The Hindu Business Line : The obsession with attrition

The entry-level attrition rate across the BPO (business process outsourcing) industry stands at 45-50 per cent for voice-based processes and 15-20 per cent for non-voice based processes, according to Nasscom data.

Every corporate is implementing measures to counter attrition, right from identifying the root cause to making the right hires.

With industry growing at 30 per cent per annum, and the gap between demand and supply widening, industry needs to change its business plan to tackle employee attrition.

Know specific reasons

There could be some common attrition factor across industry but every organisation need to know its top five attrition reasons.

The starting point is to make the exit process counselling independent of the direct business manager.

Once this is done, one needs to analyse the data on the top five attrition reasons on various parameters such as shift timings, reporting manager, education background, native city, referral, distance from work place, month of resignation and months in service.

As the profile of the people and the nature of job in each service line (technical support call-centre, marketing call-centre, transaction processing, banking and accounting) differs, it is advisable to investigate the attrition reasons across all of them.

Keeping it low

Once the reasons are identified some preventive action can be taken first by assigning a task force to monitor and measure attrition, and then taking counter measures.

Initially, one needs to place more emphasis on non-cash incentives such as hiring the right candidates, training, aligning the organisation hierarchy to the industry standard, and clarity on promotion cycles and rewards for productivity and quality.

Each of the corrective measures that has a direct monetary impact, such as faster promotion cycle, increments, cash incentives, etc., should be implemented as per industry norms. Companies also need to launch incentive schemes for employees who want to achieve extra points by getting trained in different process.

A significant weight may be assigned in a manager's performance matrix that measures them on the number of hours the team spends on cross training.

Don't get obsessed

One of the common mistakes across organisation is getting obsessed with attrition, so much so that, gradually, the cost of retention becomes comparable to that of attrition.

If, for instance, an employee says he/she has an offer that promises a doubling of salary, nothing much can be done to retain that talent.

If that employee is not due for a promotion, it may be best to let that person go, because giving him a promotion or more money may upset the structure.

Create Buffers

Based on the current attrition rate, the Human Resource Department should project the staffing needs. The thumb rule is to plan two months in advance; for instance, if the current attrition rate is 36 per cent per annum, then it is advisable to have 6 per cent buffer resources in the pool.

These buffers resources need to be cross-trained in different processes, and not be confined to one account.

The buffer team must be assigned only peak period work. One of the common mistakes is once the team is used to a certain percentage of buffer staff, it tends to offload a part of the current work and the revised workload becomes the new standard.

There is no set attrition percentage number that can be termed good or bad; the important thing is to measure it continuously, taking corrective actions and adjusting it to the overall business plan.

Once the organisation manages to restrict attrition at 60 per cent of the industry average, it should not be pushed too much farther.

(The author is in the ITES industry and can be reached at rohit.gg@gmail.com)

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