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Rajat Joshi

Retention of Key employees is critical to the long term health and success of any organization. It is a known fact that retaining your best employees ensures customer satisfaction, increased product sales, satisfied colleagues and reporting staff, effective succession planning and deeply imbedded organizational knowledge and learning.

Employee retention matters as organizational issues such as training time and investment; lost knowledge; insecure employees and a costly candidate search are involved. Hence failing to retain a key employee is a costly proposition for an organisation. Various estimates suggest that losing a middle manager in most organizations costs up to five times of his salary.

The BPOs in India face an enormous challenge in reducing attrition rate and this being a nascent industry needs to draw parallels, examples from other industry practices as well as develop innovative Employee Relation Initiatives as highlighted below. This has been classified into three groups

1. The Corporate level

2. Managerial/supervisory level

3. Employee Recognition Initiatives

Here this article attempts to highlight the strategies for the corporate level.

Corporate Level Retention strategies:-

Relevance of Retention Strategies in the Indian BPO Industry vis-à-vis other industries is very critical to its existence for the following reasons -

· To bring stability in business and increase customer service process.

· Nasscom has estimated that the Indian ITES industry will gross over $5.7 billion by 2005 (based on a conservative year-on-year growth of 65 percent by Nasscom).

· Staff/employee satisfaction translates directly into money quite quickly in the BPO industry compared to other industries.

· To reduce the pressure on the recruiting process.

· Recent acquisition deals both domestic & overseas by BPOs makes it even more critical to stabilize their back end operations to service new customers.

Before we proceed its important to understand the underlying reasons for high attrition rates, which are pretty steep and are around 40-50%. Currently it is about 35% in non-voice and 45% in voice call centers. About 80% of them look for better careers within the same industry. Agents want to become team leaders. Team leaders want to become supervisors. Supervisors want the job of the CEO. Based on my discussions with the experts in the BPO industry, literature and data available, the following trends are seen as below.

There are varied reasons for the same and the major reasons for attrition rate are(based on author’s sample study):-

· Money - 10%

· Night shifts - 35%

· Monotonous/boring job – 30%

· Others - 25%

As seen above from the above data, HR Strategist at the Corporate Level of the BPO Industry indeed have a huge challenge before them and their approach has to be proactive and they have to develop Innovative Employee Relation Initiatives as mentioned hereon.

· A satisfied employee knows clearly what is expected from him every day at work. Changing expectations keeps people on the edge and creates unhealthy stress. This creates insecurity and makes the employee feel unsuccessful. An employees deliverables at work must be communicated to him clearly and thoroughly.

· The quality of the supervision an employee receives is critical to employee retention. Frequent employee complaints center on these areas.

--lack of clarity about expectations,

--lack of clarity about benefits pertaining to performance based incentives.

--lack of feedback about performance,

--failure to provide a framework within which the employee perceives he can succeed.

· The ability of the employee to speak his or her mind freely within the organization is another key factor. Have meetings or dinner once a month, to share the company’s vision, the industry’s growth and where they see themselves in this scheme of things.

· Using psychometric tests to get people who can work at night and handle the monotony.

· Talent and skill utilization is another environmental factor your key employees seek in your workplace. You just need to know their skills, talent and experience, and take the time to tap into it

· The perception of fairness and equitable treatment is important.

· When an employee is failing at work, Refer to W. Edward Deming’s question, “What is about the work system that is causing the person to fail?” Most frequently, if the employee knows what they are supposed to do, then the answer is time, tools, training, temperament or talent. The easiest to solve, and the ones most affecting employee retention, are 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.

· Another important factor is focus on the process than on the person especially when the employee is not failing at work.

· Implement Competency Models which should be well integrated with HR processes like Selection & Recruitments, Training, Performance appraisal and potential Appraisal.

· A common complaint or lament during an exit interview is that the employee never felt senior managers knew he/she existed. In my experience I knew the MD of a company who knew the first names of all staff including workers to that extent he used to enquire about the well being of the family members if it was casually mentioned that wife or children aren’t keeping well. Senior managers refer to the president of a small company or a department or division head in a larger company. They have to take time to meet with new employees to learn about their talents, abilities and skills. Meet with each employee periodically. They will have more useful information and keep their fingers on the pulse of organization. It's a critical tool to help employees feel welcomed, acknowledged and loyal.

· The Senior Managers to be involved in the recruitment process if the Recruitment team has identified potential and cultural fit candidates.

· Involve the advisors or team leaders in the interviewing panels.

· In Company presentations to potential candidates, encourage the employees to share their experiences.

· Your staff members must feel rewarded, recognized and appreciated. Frequently saying thank you goes a long way. Monetary rewards, bonuses and gifts make the thank you even more appreciated. Understandable raises, tied to accomplishments and achievements help to retain staff.

· Select the right people in the first place through behavior-based testing and competency screening.

· Draw lessons from the Indian Army, for their command and control leadership where the troops are highly skilled, motivated and morale is high. The comparisons is drawn as both(BPO & army) have large numbers of employees and army’s style of leadership may not relevant to BPOs but it must be understood & gathered that military organizations are team oriented with continuous training. Troops expands their skills and experience capabilities they never dreamed possible, produces a highly motivated and efficient organization. Learning opportunity and responsibility is the key.

· Offer an attractive, competitive, benefits package.

· Provide opportunities for people to share their knowledge via training sessions, presentations, mentoring others and team assignments.

· Demonstrate respect for employees at all times. Treat the employees well & provide dignity of job; follow the maxim of Mr. Marriott that “Ladies & Gentlemen serve the Ladies & Gentlemen”.

· If a key employee resigns, it should be taken up on a priority basis and kept confidential as far as possible and the senior management should meet the employee to discuss his reasons for leaving and evaluate if his issues bear merit and whether they can be resolved

· Exit Interviews: Outsource this process to external consultants to get a realistic and unbiased feedback. This can be a great source of information regarding the shortcomings in a management system.

· People want to enjoy their work. Make work fun. Engage, employ the special talents of each individual.

· BPOs should endeavour to implement work-life balance initiatives to reinforce the retention strategies. Innovative and practical employee policies pertaining to flexible working schemes, granting compassionate and urgency leave, providing healthcare for self, family and dependants, etc. Work-life balance policies would have a positive impact on:

Attracting high calibre recruits

Retaining skilled employees

Reduce recruitment costs

Improve employee morale

Maintain a competitive edge

· Listen to employees’ ideas; never ridicule them.

· Offer performance feedback and praise good efforts and results.

· Implement organizational culture measurement tools like Adversity Quotient (AQ).

· Recognize and celebrate their success.

· Staff adequately so overtime is minimized for those who don't want it and people don't wear themselves out.

· Get them involved in social causes and fund drives like Tsunami Disaster Relief. Provide a meaning or a cause to their lives.

· Nurture and celebrate organization traditions like Diwali, Holi ,Christmas etc.

· Communicate goals, roles and responsibilities so that people know what is expected of them and feel a part of the crowd.

· According to research by the Gallup organization, encourage employees to have good, even best, friends, at work.

· Encourage humour & laughter in workplace to deal with stress which will ensure that the employees are happy which gets reflected in their services especially critical in voice based transaction.

· Feeling valued by their manager in the workplace is a key to high employee motivation and morale.

· Reach out to the families of the potential candidates with sustained and focused messages in the media about the excellent prospects in the BPO Industry. There is an example of this instances- Late Rai Bahadur Mohan Singh Oberoi, Chairman of the Oberoi Group in efforts to makes sure that many women joined his company went to educational institutions and elicited women’s parents to come to the hotel. He told them “ I will walk you in and show you what your daughters will do with us, please help us to train them”.

· Excellent Career Growth prospects. -

Encourage & groom employees to take up higher positions/openings. If not fulfilled then they will look outside the organization.

Look for talents within the organization and encourage them. For instance, if a person has the potential to be a trainer, groom & develop the employee.

· Night shifts

1. Have people from other walks of life to talk about their experiences. Other professions like Army, Medicine, and shop floor workers also have to work in night shifts.

2. Have doctors to advise & guide them about their biological clocks and ways & means to deal with them.

3. Dietary advice:- Do’s and don’ts.

4. Create the passion that they are doing a yeomen service to the nation by bringing the much-required Foreign Exchange.

5. They are helping people (clients) to make their life easier.

6. Special lights in the office/workplace to ensure their bodies get sufficient vitamin D.

7. One distinct disadvantage of night shifts is the sense of disorientation with friends and family members. Concentrate on this problem and develop innovative solutions and ways to deal with it.

· Focused Training & Development Programs-

For Associates & Team Leaders

· A session on Transactional Analysis during the induction period so that both are made aware of the causes for Communication breakdowns & conflicts which affect their mental behavior and stress which needs to be tackled at the earliest in the right manner.

· Those who are working on services verticals – like Banking & Financial services to be imparted training/knowledge of Vedic Maths, which would help them, calculate the figures quickly without using calculators.

· Creativity & Innovation- Its all about Attitude! A job can be as monotonous or exciting as you think/believe it to be, as it is all a state of mind. Look for excitement in the job process as it is not just answering the queries or solving the problems of customers but learning more about the customer through his voice accent or visualizing his environment/culture.

· Encourage the best performers to share their experiences with others and mentor others.

The emphasis is to create the desire to learn, enjoy and be passionate about the work they do.

· Meditation Room or deep breath exercises for Associates & Team Leaders – the emphasis is that they should never be in the stress mode or upset while attending calls of a customer.

· Hire outstation candidates (from small towns like Amravati, Latur,Nashik etc) and provide them with shared accommodation.


It is HR's job, though not HR's job alone, to champion and shepherd effective human resource management practices at both the strategic and day-to-day levels. That is, to be effective, human resource management practices must be grounded in two ways. First, they must reflect company wide commitments as to how it will manage and relate to its employees. Secondly, HR must implement these commitments so that the ideals of the enterprise and deeds of its agents are congruent.

HR to play a key role in the development and execution of the Business Strategy of an Organisation. It should evolve from a transactional support role to partnering in the organization’s business strategy.

( The next article would highlight the retention strategies in Managerial level & Employee Recognition Initiatives.)

Rajat Joshi

Personal Profile

PGDM from SCMHRD in 1995, have eleven years of corporate experience and wrote this article on a short sabbatical before joining back the Industry. Besides reading extensively and consulting, conduct Workshops on Business Creativity & Innovation in B-Schools.

From India, Pune
Hr Practices
Rajat Joshi
Hr Consulting ,trainer -creative Thinking
Rajesh Balasubramanian
Head - Operations & Delivery
Web Administrator
Hr Professional
Training Mgr
Hr Professional
Six Sigma,iso9001


Hi Rajat,
that was a very explicit article on retention. When can we expect the next in the series?
Also , I am eagerly looking at a course or something that can help me in Compensation and Benefits , a field that I want to specialise in. Any suggestions?

From India, Delhi
Rajat Joshi

Hi Pooja,
Thanks ...
Next series is on the pipeline and giving finishing touches...
Regarding C&B, please specify what do you want to learn...structure you may get to know bits of others on this and most imp is taxation part which you have to read the Tax Manual ...if you pick it up ..wud add value to your skills...infact the Tax manual wud contain a lot of info on structure and permissible limits and various components...

From India, Pune

Hi Rajat
I was actually wondering if there is a site or some softawre which helps in designing good salary packages and literature on guidelines on various perks and benefits that can be given to employees and of course as you rightly said , the taxation part which is of utmost concern.
can you suggest something for me?
I will definitely go through the tax manual in the meantime.
Looking forward to your next article.

From India, Delhi
Rajat Joshi

Hi Pooja,
Regarding the software or website - am not really aware but i know is that the companies develop their own packages based on the templates decided by the company. Would find out the details and revert to you.
Basic info would be available in Tax Manual...Its a Bible....give me sometime would make the ready reckoner for you only once you have read the Bible...
Have a great weekend!!...

From India, Pune
Hi Rajat,
Thats a cool article.. Havin done a small stint there as well I agree with your ideas and ways to reduce the attrition rate in the BPO industry.
What about your views on the Advertising Industry? (close to your heart?!)
Any major problem you think we're facing there which needs to be tackled?
See you soon..
Mee :)

Rajat Joshi

Hi Meera,
Thanks and appreciate your comments and feedback!!
What about your views on the Advertising Industry? (close to your heart?!) working on that too as well....
Busy conducting Business Creativity Workshops here in Pune and coming to Mumbai tmrw...
Lets catch up...

From India, Pune
Hello Mr Joshi, This was indeed a very nice article on BPO Industry. Please let me know if you are looking for a change in BPO Industry? Look forward to the next series. Regards, James

This is a good article to read at. But the retention strategies can not be generalised across industries and functions.
The retention normally becomes difficult for technical persons during boom period. During upswing of business cycle when all are doing well , then also most of the retention stratigeis fail as people have lots of option to choose from.
It differs from Industry to Industry and from function to function. Most importantly the location also plays its role.
So the strategies should be customized depending upon the location , function, industry and keeping the business environment in view.
with regards
srinibas (at) rediffmail (dot) com

Rajat Joshi

Hi Srinibas,

Thanks for the feedback!!

Q. This is a good article to read at. But the retention strategies can not be generalised across industries and functions.

A. I agree but the way industry is changing & as and when the organization grows , faces fresh challenges in the competitive environment then the retention strategies becomes essential. For instance, today some of the Manufacturing firms are thinking or giving ESOPs which is unheard of but it is very common in IT Industry. The point is somewhere along the line we HR Professionals have to innovate & create structure/systems to retain Talent.

Q. The retention normally becomes difficult for technical persons during boom period. During upswing of business cycle when all are doing well , then also most of the retention stratigeis fail as people have lots [b]of option to choose from.

A. Well , this point is debatable, infact am drafting the second series addressing this issue. The point to be understood is that today's world is employment at will & it is upto the organization how well they are able to release the deepest levels of creativity & highest level of productivity of their staff. Here i would like to quote


“I believe that the real difference between success and failure in a company can be often traced to the question – how well the organization brings out the great energies and talents of its people.

Besides money, its the culture & values and above all, a sense of belonging.

Q.It differs from Industry to Industry and from function to function. Most importantly the location also plays its role.

A. Differs today but tommorrow it may not and location to some extent also the plays the role- agree.

Q So the strategies should be customized depending upon the location , function, industry and keeping the business environment in view.

A. Well, that's we HR Professionals are paid to do!!


Rajat Joshi

From India, Pune
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