Managing Attrition in BPO Industry - How to Stop Attrition

 | April 09,2014 03:59 pm IST

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.

Comparative Position of Attrition in BPOs across the Globe

Attrition rates -  %
US - 42%
Australia - 29%
Europe - 24%
India - 18%
Global Average - 24%
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)
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.