ACKNOWLEDGEMENTS

I would like to thank my supervisor JONATHAN C WESTLAKE for his insurmountable guidance and tremendous encouragement throughout this research. Without him I couldn't get effective results in this research. His precious inputs and valuable suggestions helped me throughout my research.

I would like to thank my award leader PHILLMICKLEBURGH for his wonderful support and advice in technical and personal matters throughout my course and project work.

I would like to thank the working people (in Information Technology) for their valuable time for giving me requires data. Last but not the least I would like to thank all my family and friends for helping me in so many ways and for just being there when I needed that bit of extra strength to carry on.

It is pleasure to acknowledge contributions of all above people.

RESEARCH OVERVIEW

The whole research was divided into five chapters for the flexibility of reader to make this research meaningful and better understanding of what it explains. All these five chapters are interrelated to make this research appropriate and each chapter has its own importance in this research to make the necessary findings.

The first chapter contains brief description about this research, introduction to information technology industry in India and describes attrition meaning. Then this chapter describes purpose of this research, fundamental aim, objectives, research questions to be investigated in this research and the methodology applied to get effective result and necessary findings.

The second chapter contains information about literature review of this research, which contains the collection of data from researches done previously related to this topic. This data has been collected from books, journals, articles, web sources and magazines.

The third chapter describes well about the research methodology and explains how the researcher used different types of methods to collect primary and secondary data. The data has been collected from employees and managers of different Information Technology organizations in India. Two different questionnaires have been prepared by the researcher to collect the data. One is for employees to collect required data and second one is for managers to investigate the depth of the problems and related solutions of this research. A good response from the employees and managers made this research process easy to get the accurate information required.

The fourth chapter is the evolution part of this research. The information collected as means of primary data and secondary data, has been analysed by the researcher to find the required answers for research questions. The analysed data is presented in the form of tables and pie diagrams.

Fifth chapter is the finale report of this project, which is useful for IT organizations in India to prevent and reduce the Attrition rate. The recommendations were prepared on the basis of primary data, secondary data and analysis part of this research. The management can use these suggestions as upcoming strategies to curb the attrition in their organizations.

RESEARCH INTRODUCTION

IT (Information Technology) industry is booming in India. The growth of IT sector in India represents the potential of IT industry to perform at world class levels. Internationally famed companies and locally self-made small-medium sized companies are competing in developing new software with in this huge industry in India. These companies function mainly in two divisions, i.e. Technical (development of software) and Support (HR, Marketing and Finance). Big giants throughout the world are competing to get their software projects done from Indian companies due to some prominent reasons, which include Cheap Labour and Technical excellence. Taking advantage of these incoming clients, Indian companies are not leaving any stone unturned to provide the top quality service.

There are many reasons behind this growth of Information Technology market in India. These reasons belong to social, economical, technical and political issues. There are many Universities offering courses on science and mathematics and this kind of education system placed a great emphasis on increased number of science and engineering students. According to the NASSCOM (National Association of Software and Services Companies) of India These Universities are pumping out nearly 0.2 million engineering graduates every year. This population constitutes one of the greatest assets of Indian IT market. Even though there is shortfall of workers due to brain drain with many skilled workers interested to move overseas for better pay and living conditions. Software services sector occupied nearly seventy percent of technical industry of India and its abundant skilled man power is attracting international software companies to back end their operations in India. The advantage of India's backend operations is geostrategic location which offers 24x7 services and reduction in turnaround times by leveraging time zone differences. Recently government of India set down new ministry for Information Technology which established comfortable environment for growth in IT developments and attracted many multinational companies by providing greater range of facilities with cheaper costs. According to the NASSCOM survey IT industry attained the revenue of US $17 billion in 2008 there by capturing 12% of world market and expected growth of nearly 16.5% by the end of year 2009.

Though the above points are considered as positive attributes in the growth and development of Indian software industry, so also, the negative impact comes into picture in the form of ATTRITION (Loss of Employees/ Work force), which can be explained in terms of large growth of the “number” of companies attracting talent/ work force (people) which is finally leading to confusion among the work force in deciding the company to work for depending upon the offers made by them.

Attrition can be defined as the out flow of employees from an organisation due to various reasons. This research will contribute to identify the reasons behind the dangerous attrition levels in IT industry with in India and will suggest possible solutions to fight this problem. The increasing growth of the industry is leading to equal opportunities for inexperienced and experienced workforce. Since the companies rely on senior and experienced workforce for the projects, there is an unhealthy competition among them to attract the so called senior and experienced workforce which is finally leading to attrition.

This research paper clearly lays emphasis on the importance of considering attrition in perspective of individuals and organization because attrition destroys the value of business, causes companies to lose knowledge there by leading to never ending cycle of hiring. The researcher here emphasised on the reasons behind the attrition levels in IT industry in India and the possible solutions to curb it. Questionnaires used in this research serve as channels to understand the specific reasons behind attrition.

RESEARCH TITLE:

Reasons behind the increase in attrition rate in the Indian IT Industries - focussing Employee Turnover and techniques to reduce the Attrition.

RESEARCH AIM:

The main purpose of this research is to investigate the reason behind the day to day increasing Attrition rate in the Indian subcontinent with respect to the IT industry and there- by develop a report with the factors affecting attrition and possible solutions to overcome these issues.

RESEARCH QUESTIONS:

The proposed research questions are as follows:

  1. What are the reasons behind high attrition rate in the IT sector of Indian sub continent?
  2. What factors determine the attrition rate?
  3. How can this attrition rate be reduced in IT organizations' perspective?

OBJECTIVIES:

  1. The main objective of this research paper is to determine the relationship between good human resource practices and the reasons behind the employee attrition.
  2. To analyse various factors that affect an individual's decision to leave a job for a better opportunity, including individual related, job related and organizational related.
  3. To discover various threats and issues those impact the business performance, organisational health and rise in business cost, thus emphasising the importance of attrition in perspective of IT organisations.
  4. To evaluate the issues those affect the performance of the industry and minimise the attrition rate and also to analyse the techniques of motivation those will help in reducing the same?

ACTIVITIES TO ACHIVE THE OBJECTIVE:

Primary data collection will be done by conducting online survey with managers and employees in the organisation; the main reason being to gather accurate information. Moreover, while collecting primary data if the researcher can get to meet any of the old staff who have retired or who have left the organisation due to some reason, researcher would collect information from them to enquire the reason behind their exit from the organisation and their experiences while they were working for the organisation, the difference between their old and new organisation they have joined, whether they are satisfied at the new work place and their expectations from the new company.

Conducting a survey with employees would result in measuring the level of satisfaction they have attained in the organisation. To achieve the above task two different questionnaires aimed specifically at managers and employees respectively contribute to the collection of relevant information to understand the problem of attrition in the organisation's perspective.

The secondary data collection in this research will be done by reading books, journals, web sources, articles, magazines and collecting the old data which is related to human resource management etc related to the research topic.

Thus, data analysis of the information gathered would bring in a clear picture of the reasons behind the increasing attrition rate.

THE RESEARCH METHODOLOGY:

  1. To study the previous works done (on this research topic), making a list of them and analysing them by means of literature review.
  2. Discovering the designations where in attrition is more and creating the attrition chart by conducting organization study.
  3. Conducting a job satisfaction survey and evaluating the work environment by interviewing IT employees and spreading questionnaires.
  4. Conducting a survey with managers to have a look at recruitment process, benefits, training and motivation techniques implemented in the organization to cut down the level of attrition.
  5. Considering the reasons for attrition by the analysis of interview data.
  6. Suggesting and implementing techniques on how to reduce the attrition.

LITERATURE REVIEW

Attrition in Indian IT sector is rising drastically due to rapid globalisation and high economic growth. According to the researcher, the attrition is occurring mainly among technically skilled persons due to vast growth of opportunities and booming job market. This booming job market is creating enthusiasm not only among the graduates but also among the most satisfied employees. Due to this act organizations are unable to predict the start of attrition. One of the main reasons put forth for attrition is external inequity of compensation. The affect of attrition is seen in the form financial imbalances in organisations, which can be balanced by reducing attrition through retention of employees which is possible by the diligence of people in managerial positions.

ATTRITION IN INDIA

Almost all major business sectors in India are facing high attrition rates; these include BPO (Business Process Outsourcing), Telecom sector, Retail sector, Services sector, Biotechnology and Pharmaceutical. Attrition rates in different sectors for 2007 are shown below.

Source [online]: http://www.qcin.org/nbqp/qualityindia/Vol-3-No1/retaining.htm

As evidence in the figure 1, BPO sector is the worst affiliated by attrition and IT sector is at ninth place with the attrition rate of 27%. This shows attrition in India is an enormous problem with wide range of concerns. As this research is narrowed by only concentrating on IT sector, a brief introduction was given below as a table about top Indian IT organizations.

Name of organization

Number of employees

1. TATA CONSULTANCY SERVICES

Employee strength 141,642 with 30% women.

2. Infosys Technologies

Number of employees 1,03,905

3. WIPRO Technologies

98,521

4. Cognizant Technologies

63,700

5. HCL Technologies Limited

54,026

6. Hewlett-Packards

48,000 (approximately)

7. GE Capital International Services

36,200

8. Mphasis LTD

33,810

9. IBM

30,000 with 9 locations

10. Intelnet Global Services LTD

27,000

11. Tech Mahindra

25,482

12. Oracle LTD

12,000

SOURCE [online]: www.economictimes.indiatimes.com/photo/4835043.cms

The above table provides overview about working human resources in top IT organizations. Thousands of organizations were equipped with human resources as main source of business.

Arup Chowdary, CIO of Everyday Industries explains “major challenges are in terms of resources. The kind of attrition that we have in the IT industry today is one of the business challenges. It is extremely important that the resources that are given into the project actually continue for a longer period of time, which is not really the case; because the IT industry so volatile. So one is managing resources and number two is training those resources with adequate means to come to the market standards” .This statement gives clear indication of attrition affect on Indian IT industry.

According to the CCI (Chambers of Commerce of India) research study in India, attrition rate for 2007 was 27% and for 2008 was 29%, and according to Hewitt Associates survey for 2009-2010 most companies continued to experience attrition rates in double digits despite economic downturn.

According to the India Attrition study 2008, which was done between October 2008 and March 2009 by partnership between BT and PeopleSoft, key drivers for employees leaving their jobs are opportunity or career growth, salary, type of work, training or development, family circumstances, current job dissatisfaction, health, work load and working environment. According to this survey highest percentage of people are leaving their jobs for career growth and next for salary. Among the people who leave IT organizations, more number of people is top performers (45%) of whole employees.

Figure 3: Leaver type across Indian IT industry .

REASONS FOR ATTRITION

According to researcher, the major reasons for attrition other than monetary reasons (high salaries) are thought to be:

Ø The aspect of exploring new avenues by the employees where they get a bigger opportunity to hone their existing skills.

Ø Many employees, who work in IT sector, leave behind their interests and finally when they identify the clichéd nature of these jobs they willingly opt out and look for something novel and exciting even if it costs their careers.

According to Dr. A. Oliver Bright, causes for attrition vary from one organizational level to another. Considering at senior management level many firms chase the dearth of top talent in business, this situation results in senior managers getting new offers with more compensation than existing job. At medium level, employees seek to move from one zone to another like moving from technical role to managerial role or slower moving sector to faster one. At junior level, hike in salary and demand for employees in the market make employees to move to another job. There is a rapid development in Indian IT business sector, because many organizations from the USA and the UK outsource their work to Indian companies, thus resulting in the rise of opportunities. Hence people want to reach the top of the career at faster pace. It makes the employees to skip from one company to another.

Employee as reason for attrition:

An employee might get the feeling of “insecurity” regarding his job if the management neglects his career ladder. There are chances of an employee leaving the organisation if the so called training does not emphasise on his area of work and career growth. The communication gap between higher managerial personnel and the employees could be another possible reason of attrition. Another reason is the delay of intra-organisational promotions, which if offered by a different organisation will lead to the loss of employees (attrition). Employees tend to leave the organisation if they are not engaged in projects, which can be avoided by focussing on their growth. Several reasons for attrition could be due to the employee himself/herself. The employee might not have grasped the job profile at the start of his/her tenure and/or the profile was not explained in detail by the company. Poor work habits of employees from their previous job get carried over to their new jobs which disturbs their comfort zone. As explained earlier due to insufficient knowledge about the job profile the employee might not be competitive both in his/her organizational skills and interpersonal skills. This leads to improper job handling. A poor job fit, which is explained by the inversely proportional relationship between the new job preferences and the employee attitude/interest.

High female staff attrition is great problem these days in IT organizations as many number of female employees quit their jobs to give focus on their families even their salary is with six digits. WIPRO joint CEO Mr Vaswani says male to female ratio is almost same at entry level, but women employees drops to about fifteen to twenty percent at middle management levels and further about five to ten percent at senior management levels, and he continuous that it is a loss when trained and talented employee leaves. Currently Infosys employs 33.4% of women, TCS 30% and Wipro 29%. A women project manager says “I had to stretch myself and the team till late nights to fit into client's time zone. Women also quit at mid level because their priorities change. They want to show their excellence as a homemaker, which was the case with me”.To reduce this attrition organizations increased maternity leave, offering work from home policies for women, relocating them if their husbands get transferred, trying to be gender neutral and making easier to women for working.

{Source [online]: http://economictimes.indiatimes.com/News/News-By-Industry/Jobs/TCS-Wipro-Infosys-go-all-out-to-check-high-female-staff-attrition/articleshow/5324809.cms?curpg=2.Accessed on 13/12/2009}

Ashok Arora, executive director for HR, Ashoka Leylands says “high end talent is always high on aspiration; their worry is not one of survival, but how fast they climb up the corporate ladder. Management people tend to lose them every time if they do not reasonably address their concerns.

The reasons behind people changing their jobs:

  1. Employees expect more salary and more compensation than within their present position.
  2. Overseas opportunities, which may give hike in salary and position. A higher position in Indian culture means status and respect.
  3. If employees want to change their locations for personal and family reasons. Especially in India family plays a crucial role where a family decision can change the career path of a young professional and make employee to change his/her job (Dr. Elena Groznaya).
  4. People are interested in new technologies rather than working with same technology.
  5. To balance the social life and flexibility with working hours.
  6. Taking into account the company image and future growth of the organization.
  7. Employees will be self motivated to leave the company because of job insecurity, no freedom of decision making, relationship with peers, less compensation packages and lack of motivation.

Management as cause of reason:

It is very important for the management to meet the expectation of employees, if there is any such kind of problem or communication gap between management and employees then the persons would like to leave the organization. Another reason for attrition in organization is if management fails at satisfying employee needs and management does not follow correct policies or does not have appropriate tools to manage the employee related tasks then this situation leads to further dissatisfaction.

Azim Premji (CEO, WIPRO Technologies) stated that “when talented people leave organizations despite of high salaries, they don't leave the organizations but they leave their managers”. When there is continuous process of good employees resigning their jobs then management should have a look at their immediate supervisor. Advantage of Indian IT industry is the availability of large number of human resources in market, when managers show their concern as “plenty of fish in the pond” towards their employees by not considering their personal values then there is chance of increase rate of attrition rate. When first time employees face difficulties with their managers they look forward to solve that situation, second time they will think about leaving, but third time they will look for external opportunity.

Job profile as a cause of reason:

Job profile may cause the increase in attrition by considering the following factors. While dealing with the outsourced projects the employees have to work according to the time zone of client place, employees have to work by travelling most of the time to reach their targets, and if the employee is not satisfied with his job profile all these factors push the employees to look for a different alternative.

REFLECTING FACTORS OF ATTRITION

According to the researcher high attrition level may cause the employees to feel insecure and leave the organization, while lower rate of attrition will act as a retention policy. High attrition level indicates the poor ability of organization to hold its people.

“Attrition is unfortunately viewed as a management flaw when in fact it could well be a recruitment error”. (MONISHA ADVANI, CEO, EMMAY HR)[source:http://www.expresscomputeronline.com/20050822/technologylife01.shtml)]

Attrition level not only reflects the flaws in recruitment strategies but also training methods, retention strategies, work culture and company value in the market.

CALUCULATING EMPLOYEE ATTRIRION

It is very much important to concentrate on the rate of attrition in an organization which can be achieved by analysis and debate for. According to Sudiptha dev calculation of employee attrition may vary from one organization to another. Anil Naronha one of the director and HR of Novell software limited states that the standard method used to calculate the attrition of employees is dividing the number of employees who left during the year by the average number employed for that year.

According to the researcher it is very important to consider the root problem while calculating the attrition level of employees by going back to the hiring stage. Fresher (newly recruited) attrition level will be calculated by considering the number of these employees left and critical level attrition will be calculated when key persons leave.

Some organizations may not consider the attrition of beginners when they leave the organization for higher studies and moreover, termination of employees (whose performance is not met to the standards) is also not considered as attrition. But these exemptions depend on the policies/ methods followed by the organizations to calculate the levels of attrition.

COST OF ATTRITION

There are both visible and invisible costs associated with attrition. The invisible costs are low production rate which in turn creates loss in future sales, loss of customers and degradation of brand name in the market, loss of clients and contacts that person had with industry. Visible costs are the costs due to workforce leaving the organization, recruitment costs, training costs, loss of productivity costs and new hire costs etc. Costs due to loss of workforce includes the cost of the temporary recruitment to fill in while the position is vacant, compensation and benefits, administrative costs like clearing the benefits and stopping the payroll and cost of lost knowledge. Every person who leaves an organization becomes its ambassador, for better or for worse.

When employees leave the organization continuously, it is important to consider the recruitment process which in turn will become a never ending cycle. Recruitment costs include cost of advertisement, employee referral costs and agency cost.

Recruitment is a long-term process which consists of many stages and tasks to perform. These steps include understanding the requirements of position, advertising the vacancies, search for new talent, checking the background of applicants, preparing and conducting interviews and notify results to candidates whether they are successful or not.

Training is the next aspect to consider which involves high costs. It is an important task to hire a person who conducts the orientation which includes the cost of orientation materials. Cost for training material includes cost of hardware, software and printing manuals.

By considering the above factors one can lead to a conclusion that there are massive costs associated with attrition.

TECHNIQUES TO REDUCE THE ATTRIRION

The attrition levels can be reducedby the active input from HR people of the concerned organizations. Since they are the first line of contact for employees, they need to emphasise on the necessity to communicate with employees very often, motivating them and identifying any troubles and disturbances which if not done will gradually encourage the employee to leave the organisation. When the management neglects career ladder of an employee, that person might get the feeling of future insecurity. This can be reduced by conducting well prepared training sessions to improve employee skills and attitude. Some of the solutions that have been implemented successfully by the organisations in recent years to reduce attrition include, work-life balance, recognition and corporate brand building, healthy work environment, continuous employee learning (Subramaniam 2005).

It is very important to follow the effective recruitment strategies rather than following traditional recruitment methods. This can help the company to improve the response between organization goals and individual expectations to reduce the attrition level.

The type of Indian IT market can be called as people driven business, because it is a huge industry which is mainly depend on Human resources. So it is big challenge for human resource department to handle high stream of employees coming in and going out of the organizations.Padmaja Alaganandan, Principal Consultant, Mercer HR Consulting, India says “recruitment should be strategic to scale back organizations business targets because of their inability to recruit quality talent at the pace and scale called for. In such organizations with large scale of hiring, recruitment needs to be seen as a separate function with strong linkage to the business”.

Compensation and rewards play vital role in IT organisations to motivate and satisfy the employees. When a company makes high profits, it should make an effort to recognise the contribution of employees in this success by releasing bonuses which will lead to a positive employee response in future endeavours. Dr Elena Groznaya(freelance researcher and consultant in the field of intercultural relations and diversity management) suggested some motivation methods, they are extrusive motivation by money (pay rises, bonus and promotion), by showing long-term perspective towards employee including the family and enabling personal development. In order to motivate staff, experts claim that it is important to recognise set of values and needs, those vary in each particular culture. According to the classical theory of Maslow the hierarchy of needs includes :

  • Psychological, survival needs
  • Safety and security needs
  • Social needs of acceptance
  • Esteem and acknowledgment needs
  • Self-actualization and self-development needs

Major impacts on the employee behaviour are organizational culture and working environment. Providing good work environment and acknowledging the employee as a customer is an effective technique to reduce the attrition level.

A good employer can be differentiated from other employers by thoroughly looking at the priorities of them, while considering the goals and needs of employees. Maintaining work-life balance among the employees is the main technique to reduce the attrition level.

The nature of IT industry is to upgrade its operations frequently to achieve the business requirements and for this there is a need of dynamic change in deploying and using the upgraded technologies. To achieve the above requirements the management needs to take measures to help employees to update their knowledge through training programs from time to time.

It is important to identify top performers to reward and retain them, but keeping them secure and motivated becomes a key challenge. One of the best ways is to engage them by implementing strong career program for them. One of the top companies of India, National Information Technology, has implemented structured staff communication program which includes periodic sessions with business heads, skip level meeting, star performing bonus for high level performers and national or business level recognition programme. On other hand identify non performers to put on performance related exercises. To keep employees engaged there is need for staff involvement programmes like pre festive events, in-house sports activities and participation in outside activities.

According to the WIPRO leaders' quality survey, perfect leadership is one of the techniques to reduce attrition levels.

Marcia Robinson and Ravi Kalakota (2005) suggested seven strategies for recruiting and retaining employees.

  1. Spend time developing and Bench marking incentives which include free transportation, education allowances, health related allowances, bonuses and performance based appraisals.
  2. The main problem in Indian IT industry is that most of the newly recruited students/employees are leaving the organization to pursue masters/ higher studies. This situation can be overcome by the organisations, through the provision of subsidies for the higher education of beginner employees, to improve their knowledge in their area of expertise.
  3. Change the locations of work by sending the projects to places where labour and real estate costs are low which would further reduce the attrition level.
  4. Rotating employees into different disciplines and locations would make the employees feel the new challenges of work.
  5. Combat poaching (offering high salaries than competitors to attract the employees) by encouraging referrals.
  6. By providing well working environment and incentives is not enough, it is important to ask the employees whether they are satisfied or not.
  7. To hire the right people at right positions for which the human resource management personnel have to spend more time on the process of recruitment.

AFFECT OF RECESSION ON ATTRITION LEVEL IN INDIA

Recession in global economy has affected job scenario all over the world and Indian IT job market too has been reeling under this pressure. According to the researcher there is a steep decline in the rate of attrition of information technology field in last quarter compared to last few quarters and attrition level touched lowest rate. The basic cause behind this deep decline in rate of attrition level is the fear caused by global crisis and financial down turn. The IT professionals experienced vast job market and freedom to pick and choose among several jobs for several years, but because of present recession IT professionals are in tight position and strange circumstances that they prefer to stick to the jobs they have, instead of looking for another. IT companies are now following cost reduction and cut down methodologies by tightening recruitment policies and getting rid of non performing employees. The companies prefer graduates over experienced employees because they are cheaper to hire. IT companies are fighting for survival of business rather than fighting for talented employees, due to the current global recession. So the IT professionals do not have much choice to choose the jobs among several options.

The author states that the fall in attrition rate is related to lack of job opportunities and financial down turn. But still some employees are in desperate situation to resign their current jobs because of the uncertainty in the future of organisations and some other factors. Recent media reports reveal that major IT Company lost nearly 3,500 employees in the last month because of the uncertainty surrounding its future.

{Source [online]:http://news.in.msn.com/business/article.aspx?cpdocumentid=2222460)}

“What we see here is normal attrition during this period. In an organization which has 50000 employees, this is normal”. (Kiran Karnic, Satyam chairman and former NASSCOM chief).

Hewitt annual Asia pacific salary survey for 2009/2010 revealed that economic uncertainty should not helped to ease pain on high employee turnover but comparatively high turnover rate raises an alarm and reason behind employee turnover is better external opportunity. This shows companies are still searching for talent even under a tough economic situation.

{Source [online]: http://economictimes.indiatimes.com/News/News-By-Industry/Jobs/India-Inc-continues-to-see-high-attrition-despite-downturn/articleshow/5160363.cms}.

CHAPTER - 3

RESEARCH METHODOLOGY

This chapter explains how the research is conducted and organised in an efficient manner to make the best use of opportunities and resources available. The purpose of this research is to review and synthesise existing knowledge about attrition in Indian IT organizations, to investigate existing problems in organizations and to provide solutions to decrease the attrition rate. In this chapter researcher explains about importance of methodologies, methodological assumptions, approaches and limitations in this research. The result extracted from the methodology is the main source for findings and interpretations.

According to Jill Collis & Rojer Hussey (2003) the procedures, resources and methods in which data is collected to complete the research is known as research methodology and it includes the techniques of data collection for investigation of research problems. Here adopted paradigm of methodological assumptions is positivistic approach. Researcher conducted a survey which is a positivistic methodology whereby sample of people are chosen from a population and studied to make assumption about that population. Considered population for this research survey is working people on information technology in India. This population is very large, collecting data about every member is time consuming and expensive, so only sample of population is considered. This sample is enough to derive the characteristics of whole population by using statistical techniques.

It is important to materialize required questions to conduct survey and necessary to decide how to ask these structured questions. Well organised questionnaires are prepared to investigate the reasons behind attrition rate. These questionnaires were shared among the people by online through Google documents.

The techniques used in preparing questionnaires for employees, managers and how the survey carried out to get required response has been explained in this chapter. Researcher explained what the difference between qualitative and quantitative methods is and why these methods have been used in this research.

Data has been collected in two ways, one method is to collect primary data and second method is to collect secondary data.

PRIMARY DATA

Sources for primary data are online survey with prepared questionnaires and telephonic interviews. As per the main objective of this research paper is to determine various factors those affecting attrition rate in organizations, it is important to consider and investigate reasons in perspective of employees and organizations. In order to achieve above solution researcher conducted survey with two different forms or questionnaires, one is for employees and second one is for managers.

Interview (online survey) with managers:

Here the researcher prepared some questions for managers in such away to obtain required information. These questions are for managers like team leaders, project managers and human resource managers. The questions are asked to find out the present attrition rate in the organizations, to find out cultural impact on employees and techniques followed by the mangers to reduce the attrition rate in their organizations. Main aim of this process is to find out the reasons behind attrition from managers perspective. Data collected from this process will be very helpful because managers are first to be affected when an employee leaves the organization. This data is very helpful to know the views, ideas and activities of managers related to the research area.

The questionnaire used for this online survey is attached in the annexure at the end.

Interview (online survey) with employees:

Here the researcher prepared some questions for employees to find out working and cultural environment at their work place. It is important to know about personal life, working life and future planning of employees to find whether they are going to stick with their organization or not. There will be many reasons for turnover of an employee from a particular organization. So questions in this survey form were prepared to reveal the reasons behind employee turnover. Here the questions were asked to know the experience of employee, to know the satisfaction levels of employees and probable causes for dissatisfaction. The employees were asked whether they are looking for a change in near future, are there any hurdles regards with communication between employees and managers, what is affect of recession in their view and what are their future decisions.

One important question was raised in this questionnaire that whether employees worked before in any organization, the answer for this question gives how many people left their jobs before their tenure at present organization and what was the reason behind that. The questionnaire used for this survey is has been attached in the annexure at end.

By this survey data is collected from employees and mangers working in various organizations like TATA Consultancy services, Infosys, WIPRO, MICROSOFT, Sathyam Technologies and Oracle etc.

Telephonic interviews:

Initially data collection was started with telephonic interviews. Researcher called some employees and managers to collect required data by asking unstructured questions and asked them to fill the survey forms. This is the valuable method which reduces the costs associated with face-to-face interviews, but still allows some aspect of personal contact as the researcher unable to visit people directly. For better response researcher asked simple and short questions, this process makes people to feel easy to answer the questions and consumes very small amount of time. Before asking questions it was clearly mentioned about the purpose of this research and promised to keep the replies confidential. While collecting this kind of data researcher observed that it was the new joiners who were more likely to leave organizations for their career growth. While collecting secondary data it was observed that this situation is not only occurring in India but also exists everywhere in the world like US, UK and Europe etc.

There are two types of this kind of interviews. One is structured interviews where specific structure of questions prepared to get required data to solve initial problems (Sekaran, 2003). Second type is unstructured interview where no specific questions prepared and questions don't have any specific structure. Researcher followed second type while collecting data from employees and managers, because primary intension of researcher is to ask the people to fill the survey forms and there is no need for additional data except some basic information.

Advantages of telephonic interviews are cost effective and less consuming, but also there are many disadvantages like less scope of observation.

Preparation of questionnaires:

Now day's popular method for collecting data is questionnaire survey which is cheaper and less time consuming than conducting interviews and considering large samples. While preparing the questionnaires researcher followed some simple rules to reduce the complexity level of interviewing. These steps are explained below.

  • At the starting of every questionnaire purpose of interview has been explained to all participants.
  • Made an effort to keep the questions as simple as possible.
  • Avoided using negative questions and phrased each question in simple way so that only one meaning is possible.
  • Attempted to avoid offensive and insensitive questions to reduce the embarrassment.
  • It was clearly mentioned and promised to keep the replies confidential.
  • This research basically rely on questionnaires as the vehicle for extracting primary research data, questions were reviewed many times in the guidance of supervisor of this project.

SECONDARY DATA COLLECTION

The process of collecting secondary data is exploring the existing literature to ascertain what has been written on research topic; it includes examining how the previous research conducted and how it impacts present researching problem. This secondary data improves the knowledge about research area and helps to determine the scope of feasibility study. The secondary data has been collected from books, articles in journals, magazines, newspapers, reports, published statistics, electronics databases and internet. This collected data will have the proper references of sources of published data. Secondary data helped researcher to explore what others have contributed to present research topic, to compare the present ideas with what has gone before and to create new ideas. This secondary data is the literature review; it is a written summary of the findings from literature search. Cooper (1988, p.107) provides “First, a literature review uses as its database reports or primary or original scholarship, and does not report new primary scholarship itself. The primary reports used in the literature may be verbal, but in the vast majority of cases reports are written documents. The types of scholarship may be empirical, theoretical, critical/ analytic, or methodological in nature. Second, a literature review seeks to describe, summarise, evaluate, clarify and/or integrate the content of primary reports”.

It is very important to set the parameters accordingly to decide the scope of present research. The parameters here considered were geographical areas is India, industry is Information Technology and main keyword is Attrition.

Researcher faced many difficulties while collecting secondary data, because there was not much data available on selected research topic as less people worked before on related area. As the researcher is from United Kingdom it is not possible to get printed material or any printed books related research area. So the main sources of secondary data are computerised databases, online databases and internet.

Computerised databases:

Data bases provide huge knowledge related to most areas. Contained information in the databases can be classified into two ways that is bibliographical information and text or factual information. Books, articles and reports, this kind of information can be called as bibliographical information and this information is available in the form of references. Searching these data is very time consuming process and sometimes may give inefficient results. Text or factual information is available as electronic forms, this kind of data searching speeds up the process of carrying out efficient results. A computerised database is “a comprehensive, consistent, controlled co-ordinated collection of structured data items” (Hussy, 1994, p. 345).

There are two types of computerised data bases they are online databases and offline databases. It is very difficult to access offline databases as they are unable to access under the control of processor. Most of the data gathered by researcher in this process was from online databases.

Online databases:

The main advantage and flexibility with online databases is they are accessible from anywhere and every corner in the world. These databases are made for availability of public where the user is connected to remote computer which holds the database. Researcher spends most of the time on internet to search online databases for appropriate information. The advantages of this computerised searching are easy accessibility to available computerised databases; cross-disciplinary searching, updated and current information availability, speedy process of searching and less cost effective. Sources of accessed online information were recorded under Harvard system.

Data collecting methods can be described in two types those are

  1. Quantitative method,
  2. Qualitative method.

Quantitative method:

Quantitative data concerns with numerical form of information which can be counted. This type of collecting data provides the information in the form of numbers and statistics. This data can be classified as discrete or continuous, where discrete data can take only one of a range of distinct values (e.g. number of employees) and continuous data can take any value within a given range (e.g. time or length). Here the information was collected by classification of data, like occupation of employees and their working cities or towns. Some data was collected in terms of equality and difference which provided additional information such as greater number of new joiners quitting jobs than experienced employees. The strength of quantitative data is that produced information is quantifiable, reliable and universal to some larger people.

Qualitative method:

Qualitative data concerned with qualities and non numerical characteristics. Data available from this method will provide information with the perspective of target audience by interacting with people under study. These methods are useful for observations, in-depth interviews, and focus groups and for subjective analysis. The advantage of these methods is they provide rich and detailed data which provides correlations between different variables; researcher can gain the sort of insights into people and situations he/she required.

Van Maaneen (1993) defines qualitative methods as an array of interpretive techniques which seek to describe, decode, translate and otherwise come to terms with the meaning, not the frequency, of certain more or less naturally occurring phenomena in the social world. Instead of measuring answers like in quantitative methods the valuable data should be understood and observed by researcher. This method is multi process approach to perspectives, interpretations, experiences, practices and findings.

Jacob (1987) explained, this research can be done in lot of ways, they are cognitive anthropology, symbolic interactions, communication of ethnography, holistic ethnography and phenomenological. Here researcher followed phenomenological approach to conduct research to investigate whole problem, but make it simple enough to be understood by everyone. Here the data collected will be interpreted and concluded by the researcher, (Wolcott, 1994) the data collected is filtered by the researcher personal lens which is positioned in precise socio-political and chronological moment.

Ethical problems:

It is difficult to conduct much research at all without running in to ethical arguments (Coolican, 1992 p.249). Therefore it is very important to consider number of different ethical issues before starting research study. Especially this research is about to collect some information regarding personal issues and views of working people in IT organizations and data collection about working and cultural environments of organizations by interviewing people, which is a matter of confidentiality. Researcher assured to offer confidentiality or anonymity to participants in this project that information received should not be passed to someone else. Revealing collected information about organizations might be harmful for their business, so offering confidentiality will encourages them to give more open and honest responses. This research process should not harm participants, indirect participants (about whom information is gathered) and others (people not involved in this project). This research process should not violate community standards, accepted research practice and drawing conclusions (Kervin, 1992, p.38). To avoid unanticipated ethical issues researcher made clarity about intension of study.

Research limitations:

This research is to find out reasons behind attrition rate in organizations, researcher has chosen to research on IT organizations in India to narrow down the topic. As not much information is available because less work done by other people in this research area, researcher found that it was very hard to gather secondary data. Nearly one million people are working in Indian IT organizations, so this population is very large, collecting data about every member is time consuming and expensive, so only sample of population is considered. This sample is enough to derive the characteristics of whole population by using statistical techniques. Questionnaires prepared for online survey were simple and with short questions to save the time of participants.

Summary:

In this chapter researcher explained the ways in which primary and secondary data has been collected. Secondary data was collected by searching the literature and primary data was collected by conducting online survey. During the course of this research various documents were used for reference as a part of study, the sources of these references were recorded under the Harvard system. Survey forms used for primary data collection have been attached in annexure. In the next chapter DATA ANALYSIS results of research methodology have been represented in appropriate, detailed and subjective manner.

CHAPTER IV

DATA ANALYSIS

This chapter explores the reasons behind high attrition rate in Indian IT organizations by the analysis of primary and secondary data. Researcher has done online survey by Google with well structured questionnaires. These questionnaires were used to investigate the answers for research questions by interviewing employees and managers. Two different types of questionnaires were used here to achieve the above tasks. Initially the primary data was examined in different aspects; next the findings of this research were explained. This part of research provides answers for the questions reasons behind attrition rate, what factors determine high attrition rate and how this attrition rate reduced in perspective of Indian IT organizations.

Primary data analysis

The primary data was collected by interviewing employees and managers with online questionnaires.

Interview with employees

Here the samples of 30 employees were interviewed by online questionnaire. Data collected from their answers was explored here by considering each question.

To find out the employee switching rate among different IT organizations, the question was asked to employees “have you worked before in any other organization?” The answer was “NO” for 26% of the sample, and “YES” for 74% of the people. The reasons for changing their organization are

  • For high salary
  • International opportunity
  • Organization brand name
  • Career growth
  • Higher education
  • Relocation
  • Issues in personal life
  • Marriage
  • Type of job

The PIE chart was drawn below to recognise effect of employees' decisions.

It can be observed from the data collected that most experienced people changed their job for career growth and personal life, where new joiners or inexperienced employees (Less than three years of experience) changed their jobs for money, higher education and organization brand name. Female employees said personal life is the main reason. This shows age and marital status are key demographic variables behind high turnover of employees.

To know the satisfaction levels of employees they were asked to rate their present job satisfaction. Most of the sample said they are very satisfied (rating above 7 out of 10). Their ratings were shown by below chart.

Better understanding the phenomenon of organizational culture and working environment will provide information about the efficiency and effectiveness of human resource planning process to focus on the present problem. To know the organizational culture and employee views about their working environment they were asked “which was the one sector within company you think has gained improvement?” and different opinions were expressed for this question. The answers of the employees are Centre of Excellence (The Learning and Skills Improvement Service aims to accelerate the drive for excellence in the learning and skills sector),change at technical aspects related to knowledge and performance those are useful for learning and personal development, efficiency in payment methods, salary structure, internal communication infrastructure, Human Resource Management Techniques, employee development programmes (training, cultural development, internal networking), project management, special offers for employee security like providing health insurance etc and administration.

Appropriate and respectable communication between employees and their management would represent the co-ordination at working environment. When employees were asked the question “are there any hurdles in regards with the communication between you and your team leader or manager?” most of the answers given as there is “NO” problem with the status of communication. Some of the sample interviewed (23%) said there are problems with communication in the vein of when working at client's place manager will be far away from their team; this brings difficulties in communication at significant times. Another employee said managers show interest to communicate with seniors than juniors in their team. They suggested some important points for management those are, all managers should maintain proper communication with “ALL” employees in their team, then only they can understand and rate strengths or weaknesses of team members and they should not rate the level of performance by considering other people feedbacks or explanations.

Type of job also a better reason for voluntary turnover of employees, so when employees asked “have you been looking for a change in your present job”? 43% said “NO” and 57% said they are looking for change in their work. The changes they are looking forward to obtain promotions, lessen workload, handling of challenge work, training in new technologies, increase in salary, change of place, change of organization and work in overseas. Challenge in work and increase in salary are the most desirable changes employees looking for.

From the above chart it can be said that most of the employees need a proper guidance to achive their desires by training or change of work etc. If we compare the employees' satisfaction chart and change in job chart, most of employees are very satisfied with their job but still they are looking for change in their work. Management should take proper steps to solve this kind of situations.

It is important to educate employees about the affect of attrition and its consequences on organization. When employees committed to work sincerely for their organization, if they know about bad impressions of attrition on organizations employees might change their decisions and this will cause a revolutionary change in Indian IT market. To know the views of employees on affect of attrition they were asked “what according to you is the affect of attrition on organizations, what suggestion would you give to management to control attrition?” most of the employees explained the affect of attrition will be very bad and considerable. They shared their valuable views and reasons for high attrition rate. High attrition would cause for loss of skills (technical and knowledge base), increase in costs at all levels (recruitment costs, training costs, project costs), imply worst conditions on present and future economic status of organization, would create difficulties for management, obstruct company growth, increased work load on other employees and high attrition rate one particular organization represent its inability in the IT market. Naveen, one of the senior and experienced employees at TATA Consultancy Services, said “organization will lose heavily in-terms of technical and architectural investment done on associate; this is coupled with huge infrastructure expenses, company resources and resignation would damper the success of project. This directly will impact the customer unhappiness and there by a business redemption happens”.

It was observed by the analysis of data (answers to above question) collected from employees; some of the participants (14%) have no idea about attrition and its consequences on IT organizations. Management should take responsibility to provide knowledge regarding attrition and its affect on organizations.

Employees suggested some key points to management to control attrition rate.

  • Maintaining proper communication with employees, taking regular feedbacks from employees to know their job satisfaction levels, working environment and personal problems.
  • Making use of talented employees for appropriate work by recognising their skills and knowledge, unfeasible deadlines should not be given to the employees.
  • Motivating and encouraging people by offering reasonable salary packages against the market value.
  • Reducing pressure on employees by providing a friendly environment and giving value to their views.
  • By not giving false promotions and bring to a close of bad politics.
  • Implementing employee development programs, which include training employees whenever they need of latest information and skills, good staffing structures, motivation programmes, employee assistance programmes and cultural activities.

There is big drop out at job opportunities in Indian IT sector as everywhere in the world, because of economic downturn. This recession reduced the rate of attrition as wide range of opportunities and poaching are main reasons of attrition rate. To know the views and future plans of employees in economic down turn the question was asked “what is the affect of recession on your present and future decisions?” 47% of sample said that they want to stick to present job because of not many openings in the market. 20% said this economic downturn doesn't affect their decisions. Rest of the sample said they want to stick to their job even they are looking for change in present job.

From all the above analysis it was observed 30% employees looking for change in their jobs even they are well satisfied with present job. 27% said they are looking for change as they were not satisfied with present job. 24% said they are not much satisfied (satisfaction level below 7 out of 10) with their present job even though there was no hurdles regards communication with their management. 27% of sample employees said they have problems with their management but still they are well satisfied (satisfaction rate above 7 for 10) with present job.

Interview with Managers

A sample of 12 managers were interviewed with online questionnaire, important data was collected from them. When any employee leaves managers are the first to be affected in a team or in an organization, so the feedbacks from them are very important for this research to find the reasons and to develop report on hoe to reduce attrition rate in Indian IT organizations.

To find the rate of attrition, managers were asked to rate it in terms of skills and knowledge, most of the managers (58%) said their teams are experiencing high attrition rates (above 7 out of 10), rest of them (42%) responded as their teams are facing normal (rating in between 4 to 6 out of 10). Chart for this result shown below.

Important issue is to know who is more prone to leave organizations, the experienced or new joiners (inexperienced, below 3 years of experience). When this question was asked there was mixed response from managers. 50% of the sample said experienced people are more prone to leave and other 50% said for inexperienced employees.

According the managers main reasons behind the exit of employees from organizations are when employee caught in a project which does not have scope in knowledge improvement, foreign opportunity, promotion issues, no salary increments, career growth, internal politics, dissatisfaction with work, problems with management, to pursue higher education, family and personal issues, better pay or opportunity, looking for organization brand name and relocation.

All of the managers articulated that their team or organization will lose more in terms of skills and knowledge when an employee leaves in middle of project. This shows employee turnover is really serious concern in knowledge base or Information Technology Enabled Service organizations.

The question “could you mention one area of improvement in your own project which could go a long way to help curb attrition?” was asked to know the effective planning and approaches of management to control attrition. They mentioned some key areas of improvement. Those are

Typically time period for taking feedbacks from employees is six months. This time period was reduced to catch employees' psychological status.

Improved sessions for employee engagement programmes, this consists of training on new technologies. They implemented employee development programmes (improved knowledge base, online training for knowledge sharing, effective knowledge management). Some of them said decisions were made at early stages of project and tasks were allocated in proper way. Some organizations are providing external legal support to solve employees and they are offering better health insurance policies. One of the managers said they are “releasing people from projects after continuous work for two years, this is an option for employees to decide whether continue with organization or not. Once they decided to work they can't leave till the end of next project”.

Almost all the employees said similar answer, that when they sense an employee is about to leave the organization then their next would be to arrange immediate meeting and this activity might give the reason for employee decision. To persuade the employee to stay back managers said they will take necessary steps according to the situation.

For the question “how does attrition affect the organization as whole?” Managers provided valuable information by their answers. They said unexpected turnover of employees would impact project schedule, sometimes resources have to cover up by sitting late and increase in project cost by training and recruiting new people. High employee turnover affects internal organization culture and environment by creating negative impacts on employees' attitude. One of the managers said experienced employees are very expensive resources; if they leave the affected factors would be project budget project planning and organizational growth, this condition makes other people (employees, managers) have to carry out additional work. High attrition rate impacts negative sign on capability of an organization in competitive business market.

Most of the mangers said there is negative impact on employee turnover because of economic downturn, and one of them expressed still employees are leaving organizations for their reasons.

If given a chance what steps would you take to control attrition? Managers said they will promote employees as per eligibility, increases salary according to the outside IT market, send employees to foreign wherever possible, speak to employees on timely basis to find out if they are facing any special problems in professional and personal life.

Summary:

In this chapter researcher followed different methods of analysing primary data collected by online survey. The participants (employees and managers) in this survey are working in different organizations. The main reason for this survey is to find out basic reasons behind employee turnover in Indian IT organizations and to acquire a basic picture of IT organizational culture.