It is war for talent. Retaining employees has become the most crucial challenge for companies in the information technology sector. With attrition rate in double digits, it is becoming tough for them to make employees stay for a longer period.
Take the case of Baskar. Just out of college with an engineering degree, he was picked up in campus by one of the top three software companies. However, following a tiff with his boss, Baskar left the company within a few months to join a rival firm. “This is the trend with youngsters. They can leave for any reason at short notice. With the market wide open, it is very difficult to retain people,” says an official of a leading software company who is not authorised to speak to the media.
Over the years, the ‘war for talent' has not diminished. Moore's law seems to be applicable in the employee landscape as well. Every two years, the dynamics of the employer-employee relationship changes, says Saurabh Govil, Senior Vice President and Global HR Head, HR, Wipro's IT Business.
The industry seems to be facing the retention problem mainly with junior employees. The reasons range from higher studies to better opportunities, which usually come with more money. The anchor for staying in a company for a longer period would be based on factors like the role, growth, job satisfaction, work environment and not just money.
Retaining talent will continue to feature in the top agenda for companies. The pace of change will be faster than the pace at which the talent pool is becoming available. It will be incumbent on companies to fill the capability gap with a mix of hiring as well as accelerated learning programs.
In the fourth quarter, Wipro's annualised employee attrition fell year-on-year by 6.5 per cent to 14.4 per cent. “This is a clear reflection of the fact that our engagement measures are working,” said Govil.
How to hold back?
Talent retention is crucial to delivery and client satisfaction, and there is a lot of focused effort that goes on to retain talent. Periodic talent review and planning process helps Wipro to identify the high potential talent pool. Retention efforts are around creating a visibility and exposure map for the top talent, providing them with ‘bubble' assignments, accelerated growth opportunities and differentiated rewards. “We offer a mentoring programme for our high potential women in middle management,” says Govil.
Contrary to the widely held belief, compensation is not the only way for a company to make its employees feel valuable and wanted. A singular focus on compensation to attract and retain talent is inappropriate because it comes with limited shelf-life and feasibility, feels Shankar Srinivasan, Chief People Officer, Cognizant Technology Solutions.
Cognizant, says Srinivasan, believes in empowering people. It has created an entrepreneurial culture that encourages responsibility, commitment, sharing and excellence across all layers and gives associates a free hand to push the ‘limits of imagination' in doing what they think is right for the customer and for the company.
“We need to give employees the right tools to replicate their digital lives in the workplace to engage them better, improve our overall performance and in turn, enhance the quality of service we offer to our clients,” he said. One example of this is Cognizant 2.0, which is a Web 2.0-based platform serving as a virtual town square for over 140,000 Cognizant associates and over 100,000 active users who share knowledge such as best practices, process guidance and technological artefacts across the company's global delivery network and collaborate on hundreds of projects worldwide.
Cognizant's attrition, including both voluntary and involuntary, and all its businesses like BPO was 10.6 per cent for the first quarter 2012. It has been hovering around the 10 per cent per cent mark for the past two quarters. Attrition is mostly at the junior levels. The primary reason for attrition is higher education, according to Srinivasan.
E. Balaji, CEO, Randstad India, a recruitment company, agrees that compensation was not a major factor in retaining employees. "It all depends on the age group as sizeable people leave due to higher studies. The 1-3 year old in the company has aspirations and a few of the women get married and relocate to other places. A company also loses people due to personal factors," he said.
HCL Technologies follows the practice of ‘Employees First' as the company believes that retaining talent should be a constantly evolving procedure. "In today's aggressive business environment where customers have a lot of options to choose from, what distinguishes a company is the innovation and service delivery," says Naveen Narayanan, Global Head, Talent Acquisition, HCL Technologies. Innovation is the key to success and therefore companies are more dependent on their talent to distinguish themselves from the competitors, he adds.
Growing within the organization
Employee retention strategy at HCL is built around several approaches; some which are intended to impact retention directly while others have retention as one of the key considerations. These approaches focus on the key areas and factor that impact retention.
For instance, HCL believes that career development and growth within the company are critical factors towards retaining employees. The company encourages its employees to focus on continuous learning and growth – both from a career as well as individual development perspective and provides various avenues to pursue the same.
HCL saw an attrition rate of 15 per cent last quarter. Every individual has different growth and career plans in life, therefore their reasons of leaving a company would also differ. Most studies will tell you that employees don't just leave for money. It would be a consequence of a decision for many reasons.
Companies today seem to have realised that to keep a momentum of business and revenues, they need to strategise newer ways of retaining and motivating employees. Attrition rates have stabilised for most companies. Sophisticated ways are there to predict who may potentially leave, programmes to retain top talent and such initiative, he said.
The key to employee retention is to look beyond salaries and move to smart people management tools and practices. Analytics on retention trends and demographics play a big role managing a multi cultural and multi generational environment. Keeping pace with skill redundancy is the key to retaining talent.
Today's Gen Y also looks for a workplace that offers them a democratic style of working, a place where they can experiment with ideas, get timely coaching and feedback, and have their growth plans well defined.
To retain talent, companies will have to come up with innovative platforms to engage and enable employees to contribute their ideas besides their professional growth. HR today needs to understand the aspirations of Gen Y and develop policies and procedures according to their requirements rather than focusing on the senior management, he said.