Wednesday, June 25, 2008

Carrots for Retention Age - Nandita Gujjar

One topic that is most debated on is attrition in the BPO industry. I spent some time on the internet doing research on BPOs and was amazed to find a number of articles on attrition and the reasons for this. There have been a lot of studies done in the past five years on attrition. The flip side of retention is employee retention.

What is employee retention?

Retention is defined as the act of holding back. Employee retention is the ability of an organisation to hold on to its employees. There are a number of advantages to employee retention.

Retention as knowledge management: An employee builds knowledge on how to successfully run a client process and this is sometimes not captured in process maps or manuals.

Retention as process improvement: It is only when an employee has worked on a process long enough that he/she is able to improve the process and provide value-add.
Retention as cost utilisation: Retention can provide an organisation immense cost gains. Replacement costs often amount to 2.5 times the salary of the individual you are replacing.

It is therefore critical not only to measure attrition but also retention in any organisation. At Infosys BPO, we periodically track retention. We call it the ‘Retention Age’. There are many reasons why people stay in an organisation and these reasons change depending on the experience and maturity of the employees. Infosys tracks the retention age for different categories of employees — 0-3 months, 3-6 months, 6-12 months etc. Each category throws up different reasons and we take action based on how we prioritise them.

Our business model is such that at entry level 40% of our recruits join directly from campus. This helps us control the spiraling salary costs. However, at other levels, we ensure retention through many ways:

Tracking the proportion of internal promotions to external hires at every level. Our aim is to advertise all available positions internally before going to the external talent pool.

Tracking the tenure span of control. We control the number of employees that can report into the next level and this is called the span of control. Along with this measure we also track the tenure of the reporting relationship. Managers are encouraged to have a higher span of control retention age.

Tracking the management cadre to see actual growth of the individual based on current role, span of control, projects, client feedback etc.

Early Warning Indicator System: This is a system we have introduced to keep track of the retention age among employees. The system highlights employees who are most likely to quit based on a number of pre-decided factors. This helps us retain at least our high performers. We also have direct ways of encouraging retention.

Compensation: One of the programmes we have launched is called PEARL. It is a retention bonus that was created especially for the 0-6 month employees. We found that there was a growing percentage of employees in the 6-9 month category that decided to move to other organisations for larger salary packages. We introduced PEARL, designed to ensure that every employee got a month’s bonus salary on completing a year in the organisation. We also have a ‘loyalty bonus’ whereby an employee’s capability of earning a higher bonus increases with the time he spends in the organisation.

E-SAT and key determinants: Employee satisfaction is a key determinant of an organisation’s health. It is a way of ensuring that employees are motivated and their concerns and issues are addressed in a timely manner. For example, the food committee is completely managed by employees. They decide on the food, selection of vendors etc and are responsible for ensuring the success of food courts.

Focus on high performers, high potential: At Infosys, there is an attempt to re-define the way we do work and transformation is the biggest way of doing this. We have found that our high performers are the ones who are constantly helping us make things cheaper, better and different. We are therefore working at ensuring that we have different programmes in place that specifically address the needs of our high performers and high potentials.

Nandita Gurjar (The author is vice-president and group head, HRD, Infosys Technologies)

Source : ET

Read the Previous Posts