Attrition and Measures to ControlAttrition and Measures to Control Presented by :Presented by :

ID:ID:

ATTRITIONATTRITION

""A reduction in the number of employees A reduction in the number of employees

through retirement, resignation or deaththrough retirement, resignation or death""

How many people are leaving each yearHow many people are leaving each year

TurnoverTurnover = Number of staff leaving per year x 100 / = Number of staff leaving per year x 100 / average number of staffaverage number of staff

Attrition RateAttrition Rate

• A factor, normally expressed as a percentage, reflecting the degree of losses of personnel due to various causes within a specified period of time• The rate of shrinkage of manpower in size or number.• Reduction of employees by retirement, resignation & layoff.

• A term used to describe voluntary and involuntary terminations, deaths, and employee retirements that result in a reduction to

the employer's physical workforce.

The formula and correct logic behind The formula and correct logic behind calculation of ATTRITION RATEcalculation of ATTRITION RATE

• [(No. Of attritions x 100) / (Actual Employees + New Joined)] /100.

ExamplesExamples

1) Actual Employees No. Of people left No. Of Joined Total Employees

150 20 25 155 So according to the formula: ((20 x 100) / (150 + 25)) / 100

Which comes to 0.1142 i.e. 11% Now as you had 150 previously and now 25 joined so it makes 150 + 25 =175 Now if you calculate 11.42% of 175 i.e. 175 x 0.1142 = 20 Which clearly shows that 175 - 20 = 155, which is your current headcount and at the same time you can say my attrition is 11.42% that shows you lost 20 employees of 150 and 25 more joined which makes count to 175.

ExamplesExamples

2) Actual Employees No. Of people left No. Of Joined Total Employees

100 50 0 50 • This is the special case where we are considering attritions only keeping

into mind that nobody has joined in particular month. • So according to the formula: ((50 x 100) / (100)) / 100 • Which comes to 0.5 i.e. 50% • Now as you had 100 previously and now 0 joined so it makes 100 + 0 =100 • Now if you calculate 50% of 100 i.e. 100 x 0.5 = 50 • Which clearly shows that 100 - 50 = 50, which is your current headcount and

at the same time you can say my attrition is 50% that shows you lost 50 employees of 100 and 0 joined which makes count to 50.

Sector wise attrition rate/no.of yearsSector wise attrition rate/no.of years

Business Process OutsourcingBusiness Process Outsourcing

One of the fastest growing segments of the ITES industry

Major Challenge: Employee Satisfaction

Services OfferedServices Offered

AttritionAttrition

Biggest challenge in the industryService oriented industryCost aspect

Loss of 25% revenue due to attrition

As per NASSCOM – cost of attrition in Indian BPO is 1.5 times the annual salary

Continued …..Continued …..

Attrition in 2011 – 55%

Attrition rates in the industry: Infosys BPO 28%Wipro BPO 18%TCS BPO 21-22%Tesco HSC has seen a 6% drop in attrition

Causes of AttritionCauses of Attrition

Causes of attrition

Drive Drive AttritionAttrition

Drag Drag AttritionAttrition

EmployerEmployerPolicyPolicy

Quality Quality PolicyPolicy

HolidayHolidayPolicyPolicy

Lack of importanceLack of importanceOf JobOf Job

Limited Limited PromotionsPromotions

StressfulStressfulJobJob

Specific Causes for AttritionSpecific Causes for Attrition

Poaching

Use of referral schemes by competitors

Growth Opportunities

1/10 is made a consultant

1/100 is made a manager

Personal Reasons Change of place Getting married

Higher education Health

Salary & benefits Higher Salary

Better positions

Work Environment

Rigid rules Strict Monitoring

High Stress Levels Nature of the job

Expectation mismatch

What is Employee What is Employee Retention?Retention?

Employee retention is a process in Employee retention is a process in which the employees are encouraged which the employees are encouraged to remain with the organization for to remain with the organization for the maximum period of time or until the maximum period of time or until the completion of the project. the completion of the project. Employee retention is beneficial for Employee retention is beneficial for the organization as well as the the organization as well as the

employeeemployee..

Importance of Employee Importance of Employee retention.retention.

The cost of turnoverThe cost of turnoverLoss of company KnowledgeLoss of company Knowledge Interruption of customer ServiceInterruption of customer ServiceTurnover leads to more turnoverTurnover leads to more turnoverGoodwill of the companyGoodwill of the companyRegaining efficiencyRegaining efficiency

Key Areas in Employee Retention

Compensation Environment Growth

RelationshipSupport

Retention Strategies used in the Retention Strategies used in the IndustryIndustry

Daksh services and Global Vantedge –cash incentives

GE, Wipro Spectramind – management diplomas and MBA courses

Exl Service.com and ICICI one source –hire outstation candidates

HCL Tech BPO Services, GTL – career counseling and planning career

paths

RECRUITMENT PLANNING MODEL TO CONTROL THE RATE OF ATTRITION

• Evaluating the Recruitment Channels

•  Careful Analysis of the Background of the Employee

•  Assessing the Reasons for opting the Job

• Selecting the Right person for the Right Job

• Clarity about the Job Profile and Appraisal System

• Change the employable target audience

• Innovative Techniques to Recruitment

• Changing perception of employees from life style to career

ConclusionConclusion

• The multi-billion dollar BPO industry is racking its brains to solve the crisis, a complicated one that could prove to be disastrous in the long run.

• Brand building has come up as a good panacea for the attrition problem. The Indian BPO industry is focusing on the process of brand building with a view to create respect and awareness of the job among the people.

• Today, most of the BPOs are on the look out for freshers and agents with more than one-and-a-half to two years of work experience, rather than graduates with no prior experience in the industry.

• The attrition rate which goes as high as 50-60% can be reduced to as low as 10-15% considering the recruitment planning model. If the present attrition rate goes on the outsourcing industry is likely to face a shortage of 262,000 professionals by 2012.