Causes of Attrition:

1. Incorrect setting of expectation

2. Business turmoil in the organization
3. Compression of salary
4. Perspective towards contact points in the orgn - peers. Leads to inferiority complex.
5. Perspective towards immediate manager
6. Feeling of lack of utilization
7. Killing of creativity
8. Personal ambition/reason - higher education, relocation etc
9. Active poaching by competition
10. Perspective towards work being done
11. Perspective about the industry - let me move from systems to j2ee, from pure development to
customer facing
12. Lack of growth opportunity

There are certain things that each organization does to control the attrition.

1. Communication - business communication should be crystal clear - financial data, industry data,
and operations data - available to all.
2. Most organizations have respective business unit related product development strategic meets
- open to all
3. Most orgn encourage people to participate towards process improvement, generation of new
ideas and reward them accordingly
4. Managers undergo training on handling different situations, effective communications etc.
5. Escalation channel is always left open and people are encouraged to use that route on need
basis
6. Reprimand is a no-no for most cases. Cannot be taken up without a consent from your
immediate boss.
7. Setting expectation, welcome aboard etc for new hires
8. Regular industry surveys to see where your salary indices fit

Reduce Employee Turnover

Employee attrition is a costly dilemma for all organizations.

Control attrition with effective communication - build strong, high-performance teams.

Is ATTRITION important in your organization?

Employee attrition costs 12 to 18 months’ salary for each leaving manager or professional, and 4 to 6
months' pay for each leaving clerical or hourly employee. According to a study by Ipsos-Reid, 30% of
employees plan to change jobs in the next two years. Do the math and discover how much your
company may pay for attrition.

Although employee turnover can help organizations evolve and change, an American Management
Association survey showed that four out of five CEOs view employee retention as a serious issue for
organizational success. If managers know the real causes of attrition, managers can control attrition and
retain employees. Each retained employee can save money and lead to better opportunities.

Why Employees Leave

Most employees leave their work for reasons other than money - and your organization can correct
these reasons. Most leaving employees seek opportunities that allow them to use and develop their
skills. Leaving employees want more meaning in their work ... they often indicate that they want to use
their qualities and skills in challenging teamwork led by capable leaders.

 Hourly employees notice whether they are treated with respect, have capable management and
interesting work
 Clerical employees voice concerns such as "type of work," "use of skills and abilities" and
"opportunities to learn"
 Professional employees cite concerns about "supervisory coaching and counseling," "company
direction" and interesting work
 Managerial staff cite "career growth" and "leadership" as the major factors that influence their
decisions to stay or leave, together with "opportunities for management" "ability of top
management" "use of skills and abilities" and "work/family balance"

Employee Orientation

Corning Glass reported that New employees who attend an employee orientation program are 70%
more likely to be with the company three years later.

Mergers/Acquisitions

Lee Hecht Harrison, a HR consulting firm, advises, "More employees will leave following a restructuring
than are laid-off or terminated during downsizing. This lost talent, and cost can be minimized through
good communication."

Exit Interviews

Exit interviews provide an excellent source of information of internal problems, employees' perceptions
of the organization, underlying workplace issues, and managers' leadership abilities.

Ineffective Managers

Employee turnover can often be attributed to poor managerial performance, low emotional intelligence
and ineffective leadership. Poorly selected or improperly trained managers can be expensive .
A Workforce Magazine article, "Knowing how to keep your best and brightest," reported the results of
interviews with 20,000 departing workers. The main reason that employees chose to leave was poor
management. HR magazine found that 95 percent of exiting employees attributed their search for a new
position to an ineffective manager.

Hire attitude; Train skills

We can help you hire and inspire appropriate employees ...

 Build positive, friendly, teamwork attitudes and commitment to customer services

 Help new employees feel comfortable as they participate as valued team members
 Provide periodic refresher courses to maintain team purpose and functionality
 Apply Expert Modeling to rapidly transfer expert skills within a workforce

Reduce Attrition: Managers and Professional Employees

We can help you adjust your company vision and manager's performance reviews to reflect employee
turnover, and provide mentoring and interpersonal training to inexperienced managers.

 Develop and communicate a strong strategic vision

 Provide relationship coaching and help people develop to their potential
 Reward managers for their relationship skills - not only for technical know-how and financial
results
 People don’t leave jobs, they more often leave managers! Replace managers who will not
develop relationship skills

Reduce Attrition: Clerical and Hourly Employees

We can help you communicate. Most employees want to know more about their work. We can explain
each process and help employees understand the importance of their work. Your employees will
become more knowledgeable about their effectiveness. Here are a few ways ...

 Address staff by their first names

 Involve employees in organizational planning
 Update employees with technical information
 Let employees know that their opinions are valuable
 Titles cost little and remind employees that they are valuable
 Compliments and thanks cost little and can bring great benefits
 Keep employees informed - don't let them hear important news through rumors
 Create community with activities such as informal meals or events outside work
 Publicly praise what the employee has accomplished and say why it was important
 Criticize privately about what the employee can do better and explain how to do it better
How does TCS manage to control attrition?

For all the noise that IT and BPO companies seem to be making about reducing attrition, its clear that no
one seems to be succeeding in stemming the disease. Most first tier companies renew close to 100% of
their workforce every 4 yrs (@25%attrition per annum). And let us not even start talking about attrition
in BPO’s. For all the employee friendly policies, salary hikes and hajaar other toys that companies seem
to be dishing out, nothing seems to be working.

There is one clear exception though- TCS. Attrition at TCS is – hold your breath is 10.8% vis a vis industy
average of 15%.

How does grand daddy manage this in today’s day and age- that too with pay scales that are just about
competitive and nothing to crow about? The reasons have to be external to monetary issues. Can some
TCS staffers shed light on the matter?

Infosys, despite being voted as the most employer friendly company seems to be struggling v/s TCS in
this respect- albeit marginally- with attrition at 13.7%. So much so that Infosys recently introduced a
non-compete bond for all employees, according to which, an employee will have to wait for six months
after quitting Infosys, before he joins a `competitor’ who shares a common client with Infosys, especially
if the employee in question had serviced the client in the last 12 months before quitting.

Personally, I think that attrition is an almost the natural side effect of an industry which is growing so
fast. Woudn’t IT companies reap the benefits when their services are more in demand? How would they
feel if the Govt. were to introduce a bond asking them not to sign on the competitor of an existing
client? This is similar to another recent move where some companies (Wipro was rumoured to be one
such company) are thinking of introducing a 6 day working rule to offset the appreciating Rupee. Many
employees were angered enough to question the ethics of doing this when the same companies have
benifitted over the years due to rupee depreciation and other sops like zero Income tax.

Looks like IT companies are forgetting the below dictum:This is the sum of duty: do not do to others
what would cause pain if done to you. Mahabharata 5:1517. BTW,No less than 21 religions have a
maxim to the same effect!

HOW TO CONTROL SHRINKAGE

What has been your store's shrinkage experience for the last two years? What will it be this year? If it
has not been as good as it should have been, now is the time to analyze the possible causes and take
steps to keep shrinkage in line this year.

WHAT IS SHRINKAGE?

The difference between the perpetual book inventory and the physical inventory count is called
shrinkage. The book inventory is a record of what ought to be on hand in view of what has been
received, what has been sold and price changes. Physical inventory count is the volume and value of all
the goods actually on hand.
CAUSES OF SHRINKAGE

Shortages can and will occur at every point where merchandise changes hands or paperwork is created
or processed. Proper systems with built-in controls must be put in place to eliminate or reduce these
shortages. While there is not enough room to list all the specific causes of shrinkage, we will give several
examples of each of the three general causes: paperwork errors, internal theft and shoplifting.

PAPERWORK ERRORS

Paperwork errors can happen almost anywhere in the merchandising cycle. For example:

* Marking goods at a price lower than the retail price recorded on the receiving record.

* Failure to record all markdowns.

* Miscounting physical inventory.

* Clerical errors causing the book inventory to be higher than it should be.

* Timing is of particular importance. When comparing the actual physical inventory count to the
perpetual book inventory, care must be taken to ensure that every invoice representing goods that have
been received before the physical inventory count is included in the calculation of book inventory.

INTERNAL THEFT

While internal theft can be anything from taking merchandise to taking cash or store supplies, we will
focus on those instances of internal theft that pertain to merchandise. Some examples are:

* Writing up a cash sales slip for merchandise but destroying the ticket after the customer leaves and
pocketing the cash.

* Recording a false cash refund and pocketing the cash.

* Taking merchandise without paying for it.

* Extending unauthorized discounts or credit card refunds for friends.

SHOPLIFTING

Shoplifting can occur at any time. Anyone can be a shoplifter; a regular customer who never intended to
steal but gave in to temptation and opportunity, or a seasoned professional.

OVERAGES

Although shortages are normally expected, it is not logical to have counted in the physical inventory
more than the book figure indicates. Goods are stolen, but not donated to the store. Therefore,
overages are due largely to errors in record keeping, although they may be due to an employee trying to
cover up the theft of merchandise. Some examples are:

* Recording markdowns without actually reducing prices on price tickets.

* Overstating the physical inventory.

* Including in the physical inventory count merchandise that has not yet been recorded in the book
inventory.

HOW TO REDUCE SHRINKAGE

There are several factors that affect the reduction of shrinkage.

* Whether or not you have a stated shrinkage goal to work towards.

* Top management's commitment to reduce shrinkage. If top management gives shrinkage control top
priority, it will invariably be reduced.

* Whether or not proper procedures that contain built-in internal controls have been set up for each
transaction or event in the flow of merchandise from the time it is ordered until it is purchased by your
customer. And whether or not these procedures are being followed.

* The record keeping system being used. The Retail Inventory Method can help keep losses down. The
fact is that shrinkage declines when it is measured, and the Retail Inventory Method generally provides
the best measurement of shrinkage.

PREVENTION OF PAPERWORK ERRORS

Paperwork errors can be controlled by use of a good, well-documented system containing built-in
checks and balances. This is an area in which we have helped many retailers by conducting internal
security checks and developing written procedure manuals. But a good system is not enough. All
employees (receiving clerk, salespeople, buyers, office personnel) must be properly trained. They must
be told the importance of following the proper procedures. And, of course, management must follow up
to see that the proper procedures are being followed.

PREVENTION OF INTERNAL THEFT

The retail store by its very nature presents many day to day temptations to employees who handle the
merchandise and money of the company. It is the responsibility of managers to remove as many
temptations as possible thereby helping to keep employees honest. This is done by setting up
procedures containing good internal controls and by seeing that these procedures are followed without
exception. For example:

* Require management approval on all refunds and credits.

* All employee purchases should be rung up and checked by the owner, manager or another designated
person.

* Keep strict control over refund authorization slips, sales tickets, gift certificates or any other types of
forms which can be used by an employee to obtain cash or goods.

* Know your employees. When hiring new employees make an effort to hire honest employees. This can
be done through interviewing techniques, by carefully checking references and by the use of carefully
developed written honesty tests.

PREVENTION OF SHOPLIFTING

How your merchandise is displayed can have an impact on shoplifting. For example:

* Keep small, expensive items behind a counter.

* Keep your store neat and uncluttered. Neat displays make it easier for alert salespeople to spot
missing merchandise.

* Do not have blind spots on the sales floor. Try to avoid counters that are exceptionally high.

While the above can act as a deterrent to shoplifting, well-trained and attentive sales personnel are your
best defense. Alert, courteous salespeople can deter many would-be shoplifters by their presence. Make
sure they are properly trained so they can spot suspicious behavior and know what to do if they see
someone taking merchandise. Your local police department may have information concerning this or
may be willing to present a seminar on the prevention and detection of shoplifting.

SUMMARY

There is no one shrinkage solution for all retailers since every retail store is unique. Solid accounting
procedures and systems must be developed specifically for your store and scrupulously followed at ALL
levels. Employees must be properly trained to follow correct procedures. Management must follow up
to see that procedures are being followed. In other words, good management will help reduce the
temptation and conditions favorable for dishonesty and theft and reduce your shrinkage losses.

Shrinkage is a variable and controllable expense. Management's attitude toward and tolerance level for
shrinkage is the controlling factor.

Call Center Shrinkage

By Peter DeHaan
July/August 2004

In retail, the term shrinkage is euphemistically used to reference stock which "disappears"
before it can be sold.  In essence it is a product that the retailer bought, but can't sell.  To be
direct, shrinkage is theft.  While some of this occurs in the form of shoplifting, it also results
from employees, both through acts of commission and acts of omission.  Regardless of the
source or the motives, shrinkage hurts everyone in the form of higher consumer prices and lower
company profits.  This affects jobs and threatens the business's future viability.  Some retail
operations take a surprisingly relaxed position about shrinkage, viewing it as an inevitable cost
of doing business; whereas others see it as the theft that it is, taking aggressive steps to eliminate
or at least reduce it.

Shrinkage in the retail environment has an analogous application to the call center.  True, a
call center does not have tangible inventory that can disappear.  A call center's inventory is
human capital, that is, the call center schedule.  Shrinkage in a call center, therefore, is agents
who are "on the clock" but who aren't processing calls.  This could be manifested by agents who
are not at their stations when they are supposed to be, not being logged in, not being "in
rotation", or who employ some "trick" to block calls.

Similarly to retail, some call centers take a surprisingly relaxed position about this shrinkage
of the schedule, also viewing it as an inevitable cost of doing business.  Their response to it is
intentional over-staffing.  This only serves to cover the problem, not resolve the underlying
cause.  Other call enters see shrinkage as little more than stealing - stealing time.  Like their retail
counterparts, they too take aggressive steps to eliminate or at least reduce it.  Call center
shrinkage likewise hurts everyone: a lower service level offered to the client, reduced profits to
the call center, decreased morale, and even less compensation for the call center agents.

There are three factors that help track, explain, and counter call center shrinkage.  They are
adherence, availability, and occupancy.

Adherence: Adherence is a measurement of the time agents are scheduled to work compared
to the time they actually work.  Why is adherence important?  Quite simply, it is because the
schedule was developed to match the traffic projection and when the schedule is not fully
worked, the result is understaffing.  In an ideal situation, staff should adhere 100% to their
schedules.  Unfortunately, this is not the case.

Adherence can be best tracked by comparing logged in time to scheduled time.  Most call
center managers are shocked the first time they look at this.  It can represent a huge unnecessary
cost to the call center, as well as contribute to lower service levels.

Several factors can account for differences between the schedule and the time worked.  The
first area is scheduled breaks, lunches, and training.  This is the only acceptable contributor to
adherence discrepancy.  Depending on the length of breaks, the best resulting adherence will be
around 90%.  Forty-five minutes of breaks in an eight-hour shift will result in an adherence of
90.6 % (7.25 hours / 8 hours).  The second consideration is absences, late arrivals, and early
departures.  Unless these openings are filled, the result is a disparity between the schedule and
the fulfillment of that schedule.  If this missed work is paid time off, such as paid sick time, then
there is both a dollar cost and service impact that results.  The third area is unscheduled breaks or
any other distraction that causes agents to leave their positions.  When factoring all of these
items together, it is not uncommon for call centers to have adherence rates around 75%, although
well-run centers will be in the low 90s (as determined by their established break schedule.)
 Adherence is the first of three related scheduling metrics.  The next is availability.

Availability: A second, and related, staffing metric is availability.  Availability is a subset of

adherence.  Of the time that staff is adhering to their schedule, availability measures how much
of that time they are ready (that is, available) to answer calls.  It can be easily calculated by
comparing available time (also called, "on time," "in rotation," or "ready") to logged in time. 
Specifically, it is the percentage that results from dividing available time by logged in time. 
Although the ideal goal of 100% availability is achievable (that is, ready to process calls all of
the time agents are logged in), 98% to 99% is more realistic.

Agent availability is strictly within the control of agents.  It is determined by each agent's
willingness to keep his or her station in a state of readiness to be assigned calls.  Simply put, it is
whether the agent is available to take calls all of the time.

Availability is the second scheduling related metric.  The third is occupancy.

Occupancy: Occupancy is the amount of time agents spend talking to callers compared to
the time they are turned on or are available.  Although it is possible to have 100% occupancy, the
corresponding service level would be poor and generally unacceptable.  One hundred percent
occupancy means that agents are talking to callers the entire time they are logged in.  It also
means that there are calls continuously in queue, waiting to be assigned as soon as an agent
completes a call.  The resulting efficiency is great, but callers can end up waiting in queue for
several minutes.  Therefore, 100% occupancy does not produce quality service and can lead to
agent burnout and fatigue.

Interestingly, ideal occupancy rates vary greatly with the size of the call center.  Smaller
centers can only achieve a low occupancy rate (perhaps around 25%) while maintaining an
acceptable service level.  Conversely, large call centers can realize a much higher occupancy rate
(90% and higher) and still maintain that same service level.  This dynamic relationship between
occupancy rates and call center size is the underlying impetus for mergers and acquisitions
among outsource call centers; it is a profound example of economies of scale.  Call centers in the
10 to 20 seat range typically see occupancy rates around 50%.

To calculate occupancy, divide the total agent time (that is, talk time plus wrap-up time) by
agent "on" time.  This should be determined for each agent as well as for the entire call center.

Two Case Studies: Now, let's consider all three of these metrics together and apply them to
two call centers.  The first, a well run call center and the second, an under-managed one.  We
will assume that they are the same size and both have a realized occupancy rate of 50%.

Call Center A has an adherence rate of 90% and an availability rate of 95% (along with the
aforementioned 50% occupancy rate.  For each 8 hour shift there is 3.42 hours of on-line time or
actual work (8 hours x 90% x 95% x 50%).
 Call Center B has an adherence rate of 75% and an available rate of 65% (with an occupancy
rate of 50%).  For each 8 hour shift there is only 1.8 hours of on-line time or actual work (8
hours x 75% x 60% x 50%).

Although the results for call center A, a well run operation, may be surprising, the
corresponding number for call center B is shocking.  In fact, to maintain the same service level,
Call Center B would need to schedule almost twice (1.9 times) as many hours as Call Center A. 
Consider what a significant impact this would have on the bottom line.

Lest you think that these are unrealistic numbers, both are real situations describing call
centers I have visited.  It takes a concerted and ongoing management effort to be like Call Center
A, while all too many operations are more like Call Center B.  I challenge you to run your
numbers to see how you compare - and then take steps to improve them.