India Attrition Survey 2008

The objective of this study is to reveal the key factors that impact attrition, so that organizations may be able to address the problem at the root level and improve retention.

This report provides information on trends and challenges of attrition and best practices followed by HR professionals for retaining talent. It includes an analysis of demographic variables, key trends in attrition and retention at various levels and also factor analyzed trends. This report aims to provide HR professionals and senior management executives, sharper insights into attrition management and an understanding of the perspective(s) of fellow HR professionals from across industry segments to help develop strategies for retention.

What's different about the present study?

• Comprehensive study designed to reveal both push and pull factors that would help organizations to deploy appropriate retention strategies.
  
  
• Surveyed HR executives, those charged with addressing attrition and retention, not individuals who are leaving.
  
  
• Used factor analysis to interpret data, beyond simple descriptive statistics.
  
  
• The findings of the study lead to recommendations for targeted strategies towards managing retention across levels in the organization.
  
  
• Findings and recommendations based on HR executives' perceptions of why people leave-drawn from their experiences

The research data reported and referenced in this report is based on Human Resource professionals’ responses to a comprehensive survey. The data was collected during February and August of 2008.

Survey participants represent diverse industries including Information technology ITES Manufacturing, Financial services, FMCG, Pharma, Telecom, Retail, Diversified and others.

The survey participants included HR professionals in Junior Management - Frontline Individual contributors (23.7%), Middle Management - First and Second level Supervisory positions (37.9%) and Senior Management - positions above Middle Management (38.4%).

 
Analytic Technique

Data were analyzed using Factor Analysis - a statistical technique used to explain variability among observed variables in terms of fewer unobserved variables called factors.

Our study of over 700 HR professionals across all the industry segments in India provides a snapshot of the attrition and retention climate in India.

‘Retention and Attrition management was ranked first by HR professionals as the most challenging, among the various workforce management processes that they are charged with.  A majority of the respondents (65%) consider this to be an area of shared accountability with other functional heads.

It appeared that for every level in the organization, there were different sets of reasons for attrition most often requiring strategies for retention.  Our study findings establish very clearly that “one-size-fits-all” strategies are not likely to work and organizations need to address attrition and retention at different levels through different interventions.  These findings support the literature, which suggests that individuals seek different rewards from the job and the organization, as they gather experience and grow in their jobs and careers.  The challenge for most organizations was to identify the causal factors leading to attrition at various levels and evolve targeted retention strategies as quickly and efficiently as possible.

The research suggests that the core reason people join organizations is different from those that compel them to leave.

It is interesting to note that there is a disconnect between the reasons for attrition and the push factors identified by the respondents in our research.  As an example, compensation does not figure in the reasons for attrition for the junior and middle level managers, yet features prominently in the list of push factors for both levels (with the reverse being true for the senior level managers).  It would seem that the reasons for attrition are based on the respondents’ actual learning from exit interviews with those who have left their companies.  This is in line with what is reported by global literature on attrition.  On the other hand, the push factors seem to be reported based on what is generally believed by executives, to be the reasons people leave companies, not surprisingly, compensation features prominently.

Again, it might seem interesting that the retention strategies employed by HR professionals are not in consonance with the pull factors listed.  For example, for junior level executives, compensation is listed as the number one pull factor, yet listed as the number five retention strategy.  This might have to do with the fact that HR executives may often be constrained by organizational senior management philosophy or policy or budgetary realities.

A look at the retention strategies from an overall perspective indicate that HR professionals believe that it is through providing people opportunity to grow and develop that you can retain talent.

It is also noticed that employee engagement is a leading retention strategy employed in India.  It is worth noting here that this is currently being seen as the number one retention strategy globally, especially in the United States.

Our data provides ample evidence that work culture, supervisor’s management style and profile of people in the company are, clearly, key factors that should be paid attention to.  It is clear that compensation alone is not going to achieve the goal of retention.

This research report, conducted by AssessPeople covers the reasons and trends in Attrition in Indian organisations. The key trends outlined in this report are summarized below:

• When HR professionals were asked to rate the functions in HR they found most challenging, ‘Attrition and retention management’ ranked first and HR respondents felt that ‘Employee Motivation’ was the least challenging. Clearly, the importance of understanding the reasons for Attrition has never been greater, with 27 % of respondents saying they find it difficult to manage Attrition.
  
  
• An overwhelming 65% of HR professionals feel that managing attrition is a shared role. 30% of the respondents opine that it is HR that is primarily responsible to manage attrition.
  
  
• Employees tend to leave at a higher rate in the first 2 years!
  
  
• A substantial percentage of employees leave within the 2 months!
  
  
• The higher the qualification, the more likely the employee is to leave.
  
  
• Males are more likely to leave than females.
  
  
• Single employees more likely to leave than those who are married.
  
  
• Employees with an Urban Background more likely to leave than those from rural backgrounds.
  
  
• Employees in the age group 25-30 most likely to leave.

• The reasons people leave organizations are not the same as the reasons people stay.
  
  
• Retention at different levels needs to be addressed differently, with targeted strategies developed for each level.
  
  
• Organizations need to identify key individuals and make efforts to retain them.
  
  
• Both Indian and global research show that targeted strategies positively impact retention and that training managers to be people-managers is a critical factor in improving workplace culture and retention.
  
  
• Work culture, supervisor's management style (or even ability to supervise) and profile of people in the company are clearly key factors that should be paid attention to.
  
  
• Compensation alone is not going to achieve the goal of retention.