HRM in IT Sector
HRM in IT Sector
HRM in IT Sector
“Talented persons are like frogs in a wheelbarrow, which can jump at any
point of time when they sense opportunities”
Attracting the best professionals is never easy no matter what industry segment
we consider. There is some truth in saying that what the Middle East is to oil,
India is to software professionals. So, in a predominantly manpower intensive
software industry, issues of the manpower availability, its cost, turnover and
productivity are critical issues.
A major proportion of the turnover issue is attributed to movement of manpower
to the so-called “land of opportunities-USA”.
The average stay of a software consultant in any given in any given IT company
is not more than two years which has further dropped down to one year. HR
managers in India are realizing that employee retention is a Herculean task for
the IT industry, even for big players.
The present skill crisis has caused a panic in the employment market, with skilled
professionals being poached or choosing to change jobs. The attrition rate in the
industry is at an all-time high. This trend is likely to continue and even accelerate
as more companies suffer erosion while business demands continue to escalate.
HR department must therefore ensure that they donot fall fowl to the talent war
by ensuring, foremost, that their talent does not run out the door and go knocking
on the next.
Companies that can recruit the best talent and retain them will have an
edge in the long run.
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INTRODUCTION
India has the largest pool of manpower, second only to the US.
According to a study conducted by the National Association of Software and
Services Companies (NASSCOM)-quantity of skilled knowledge workers in India
seems to be a non-issue, and it would be so atleast for another couple of years.
Most CEOs site lack of skilled professionals as one of the major hindrances to
growth in the Indian Software Industry. Reputed software companies might get
people at the base level but getting somebody with an experience of more than
4-6 yrs is a problem. The problem of retention was more prevalent in the
telecom, IT and the Services sector than manufacturing and traditional sector.
Data shows that in companies with more than 1000 employees, the HR
Department was strong whereas in mid-sized companies, the individual
department was responsible along with the top management.
Large companies with growth rate higher than 10% did not face serious retention
problems, but large companies with lower growth rates had acute problems in
retaining their employees. In all industry segments, the employee attrition rates at
the junior level were on the higher side compared to that at the top management
level.
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Studied over the last two years, retention levels have either increased or
remained same due to better compensation, healthy competitive environment,
higher profitability of the company, and good working conditions. But the case is
not so with the IT sector, where the key motivator is the lure of U.S market.
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OBJECTIVE
The boom in the information technology revolution has been rising during the
recent past and is expected to go on for many years to come. Attracting the best
professionals is never easy, no matter what industry segment we consider.
This is especially true in the case of the IT industry where the attrition rate has
been the highest.
Attracting and retaining talent has become a Herculean task in this sector. The
objective of this project has been to find out the major causes of employee
turnover in the IT companies. It also looks at how this brain drain can be reduced
and what methods can be adopted to retain the knowledge worker in the
company.
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RESEARCH METHODOLOGY
The objective of this project is to throw light on various strategies used by the IT
companies to retain people.
This questionnaire purports to find out the issues faced by the various IT
companies with respect to retention of talented human resource.
These questions have been answered by four IT companies which are Onward
Technology Ltd, Mastek Ltd, Atos Origin and Rave Technology.
The findings and recommendations have been mentioned later in the project.
QUESTIONNAIRE
Q:1) What are the HR challenges that the organization faces? Is retention of
Human Resources a critical issue?
Recruitment
Manpower Planning
Training
Compensation
Retention
Any other (please specify)
Below 5%
5-10%
10-15%
15-20%
Above 20%
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Q:3) What are the methods adopted by the company to find the cause of the
turnover? Also rank them according to effectiveness.
Exit interview
Climate Survey
Employee Satisfaction Survey
Grapevine
Any other method (Please specify)
Compensation
Job satisfaction
Growth opportunities
Rewards and recognition
Other benefits
Any other
Q:5) What are the methods adopted by the company to retain people?
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Q:7) Has the attrition rate reduced after the implementation of retention
strategies? If yes, by how much?
Q:10) Which are the most preferred retention strategies by your employees?
Rank them.
Compensation
Job satisfaction
Growth opportunities
Flexi-time
Performance based rewards
Other benefits
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INDUSTRY ANALYSIS OF THE IT SECTOR
The IT industry has so far witnessed three major changes. Each changeover has
been marked by emergence of technologies that have dramatically increased the
number of IT users and applications riding a new wave of growth.
Elements of the previous period remained, but new technology was the driving
force in the growth of IT industry in the new period.
The first period marked the beginning of mainframes and ushered in computer
technology but usage was limited. In the second period mini computers led the IT
growth and helped automate several business processes. The third period which
began some 20 years ago, belonged to the PCs and client server technologies.
Of applications and IT industry revenues. This fueled an’ order-of- magnitude’
growth in the number of users, the number of applications and IT industry
revenues. Much of this was achieved by making IT products available at cheaper
rates, which enabled manufacturers to widen and deepen the market.
The fourth period, which is in its early stages, is the Internet era or the wired
market era. The wide and instantaneous reach of Internet, displays its potential
to fuel another order-of-magnitude growth in the IT industry.
This would obviously require selling at still lower price points and revamping
current distribution strategies and marketing approaches. The Internet era
provides another opportunity to grab leadership positions- not only in the IT
sector but several other industries as well. Companies, which are quick to react
and take the initial lead, will grow faster than those who fail to do so.
Already the corporates are using the Internet to deliver product information,
establish corporate identity, provide customer service, advertise etc. Internet also
provides a cost to effective communication medium. Apart from e-mail, it can
used to make inexpensive phone calls, videoconferencing, real- time interaction
etc.
Players
Indian software industry has a mix of a few large companies and several small to
medium sized companies. Currently 42 Indian companies have exports of more
than Rs 1 billion. First generation entrepreneurs, who had limited access to
finance and low risk taking capabilities, operate most of these large companies.
Smaller companies which are also typically entrepreneur run companies, have a
similar potential to strike it reach. Some of the key players in this industry are
Infosys, Wipro, Mahindra British Tele., Mastek etc.
Geographical Distribution
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Most of the software companies are concentrated in western and southern part of
India. These are further concentrated in a few cities. Choice of location has
been driven by availability of infrastructure facilities, cost of space and
manpower availability. In terms of business size, Mumbai, Pune, Hyderabad,
Banglore and Chennai have the highest concentration.
-Of-shore service: In this case software development and services will be done
in India and exports are done either in physical form i.e. on magnetic media,
paper, etc. or in non physical form i.e. via telecommunication/ data
communication links. In the case of physical form the declaration form used is
GR form and Softex form for non-physical form. For exporting the software by the
STP unit "Software Declaration Form" in triplicate need to be attested by. The
Jurisdictional Director of STP. The attested copies of the declaration form need
to be submitted to RBI after effecting the exports for necessary remittances in
this regard from the client.
Government Initiatives
Government has provided several policies to hold and improve prosepects for
domestic software companies.
These include
Setting up of STPs : STPs (Software Technology Parks) are autonomous
organizations set up the Department of Electronics (DOE). Under the STP
scheme, Member software units are provided various incentives. Currently the
Government has set up STPs at various cities like Bangalore, Pune,
Bhubaneshwar, Thiruvanthanapuram, Hyderabad, Noida, Gandhinagar, etc.
To provide further incentives to units in the STP government relaxed the 100%
export requirement. Software companies are also exempted from applicability of
Minimum alternate Tax (MAT).
Export processing zones (EPZ) : The government has set up various EPZs. Units
setup inside the zone can have 100% foreign equity. The firms are expected to
export 75% of their production and can sell the balance in te domestic market.
Additional incentives exemption from income tax on export profits.
Telecom policy : In May 1994, the government released the Telecom Policy to
improve the telecom municationinfra structure in India. The policy sought to
encourage privatization of infrastructure, which was a radical step at that time.
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Curbing piracy : To protect rights (IPR) of software companies, apart from
cracking down on piracy, the government has also made several policies to
actively discourage piracy, the government has also made several policies to
actively discourage piracy. Authorized sellers ofimported software are allowed to
reproduce software in India and sell it without import duty. Local software
manufacturers are exempt from excise taxes.
The much-awaited Information Technology (IT) Bill was passed by the Lok
Sabha in the month of May 2000. Even though there has been some criticism
about the provision of the bill, the fact tat the e-commerce transactions / cyber-
crimes are still very nascent areas in the Indian context means that it would have
been quite impossible for any Bill to have been fully comprehensive. As the
market matures and the users get a hang of the existing regulations, new
amendments can be brought about as and when required. Trying to make the
first Bill comprehensive would have only delayed the implementation.
It would be useful to have a look at the major provisions within the bill and their
impact.
Should boost e-commerce
The Bill is expected to give a major thrust to e-commerce activities in the country.
Though e-commerce activities have started of with most e-commerce sites
offering payment through credit cards (where the user keys in his credit card
number), there were many apprehensions regarding this given the absence of
clear-cut laws and the lack of legal recourse available to any consumer. With the
new set of laws, it is expected that buyers on the net would have the required
confidence to transact without fear.
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new area which opens up large areas for software companies with an expertise
in the areas of encryption.
Quolity Aspects
Software companies in India improved their quality tremendously in the last few
years. Today they are known for the quality of their software services. Indian has
one of the largest number of quality certified software companies in the world.
The increasing quality perception will help India transcend the cost barrier and
increase margins in offshore business.
There are several quality standards, which a software company can obtain.
These are
• SET's Capability Maturity Model – Level 1 to Level 5
ISO 9000
• Tick IT
• Bootstrap
• Spice (Software Process Improvement and
Capability Determination)
The first three are among the main certificates generally obtained by Indian
software companies. There are about 170 software companies in Indian with
quality certification. 15 Indian companies now have the SEI CMM Level 5
certification (out of 23 worldwide).
Apart from global recognition and quality assurance, government policy also
tends to be favorable to companies holding quality certificate. According to EXIM
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policy software companies with ISO 9000 series or equivalent certification are
eligible for grant of Special Import Licenses (SILs).
Competitive Position
The Indian software sector has several competitive advantages, which is allowing
it to grow at a fast pace.
Some of the key advantages are :
Locational advantage
India enjoys a locational advantage. The advantage it enjoys other countries, is a
12- hour difference with the world's largest market- the USA. This enables US
companies to establish round the clock software factories by subcontracting to
Indian companies.
Manpower
There is a tremendous latent potential of manpower supply in India. Indian has
the second largest pool of technically qualified English speaking manpower
(second only to the United States) available at a comparatively lower cost.
Demand for manpower continues to surge Indian has the capacity to supply
about 70,000 software professionals each year, which hardly meets the global
demand Indian software industry can therefore continue to have a manpower led
growth.
Low cost
Much of India's strong in software in the past is attributable to the low cost of
Indian programmers. Indian programmers are paid only about 15-20% of his/ her
counterpart in developed nations. Even among competing Indian software
professionals were paid the least. This provided domestic software companies a
cutting edge in pricing for software projects. However the low cost edge has now
been considerably eroded with most software professionals getting remuneration
at pet with global standards. Nevertheless in terms of cost-quality, India
continues to offer significant 'value for money'.
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Infrastructure facilities
India has more than 1200 high-speed communication links of 32-226 kbps,
connecting Indian software companies with their clients abroad. A
majority of this infrastructure and communication links are provided by
software Technology Parks of India (STPI).
Risk Factors
Manpower availability any cost
Indian has more than 1,900 institutions from which about 70,000 software
professionals graduate each year. This is further supplemented by
private training centers which coach about 40-45,000 students each
year. With many students opting for further studies / other employment
streams and several overlap between students at institutions and training
centers, it is estimated that India can supply about 75,000 software
professionals each year. Despite this huge addition to the manpower
base each year, the demand-supply situation is expected to remain right
during the next 3 years.
The excess of demand over supply will further push salary levels up ward Salary
levels for experienced and qualified professionals are broadly at par with
develop countries. The rising cost of manpower has already eroded
India's position as a cheap source of labor to a large extent. This
increases the risk of losing business to completion counties like China
and Russia who have cheaper labour, if they would be able to match the
quality Indian professionals offer.
Manpower turnover
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It is essential that an organization keeps employee turnover to a minimum, so as
to maximize on productivity. This is even more important if an employee
has to undergo initial training to develop specific skills. Employee
turnover occurs as employees show little respect for continuity with a
single organization and even employers actively 'poach' from competing
companies by offering more lucrative salaries. Most software companies
have been providing various incentives and stock option schemes to
retain talent, especially at senior levels. Organizations also have to
provide better working facilities to motivate employees to put in their
best.
Availability of infrastructure
The current boom in the software sector can be sustained through an increase in
offshore programming activity. This places special emphasis on availability of
quality infrastructure facilities in the form of hardware / software, power and
telecom links. India's power and telecom infrastructure is poor compared to many
developing countries. On top of that power and telecom costs are among the
highest world. The attempts at privatizing these institutions have not improved
the situation in a significant in a significant manner. For software companies,
investing in telecom infrastructure is an additional overhead, which few
companies will be able to afford.
Government policies
Government policies so far have been favorable to software companies. If tax
exemption on exports is withdrawn if cable affect software companies adversely.
WTO regards tax exemptions on exports as an indirect subsidy and hence the
government may phase out exemption in the near future. Also government
policies in future should be framed to encourage development of application
software packages, as this can only sustain the carrent growth rates.
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Several non-tariff trade barriers exist in foreign countries, which could restrict
growth of Indian exports. For example, since October 92 only H-1B visas are
issued irrespective of the duration of the project. Earlier for short term project B-1
visas were issued, which were caster and faster to obtain. H-1B visas require
several clearances and take about six weeks to proves. It also requires retention
of legal counsel to follow up with the respective offices.
Also the US has permitted to allow only 115,000 visas worldwide for skilled IT
professionals. This typically gets exhausted in the first 7-8 months of the year.
This year it was exhausted in May itself.
Several such subtle trade barriers can restrict Indian companies' ability to
maintain the current pace of growth.
Financing
Software companies require finance for setting up development centers.
Establishing communication links and other infrastructure and for working capital.
Traditionally, lenders have been averse to project finance due to lack of tangible
assets as security. The recent spurt in share prices of all the listed software
companies reflects the confidence amongst investors. This should enable
software companies to raise adequate finance in the form of equity. But
government has to set machinery in place to provide software companies with
venture capital, project and lease finance etc.
Quality
India has gradually moved into high quality but competitive cost bracket.
Currently, many of the large companies hold quality certificates. However, there
are various quality levels and standards. Moreover Indian companies need to pay
more attention to Total Quality Management and not just Production process
quality.
IPR
Indian companies have to move up the value chain to become truly global
companies. This requires a strong policy on IPR and strict enforcement
procedures. Uniformity of IPR policies with the 'target countries' will also help
Indian companies to improve export prospects.
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collages/ institutes. Also career oriented professionals used to go abroad for
training. The industry acquired critical mass and gathered momentum in the late
80s and early 90s. During the last 5 years, the industry has been growing at an
explosive pace of around 30-35% per year. While established raining companies
have maintained a high growth rate, scores of new small companies have sprung
up. Currently the industry is estimated to be Rs. 12 bn in terms of revenue.
Industry Structure
Computer education and training industry can be broadly divided in two
categories
-Use oriented training for basic awareness regarding computer and software
packages
-career oriented training imparted to professionals who aspire to pursue a career
in information technology and software development.
International presence
The leading Indian training companies have set up franchisees / centers in
several other countries, such as China, Hong Kong, Indonesia, Singapore,
Philippines, Middle East and USA. These countries have demand for computer
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education and training but shortage of tutors. Although currently revenue
contribution from overseas operations is insignificant, there is long-term potential
for Indian companies to replicate franchisee model in developing countries and
leverage low cost skilled manpower advantage (akin to body shopping) in
developed countries.
Several leading global payers have set up shop in India. These global players
have started their own training centers and also authorized training centers
(ATCs). ERP companies like SAP and Oracle have high dependence on India for
supply of trained and skilled manpower. Demand growth of ERP packages is
constrained by availability of skilled manpower. Demand growth of ERP
packages is constrained by availability of skilled and trained manpower to
implement, operate and service the packages. Oracle through is division Global
Education Center has set up several authorized training centers. Microsoft has
started certified.
Courses like Microsoft Certified Systems Engineer Similarly, Novell also givens
certificates for authorized Novell engineers. IBM Global Services has also set up
authorized centers. International companies like Unisys. IBM, Inter, Orate and
Compaq plan to set up their own centers for training for training in their own
proprietary software packages.
Upgradation
Training requires constant upgradation of knowledge base and hardware to keep
abreast with the rapidly changing technology and training requirements. Training
curriculum needs to be changed frequently to meet the current needs of the
market.
Quality
Owing to subsidized formal education, computer training appears to be very
expensive affair. Moreover the lack of curriculum standards has caused wide
disparities in the quality of training imparted by the various players.
No regulatory authority
There is no regulatory authority to check the standards of education imparted
and practices followed by private training institutes. A large no. of private training
institutes all over the country, aggressively advertise and market on the platform
of assured job.
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Internet Service Providers connect customers to the internet. For a particular
access fee, the service provider provides an installation software, a username
and password and access phone number.
Types of ISPs
National ISPs
These ISPs operate points of presents throughout the country. One category of
national ISPs own the network backbone and lease the international connectivity
while the other category of players lease the network and the international
connectivity from other ISPs.
The main target of these ISPs is the corporate segment. A presence throughout
the country helps these ISPs to cover all the locations for a particular corporate.
Cable ISPs
These ISPs are normally owned by the cable companies which helps them to get
exclusive use of the cables. Cable access ISPs offer broadband Internet
connectivity through the coaxial fiber network. These usually serves the
consumer segment of the market.
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- Additionally, business gains the ability to increase sales through e-
commerce transactions and decrease dependence on traditional
distribution channels.
- Increased sales
Competitive scenario
Retail segment
In the retail ISP market, the competition is fierce because the only service
provided is access and, therefore, there is very little differentiation that is
possible. So the competition veers around to price.
Since extent of value addition is very low here, the only way to compete is by
reaching economic volumes, so it is essential to make large upfront investments
in infrastructure and service and capture as much of the market as possible.
Corporate segment
Corporate customers have relatively lower price elasticity towards access
charges. As most of them use the Internet to support business critical
applications their focus is on service rather than costs. Corporate customers are
easy to retain because service disruptions due to change in change in vendor
can be extremely costly.
Thus entry barriers are high. This is also because a good track record is
essential to get am enter the market. The cu
4. Internet
till recently, Videsh Sanchar Nigam Ltd. Was the sole internet service provider
(ISP) in India. The new ISP policy announced by the government saw the private
sector led by Satyam enter the market. The current user base of around 5.5
million is expected to show explosive growth over next couple of years. Despite
the tremendous popularity , Internet has not been able to expand to it’s full
potential in India. One of the key deterrents has been the price of VSNL’s
service. Though this has been replaced by a new slab system, connection
charges remain against the highest in the world.
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The government has granted in-principle clearance to a few Internet service
providers for setting up international gateway, to the companies like MTNL and
Dishnet-Dsl subject to some specific conditions.
With this government has issued in principle clearance to all ISPs who have
applied for international gateway license using satellite technology.
5. E-COMMERCE
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Despite the tremendous benefits offered by e-commerce it suffers from problems.
Shopping on Internet has not yet developed fully. While manufacturers are yet
offer their complete range of products and services, customers on their part are
reluctant to pay on-line owing to fears of credit card theft.
Designing, producing and maintaining an e-commerce site requires high level of
skills.
The tools currently available are still in their evolutionary stage. The success
stories witnessed so far have been more of exception rather than rule. A large
proportion of the e-commerce sites suffer from poor sales and few visitors,
despite being designed and maintained well. Apart from this electronic commerce
also has a business risk. The worldwide reach offered by e-commerce, would
mean dealing with customers whom one has never seen and most probably will
never see. One of the most serious impediments e-commerce is the perception
that financial transactions over the internet are not safe.
STRENGTHS
INDIA’S STRENGTHS IN THE Information Technology arena are-
• Availability of unlimited pool of cheap and talented software personnel
• Presence of the biggest English speaking population after the U.S.
• Availability of western educated management personnel
• Lack of regulation in the software industry
• Burgeoning middleclass of nearly 150 million consumers
• No baggage of outdated software technology
• Time difference advantage with countries like United States.
Based on the software export growth in India, offshore programming ventures will
continue to remain profitable for the next few years. The threat India could face in
this area are from Philippines and Pakistan both of which like India have a large
pool of trained IT personnel.
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up the value chain add up to one thing- a threat from countries like china,
Philippines and a few other European nations who are making their presence felt
in the global industry.
That could change soon. The Chinese are reviving up their IT industry, with
20000 new software professionals expected to be added every year. More
importantly, they are honing up on their English-language skills. The country
already boasts of a much beeter IT infrastructure than India with a 55 Gbps
gateway compared with India’s 800Mbps.
Right now, China is three years behind India in terms of offshore outsourcing, but
the Chinese are working hard, even on their language skills. Besides, they have
a cost advantage and might soon surprise us. China could become a strong
contender in a couple of years from now, especially at the low end of the value
chain. It is definitely going to happen and most companies have to sit up and
take notice. Besides, Chinese manpower is approximately 15% cheaper than
India. The rising cost of doing business in India makes our offerings less
competitive.
There is a cross-industry consensus, however, at the end of the day, the threat
from China and other emerging countries boils down to two things-the imperative
to move up the value chain and remove infrastructure bottlenecks.
There is definitely a threat from China in the long run. And to avoid being taken
over by them, we need to beef up work on infrastructure.
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COMPANY ANALYSIS
The company has now restructured its operations to concentrate more on the
export markets which was ignored by the company so far. Onward is well placed
to capitalize on the domain knowledge acquired over the years. The company’s
days of low growth and mounting losses are over and it is now entering the
growth trajectory.
Revenues are expected to grow more or less in line with the industry. Growth in
revenues will be driven mainly by exports division. Operations of the company’s
US subsidiary have stabilized and has been able to market itself well. Profits and
margins, on the other hand, are expected to witness exponential growth rates.
MASTEK LTD.
Mastek, is one of the oldest Indian software companies with exposure to software
services as well as products. The company’s ERP product MAMIS failed to
create any impact on the market and has been largely unsuccessful. Despite
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being one of the oldest players in the country, the company has not been able to
establish itself amongst the top players. The company’s poor performance in the
past can be attributed to its loss making domestic and South East Asian
operations.
The company has increased its focus from products to software services and the
move has paid rich dividends. Mastek is one of the leaders in Customer
Relationship Management (CRM)an extended ERP application. CRM is expected
to account for 25% of the total income. The company is one of the pioneers in the
CRM area, which is one of the fastest growing segments in ERP today. Also,
margins are relatively higher.
ATOS ORIGIN
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RETENTION STRATEGIES
1) TRAINING
Companies are now spending a huge amount of money in training to keep the
employee morale high so that they donot change loyalties. Some of the factors
responsible for influencing the employee retention are the mergence of new
competing industries and increase in competition from various multinationals. In
the telecom and IT Industry, the IT department had the maximum attrition rate.
Upgrading skills-It is not only the quantity, but quality of software professionals is
also important “human capital is definitely a growing concern”.
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these technical and business skills, but in most cases, they fall short of
requirement. That is why, candidates invariably undergo further training and
acquire hands-on experience before being assigned to live projects.
2) COMPENSATION
In a dot com world, the blink of an eye matters more than anything else and
today, speed counts for business like never before. In such a scenario, pay is
becoming the accelerator paddle for change initiatives worldwide. But bnot
without some strings attatched. Salaries are hitting the roof but so are
organizational demands from employees.
Performance based pay- Nobody can deny the role of rewards and recognition in
attracting and retaining talent. Naturally then, benchmarking for compensation is
a sure shot topper on the to-do list for most HR professionals. But while window
shopping for best practices in reward system, we miss the point that there is
more to benchmarking than coping interesting practices. Specially, when we fail
to reap the same success that our competitors seem to enjoy.
The secret of attaining best practices in a reward system lies in aligning it with
business goal, performance criteria and company culture. So, stir up your own
recipe, but keep it within the norms. Professional appraisal systems and
performance-linked awards are also important.
Many smart employers are moving towards an annual incentive system. This
works for middle and upper management positions and even for teams and
individuals lower down the hierarchy. The popular technique is to use annual
incentive bonuses linked directly to goal achievement. Substantial increases like
this truly perk up energy level of employees.
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You will find a wide assortment, slaes commission plane, individual
incentive/bonus plans, team awards, gain-sharing and even performance sharing
plans.
ESOPs-Very much popular with the IT sector. The most common type of plan is
the Stock option plan, where the employee is offered shares which he can buy in
the future. The price at which employee can buy the stock is equal to the market
price at the time the stock option was granted. The employee’s gain is equal to
market value of the stock at the time it is exercised, less the grant price. The
assumption is that the recipient of stock options are motivated to help the
company perform well, so, in turn stocks will appreciate in value.
There are considerate touches. One of the companies, everytime it sends its
employees abroad for work, it distributes free telephone coupons to the family
members, thereby helping them keeping in touch.
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The softer events are driven around the company organising leisure for its
employees. The idea is hardly a new one (office picnics span various work ages
and will continue to do so) but has been given a make-over in order to promote
the idea of having fun. Some companies have initiated the concept of an evening
at a Pub once a month.
As Indian software companies discover the role of recreation and stress relief in
employee development and retention, more companies are beginning to offer
recreational facilities to their employees.
Mastek, apart from being one of the first companies in India to provide ESOPs
has been a pioneer in offering a stimulating and broad employee growth plan.
Methods used by Mastek Ltd:
Congenial atmosphere
Excellent emoluments and employee benefits
Pioneer in Technology
Wide range of career streams
Global opportunities
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Congenial atmosphere
As a company, Mastek is one of the few that have a Corporate Objective of
Employee Satisfaction on equal footing with the objectives of profitability and
revenues. Mastek has some stated values, which they practice more than
preach.
The first and most revered value being “Open Atmosphere”-Openness extends
beyond calling everyone by first names and not having cabins in the office. What
they mean by openness is the fact that they encourage, and even demand that,
Mastekeers question what they do; they push their assumed boundries, and they
raise their disagreements and hold differing views on everything. That is where,
creativity is derived in the organistaion. Freedom at work is the freedom to
change the way things are, but never at the cost of the result. Mastek
encourages people to “Just Go Do It”-which means an excuse-free approach, to
deliver results at all costs and nothing is more challenging and motivating to a
software professional than seeing himself achieve results, in spite of different
schedules, day after day.
Many other small gestures by the company which go a long way in retaining
people are:
Sending home bouquets on Anniversaries and Birthdays
Taking care of few expenses during marriage
Different types of allowances
Global opportunities
Mastek’s network is spread throughout the Globe, with operations in the USA,
UK, Germany, Malaysia, Singapore, Japan, Switzerland and Belgium. Most of
Mastek’s projects are for Fortune 500 Companies worldwide.
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Other individual as well as team-based rewards spread across the year (Monthly,
Quarterly, Half yearly, Yearly):
Movie tickets to employees every two months
Valentine Day Allowance etc.
Various other recognition programs
All too often, a resignation is accepted not with regret but with a bit of spice. This
is especially true with the IT industry. An employee resigns from an organization
for better prospects or fulfillment of his career aspirations. The lure could be
increased technical work opportunities, higher responsibilities, a more attractive
compensation package or a chance to venture out on one’s own.
But employees who leave donot always come back. They take with them some
positive and some negative experiences and an image of the company, which
they share with the outside world. Employees whether working with a company
or separated are ambassadors, who spread the word around. And while
neglecting the process of employee exit, many of us discount this fact
completely.
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FINDINGS
The problem however, is that even though most companies recognize that
they could improve, few realize that they have a retention problem.
Retention problems are like cancer that can hit any company anytime, but
there are ways to combat leaving, most importantly knowing your staff
needs and how to provide them.
The buoyant job market is one of the most serious issues facing
employers who are struggling to keep staff.
The number one reason for employees to leave is lack of opportunities for
career development.
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People are becoming increasingly selective about who they work for “Can
I be proud of the company I work for?”
It’s a candidate tight market where there are more jobs than candidates
and employees feel they are better informed about what the market is
providing and employment conditions in competitor companies to make
career-shift judgements.
Salary is not the single most important factor. Employees are also looking
at poor management and whether companies have innovative means of
rewarding people.
“Who is hit?” lower levels are the most vulnerable. Small companies are
becoming increasingly vulnerable and departure of even one person hits
hard.
Exit interviews and employee satisfaction survey do help. These are the
two most commonly used methods used to find the cause of turnover.
Employer’s version
1) Growth opportunities
2) Opportunity to work on new technology
3) Compensation
4) Rewards and recognition
5) Good work environment(open culture)
Employee’s version
1) Compensation
2) Career advancement
3) Job challenges
4) Work life balance
5) Boss
6) Education
7) Health
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) Matching organizational v/s individual demands
) Technology change
) Desire to work abroad
RECOMMENDATIONS
Companies need to continually invest to ensure that they are a step ahead
and know what competition is doing.
Be a people’s person
One of the most important tasks for any manager is hiring an employee.
Yet, very few are rained in this skill. Responsibility lies with management
in hiring managers. Right hiring will ensure longer retention cycles.
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Look at retention linked performance bonuses for managers who are good
at retaining their people.
Treat employees as you would treat valuable investments and ensure that
they have clear job roles, clear links to business needs and skills to
successfully perform their roles is a must.
Training
1) Train and re-train
2) Skill based training
3) Training on new technology
Employee welfare
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BIBLIOGRAPHY
A. Internet sites
www.indiainfoline.com
www.atosorigin.com
www.rave-tech.com
B. Publications
Business Today
Human capital
C. Reports
Mc. Kinsey Report on retention
AIMA study on retention
D. Books
Employee rewards
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