Attrition in The BPO Industry

Attrition in Indian BPO Industry
THEME PAPER
Indian Business Academy
Submitted by:
Amit
Stive
Marketing and Human Resources Specialization
Internal purpose only @Amit Page 1

Attrition
in
Indian BPO Industry
DEAN’S CERTIFICATE

This is to certify that, Mr. B. Steve Lyngdoh is a bonafide student of Indian Business Academy,
Bangalore and is presently pursuing a Post Graduate Program in Management.
Under my guidance, he has submitted his project titled “Role of HR in maintaining Work-Life
Balance”, in partial fulfillment of the requirement for the Theme Paper during the Post Graduate
Program in Management.
This report has not been previously submitted as part of another degree or Diploma of another
business school or university.
Dr. Subhash Sharma (Dean)

Lakshmipura, Thataguni Post,
Kanakapura Main Road,
Bangalore-560062
Tel: +91-80-28435931/2/3/4
Fax: +91-80-28435935
Email:-info@ibainternational.org
MENTOR’S CERTIFICATE

This is to certify that, Mr. B. Steve Lyngdoh is a bonafide student of Indian Business Academy,
Bangalore and is presently pursuing a Post Graduate Program in Management.
Under my guidance, he has submitted his project titled “Role of HR in maintaining Work-Life
Balance”, in partial fulfillment of the requirement for the Theme Paper during the Post Graduate
Program in Management.
This report has not been previously submitted as part of another degree or Diploma of another
business school or university.
Prof. Sowmya C S.

Bangalore-560062
Tel: +91-80-28435931/2/3/4
Fax: +91-80-28435935
ACKNOWLEDGEMENT

It would be insufficient just to say a “word of thanks” for all those people who have been so
instrumental in the success of this project.
I owe a huge debt of thanks to a large number of people without whom none of this would have
been possible. At the very outset, I would like to express my deep sense of gratitude to our CEO
- Mr. Manish Jain and Dean Sir - Dr. Subhash Sharma who have been so kind to give us the
necessary infrastructure. They have also been a constant source of inspiration.
I am thankful to Prof. Sowmya C S. being my mentor she has provided me proper guidance,
support and valuable suggestions throughout the work.
DECLARATION

I, B. Steve Lyngdoh hereby declare that the following Project Report entitled “Attrition in Indian
BPO” is authentic work done by me under the guidance of Prof. Sowmya C S. and this project
work is submitted in the partial fulfillment of the requirement for the theme paper during the Post
Graduate Program in Management, Indian business Academy, Bangalore. The findings and
conclusions of this report are based on my personal study and experience.
B. Steve Lyngdoh
FPB0911/022

Bangalore-560062
Tel: +91-80-28435931/2/3/4
Fax: +91-80-28435935
INDEX

Report Section Page
1. Executive summary 8
2. Industry profile 9-10
3. Introduction 11
4. Objectives 12
5. Methodology 13
6. Data analysis & Summary of findings 14-20
7. Suggestions 21
8. Conclusion 22-23
9. Bibliography 24
10. Appendix 25-27
EXECUTIVE SUMMARY
Managing attrition is not a very easy task to do in the BPO industry. It is the route to their
survival.
Turnover is of considerable concern for managers because it disrupts normal operations and
necessitates the costly selection and training of replacements, the costly hiring and training the
new employee to regain the lost customer and supplier contacts. The employee retention is
obviously one of the most important challenges in organization and avoids unwanted turnover.

Staff attrition represents significant costs to most organizations. It is odd, therefore, that many
organizations neither measure such costs nor have targets or plans to reduce them.
Employee turnover or resign could disrupt normal operation necessities the costly selection and
training of replacement. Reducing employee turnover required the management efforts of the
companies
The main objectives of the study are to understand the reasons leading to attrition , to identify
the major problems faced by employees in the organization which lead to attrition. To
understand the problems faced by the organization due to attrition and finally suggest ways
and means to check attrition.
In this paper, we have made an endeavor to highlight attrition issue faced by BPO industry. We
try to find out the various reasons for this problem, and have proposed some ways in which this
issue can be addressed.
INDUSTRY PROFILE
BPO Industry in India-
Business process outsourcing (BPO) is a broad term referring to outsourcing in all fields. A
BPO differentiates itself by either putting in new technology or applying existing
technology in a new way to improve a process.
Business Process Outsourcing (BPO) is the delegation of one or more IT-intensive business
processes to an external provider that in turn owns administers and manages the selected process
based on defined and measurable performance criteria. Business Process Outsourcing (BPO) is

one of the fastest growing segments of the Information Technology Enabled Services (ITES)
industry.
Few of the motivation factors as to why BPO is gaining ground are:
 Factor Cost Advantage

 Economy of Scale
 Business Risk Mitigation
 Superior Competency
 Utilization Improvement
Generally outsourcing can be defined as - An organization entering into a contract with

another organization to operate and manage one or more of its business processes.
Different Types of Services Being Offered By BPO's
 Customer Support Services
Our customer service offerings create a virtual customer service center to manage
customer concerns and queries through multiple channels including voice, e-mail and
chat on a 24/7 and 365 days basis.
Service Example: Customers calling to check on their order status, customers calling to
check for information on products and services, customers calling to verify their account
status, customers calling to check their reservation status etc.
 Technical Support Services
Our technical support offerings include round-the-clock technical support and problem
resolution for OEM customers and computer hardware, software, peripherals and Internet
infrastructure manufacturing companies. These include installation and product support,
up & running support, troubleshooting and Usage support.
Service Example: Customers calling to resolve a problem with their home PC, customers
calling to understand how to dial up to their ISP, customers calling with a problem with
their software or hardware.
 Telemarketing Services
Our telesales and telemarketing outsourcing services target interaction with potential
customers for 'prospecting' like either for generating interest in products and services, or
to up-sell / promote and cross sell to an existing customer base or to complete the sales
process online.
Service Example: Outbound calling to sell wireless services for a telecom provider,
outbound calling to retail households to sell leisure holidays, outbound calling to

existing customers to sell a new rate card for a mobile service provider or outbound
calling to sell credit or debit cards etc.
 Employee IT Help-desk Services
Our employee IT help-desk services provide technical problem resolution and support for
corporate employees.
Service Example: of this service include level 1 and 2 multi-channel support across a
wide range of shrink wrapped and LOB applications, system problem resolutions related
to desktop, notebooks, OS, connectivity etc., office productivity tools support including
browsers and mail, new service requests, IT operational issues, product usage queries,
routing specific requests to designated contacts and remote diagnostics etc.
 Insurance Processing
Our insurance processing services provide specialized solutions to the insurance sector
and support critical business processes applicable to the industry right from
acquisition to policy maintenance to claims processing.
Service Example:
New Business / Promotion:

Inbound/outbound sales, Initial Setup, Case Management, Underwriting, Risk
assessment, Policy issuance etc.
INTRODUCTION
Defining attrition: "A reduction in the number of employees through retirement, resignation or
death"
Defining Attrition rate: "the rate of shrinkage in size or number"
Introduction: In the best of worlds, employees would love their jobs, like their coworkers, work
hard for their employers, get paid well for their work, have ample chances for advancement, and
flexible schedules so they could attend to personal or family needs when necessary. And never
leave.

But then there's the real world. And in the real world, employees, do leave, either because they
want more money, hate the working conditions, hate their coworkers, want a change, or because
their spouse gets a dream job in another state. So, what does that entire turnover cost? And what
employees are likely to have the highest turnover? Who is likely to stay the longest?
Attrition issues in Indian BPOs are not salary oriented anymore, but due to perceived lack of long-term
career growth in the sector, according to international risk management and business intelligence firm
Hill and Associates.
However, BPOs are not prioritizing enough on solving perceptions on work and career growth-related
issues in BPO. Hiring practices in the sector are wrong and there is a huge expectation and qualification
mismatch. The aspirations of employees are not managed well.
A good number of employees leave the sector because they feel that their long-term career growth
prospects are better in some other sector. Currently, average attrition rate in the Indian BPO industry is
over 30%.
The rapid growth of the sector left no space and time for players to take care of “career issues” of
employees. This industry will take at least three years to settle its issues. But the coming years are
crucial because if the growth is not well managed, the whole system will be hurt badly.
Initially, the BPO sector had focused on taking maximum advantage of lower costs here and later the
focus shifted to quality improvement.
Currently, the industry, which is expected to be major employment creator in the country, is trying to
contain its manpower issues.
OBJECTIVES
 To understand the reasons for high attrition rate.

 To identify the major problems faced by employees in the organization which
lead to attrition.
 To understand the problems faced by the organization due to attrition.
 To suggest ways and means to check attrition.

METHODOLOGY
Source: Collecting primary data from employees from the nearby companies and use secondary
data to the measures their effectiveness and guidelines of these industries under which they
operate their daily activities.
1) I have designed the questionnaire and have taken the data by two methods:
a) Direct Survey – Market Survey.

b) Online Survey.
2) I have taken a sample size of 100.
3) I have collected data’s from different metro cities of India.
DATA ANALYSIS
For simple calculation, I have assigned values for every scale respectively. Just like in the
questionnaire I have 6 scales of measurement with their weightage as follows:
1) Strongly agree (6) 2) Somewhat Agree (5)
3) Strongly disagree (4) 4) Somewhat Disagree (3)
5) Neutral (2) 5) don’t know (1)
.

Then we count the total vote in each dimension and multiplied with the scale value.
E.g. Let say for question no.1, we have following responses
Strongly agree = 51 somewhat agree = 32
Strongly disagree = 3 somewhat disagree = 6
Neutral = 4 don’t know = 4
Hence, value of this dimension is:
(51*6)+ (32*5) + (3*4) + (6*3) + (4*2) + (4*1) = 508
Similarly, we plot graph of all the questions 1 - 10 according to their dimensions:
600
533
508 515 512 498
500 467
432
402 403
383
400
300
200
100
0
1 2 3 4 5 6 7 8 9 10
DIMENSION VALUE
Now coming on to each question individually we have the following interpretations to be made:
Question1. Employee turnover/resign is a major concern for your organization.

60
51
50
40
32
30
20
10 4 6 4
3
Strongly Agree Some what Agree Neutral

Strongly Disagree Disagree Don't Know
Interpretation: Most of the respondents strongly agrees (51%) to the fact that employee
turnover is a major concern for their organization as it brings down the morale and confidence of
the whole team.
Question2. High percentage of females in the work force adds to the high attrition rate.
40 37
35
30 25
25
20
13 12
15
8
10 5
5
0
High percentage of females in the work force adds to the high attrition rate

Interpretation: Respondents believe that high percentage of females in the work force results in
high attrition rate. This is because they feel that female employees could not adjust themselves to
the timings of the job, leave their job soon after they get married or get any good job with good
salary package.
Question-3 Some attrition is always desirable and necessary for organizational growth and
development.

35 33
28
30
25 21
20
15
9
10 5 4
5
0
Some attrition is always desirable and necessary for organizational growth and development

Interpretation: 28% of the respondents feel that some attrition is always desirable and
necessary for organizational growth and development because some of the employees are there
in organization those are less productive and hence become liability for the organization. So by
removing them organization won’t be in problem rather they would be benefitted as they need
not to spend any more on them.
Question-4 BPO firms should provide career growth and higher educational opportunities for
employees as measure of retaining them.
34
35
30 26
25 23
20
15 11
10
4
5 2
0
BPO firms should provide career growth and higher educational opportunities for employees as measure of retaining them

Interpretation: 34% of the respondents strongly feel that BPO firms should provide career
growth and higher educational opportunities for their employees as a measure of retaining them.
This would be a reason for the employee to stay at the organization as it gives them the scope.
Question-5 An employee gets sufficient promotional opportunities to enhance his position.

35 31
30 27
24
25
20
15
9
10 7
5 2
0
An employee gets sufficient promotional opportunities to enhance his position

Interpretation: Most of the employees at think that they get sufficient promotional opportunities
to enhance their position at the work place. This in turn motivates them to work more and prove
their talent to the higher authorities.
Question-6 The work schedule is exploitative.

49
50
45
40 37
35
30
25
20
15
10 5 4
3 2
5
0
The work schedule is exploitative

Interpretation: 49% of the respondents strongly agreed to the fact that the work schedule that
they are into are very much exploitative which make them feel harassed and hence force them to
quit the job.
Question-7 As job becomes repetitive; the employees find less challenge in it and hence seek for
some other job.

60 52
50
40 35
30
20
10
10 2
0 1
0
As job becomes repetitive, the employees find less challenge in it and hence seek for some other job

Interpretation: 52% of the respondents feel that the employees leave the job and seek for other
one after finding less challenge in the BPO jobs which is of more repetitive kind.
Question-8 The families of BPO employees are not fully supportive for this industry.
50 47
45
40 36
35
30
25
20
15
10 7 5 4
5 1
0
The families of BPO employees are not fully supportive for this industry

Interpretation: According to the respondents, families of BPO employees are not supportive of
the fact that they work in BPO industry with late night shifts. They also feel that there is little
respect and recognition present in their job as they have to listen abuses from different customers
at work every day and have very less scope of innovation.
Question-9 Training of employees lead to increase in attrition.

70 63
60
50
40
30 22
20
8
10 2 4
1
0
Training of employees lead to increase in attrition
Strongly Agree Somewhat agree Neutral

Interpretation: This is in fact true and I have already discussed earlier that training of
employees lead to increase in attrition. Moreover 63% of respondents also agreed to this point.
The reason that they gave is after completion of training process, employee gain some
knowledge and become eligible for some other higher post and hence quit the organization.
Question-10 Bad selection leads to attrition.

39
40
35
30 28
25
20 18
15
10 7
5
3
5
0
Bad Selection leads to high attrition.
Strongly Agree Somewhat agree Neutral

Interpretation: According to39% of respondents, poor selection of candidates leads to high

attrition because if you don’t select the right candidate for the given job then surely there would
be a mismatch and he\she would finally leave the job. At the time of recruitment, the HR
professionals should be very particular in choosing the right candidate.
Question-11 What do you think, the reasons for an employee leaving the organization?

When asked about the reasons for an employee leaving an organization, the respondents ranked
the parameters as per the following according to their preference:
1. No flexible work schedules

2. Stress from overwork and work-life imbalance
3. Lack of good working condition
4. The mismatch between job and person
5. Monetary factors
6. Organization is more concern towards business
7. The job or workplace was not expected
8. Very few supportive colleagues
9. Loss of trust and confidence in senior leaders
10. Too little coaching and feedback
Interpretation: By going through this rating we can learn that employees leave BPO sector for
no flexible work schedules in the organization. Maximum of them also quit their job for stress
from overwork and lack of good working condition. Some of them also feel mismatch between
the job as they find no challenges in it.
Question12. What would be the major concerns for an organization after the employee quits.
When asked to rate on the factors on which the organization are most concerned when an
employee quits, maximum respondents ranked the parameters as per the following according to
their preference:
1. Cost of training the employee

2. Time spent in orientation
3. Replacing qualified employees
4. Loss of productivity
5. Cost of overtime or temporary help
6. Recruiting costs & interviewing costs
Interpretation: According to respondents’ organization are more concerned about the cost and
time that they have put in the employee on training. Then they would be more worried about
replacing them with the right candidate which would prove asset to the organization.
SUGGESTIONS

Few suggestions that could help in retaining employees are as follows:-
 Starting from the recruitment process: it is better not to recruit those people who will
be the most difficult to retain.
 Attention to these aspects could be taken care of at the recruitment stage itself.
 An employee would work tirelessly for the company if he is being made aware that
he is an important part of the team.
 Cooperate with competitors. Forum clubs and associations.
 Offer performance feedback and praise god efforts and results.
 Listen to employee ideas; never ridicule them.
 Awarding employees with recognition if an employee has done something valuable.
 Nurture and celebrate organization tradition like Diwali, Holi and Christmas etc.
 Keeping in touch with the employees and help them when in need. Don’t wait till the
last moment.
 Conducting in and out (exit) interviews properly and in scheduled way.
CONCLUSION

As they say, happiness can be contagious. So make sure the work place is a happy one, which
every employee would love to spend time. Human resources department along with senior
management must take steps to make sure of this.
Effective human resource management must be practiced at both strategic and day-to-day levels.
HR management practices must reflect company policy as to how it will manage and relate to its
employees. The HR strategy should evolve from a transactional support role to partnering in the
organisations business strategy. HR must take steps to be aware of employee problems and try to
solve them, creatively.
Employee attrition is a very big problem not only in India but outside India too. Attrition rate is
increasing day by day and it’s especially the software industry which is affected the most. Why
an Employee leaves a company is the question asked by most of the employers. Companies even
hire Private HR professionals to study the company's work and find out why an employee is
dissatisfied.
HR department does the recruiting of new employees and then send them for training so that they
can understand work and work culture and become better professionals. Each and every
company faces employee turnover problem whether big or small. An employee leaves his present
job for another job to get better pay package and good working conditions.
Every Company calculates Employee attrition rate and takes measures to reduce it. The facts and
figures are not made public as it may tarnish the image of the company in front of its own
employees and its loyal customers.
A survey has found out that there are various reasons for Employee Attrition-
1. Higher Pay Package in another company

2. Good working Conditions
3. Opportunities for growth in new company
4. Change of Place problem
5. A better Boss in new company
6. Brand Image of the new company

Employee attrition costs a lot to the company. There are various costs which are borne by the
company at the start when the employee is under training period. Costs such as-
1. Conveyance Cost
2. Cost of lodging of the new employee
3. Trainers cost
4. Cost of venue where training will be conducted
5. Materials to be supplied during training process
A company has a training period of 3 to 6 months. During this time an employee is not fruitful
for the company. If an employee leaves the company when he starts working, company suffers a
big loss in terms of money as well as workforce. Every company takes measures to hold the
talented workforce by means of perks, Increments, Bonus and extra facilities. No one wants to
lose good brains to their competitors.
Now the question is how to reduce employee attrition. What should a company do to hold on the
talent?
There are various companies like TATA's and Reliance who do a lot to reduce attrition rate.
Flexible working conditions have been given to employees who have problem working 10AM –
5PM. Private hospitals for employees where they can get their regular health check up done
without spending much money. Free overseas tour once in a year when a target is achieved. Few
Companies are getting more and more work savvy and just want to get their work done by hook
or by crook. The mentality needs to be changed. Target for completion of a work should be there
but that should not hamper an employee’s personal life. Companies should conduct various
seminars on how to balance personal and professional life. An employee can be productive if and
only if his personal life is balanced. Make employees a part of your work culture family and see
the difference. Attrition rate cannot become completely obsolete but it can surely be minimized.

BIBLIOGRAPHY
 http://en.wikipedia.org
 http://www.bpoindia.org
 http://www.citehr.com
 http://www.coolavenues.com
 http://www.chrmglobal.com

APPENDIX
Questionnaire
Dear Respondent,
I, B. Steve Lyngdoh student of PGPM studying in Indus Business Academy am conducting a

survey on “ATTRITION IN THE BPO INDUSTRY”. I assure you that the details will be
kept confidential and used for academics purpose only. Thank you in advance for sparing your
valuable time and corporation in this endeavor.
Please tick the one which is applicable for you:
1. Employee turnover/resign is a major concern for your organization.

Strongly agree Somewhat Disagree
Somewhat Agree Strongly Disagree
Neutral Don’t know
2. High percentage of females in the workforce adds to the high attrition rate.
3. Some attrition is always desirable and necessary for organizational growth and
development.
4. BPO firms should provide career growth and higher educational opportunities for
employees as measure of retaining them.

5. An employee gets sufficient promotional opportunities to enhance his position.
6. The work schedule is exploitative.

7. As job becomes repetitive, the employees find less challenge in it and hence seek for
some other job.
8. The families of BPO employees are not fully supportive for this industry.
9. Training of employees leads to increase in attrition.

10. Bad selection leads to attrition.


11. What do you think, the reasons for an employee leaving the organization?
(Rate the following from 1 to 10; 1 being the top most priority and 10 being the least)
a) Monetary factors
b) Lack of good working condition
c) No flexible work schedules
d) Very few supportive colleagues
e) Organization is more concern towards business
f) The job or workplace was not expected
g) The mismatch between job and person
h) Too little coaching and feedback
i) Stress from overwork and work-life imbalance
j) Loss of trust and confidence in senior leaders
12. What would be the major concerns for an organization after the employee quits.
(Rate the following from 1 to 8; 1 being the top most priority and 8 being the least)
a) Loss of productivity
b) Replacing qualified employees
c) Cost of overtime or temporary help
d) Recruiting & Interviewing costs
e) Time spent in orientation
f) Cost of training the employee
PERSONAL INFORMATION:
Name: ___________________________________________________
Age: ___________________________________________________
Sex: ___________________________________________________
Ph no: ___________________________________________________
Thank You

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Attrition in Indian BPO Industry

Attrition in Indian BPO Industry

Indian Business Academy

Internal purpose only @Amit Page 1

Indian BPO Industry

Internal purpose only @Amit Page 2

Dr. Subhash Sharma (Dean)

Indian Business Academy

Internal purpose only @Amit Page 3

Indian Business Academy

Internal purpose only @Amit Page 4

Internal purpose only @Amit Page 5

conclusions of this report are based on my personal study and experience.

Indian Business Academy

Internal purpose only @Amit Page 6

2. Industry profile 9-10

6. Data analysis & Summary of findings 14-20

10. Appendix 25-27

Internal purpose only @Amit Page 7

BPO Industry in India-

Internal purpose only @Amit Page 8

Few of the motivation factors as to why BPO is gaining ground are:

 Factor Cost Advantage

Generally outsourcing can be defined as - An organization entering into a contract with

Different Types of Services Being Offered By BPO's

 Customer Support Services

 Technical Support Services

Internal purpose only @Amit Page 9

 Employee IT Help-desk Services

acquisition to policy maintenance to claims processing.

New Business / Promotion:

Defining Attrition rate: "the rate of shrinkage in size or number"

Internal purpose only @Amit Page 10

 To understand the reasons for high attrition rate.

Internal purpose only @Amit Page 11

a) Direct Survey – Market Survey.

Internal purpose only @Amit Page 12

2) I have taken a sample size of 100.

3) I have collected data’s from different metro cities of India.

Internal purpose only @Amit Page 13

Similarly, we plot graph of all the questions 1 - 10 according to their dimensions:

Question1. Employee turnover/resign is a major concern for your organization.

Internal purpose only @Amit Page 14

Strongly Agree Some what Agree Neutral

Strongly Agree Some what Agree Neutral

Internal purpose only @Amit Page 15

Strongly Agree Some what Agree Neutral

Strongly Agree Some what Agree Neutral

Question-5 An employee gets sufficient promotional opportunities to enhance his position.

Internal purpose only @Amit Page 16

Strongly Agree Some what Agree Neutral

Question-6 The work schedule is exploitative.

Strongly Agree Some what Agree Neutral

Internal purpose only @Amit Page 17

Strongly Agree Some what Agree Neutral

Strongly Agree Some what Agree Neutral

Question-9 Training of employees lead to increase in attrition.

Internal purpose only @Amit Page 18

Strongly Agree Somewhat agree Neutral

Question-10 Bad selection leads to attrition.

Strongly Agree Somewhat agree Neutral

Interpretation: According to39% of respondents, poor selection of candidates leads to high

Internal purpose only @Amit Page 19