According to NASSCOM, the cost of attrition in the Indian BPO & ITES is 1.5 times the annual salary.

So it
becomes all the more necessary for BPO industry to explore into the reasons for this high attrition rate.

The main reasons which have led to this problem are: -

• Improper Work Timings

• Family Pressure

• Health problems due to imbalance in work-life pattern

• Peer Pressure

• Lack of growth options within the company

• Other Career options like pursuing further education, joining other sectors.

• Salary (at lower levels)

The much-hyped "work for fun" tag normally associated with the industry has in fact backfired, as many
individuals (mostly fresh graduates), take it as a pass-time job. Once they join the sector and understand
its requirements, they are taken aback by the long working hours, and later, monotony of the job starts
setting in. This is the reason for the high attrition rate as many individuals are not able to take the
pressures of work.

The inexperienced middle and frontline management is also one of the key causes of attrition.

Strategies to Address Attrition

We propose the following solutions to tackle the acute problem of attrition in BPO industry.
BPO companies are still grappling with the issue of keeping agents motivated in a rather monotonous job.
To resolve this problem the high achievers in the company should be moved up the hierarchy (refer
figure) as systematically as possible, to keep them motivated.

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Figure: BPO Personnel Hierarchy: Typical Case

Source: NASSCOM
The Indian BPO companies have realized the importance of employee retention and are looking for ways
and means to keep a check on employee attrition. For this, some measures that can be adopted by the
BPO firms are: -

• Besides the induction and project training, a "continuous training program" should be launched for the
employees, which should also involve motivational training.

• BPO companies can look beyond the traditional areas of recruitment and some thought could be given
to employ physically challenged people and housewives. This would also earn the companies good
reputation with compliance of CSR objectives.

• Companies need to go in for a diverse workforce, which does not only mean race, gender diversity, but
also includes age, experience and perspectives. Diversity in turn results in innovation and success.

• Age should not be a barrier for training employees and could in fact bring in more stability to the
company.

• Better Customer-Agent Communication should be encouraged by adopting a mix of various media like
e-mail, phone and fax. Today BPOs deploy voice-call, e-mail, web-chat and fax to "collaborate" or interact
with customers. However, even after tapping all these media, BPOs have largely failed to deliver
uninterrupted agent-customer communication. The customer-agent interaction is still plagued by various
bottle-necks, which directly result in customer dissatisfaction. This has a direct bearing on employee
attrition.

• A fun factor could be brought in this operation, which becomes boring and repetitive after some time.
This can be done by blending all the media. That way an agent can switch between answering queries over
the phone, e-mail or fax. It will lure employees to stay in the organization for a longer period by giving
them exposure, experience and education. It also addresses a professional's most important need: the
need to grow. Besides, it will help remove the monotony and boredom from an employee's job as he would
be performing all the processes, as opposed to being restricted to just one.

Besides these, some innovative employee retention techniques already being employed in some BPO firms
are stated below: -

• Shift rotation - It is said that "Permanent night birds fly away faster". To retain them, suitable day-shift
opportunities should be provided from time to time

• Flexi Timing

• Monthly Party

• Shop till you drop - Tie-up with a shopping mall for an evening outing and distributing prizes based on
that.

• Housing

• Cash Incentives (good rewards)

• Career Guidance

• Bonding Techniques

• Pressure Relievers

• Flexible Working Hours

• Stronger Career Path

• Growth Opportunities (within the company)

• Education (learn while you earn)

• Another strategy that BPOs are employing is the go-ahead to indulge in "small talk" between customers
and agents. BPOs such as Amex, HCL, Convergys, Spectra-mind and EXL are some of the few companies
that have reaped dividends from implementing this strategy.

In small talk the agent is not restricted to just fixing the problems of the customer. It rather gives the
agent sufficient room to discuss things other than business. For BPOs, small talk helps in striking a good
agent-client rapport. A happy customer means an agent who feels elated at a job well done. For BPO
companies, it is a win-win situation - being successful in retaining both employees and clients.

Housing Education Cash Incentives Career Concerns

Hire outstation candidates Offer management As only 5 out of 150 Use various filters like
(preferably non-metro) and diplomas and MBA employees become psychometric tests to
put them up in shared courses as most fresh team leaders in a get people who can
company accommodation. graduates want to study year, cash incentives work at night and
As an incentive, pick up further. Also give are a great way to handle the monotony.
utility bills. If the employee incentives like get employees to Career counseling
leaves, he or she loses the scholarships. If they stay on. The bonus - and planning career
apartment leave in between, they performance boost paths also helps
have to discontinue the
Who is doing it course Who is doing it Who is doing it
exl Service.com Daksh e-Services, HCL Tech BPO
Who is doing it Global Vantedge Services, GTL,
GE, Wipro Spectramind Tracmail, Vertex India

BPO Industry - Positive Outlook

As the industry moves up the value chain, attrition rates are expected to decline.

For BPO service providers, moving up the value chain is critical, given the attrition rates in the industry,
which are on an average higher in low value-added segments (in call centers) as compared to higher
value-added segments like engineering.

It will not be possible for the industry to arrive at a blanket agreement on poaching but bilateral
agreements between companies are being signed. Basic norms are being put in place and code of ethics is
being stressed upon by industry. Companies are being encouraged to adopt responsible behavior in order
to ensure that the industry does not become a victim of its own actions. Industry needs to go aggressive
but not cannibalistic.

In order to ensure a consistent flow of trained manpower in the future, the industry needs to work with
the government to introduce courses at a school and college level, which are in line with the requirements
of the ITES-BPO industry. India has one of the largest pool of English speaking graduate workforce.

The challenge for the industry is not in employment but employability. The industry is also hiring
professionals from outside the industry in order to meet its steady supply of manpower.

High attrition rate, price wars, poor infrastructure and lack of data protection laws could derail India's
booming outsourcing industry. All this has induced the companies to take necessary steps, both internally
and externally. Internally, most HR managers are busy putting in efforts on the development of their
employees, building innovative retention and motivational schemes (which was more money oriented so
far) and making the environment livelier. Outside, the focus is on creating awareness through seminars
and going to campuses for recruitment.

Companies which have not been able to tackle this image could take a cue from ICICI OneSource, which
gives employees who have been with the company for more than 18 months an option to switch to
positions in other ICICI group companies.

The system works as a big assurance for BPO employees that the skills they have learnt such as customer
friendliness and rapid response to customer problems have wider applications and market demand.

Conclusion

It is clear that there are massive costs associated with attrition or turnover, and while some of these are
not visible to the management reporting or budget system, they are none the less real.

Pay cheques alone are not enough to retain employees. Management also needs to consider other aspects
like secure career, benefits, perks and communication. The attrition battle could be won by focusing on
retention,

making work a fun place, having education and ongoing learning for the workforce, and treating
applicants and employees in the same way as one treats customers.

A better agent-client interaction using latest technologies would also help in establishing a good rapport
with the employees as well as customers, resulting in win-win situation for the company.

NEXT
The specific reasons for attrition are varied in nature. A list of issues, some very prominent and some even
trivial, are identified below: -

1. No growth opportunity / lack of promotion: Only one in 10 people will ever make consultant;
one in 100 will make it to line / practice manager.

2. Organisational matters: The knowledge employees always assess the management values, work
culture, work practices and credibility of the organisation. The Indian BPOs do have difficulties in getting
the businesses and retain it for a long time. When there is no focus, and in the absence of business plans,
non-availability of the campaigns make people to quickly move out of the organisation.
3. Work environment: In the Indian BPO industry, rigid rules and strict monitoring are the norm.
Employees often feel that they are being constantly spied upon. Sometimes, it even infringes on the
employee's private space, thereby forcing them to look for other opportunities.

4. Job matters: A number of job related reasons contribute to the high attrition levels in this industry.
These are given below: -
(a). Stress Levels: These jobs bring lots of pressure and the stress levels are high. Hence, employees
leaving the job due to too much pressure on performance or any work related pressure are quite common.

(b). Adjustment problems: Often employees are moved from one process to another. They take time to
get adjusted with the new campaigns, and few employees find it difficult to get adjusted and they leave
immediately. Many a time, the employees move out if there are strained relations with the superiors or
with the subordinates or any slightest discontent.
(c). Nature of the job: Monotony sets in very quickly and this is one of the main reasons for attrition.
Besides the induction and project training, not much investment has been done to evolve a "continuous
training program" for the employees.
(d). Attitude of employees: Youngsters look at call center jobs as temporary and they quickly change the
job once they get in to their own field.

5. Salary and other benefits: Moving from one job to another for higher salary, better positions and
better benefits are among the most important reasons for attrition.

6. Personal reasons: The personal reasons are many and only few are visible to us. The foremost
personal reasons are getting married or change of place. The next important personal reason is going for
higher education. Health is another aspect, which contributes to attrition. Employees do get affected with
health problems like sleep disturbances, indigestion, headache, and throat infection and lose interest in
work.

7. Poaching: Poaching of trained and competent manpower from rival companies is very high. Most of
the BPO organizations have employee referral schemes and this makes people spread message and refer
known candidates from their previous companies, and earn too in the bargain.

It is not easy to find out as to who contributes and who has the control on the attrition of employees. A
pin-pointing of the prominent causes is the first step towards addressing the issue of attrition. Two
studies in this regard are worth mentioning.

1. DQ-IDC's BPO Employees' Satisfaction Survey 2003 cites some of the reasons for attrition the
industry has identified. A good 42% of the respondents said they are likely to leave for higher education.
"33% also said they would leave when they got married!!

Considering that only 26% of these were women, and assuming all women said they would leave after
marriage for cultural issues peculiar to India - that is still a substantial chunk of men saying they would
leave once they had other responsibilities at home." A good 35% said they would leave because they
cannot handle the timings. 27% employees said they would leave either because work stress or the sheer
physical strain was too much to handle.

2. A recent study by Hill and Associates, security and risk management consultants, on the attrition
rate in the BPO sector, threw up some interesting insight. The study was conducted on targeted
respondents that included the young population employed in the outsourcing business and with
undergraduate, graduate and post-graduate education and who had changed their job at least once in the
past three years.

Some of the findings of the study are: -

• Exits from BPO happen because of reasons like lack of growth avenues, expectation mismatch,
dissatisfaction with organizational policies, and the quest for a better job profile.

• Not night shifts, monotony of work and lack of salary hikes. Where the HR department took steps to
deter exits such as giving salary hikes, promotions, shift changes and other incentives, it did not succeed
completely.

• The survey revealed that respondents were overwhelmingly in favor of better career growth
opportunities and improved company policies.

• The survey indicated that more than 60 percent of the employees join a BPO after seeing job
advertisements in newspapers or through manpower consultant references. The study found that the
communication pattern of advertisements positioned the BPO job at a level much higher than its real
delivery.

An overwhelming 75 percent of the respondents were financially independent of their families. Yet, a
sizeable section among them turned to their families for support if they felt the need to quit their jobs.
This cushion provided by the social support system often drove the respondents to quit their jobs at the
first hint of any inconvenience on the job.

Thanks