Analysis of Attrition in It Industry free essay sample

The study of the attrition rate of various IT companies was undertaken. The employees ofInfosys, Wipro, Geometrics Software, Digital Technologies, and Syntel took part in the test. The results were tabulated and a number of findings were made. The study analyzes the management of human resource in the IT industry with a special emphasis on the factors responsible for the high rate of employee turnover in the industry. The IT industry, being a knowledge-based sector, requires a workforce that is highly competent. Also, the demanding nature of work in the industry requires effective strategies to retain its workforce. With growing demand for Indian IT professionals overseas and with multinational IT companies establishing their offices in India, retention becomes very difficult. To handle the challenge, companies have started using a variety of retention tools and HR practices. The focus of the extant research has been on explaining the turnover intentions of IT professionals with a variety of factors playing a significant role. These include job satisfaction, work exhaustion, fairness of rewards, and more recently life? career goal frustration. This study examines IT worker attrition in the context of offshore outsourcing. IT professionals working within business firms primarily seek to contribute to their firm’s effective leverage of IT. They are motivated to make strong internal contributions, but do not typically contribute directly to revenue and are often considered to be cost centres. In contrast IS professionals working in an offshore outsourcing context, such as in the Indian IT industry, are evaluated primarily on their ability to generate revenue. This difference in orientation calls for a closer look at factors influencing attrition and how it can be managed in the off shoring context. High attrition levels have a negative influence on firms’ ability to service overseas clients effectively. When an employee leaves, an offshore IT firm must incur several kinds of costs to make up for her move. To begin with the firm must incur a cost of hiring to find a suitable replacement. Once the new employee is hired, she cannot be expected to be as productive as her predecessor since she has not yet learnt the nuances of the job, nor is she informed about the offshore client specific relationships. Thus, there is an opportunity cost of losing an employee. Finally, in order to make the new hire more productive the firm may have to provide some combination of technical, domain and process oriented training, all of which are an expensive proposition. A continuous and high level of employee churn results in low levels of firm specific knowledge and constrains sustainable organic growth for the firm. In order to curb this, IT industry has taken a number of initiatives like improving the work-life balance of their employees, encouraging learning and development, developing a positive organization culture, etc. o retain their employees. The study examines the retention tools used by Indian IT companies to combat attrition. It ends with the discussion on the challenges the Indian IT industry faces in the future in view of the growing need to retain its talent pool. Top Seven IT Hubs in India 1| Bangalore| 2| Chennai| 3| Hyderabad| 4| Pune| 5| Kolkata| 6| NCR| 7| Mumbai| Trends in Attrition Major Worries for  the Industry 1. Start-ups a vast majority of more than 432 start-ups are a big reason to worry. 2. Companies have converted their empty basements and warehouses ntoBPO  units or firms ran out of cashamp; hence driving down prices to grab business, but have failed to deliver. 3. Infrastructure in the  industry  has more to worry about than just start-ups. 4. Attrition Rate another major problem of the workforce. More than 80,000 workforce change jobs every year. Most of them look for market leaders, for promotions. 5. Rise of costs was the major problem for small funded companies to survive. 6. Staff attrition (or turnover) and absenteeism represent significant costs to most organizations. 7. The attrition rates in some Indian call centres now reach 80%. 8. It is simply attrition people do not stay long enough to be taught or to learn the job. 9. The cost of doing business, it is surely something that all organizations should address, and equally surely it is an area in which HR can take a lead measure attrition, seek its causes, set out solutions and target performance. Monetary Losses due to attrition 1. Loss of productivity is minimum 50% of the persons compensation 2. Cost of conducting an interview when a person leaves, conducting the interview, the time of the person leaving, the administrative costs of stopping payroll, benefit deductions, and benefit enrolments are quite high. . The cost of the manager who has to understand what work remains, and how to cover that work until a replacement is found is very high. 4. Cost of training invested in this employee who is leaving is very high. 5. Who will pick up the work, whose work will suffer, what departmental deadlines will not be met or delivered late is another loss. 6. The cost of lost knowledge, skills and contacts that the person who is leaving is taking with them are something that affects the company in the long run. 7. The cost of advertisements; agency costs; employee referral costs; internet posting costs. 8. The cost of the internal recruiters time to understand the position requirements, develop and implement a sourcing strategy, review candidates backgrounds, prepare for interviews, conduct interviews, prepare candidate assessments, conduct reference checks, make the employment offer and notify unsuccessful candidates. 9. Calculate the cost of the various candidate pre-employment tests to help assess candidates skills, abilities, aptitude, attitude, values and behaviours. 10. Calculate the cost of orientation in terms of the new persons salary and the cost of the person who conducts the orientation.