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Saturday, October 17, 2009

Managing Attrition in BPO Industry - Project Report

Indian BPO Industry: An Introduction
In the best of worlds, employees would love their jobs, like their co-workers, 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 co-workers, 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?
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".
The business process outsourcing (BPO) industry in the country is facing the challenge of finding quality human resources given the current attrition rate of around 50 percent. In India, the average attrition rate in the BPO sector is approximately 30-35 percent. It is true that this is far less than the prevalent attrition rate in the US market (around 70 percent), but the challenge continues to be greater considering the recent growth of the industry in the country. Keeping low attrition levels is a major challenge as the demand outstrips the supply of good agents by a big margin.
Attrition rates %
US 42%
Australia 29%
Europe 24%
India 18%
Global Average 24%
Comparative Position of Attrition in BPOs across the Globe
Source - Times News New York (2003)

The industry should look beyond the traditional areas of recruitment and some thought should be given to employ physically challenged people and housewives. The reasons for the high rate of attrition was due to various factors like salary, work timings, other career options, adding that there is always the danger of costs increasing while billing rates decline.
Present Employee Benefits Provided by Majority of BPOs
• Group Medi-claim Insurance Scheme
• Personal Accident Insurance Scheme
• Subsidized Food and Transportation
• Company Leased Accommodation
• Recreation, Cafeteria, ATM and Concierge facilities
• Corporate Credit Card
• Cellular Phone / Laptop
• Personal Health Care (Regular medical check-ups)
• Loans
• Educational Benefits
• Performance based incentives
• Flexi-time & Flexible Salary Benefits
• Regular Get together and other cultural programs
• Wedding Day Gift
• Employee Referral Scheme
• Employee Stock Option Plans
Tackling Attrition Heads On
It is no easy task for an HR manager in this sector to bridge the ever-increasing demand and supply gap of professionals. Adding to this is the issue of maintaining consistency in performance and keeping the motivation levels high, despite the monotonous work. The toughest concern for an HR manager is however the high attrition rate. To arrest this trend, companies can look into various options like good rewards, bonding programme, flexible working hours and stronger career path.
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.
Companies need to go in for a diverse workforce, which does not only mean race, gender diversity, but also include age, experience and perspectives. Diversity in turn results in innovation and success. The 80:20 rule also applies to recruitment. So BPOs need to focus on roles, which have the most important impact.
Reasons for Attrition
When there are so many benefits associated with BPO industry…. when there are so many privileges for the BPO employees a few factors make them to change the company/industry:

• For higher Salary
• No Growth / Lack of Promotion
• For Higher education
• Misguidance by the company
• Policies and procedures are not conducive
• No personal life
• Physical strains

The Image: According to me, 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.
Communication Gap in Expectations: The toughness of the job and timings is not adequately conveyed. Besides the induction and project training, not much investment has been done to evolve a "continuous training program" for the agents. Motivational training is still to evolve in this industry. But, in all this, it is the HR manager who is expected to straighten things out and help individuals adjust to the real world. I believe that the new entrant needs to be made aware of the realistic situation from day-one itself, with the training session conducted in the nights, so that they get accustomed to things right at the beginning.
Female Workforce: The high percentage of females in the workforce (constituting 30-35 percent of the total), adds to the high attrition rate. Most women leave their job either after marriage or because of social pressures caused by irregular working hours in the industry. All this translates into huge losses for the company, which invests a lot of money in training them.

The Lossess
The reasons for the high rate of attrition was due to various factors like salary, work timings, other career options, adding that there is always the danger of costs increasing while billing rates decline.
If a person leaves after the training it costs the company dearly. Many experts are of believe that all these challenges can turn out to be a real dampener in the growth of this industry. The need is for those individuals who can make a career out of this. 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.

How to Stop BPO Attrition
Firstly, the industry has to get out of its image of an Internet sweatshop where an employee is resigned to his fate of being in office at ungodly hours for a dead-end job.

Short Term Bonding Techniques
1. Using the CFO’s services – Well, this stands not for Chief Financial Officer but Chief Fun Officer, whose only job is to think of opportunities for making fun.
2. A Pizza Party – Senior management takes orders for custom-made pizzas from agents and supervisors and serves them.
3. Shop till you drop – Tie up with a shopping mall for an evening outing and distributing prizes based on that.
4. Shift rotation – Permanent night birds fly away faster! Suitable day shift opportunities are required from time to time.
Long Term Solutions
• Involve the advisors or team leaders in the interviewing panels
• In Company presentations to potential candidates, encourage the employees to share their experiences
• Staff members must feel rewarded, recognized and appreciated. Frequently saying thank you goes a long way. Monetary rewards, bonuses and gifts make the thank you even more appreciated. Understandable raises, tied to accomplishments and achievements help to retain staff
• Select the right people in the first place through behaviour-based testing and competency screening
• Offer an attractive, competitive, benefits package
• Provide opportunities for people to share their knowledge via training sessions, presentations, mentoring others and team assignments
• Demonstrate respect for employees at all times. Treat the employees well & provide dignity of job; follow the maxim of Mr. Marriott that "Ladies & Gentlemen serve the Ladies & Gentlemen"

• If a key employee resigns, it should be taken up on a priority basis and kept confidential as far as possible and the senior management should meet the employee to discuss his reasons for leaving and evaluate if his issues bear merit and whether they can be resolved
• Exit Interviews: Outsource this process to external consultants to get a realistic and unbiased feedback. This can be a great source of information regarding the shortcomings in a management system. People want to enjoy their work. Make work fun. Engage, employ the special talents of each individual
• BPOs should endeavour to implement work-life balance initiatives to reinforce the retention strategies. Innovative and practical employee policies pertaining to flexible working schemes, granting compassionate and urgency leave, providing healthcare for self, family and dependants, etc.
• Listen to employee's ideas; never ridicule them
• Offer performance feedback and praise good efforts and results
• Implement organizational culture measurement tools like Adversity Quotient (AQ)
• Staff adequately so overtime is minimized for those who don't want it and people don't wear themselves out
• Get them involved in social causes and fund drives like Tsunami Disaster Relief. Provide a meaning or a cause to their lives
• Nurture and celebrate organization traditions like Diwali, Holi, Christmas etc.
• Communicate goals, roles and responsibilities so that people know what is expected of them and feel a part of the crowd
• According to research by the Gallup organization, encourage employees to have good, even best, friends, at work
• Encourage humour & laughter in workplace to deal with stress which will ensure that the employees are happy which gets reflected in their services especially critical in voice-based transaction
• Feeling valued by their manager in the workplace is a key to high employee motivation and morale
• Reach out to the families of the potential candidates with sustained and focused messages in the media about the excellent prospects in the BPO Industry. There is an example of this instances - Late Rai Bahadur Mohan Singh Oberoi, Chairman of the Oberoi Group in efforts to makes sure that many women joined his company went to educational institutions and elicited women's parents to come to the hotel. He told them "I will walk you in and show you what your daughters will do with us, please help us to train them"
Excellent Career Growth Prospects
• Encourage & groom employees to take up higher positions/openings. If not fulfilled then they will look outside the organization
• Look for talents within the organization and encourage them. For instance, if a person has the potential to be a trainer, groom & develop the employee

Night Shifts
• Have doctors to advise & guide them about their biological clocks and ways & means to deal with them
• Dietary advice: - Do's and don'ts
• Create the passion that they are doing a yeomen service to the nation by bringing the much-required Foreign Exchange
• They are helping people (clients) to make their life easier
• Special lights in the office/workplace to ensure their bodies get sufficient vitamin D
• One distinct disadvantage of night shifts is the sense of disorientation with friends and family members. Concentrate on this problem and develop innovative solutions and ways to deal with it
Focused Training & Development Programs
• For Associates & Team Leaders: A session on Transactional Analysis during the induction period so that both are made aware of the causes for Communication breakdowns & conflicts which affect their mental behaviour and stress which needs to be tackled at the earliest in the right manner
• Those who are working on services verticals: like Banking & Financial services to be imparted training/knowledge of Vedic Maths, which would help them, calculate the figures quickly without using calculators
• Creativity & Innovation: Its all about Attitude! A job can be as monotonous or exciting as you think/believe it to be, as it is all a state of mind. Look for excitement in the job process as it is not just answering the queries or solving the problems of customers but learning more about the Customer through his voice accent or visualizing his environment/culture
• Encourage the best performers to share their experiences with others and mentor others. The emphasis is to create the desire to learn, enjoy and be passionate about the work they do
• Meditation Room or deep breath exercises for Associates & Team Leaders: the emphasis is that they should never be in the stress mode or upset while attending calls of a customer
• Hire outstation candidates (from small towns like Amravati, Latur, Nashik etc.,) and provide them with shared accommodation
• The industry should look beyond the traditional areas of recruitment and some thought should be given to employ physically challenged people and housewives

• To arrest this trend, companies can look into various options like good rewards, bonding programme, flexible working hours and stronger career path
• Offer part-time work to attract workers who don't fit the typical call-centre profile - for example, older homemakers who have English-language skills
Communications - Getting Your People to Care
Communication is the first step toward creating the kind of environment that people care about, and if they care, they just may stay. At any time, all of your employees should have a pretty good idea of how business has been, and they should be aware of what issues the company is attempting to address.
The point here is that you want to treat these people as your partners, which they are. They may not have to worry about covering the payroll this week, but they do have worries of their own. Treat them with at least as much respect as they give you. As the store's owner or manager, you set the tone for the entire organization.
Listen to your employees when they have ideas for improvement. Let everybody know where it came from. Post a "brag board" in your break room, or circulate an internal newsletter that touts these contributions. The pay-off is a contagious feeling of pride and, perhaps, some new efficiency that saves the company money.
Set Clear Expectations
Setting expectations initiates the process. Managers need to sit down with each employee and clearly define what's expected of them. Why is a setting expectation important? Quite simply, this process can be the cornerstone of improving the motivational climate within your sphere of responsibility. Setting expectations revolves around the following three areas:
• Key job responsibilities
• Performance factors and standards
• Goals
Clarity - Expectations should focus on outcomes, not activities. In other words, you achieve clarity when you identify the expected results rather than the method for achieving them.

Relevance - The principle of relevance helps define the "why" of the assignment. If your employees have a full understanding of the project's importance, they can make adjustments as unanticipated factors crop up within the process. They probably also will be more committed to the result because they can see more easily how it fits into the big picture and how their efforts impact the company.
Simplicity - Simplicity creates a sense of grounding for employees as they endeavour to carry out assignments. If managers identify the work in simple, straightforward terms, employees will find it much easier to follow through on managers' wishes. To accomplish this, a manager must identify the key message in a fashion that the employee can embrace.

Proper Rewarding
It is about both financial and non-financial rewards and embraces the strategies, policies, structures and processes used to develop and maintain reward systems. Keep following parameters in mind, while designing a reward policy:
Build a high degree of recognition value into every reward you offer: Recognition is the most cost-effective motivator there is. While the high cost of other rewards forces us to give them sparingly, recognition can be given any time, at very little cost. Highly motivating organizations even celebrate small successes.
Example: A health-conscious company distributes fruit bowls to employee's work areas when key personal milestones are attained. Another company uses a more fattening approach: fresh-baked chocolate-chip cookies to say thank you.
Reduce entitlements and link as many rewards as possible to performance: Clearly the traditional "pay for loyalty" systems in most organizations need to be changed. Don't let attendance be your major criterion for rewards. Move toward performance-based rewards, including performance bonuses, gain-sharing and non-monetary recognition. Smart organizations are looking for opportunities to reduce across-the-board entitlements, and thereby find more resources for discretionary performance-based rewards, without increasing the total cost of rewards.
There is a well-accepted law of behavioural psychology, that if you want someone to repeat a behaviour, you should positively recognize it immediately. From this law, smart supervisors and managers can learn a vital lesson: Look for any employee doing something right, right now, and recognizes it.
Troubleshoot your reward system to make sure that what it is rewarding is what you really want to happen: The Law of Rewards - "What you reward is what you get" - Is extremely powerful. The most important question to ask in evaluating the reward system in your organization is, do the rewards we are giving elicit the performance we want? Start with the results you want to achieve and then pinpoint the types of behaviours needed to achieve them. For example:

• If you believe teamwork is going to get you the results you want, make sure you reward teamwork, and not internal competition between departments
• If you want quality, make sure that productivity isn't over emphasized
• If you want long-term solutions, don't reward quick fixes
Note: Also, don't confuse employees with too many rewards. It is better to focus rewards on the critical few behaviours and results, rather than diluting them by rewarding the trivial many.
Give employees a choice of rewards: Rewards are as different as the people who receive them and it doesn't make sense to give rewards that recipients don't find rewarding.
How do we know what will be rewarding to employees? Ask them. Smart organizations are also letting employees choose their own rewards from reward menus and catalogs. Personalizing rewards shows that a company cares enough to discover what "interests" each employee, rather than just distributing generic items.
Increase the longevity of your rewards: This can be done in a number of ways: One of the keys to reward longevity is symbolism. For instance, a T-shirt of coffee mug with a meaningful inscription will continue rewarding those who wear it, or use it, long after its initial receipt.
Use Point System: Rather than rewarding each individual behavior or accomplishment, points can be awarded, which employees can accumulate and eventually trade for items from a reward menu or gift catalog. This keeps the anticipation of rewards fresh for longer periods of time. It also addresses the need for reward individualization. Example: Sitel India
Interestingly, when researchers have investigated the motivational dynamics of these workplace games, they have found that the major motivator is the playing, not the prize.
Be continually vigilant of demotivators that may undermine your organization's best efforts to provide power rewards, and reduce them promptly: Most demotivators can be dramatically reduced by soliciting employee involvement in identifying highest-priority demotivators and by enlisting top-management commitment to support their reduction. Employees need to be educated about the reasons that this is being done, understand the ultimate benefits to them and the organization, and should probably have some input into the change process.

To avoid the perception of unfairness, it is important, first and foremost, that the process for allocating rewards is viewed by employees as being impartial. This requires an objective measurement system that few organizations have. Without such objective measurement, any reward system is probably destined to failure.
The quality of the supervision an employee receives is critical to employee retention: Supervisor has a critical role to play in retention. Frequent employee complaints centre on these areas.
• Lack of clarity about expectations
• Lack of clarity about earning potential
• Lack of feedback about performance
• Failure to hold scheduled meetings
• Failure to provide a framework within which the employee perceives he can succeed.
The ability of the employee to speak his or her mind freely within the organization is another key factor in employee retention. Employees offer ideas, feel free to criticize and commit to continuous improvement. If not, they bite their tongues or find themselves constantly "in trouble" - until they leave.
This report is not exhaustive, you can innovate many new strategies to retain your people. These are just the basics and if implemented in a proper way can give good results.

It is HR's job, though not HR's job alone, to champion and shepherd effective human resource management practices at both the strategic and day-to-day levels. That is, to be effective, human resource management practices must be grounded in two ways. First, they must reflect company wide commitments as to how it will manage and relate to its employees. Secondly, HR must implement these commitments so that the ideals of the enterprise and deeds of its agents are congruent. 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 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.


Anonymous said...

This is really good project

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