An assessment on

The Reasons behind high Attrition rate

Name: - Miss. Nayantara Ramrao Shirke Oriental Institute of Management Studies Vashi Class: - MMS I year Division: - B Roll No: - 1207 Subject: - Research Methodology

Assignment: - Finding out the reasons behind attrition rate among the
employees within the age group of 21-25

Professor: - Mrs. Shakti Avasthi

INDEX
SR.NO TITLE

1 2 3 4 5 6

Objectives Introduction Research Methodology Analysis Results & Discussion Conclusion

Objectives

1. To find out the reasons behind attrition rate among the employees within the age group of 21-25.

2. To study other reasons which play small but important role in attrition rate. These reasons include personal reasons as well as organizational reasons.

3. To determine the importance of retention and some retention strategies.

Introduction

Attrition is a phenomenon affecting any business organization in the industry. Over the past few years, organizations have taken an increased interest in aligning their HR practices to their business goals. What was originally seen as the time-keeping, records-maintaining department of the past today metamorphosed into the equivalent of a dynamic business consultant, providing strategic support. Managing a highly discerning, mobile and independent workforce has thrown up exciting challenges for the HR fraternity. Important questions on how well an organization integrates its people practices to its business objectives and the resultant pitfalls of a poor marriage of the two are the focus of many research studies. Though the current environment in terms of Talent demand and supply, presents enough opportunities for people with relevant skill sets as also enough manpower for organizations to choose from, employee turnover without doubt, bleeds value out of any organization, both in terms of time and money. As such Employee Attrition is a major Organizational issue, which different Knowledge industries manage in varying ways. Attrition is a dynamic issue that impacts business performance in more ways than the usually perceived Human Resource development angle. It is an issue which gives rise to questions like Organizational health, morale and motivation and leads up to very tangible aspects such as shareholder return and value. Attrition as a problem is also seen as the origin of further dialogues about Talent management and sourcing.

Cost of Attrition
Attrition has some business costs attached to it. It has been observed that Cost of Attrition is computed by all organizations, especially when it had a direct impact on the business.

This was usually done by calculating what it on average to replace a leaver with a new starter in each of major employment categories of the organization. This figure was then multiplied by the turnover % to calculate the total annual cost of turnover. The major categories of costs taken into account were: Administration of the resignation Recruitment costs Selection costs Cost of covering during the period in which there is a vacancy Administration of the recruitment and selection process Induction training for the new employee.

Check Attrition Levels

The attrition rate is often a harbinger of bad management. Due diligence in the sourcing process requires customers to check a vendors attrition rate. If it is too high, the customer may want to look elsewhere. Attrition is a leading indicator of other problems that are happening in the company, cautions Mehta. I take the attrition rate to mean: are people happy, and is the company doing the right things? Unless a company is able to attract and retrain the best talent, you will not get the services that you need. Attrition levels also tell a story about the culture of the service provider. In theory, a customer should choose a supplier that shares its policies and concerns for its employees. Mehta, who helped set up the offshore operations for MetLife before he moved to Wachovia, says, One big criterion for us was to look at the culture of the company, and how it meshed with ours. At MetLife and at Wachovia, there is a strong focus on how they [the service providers] treat their employees. So we chose partners who had a similar focus on their employees. Ask for a monthly report on involuntary employee turnover, experts suggest. Any slide in this data should trigger a conversation where the customer pressures the providers to take corrective action.

Use Contracts to Retain Key People

Contracts, usually in the form of Service Level Agreements (SLA), can help provide some continuity and reduce turnover. An SLA helps ensure that key people are not removed from a customer account for a set period of time or without prior permission. These agreements may include a provision stating that workers cannot

be trained on your account and then moved to other accounts. And significantly, some customers have also built in the right to remove underproductive workers from the account. The bad news in the industry is that attrition is rampant despite these agreements. The good news is that most of the movement of people is within the industry itself. Most employees leave one BPO to join another because another company may be offering them more money or a better job profile while few leave for other industries or for reasons such as higher education or marriage.

Bring Down Stress Levels

The call-center environment is often very stressful for workers the stress comes from a combination of factors such as furious callers and demanding employers and simply the work itself. The work is repetitive (most of the calls are scripted), employees have call duration and call volume targets to meet, they work at night, deal with cultural issues arising out of working with foreign customers and often deal with irate customers. For those who leave a company to work outside the industry, stress is often the reason. Absenteeism is common. In any case, stress needs to be addressed to have a productive work environment. The sourcing-evaluation process should include a look at the providers policy on managing stress levels in the workplace. Many service providers organize yoga and meditation centers, have gyms on their premises and some even assign agents as fun managers, whose job is to make the work environment lively and less stressful.

Research Methodology

Problem - To study attrition and reasons behind it

Hypothesis - Employees leave the job mainly because of compensation, lack of recognition at work followed by lack of growth Samples - 116 employees were randomly selected from the age group 21 to 25

Data source: 1. Primary data :Primary data has been collected from the employees of age group 21 to 25 with the help of questionnaire and also through interviews.

Questioners types - Closed as well as Open ended question

Variables: Independent variable:Reasons for attrition- 1) compensation 2) Lack of recognition 3) Lack of growth Dependent variable - total percentage of each reason Mediating variable - Percentage of ranking given for each reason by employees Control variable- 1) Age group of all samples was 21-25 years 2) All employees were randomly selected

Analysis

The hypothesis of the study was Employees leave the job mainly because of compensation, lack of recognition followed by lack of growth The hypothesis of the study was Employees leave the job mainly because of compensation, lack of recognition followed by lack of growth

The results obtained were not in accordance with the hypothesis. According to raw data table 1.1 percentages of people leaving the organization for the compensation reason was 16.37%, for lack of recognition it was 12.06% and for lack of growth percentages were14.65% but as specified in the hypothesis these are not the highest reasons for attrition. Therefore, hypothesis is not supported. It was found that the main reason for employee attrition was to pursue further studies; the total percentage for the same was 56.89%. The second highest reason was desire change in function and the percentage for this reason was 32.75%. The third major reason was relocating or migrating abroad percentage was 17.24% It was observed that age group of employees played a major role in overall results.

The age group of employees was 21 years to 25 years so it was found that the main trigger behind their attrition was to pursue further studies. Some employees were working as a part of their educational course; some employees got the admission for the higher studies so they decided to quit the job. Target group was the age group 21 to 25 years. This is the age when people get exposed to the varied opportunities in the industry. Moreover it is the age tempting to try for something different and new. Many a times this age group does not work only because of their household responsibilities but try to establish themselves and find their field of interest, this may lead to desire change in function.

After globalization there are ample opportunities in Indian markets. People prefer to work in MNC culture and hence are keen in completing their higher studies especially from foreign universities. This gives them a lift in their profile and better access to new openings. Therefore young employees prefer to relocate or migrate abroad.

Apart from these reasons, some other reasons for attrition were also measured. The obtained percentages for those reasons are as follows. These are personal as well as organizational reasons. 1. Health reason 0.86% 2. Marriage 2.59% 3. Location constraints 5.17% 4. Starting your own business 4.31% 5. Maternity responsibilities 0% 6. Elderly parents responsibilities 11.21% 7. Change in industry or field 12.07% 8. Not consciously looking for a job 11.21% 9. Lack of flexible work schedule 4.31% 10.Working conditions in the company 0% 11. Conflict with supervisor 0.86% 12. Poor culture 0.86% 13. Working conditions in the department 8.62% 14. Conflict with peers 0.86%

Hence, it is clear that hypothesis is not supported in this case. Table 1-1 shows the above results and figure 1.1 also depicts the data.

Raw data table 1-1

Personal Relocating and Migrating Abroad

code

Organizational Desire change in function Lack of flexible work schedule Lack of recognition for work Working conditions in the company Conflict with Supervisor Compensation

Code

P1

17.24%

O1

32.76%

Health Reasons

P2

0.86%

O2

4.31%

Marriage

P3

2.59%

O3

12.07%

Location Constraints Starting your own Business Pursue Further Studies

P4

5.17%

O4

0.00%

P5

4.31%

O5

0.86% 16.38%

P6

56.90%

O6

Maternity/Childcare responsibilities Personal reasons e.g. Elderly parent responsibilities Change in industry or field

P7

0%

Poor Culture

O7 0.86%

P8

11.21%

Lack of growth

O8 14.66%

P9

12.07%

Working conditions in the Department

O9 8.62%

Was not consciously looking for a job

P10

11.21%

Conflicts with peers

O10 0.86%

P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 O1 O2 O3 O4 O5 O6 O7 O8 O9 O10

PIE CHART

Recommendations for retention:

Following are some of the recommendations given to company to retain the employees between the age group of 21-25.

1. Company can give special permission to employees to leave early, so that they can complete higher studies by doing part time courses. 2. Company can send employees to abroad for taking more education in their respective field. This will be beneficial to both. 3. Company can give scholarships to employees. 4. Company can give exposure to employees in various fields. This will help employees to decide their area of interest.

Conclusion

It is clear from the above data that the main reasons for employee attrition between the age group of 21-25 is to pursue further studies, desire change in function and relocating & migrating abroad. But these reasons are different than the general reasons for attrition.