Holding back employees

One topic that is most debated on is attrition in the BPO industry. Spending time on the internet doing research on BPOs one can be surprised 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.

Employee retention:

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

Retention for 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. 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 addition. Retention can provide an organization immense cost gains. Replacement costs often amount to 2.5 times the salary of the individual you are replacing. Retention contributes to cost utilization.

It is therefore critical not only to measure attrition but also retention in any organization. At Infosys BPO, retention is periodically tracked. Now one can call it the ‘Retention Age’. There are many reasons why people stay in an organization 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 they take action based on how to prioritise them.

Their business model is such that at entry level 40% of recruits join directly from campus. This helps to control the spiraling salary costs. However, at other levels, they ensure retention through many ways.
Tracking the proportion of internal promotions to external hires at every level, their aim is to advertise all available positions internally before going to the external talent pool.

Tracking the tenure span of control:

They control the number of employees that can report into the next level and this is called the span of control. Along with this measure they 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 the Company has 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 to retain at least high performers. They also have direct ways of encouraging retention.

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

Employee satisfaction is a key determinant of an organization’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. They have found that high performers are the ones who are constantly helping make things cheaper, better and different. They are therefore working at ensuring that the Company has different programs in place that specifically address the needs of high performers and high potentials.