Introduction THE Retention Malady
Don't shrug it away; it's real. Three out of every 4 software companies surveyed, and almost 1 in every 2 manufacturing and services companies confess that their retention-related woes are acute. Indeed, more than 90 per cent of the companies surveyed admit that they all have some sort of people problem although these percentages indicate the perceptions within, and not the retention-levels of, these organisations. SAMEs (Small And Medium Enterprises)-with a turnover of less than Rs 100 crore and fewer than 100 employees-feel the threat of attrition stronger than the others. On the one hand, the fewer number of employees on their rolls makes every departure significant; on the other, SAMEs are happy hunting-grounds for larger firms that can offer the best employees in such units more in terms of monetary as well as non-monetary compensation.
While the actual turnover-rates are much lower than the perceived threat of attrition, across industries and management-levels, they showed a rising trend that should worry every CEO. Undoubtedly, the junior management level is most vulnerable to poaching: turnover-rates range from 7 per cent in manufacturing companies to 13 per cent in hi-tech organisations. That's because junior managers, typically, experience more problems related to fit and culture than their senior colleagues. Of course, they are also more susceptible to monetary inducements at this stage of their careers.
Analysed on the basis of size, their track-records indicate that retention-levels have declined the most in mid-sized companies (with turnovers of between Rs 200 crore and Rs 500 crore). And they have either remained the same (83 per cent) or increased (17 per cent) in organisations with turnovers of more than Rs 1,000 crore. The logic in hindsight: a small organisation is an exciting workplace, with their fewer number making every employee feel wanted. And large organisations have elaborate people-management practices in place, which define the role that each individual is expected to play, and the route his or her career is likely to take within the organisation. But mid-sized companies are trapped in limbo: they are placid places to work in and, more often than not, do not have the kind of systems that their larger cousins do.
Marketing and services companies, though, would do well to look beyond the simplistic assumption that retention is a critical issue only in hi-tech industries. That may be the case in absolute terms but, while the retention-levels in 16 per cent of the infotech and telecom companies sampled have declined, they have fallen in 26 per cent of the marketing and services companies. Across industries, though, the function which witnesses the maximum attrition varies. In manufacturing and marketing companies, it is the production function. In services companies, it is the finance function. And in infotech companies, it is the line function of information technology. Evidently, the problem of retention is quite wide-spread in corporate India.



Reasons for employee movement:
Following are the reasons for professionals to change his/her job.
No growth opportunity/lack of promotion
For higher Salary
For Higher education
Misguidance by the company
Policies and procedures are not conducive
No personal life
Physical strains
Uneasy relationship with peers or managers
Retention a challenge:
Fundamental changes are taking place in the work force and the workplace that promise to radically alter the way companies relate to their employees. Hiring and retaining good employees have become the chief concerns of nearly every company in every industry. Companies that understand what their employees want and need in the workplace and make a strategic decision to proactively fulfill those needs will become the dominant players in their respective markets.The fierce competition for qualified workers results from a number of workplace trends, including:
A robust economy
Shift in how people view their careers
Changes in the unspoken "contract" between employer and employee
Corporate cocooning
A new generation of workers
Changes in social mores
Life balance
Concurrent with these trends, the emerging work force is developing very different attitudes about their role the workplace. Today's employees place a high priority on the following:
Family orientation
Quality of life issues
Autonomy
To hold onto your people, you have to work counter to prevailing trends causing the job churning. Smart employers make it a strategic initiative to understand what their people want and need -- then give it to them.
THE Retention Responsibility
Carry the Pareto Principle to an extreme: as 20 per cent of your employees account for 80 per cent of your success, focus 80 per cent of your retention efforts on 20 per cent of your people. Across industry-types, manufacturing, marketing, and services companies believe that it makes little sense to retain all their employees all the time. The real objective: retain only those people who contribute to the company's performance in terms of improving the quality of goods and services, or increasing the level of customer satisfaction.
However, hi-tech companies insist that their strategies must focus on retaining all employees. Their logic is that organisations get the kind of employee-performances they deserve. Given the high costs involved in mid-career hires, especially in software and telecom companies, it does make sense to create an environment where all their employees can continuously upgrade their skills-sets rather than let go of them.
Expectedly, the hr department and the senior management are the organisational centres vested with the responsibility of retention management. However, the process is shared: in most organisations, the hr department, the individual functions, the top management, teams, and the trade unions manage the retention function, individually and together. The choice of the unit varies across industries: 50 per cent of the companies where the union has a role to play belong to the manufacturing sector; teams are popular with manufacturing (37 per cent) and services (35 per cent) companies; and 32 per cent of the companies where the senior management involves itself in retention are infotech and telecom companies. Obviously, the high attrition-rates and the almost-perennial demand for skilled manpower in these industries is why.
Size too matters. 89 per cent of the companies where the senior managers concerned themselves with retention had turnovers of less than Rs 500 crore. And 69 per cent of them had less than 500 employees. Obviously, it is easier for senior managers to concern themselves directly with retention management when they do not have to deal with too many employees. Expectedly, teams and trade unions have a significant role to play in large companies (more than 500 employees and turnovers exceeding Rs 500 crore).
What can be done?

Though, it is impossible to scrap problems totally, there are certain ways by which BPO managements can tackle attrition. Since the BPO environment is unique, these companies need to develop innovative ways to tackle them. Human Resources department of a BPO must address these issues, and along with the management need to evolve strategies to retain employees at all levels.

At the time of Recruitment

Select the right people through competency screening.
Use psychometric tests to get people who can work at night and handle the monotony.
Offer an attractive, competitive, benefits package.
Make clear of performance enhanced incentives and other benefits. Keep these promises, later.
BPOs can set up offices in smaller towns, or recruit from there, where opportunities are few.
At the office

An employees work must be communicated to him clearly and thoroughly. The details of the job, its importance, the way it should be done, maximum time that can be allotted to complete it etc., must be made clear. If there are changes to any of these, let the employee know at the earliest
Give the employees necessary tools, time and training. The employee must have the tools, time and training necessary to do their job well - or they will move to an employer who provides them.
Have a person to talk to each employee at regular intervals. Listen and solve employee complaints and problems, as much as possible. Fairness and impartial treatment by seniors is important. Help employees manage stress, both at work and if possible, off work too. Give them special concessions, when in need. Treat the employees well & provide dignity of job.
The quality of the supervision an employee receives is critical to employee retention. Frequent employee complaints arise on this issue.
Provide the employees a stress free work environment. People want to enjoy their work. Make work and work place cheerful and fun-filled as possible.
Make sure that employees know that their work is important for the organisation. Feeling valued by their employer is key to high employee motivation and morale. Recognize their strengths and help them to improve those they lack.
Employees must feel rewarded, recognised and appreciated. Giving periodical raise in salary or position helps to retain staff.
Offer excellent career growth prospects. Encourage & groom employees to take up higher positions/openings. If they dont get opportunity for growth within the organisation, they will look elsewhere for it.
Work-life balance initiatives are important. Innovative and practical employee policies pertaining to flexible working hours and schemes, granting compassionate and urgency leave, providing healthcare for self, family and dependants, etc. are important for most people. Work-life balance policies would have a positive impact on retaining skilled employees, as well as on attracting high-calibre recruits.
Implement competency models, which are well integrated, with HR processes like selection & recruitments, training, performance appraisal and potential appraisal.

Main retention strategiesThis is not an exhaustive list, one can add or delete any of the below mentioned strategies. Secondly, the need of the hour is to have "right basics". Every individual is different, his needs are different, and his emotions, his problems are different. So, dear HR-Professionals…sit down and concentrate on your basics.
Communications - Getting Your People to Care Communication is the first step toward creating the kind of environment that people care about, and if they care, they just may stay. I'm not talking about a lot of New Age stroking designed to bring out the inner person or false praise that creates a misplaced sense of security. Instead, keep your people in the loop about what's happening with the company. At any time, all of your employees should have a pretty good idea of how business has been, and they should be aware of what issues the company is attempting to address.That means that you regularly keep your people up to date with important events affecting the company. If November was good, let them know, and while you're at it, tell them what you expect to happen in December. Share good news, as well as points of concern. If you've got "issues," talk about them before they start making you crazy. And if they don't get resolved, figure out whether the problem stems from a couple of individuals or from your system.Set Clear Expectations
How often do you appraise your employees/team-members?
What are your expectations from your employees/team-members? What are the parameters to measure their performance? Have you communicated to them?
What will be the consequences, if they fail?
What will be the rewards, if they exceed the expected level?

Proper RewardingA research reports says that in today's scenario,
70% of your employees are less motivated today than they used to be.
80% of your employees could perform significantly better if they wanted to.
50% of your employees only put enough effort into their work to keep their job.

As you might be aware of Employee Reward covers how people are rewarded in accordance with their value to an organization. It is about both financial and non-financial rewards and embraces the strategies, policies, structures and processes used to develop and maintain reward systems. The ways in which people are valued can make a considerable impact on the effectiveness of the organization, and is at the heart of the employment relationship.The aim of employee reward policies and practices, if any in your organization is to help attract, retain and motivate high-quality people. Getting it wrong can have a significant negative effect on the motivation, commitment and morale of employees. Personnel and development professionals will be involved frequently in reward issues, whether they are generalists or specialize in people resourcing, learning and development or employee relations. Keep following parameters in mind, while designing a reward policy:Build a high degree of recognition value into every reward you offer. Reduce entitlements and link as many rewards as possible to performance.Troubleshoot your reward system to make sure that what it is rewarding is what you really want to happen.Reward promptly.
Give employees a choice of rewards..Increase the longevity of your rewards
Be continually vigilant of demotivators that may undermine your organization's best efforts to provide power rewards, and reduce them promptly.
Nature of Supervision: The quality of the supervision an employee receives is critical to employee retention. People leave managers and supervisors more often than they leave companies or jobs. It is not enough that the supervisor is well liked or a nice person, starting with clear expectations of the employee, the supervisor has a critical role to play in retention. Anything the supervisor does to make an employee feel unvalued will contribute to turnover. Frequent employee complaints center on these areas.
Lack of clarity about expectations,
Lack of clarity about earning potential,
Lack of feedback about performance,
Failure to hold scheduled meetings, and
Failure to provide a framework within which the employee perceives he can succeed.

THE Retention Measures
Companies now adopt more than one technique to create an internal environment that will retain their employees. As per the survey, the most popular retention-oriented initiatives include:
INCREASING THE ORGANISATION'S LEVEL OF PROFESSIONALISM.
MOVING FROM FAMILY TO PROFESSIONAL MANAGEMENT.
MAKING PERFORMANCE APPRAISALS OBJECTIVE.
INVOLVING EMPLOYEES IN THE DECISION-MAKING PROCESS.
ENSURING A MATCH BETWEEN AUTHORITY AND ACCOUNTABILITY.
MEASURING EMPLOYEE SATISFACTION.
ACHIEVING A MATCH BETWEEN INDIVIDUAL AND ORGANISATIONAL GOALS.
DESIGNING A COMPETITIVE COMPENSATION PACKAGE.
INCREASING ORGANISATIONAL TRANSPARENCY.
PROMOTING EMPLOYEES FROM WITHIN.
HELPING EMPLOYEES ACQUIRE NEW SKILLS.
OFFERING STOCK OPTIONS.
FOCUSING ON WELFARE MEASURES..
BEST PRACTICES. The best organisations recognise the fact that the retention techniques that will work best for them depend on the dynamics of the industry of which they are a part, and the level of management at which they wish to focus their efforts. These organisations tier their retention strategies to suit their employees at various levels of the organisation. Often, recognising the individuality of employees is the best retention strategy.
A focus on retention management can serve as a good starting-point for improving the quality of systems and processes in an organisation. Retaining their best employees requires companies to launch initiatives along several dimensions: introducing good house-keeping practices in offices and shop-floors; making performance-appraisal systems transparent, objective, and participative; professionalising the senior management team; and ensuring that employees take pride in their work.
Fast-growth companies, which are among the top-performers in their industry, will find it easier to retain employees than others provided they practise the essentials of retention management: objective appraisal, and good pay-packages. Everyone loves to work for a winner. But the only way a company can improve its performance is by hiring and retaining the best human capital, and motivating it to deliver its best. If that isn't a vicious circle, nothing is. And best-in-class retention management is right at its centre



Conclusion

As they say, happiness can be contagious. So make sure the work place is a happy one, which every employee would love to spend time. Human resources department along with senior management must take steps to make sure of this.

Effective human resource management must be practiced at both strategic and day-to-day levels. HR management practices must reflect company policy as to how it will manage and relate to its employees. The HR strategy should evolve from a transactional support role to partnering in the organisations business strategy. HR must take steps to be aware of employee problems and try to solve them, creatively

References

1. “Effective employee retention stratigeies, key to reduce attrition in BPO firms – Offshoring Times
2. “Retention strategies in ITES-BPO Industry “ – Sanjeev Sharma – BPOInida.org
3. “Retention Management” – R Sukumar – Business Today.