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The greatest challenge faced today by organisations the world over is retaining talented employees in the organisation. A debate raging since many decades has been as to whether to retain them is more important than finding a successor to the vacant position. Whilst the argument continues, let us examine the causes, consequences and control of employee turnover in an organisation. By employee turnover, we mean that employees of an organistion cease to remain in the services of that organisation and leave for reasons best known to them.

Some of the causes/consequences could be classified as:

Dissatisfaction parameter:

Employees are dissatisfied with the salaries, perks and benefits offered by the organisation they are currently in. They may also be dissatisfied with their bosses or find their jobs meaningless and unimportant as a result of which their job satisfaction levels are very low. Further they may be dissatisfied with career opportunities in the organisation or even its personnel policies in general. As a consequence of the above, Employees leave to join other organisations which satisfy their needs. As the wheel of time moves along, they find a third organisation which offers to satisfy them even more. Thus they change again i.e. they are perennially job-hopping from one organisation to another.

Alternatives parameter: Here the employee leaves the organisation in search of "greener pastures" such as starting his own business, joining the family business, joining an organisation in a foreign country or even availing of the Voluntary Retirement Scheme of the organisation and relaxing at home, living off the interest generated from fixed deposits and investment. An interesting trend in recent years in has been that many managers leave industry to become consultants or even faculty in management institutes or go abroad to complete their PhD or further studies. It is important to note here that the separation here was not because of dissatisfaction with respect to the present organisation but because of other available alternatives and inclinations in that direction by the employees. The consequence here is that the organisation loses some talented employees for no fault of theirs. In some organisations some of these employees are even used as consultants on a retainership basis from time to time. This is possible if and only if the separated employees are not always in a competitive area of work.

Personal parameter: In this case, the employee chooses to separate himself from the organisation because of personal reasons such as ill-health, desire to return to the native place for family reasons, the spouse is transferred and the current organisation has no branch in the new location and so on. In the Indian context, women may have to give up their jobs post-marriage to resettle elsewhere in the country or even post-pregnancy. As some of the above problems are more common with the women employees, many organisations have an unwritten policy, which is widely practised i.e. to minimise employment of women. This is a very unfair and biased policy and unfortunately many competent and well-qualified women have had to suffer. But companies argue that many women executives, even in today's Indian context have to quit jobs after marriage or pregnancy. It is best therefore not to generalise and treat such cases on their respective merits.

Organisation initiated parameter: Sometimes employees have to separate from an organisation as they have not completed their probation period successfully or they are being laid off for want of work or their appointment was only on a temporary basis. In fact it is this aspect of separation that is most unpleasant since the earlier ones discussed were cases of separation which were employee initiated. Care must be taken by the organisations to ensure that the above be carried out as smoothly as possible else, this could create a lot of negative impressions about the company which could be detrimental for the organisation's image in the long run. One major consequence of this type of separation is that it affects the morale of the employees at large and creates a feeling of insecurity in general.

Let us realize that today recruitment has become both a highly specialised area and a costly exercise too. Once an individual joins an organisation, costs incurred on him include Acquisition costs i.e. cost of recruitment, selection and placement &Training Costs i.e. induction, specialised training and on the job training. Besides when he separates from the organisation, the company faces the cost of his position lying vacant besides having to pay his separation pay and such dues.

Hence organisations today are focusing on minimising employee turnover with great gusto.

Some of the control measures taken are:

Having a well-designed and dynamic Compensation and Benefits system which is highly competitive.

Providing opportunities for further growth in the organisation via career planning/ succession planning.

Develop a highly conducive and pro-active work culture in the organisation where openness, creativity and commitment are valued.

In many organisations today, Exit interviews are conducted to obtain feedback from separated employees about their stint in the organisation. This Exit interview is conducted in two phases.

Phase I is conducted as soon as the employee's boss receives his resignation letter. The objective of his meeting is to ascertain reasons as to why the employee wishes to leave the organistion. If the employee is really worth retaining, attempts are made to eliminate dissatisfiers if any and retain his services for the organisation. This decision has to be taken very judiciously else the employee will use this as a tool to push his demands via a resignation letter. If an employee withdraws his resignation letter; the exit interview has achieved its objective of retaining a good employee. Despite all the attempts made, if the employee still decides to separate then we move on Phase II.

Usually the second phase of the exit interview should be conducted after the employee who has separated has been paid all his dues and his accounts with the company have been settled. This ensures that the separated employee provides candid and unbiased feedback about the organisation's procedures, policies and problem areas. All such feedback should be recorded on paper and circulated to the top management. In order to ensure that a good discussion is possible, the exit interview should be held in privacy and conducted by a senior employee of the organisation who is not the boss or departmental head of the separated employee. If the feedback duly obtained by this method is looked into seriously, this serves as a good raw data base through which various irritants and lacunae in the organisation could be eliminated.

In fact, the exit interview also has one more spin-off. If the employee parts with a good feeling, he has a tendency to keep in touch with the separated organisation. Perhaps over a period of time, he would even like to come back to his old organisation. Some management's are conservative and brand the separated employee as a traitor but many other organisations welcome him back.

Whilst critics argue that a continuous inflow and outflow of people into any organisation keeps it healthy, care should be taken to ensure that the outflow does not exceed the inflow. Further good employees should be retained and developed to assume higher levels of responsibility in the organisation. One needs to remember that employee turnover is not a malady which exists in the organistion. Hence necessary steps should be taken by an organisation to identify the causes and keep this turnover at an acceptable level. Retaining talent and creating a conducive work culture to facilitate performance would ensure the organisation's health &success.

From India, Ludhiana
Manager - Hr
Senior Analyst - Talent Management
Ekta Sharma
Afolabi Ajayi
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Student - Hr Professional
Hr Manager
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Hi! mohit
I'm an MBA student I have read UR article on talent retention it was absolutely fantastic. Could U provide me some futher information regarding to the causes which led to an alarming increase in attrition rate in BPO industry.Looking for UR assistance.


hi mohit,
it was a good article.... but few studies in Us say that people leave oganisation due to their boss more than anyother causes... donot know why this problem....... just u have said about exit interview taken by senior manager i u think it will be good nod. since the interview can go formal and the employee may not reveal things easily..... what canbe done to make the employee feel good to tell abbout the problem they have faced????

From India, Vadodara

Hi sreenivasan
Well to some extend its true...but it can not be possible for each employee having grudges with management.
its depend of the person who is doing the exit interview..if he takes this job seriously and think for the company he can certainly know from the employee whats went wrong.
when employee leaves the company ...he surely wants to tell the company what he feels...its only we have to know from him.

From India, Ludhiana

hi Prabhjot

Well Attrition rate in BRO is very high and it has so many reason to rely on this fact.

well i am sending more data on this.

All companies, regardless of size, are struggling with how to keep employees from leaving for more money or better opportunities. Studies consistently show that even though employees may say they are leaving for more money, when those same employees are asked several months later why they really left, the money factor is about 5th or 6th on the list. The first few reasons include lack of recognition, disagreement with the culture or direction of the company, poor treatment by their boss, lack of excitement about their growth prospects, and poor relationships with co-workers. Did you know that studies have indicated that it will cost a significant amount of money to replace an employee? How much? When you add the costs of finding an employee, training the new employee, lost productivity and filling in for the employee who leaves, the cost can easily equal 150% of the base salary of the person who left. So, if you are paying someone 50,000, the cost to replace that person will be approximately 75,000. This money comes out of your hard-earned profits.

This is one of the key reasons that companies are focusing so much effort on keeping their current employees. How can you increase your chances? Listed below are a number of ideas you may want to consider.

Ensure you offer competitive compensation.

Ensure you offer basic health care benefits at reasonable rates.

Consider adding lifestyle benefits that are cost effective (read easy on the cash flow).

Find out what employees want from their career and do what you can to provide for their needs.

Be as flexible as possible about how the work gets done.

Be as flexible as possible as to when and where the work gets done.

Can it be OK for an employee to take a few hours off to attend to a family or personal matter if they can accomplish the job at their home in the evening?

Take a real and genuine interest in people's career aspirations and personal lives.

Catch people doing something right…frequently recognize positive contributions to the company.

Communicate company progress, financial news, major customer or sales activities on a regular basis. Follow up on your commitments to provide information or answers.

Have regular (bi-weekly or monthly) meetings with all employees where they can ask you questions about your plans, company progress, new developments to look for, etc. Be accessible to them so you can learn their needs. If you can respond to their needs before they become real issues, they won't begin looking for greener grass.

Ask former employees why they resigned. Even if they left six months ago, they still have a valid perspective.

Routinely ask employees what you can do to make the company a better place to work. Set boundaries if necessary as to what items are not negotiable; such as ownership in the company or 50% per year salary increases.

Keeping people is arguably the most challenging aspect of running a business today. The answer lies in the fact that there is no one set of answers. People are different, so their reasons for doing anything are different. Successful companies today ensure they know what makes their best people different, and they work hard to see that those

needs are met. Hopefully, some of the ideas mentioned above will spark some useful ideas for your unique company and your unique group of employees

From India, Ludhiana

hi mohit,
that's good answer from you.. but if u take BPO the retention is more and the people are very young that they are ready to spend time in the exit interview. motivation and interest rate is very less. then if you see normally there is same kind of answer for going out of the comany like salary., so if you think concentratin on exit interview will help them to do retention...
then some BPO has 50% attrition. then the exit interview itself will become a big lo of job. if there also exit interview is needed?
i think i am asking more question. but i think u dono mind to clarify to me
have a nice time

From India, Vadodara
Ajmal Mirza

I tend to disagree with sreenivasan
First, the retention is very less compared to the traditional industry.. and
Second, the employees are not ready to spend time in Exit Interview
Further, I believe that EXIT Interview should be made compulsory and should be taken by Certified HR Personnel. That would help in getting the real cause behind the move..
I agree that most of the time, it is the pay, but if the person is moving for hike as less as Rs.500, then something is being hidden. There is something that is being overlooked or under reported. A thorough study needs to be conducted in such cases and the real cause should be found.
Normally if the stress levels are high.. and that is the reason behind his leaving the job.. chances are he won't accept it..

From India, Ahmadabad

hi ajmal, i wanted to say attrition is more and i left the not in the second sentence... i wanted to mean what you are saying... now thanks for to help me in rectifying m mistak made...
From India, Vadodara
Bob Gately

If we are serious about reducing employee turnover and keeping talented people on staff, we need to change what we do before the job offer is made not after the new hire starts which by then is too late.
From United States, Chelsea


I have been following the discussion closely and would like to share my views on this.

I agree with the observation that very often when an employee leaves an organisation because of internal factors - i.e dissatisfied with the orgn - more often than not it is due to the reporting manager. It is a harsh truth but we need to face it that when it comes to retention and motivation everyone looks at HR deptt, whereas every manager is responsible for his / her team's retention and motivation at the base level. They are the ones in direct and constant touch with the employees and hence are and should be aware of every movement and reaction.

Very often, when an employee resigns, everyone comes into action and tries to retain the employee and majority of the times he is asked why and what he wants etc and often gets what he wants - hike, perks etc as decided by mgmt. But rarely would you have heard of the manager being asked why his / her team member is leaving. If that is done, the problem can be identified and rectified at an early stage itself.

Lastly, Exit interviews are a critical and useful tool but only if implemented properly via a neutral source to ensure that the real problems are shared candidly.



From India, Delhi
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