International journal of Marketing & Human Resource Management Volume 1 Issue 1 May 2010 pp. 18-27 http://iaeme.com/ijmhrm.html IJMHRM IAEME A CRAM ON EMPLOYEE ATTRITION IN CHENNAI BASED CALL CENTERS: AN EXPLORATORY STUDY G. Sri Devi 1, Dr. N. Panchanatham 2 ABSTRACT Employee Attrition is considered as major issues by organizations across the globe as well as specifically in call center jobs. This paper initially highlights the rapid growth in the call centre sectors in Chennai city. It then makes an analysis based on an empirical study. In this study it is find out the emerging issues of attrition. A mixed research approach comprising in depth interviews and questionnaire survey was adopted to conduct the investigation. The core reasons for the increasing levels of attrition are highlighted. 1 G. Sri Devi, Assistant Professor, Department of Management Studies, A.V.C.College of Engineering, Mayiladuthurai, Tamil Nadu. 2 Dr. N. Panchanatham, Professor & Head, Department of Business Administration, Annamalai University, Chidambaram.
Introduction: Human resources are the only source of long term competitive advantage for any business organization. Thus human resources are rightly known as the real assets of an organization. But in the competitive environment and modern era of business the employee attrition is a Herculean problem for all firms. It is very frustrating for an organization to go through the entire process of hiring and training, only to find employees leaving after two months or some times even quitting after the training period is over. Employee Attrition: Attrition or Labor Turn Over can be defined as the rate of change in the working staff of an organization during a defined period. Rossano (1985) defined turnover as Voluntary termination of participation in employment from an organization, excluding retirement or pressured voluntary withdrawal, by an individual who received monetary compensation from the organization. Turnover is considered as a bad sign for the organization as it involves considerable visible and hidden cost. It may tarnish the image of the company as a bad employer. In Indian IT and BPO sectors the turnover situation is alarming. The attrition rates have been reported as high as 80 percent in the IT services sector and as high as 100 percent in Indian Call Centers. Call Centers: Call Center is an Umbrella term that generally refers to reservations centers, help desks, information lines or customer service centers, regardless of how they are organized or what types of transactions they handle. Though Call Centers have been operating in India since 1986, only recently it has taken a prominent position among the IT enabled services. The call center concept in India flourished because of the multinationals that have started setting up their in house call centers. In India, where graduates with sound Information 19
technology knowledge find difficulty in getting a decent job. The growth of call centers is a boon which is sent by the god for them. Chennai is the Hub for Call Centers: It is a fact that Chennai is now enjoying tremendous brand equity in major markets due to its growth and enrichment, the answers are obvious. Chennai offers a huge pool of English speaking and computer literate graduates who can cater to the growing demand for professionals in IT Enabled services. These professionals are skilled and quality conscious. Internet and Intranet technologies and ERP software are making it easier to deliver many corporate functions more efficiently. Technology is another important factor. In the past two years, Chennai has installed reliable, high capacity telephone lines in most of its major places. This makes it possible for people in Chennai to communicate with someone in the US by phone or the internet as easily as communicating from within the US. Literature regarding Attrition: Bain and Taylor, 1999 states that the problem faced by the management of Software Company is the High labour turnover in call centers. The reasons attributed to this are the pressure of job, lack of promotional opportunities, working time, work life balance, repetitive nature of work. According to them the BPO industry is witnessing 60 to 70 percent attrition due to career opportunities, comparisons, working environment, psychological satisfaction, poor supervision, stress, health problems etc., Methodology: As per the exploratory nature of the research, a questionnaire survey was conducted with 204 on-floor agents across the 7 call centers. All the units for the study are based in and around Chennai. Based on discussions with call centre employees, a questionnaire comprising nine sections was developed. These 20
sections cover issues related to working conditions, pay and incentives, job enrichment, customers, health, relationship with colleagues, commitment level, performance appraisal and career development. Respondents Company Details: Company 1 is Chennai based leading BPO and remote processing company. It employs 435 associates. Company 2 is also Chennai based call center. It enables IT services, CRM, Software Development, E-commerce, It Education and Enterprise resource planning services through its three IT divisions. It employs over 500 people. Company 3 is Chennai based call center with a capability to provide voice, non voice and web based services, it is a full spectrum service provider and offers end to end solutions covering a wide range of industries. It has over 100 associates. Company 4 is also Chennai based call center that provides solutions in the area of Global Customer Care to its clients in America. It employs over 105 people. Company 5 is also a call center it consolidates back office processing in Chennai for client organizations. It employs over 132 people. Company 6 is a leading IT enabled services firm s call center that provides leading edge customer care technologies such as live chat, e mail management, voice communications. It employs over 450 people. At last company 7 is a call center and employs 234 employees. A total of 28 statements denote aspects of these areas. All these aspects have implications for employee turnover. The respondents were asked to rate these statements on a 1-5 rating scale where 1 = strongly disagree and 5 = strongly agree. Apart from this, the respondents were asked to provide up to three main reasons regarding the high attrition rate in the call centre sector. 21
Findings of the Study: The retention rate of employees in seven call centers is claimed to be approximately 80 to 85 percent. The problem of employee attrition is now becoming severe. It is more severe at the junior level employees in all the call centers. The reason for this includes better opportunities, monetary, further education and growth opportunities anywhere. Sometimes employees leave as they find the work not to their taste. A HR manager of call centre seven made an appropriate comment about this issue. Some employees leave due to dissatisfaction with the work culture, this usually happens with the first timers in the call center industry. The measures used in order to retain employees include counseling, rewards with recognition, increased pay and benefits. Still in 6 call centers there is no career planning system. During the questionnaire survey the respondents were also asked to suggest up the main reasons for the increasing levels of attrition in the Chennai based call centers. The following is the summary of their main responses. S.NO Common Reasons for Attrition Percentage of the Respondents 01. Limited growth and career development 20 02. Monotonous job and work boring 12 03. Limited and non challenging role. 11 04. Night shift and stress syndrome 11 05. Not emphasize specific qualifications 10 06. Better pay and incentives by other companies 10 07. Management s Favoritism in Appraisal and 09 promotion 08. Hard to understand the Accent or voice 08 09. In adequate job enrichment 06 10. Non favorable job design 03 22
Percentage of the Respondents 25 23 21 19 17 15 13 11 9 7 5 3 1 Lim ited growth and career development 20 Monotonous job and work boring 12 Lim ited and non challenging role. Reasons for Attrition 11 11 Night shift and stress syndrome Not em phasize specific qualifications 10 10 Better pay and incentives by other com Major Reasons Management s Favoritism in Appraisal a 9 Hard to understand the Accent or voice 8 In adequate job enrichment 6 Non favorable job design 3 Factors related to attrition in Call Center: The factors related to attrition has classified into two heads. Those were job related, personal and health related factors. Let we see the respondents opinion about the above said issues. 23
I. Job allied Reasons interconnected with attrition in call centers : S.NO Reasons for Attrition Percentage of the Respondents 01. Low commitment in the job 86 02. Low team spirit 70 03. Late night shift 72 04. Heavy competition among teams 69 05. Irritated and abusive customer 68 06. Dis satisfaction in the job 49 07. Dis satisfied with appraisal system 47 Job related Reason for Attrition 90 86 Percentage of the Respondents 80 70 60 50 40 30 20 10 0 70 72 69 68 49 47 Reasons 24
II. Personal Reasons interconnected with attrition in call centers S.NO Reasons for Attrition Percentage of the Respondents 01. No hike in pay and incentives 80 02. Call center jobs are physically drained 74 03. No protection to mental health 59 04. No opportunity for further growth 57 05. There is no Friends in the work place 56 06. Family commitments 43 07. Due to Marriage and delivery 41 08. Hated the Work culture in the industry 32 Personal Reasons for Attrition There is no Friends in the work place 13% Hated the Work culture in the industry 7% Due to Marriage and delivery 9% Family commitments 10% No opportunity for further growth 13% No hike in pay and incentives 18% Call center jobs are physically drained 17% No protection to mental health 13% 25
Discussion: The contradiction found in the research is the reporting of relatively low employee attrition rate. Taylor and Bain (1999) state that, officially, companies give turnover rate between 20 and 30 percent, but informally they admit that it is double or may be more. As per the findings, it seems to vary between 10 to 25 per cent. How ever, other sources (see Singh, 2005: Taylor and Bain 2005) indicate that it is much higher than that and is the most important problem for call centers. Most of the reasons identified above are also reported by different media reports as contributing to rapidly increasing attrition rates. It is now crucial for call centers to seriously examine this issue. There is a need to re evaluate the recruitment, training, career development and retention policies. Aspects of work life balance, leadership, job rotation, corporate degrees, flexible working, psychological counseling, and other things which can control this problem should be seriously considered by the call centers in Chennai. Conclusion: The structure of all the call centers is very formal and bureaucratic. To some extent such an approach is productive, however in the long run (as already evidenced by the increasing attrition and stress rates) the existing systems have to be modified by providing flexibility, empowerment, development of proper career progression and open systems, and promotion of females to higher positions. The results highlight that attrition is emerging as a serious issue in the Chennai based call centers and careful initiatives are required to control it. The above suggestions in this regard will not only help to retain good employees but will also help to maintain their efficiency level. There is also a need to develop psychometric profiles of applicants to choose stress lasting employees. At the moment this approach is not adopted by most call centers. More then this, the absence of females at top positions, management of stress, employee retention and career development systems should also be a matter for serious concern. There 26
fore, there is no ready made solution to this problem. So the Chennai based call centers need to do proper diagnosis to unravel employee turnover issue in the organization and plan retention strategy accordingly. References : 1. NASSCOM ( 2009) Nasscom s Handbook of call center issues in Chennai. 2. Singh.H (2005) Is the BPO Iceberg Melting Under Attrition Heat?, The Economic Times, 10 th February. 3. Business Line (2003) HR Department in Call Centers has its hands full, 16 th June. 4. Taylor.P and Bain. P ( 2005), India calling to the Far Away Towns: The Call Center Labour Process and Globalization, Work, Employment and Society, 19(2): 261-282. 5. Taylor.P and Bain. P (1999), An Assembly line in the head: The Call Center Labour Process, Industrial Relations Journal, 30(2): 101 117. 6. Rossano, E.(1985), Factors associated with the Turnover Intentions of Ohio Cooperative Extension Country Agents, Published doctoral Dissertation, The Ohio State University, Columbus. 27