) tc= Xs-4 / Standard Error j) t Result tc < t 0.05 Table 18: Extent of Employee Attrition in Select ITeS Organizations S. No. Organization Employee Attrition in terms of percentage 1. Dr. IT Planets 7.5% 2. Excel Callnet DNP* 3. Pugmarks Interweb 60% 4. OSI-Info-Solutions (I) DNP 5. Vismaad Mediatech 5% 6. KDMS 70% 7. Seasia DNP 8. Omnia BPO Services 43% 9. Tata Business Support Solutions 30% 10. Competent Synergies 40% 11. Techno Beez DNP 12. Ecologic Corporation 20% * DNP Data Not Provided by the Respondent Table 19: Level of Employee Attrition in Select ITeS Organizations S. No. Organization Levels of Employee Attrition Less than Industry Average Same as Industry Average. More than Industry Average 1. Dr. IT Planets 2. Excel Callnet 3. Pugmarks Interweb 4. OSI-Info-Solutions (I) 5. Vismaad Mediatech 6. KDMS 7. Seasia 8. Omnia BPO Services 9. Tata Business Support Solutions 10. Competent Synergies 11. Techno Beez 12. Ecologic Corporation Total Res Manageria Nov.-Dec Vol. 1 Issue 1 Sharma et al. 16

17 Table 20: Exit Interviews in Select ITeS Organizations S. No. Organization Existence of Exit Interviews in Respondent Organizations Yes No 1. Dr. IT Planets 2. Excel Callnet 3. Pugmarks Interweb 4. OSI-Info-Solutions(I) 5. Vismaad Mediatech 6. KDMS 7. Seasia 8. Omnia BPO Services 9. Tata Business Support Solutions 10. Competent Synergies 11. Techno Beez 12. Ecologic Corporation Total 12 0 Table 21: Extent to which Exit Interviews help to Reduce Employee Attrition and Improve Employee Retention S. No. Number of Respondents Highly Disadvantageous Somewhat Disadvantageous Neutral Somewhat Advantageous Total Highly Advantageous Conclusions & Recommendations The present study was concluded with following recommendations: 1. A wide range of Employee Retention strategies have been employed in different organizations to retain their manpower and they vary from one organization to another. 2. Employee Retention strategies can be broadly classified into two categories i.e. monetary and non-monetary strategies. Although, majority of the organizations are employing the monetary strategies such as Performance Linked Incentives, Rewards, Increment in Salary; yet good number of innovative non-monetary practices are also being implemented to retain the manpower. These practices include Job Rotation, Job Enrichment, Exit Interviews, Participation in Management, Public Recognition of Achievements etc. 3. Initial handholding is critical for retaining the manpower in this industry. Therefore, the respondent organizations were observed to be closely monitoring and tracking the performance of the new employees, providing them with weekly feedback and ensuring a friendly environment. 4. It has been found statistically that as the employee gains more and more experience of working in this sector, the probability of his attrition rises significantly. On the basis of the frequency distribution, Age and Educational Res Manageria Nov.-Dec Vol. 1 Issue 1 Sharma et al. 17