Walk With Me

Is there a dearth of skilled manpower in the country? Are you having problems
retaining your best employees? Ask these questions to anyone, whether it is a
big solution provider sitting in a metro or a channel partner sitting in the far
reaches of the country. Chances are that the answer will always be the same.
Yes.

With the economy booming and the country becoming a playground for big
multinationals and BPO operations there is no dearth of jobs for people with the
requisite skills. However, the problem is that while jobs have been growing
exponentially in the market, the number of people who can fill in these
vacancies have not grown that fast. The net result, the growing attrition rate
has become the biggest problem that any company irrespective of their size
faces.

To see how the solution provider community is grappling with this problem, DQ
Channels did a dipstick survey across the country, the results of which were
discussed in a session on 'Manpower Retention' in the SP Summit, which was held
in the Andaman Islands earlier this year. Shyam Malhotra, Editor-in-Chief of DQ
Channels, who is also directly involved in formulating the HR policies for
CyberMedia, had conducted this session.

In the survey we spoke to 28 people from both metros and upcountry locations.
To get a fair spectrum of ideas we spoke to companies whose manpower strength
varied from 10 to 850 employees and their revenues ranged between Rs 3 crore to
Rs 150 crore.

Landscape

Before discussing anything about retention, it is prudent to find out how
widespread attrition actually is. During the survey 29 percent of respondents
said that attrition was one of their top two problems, while for 54 percent it
featured among their top five problems. A small portion, seven percent, said
that it was a problem but would not feature in their top five.

What was surprising was that for 10 percent of the respondents it was not a
problem at all! Taking a closer look at the 10 percent revealed that these are
typical companies, which have shown high growth rate in the last few years, and
thus the opportunity for personal growth of any employee has been high and that
is why attrition levels have been low. But this kind of scenario only exists in
companies till they are on the growth curve. Once they reach a plateau then it
is a different story altogether.

So with attrition becoming so rampant, how important is retention of valuable
employees? The survey shows that when asked to rate the importance of retention
on the scale of 1- 10 (with 10 being highest), 36 percent of people ranked
retention at number 10, 32 percent at number nine, 21 percent at number eight.

However, what was surprising was that despite a majority of respondents
thinking that retention was an important thing for them most did not have a
dedicated person driving retention activities in the company. In 61 percent of
organizations retention activities were a part of HR.

According to Malhotra, “Manpower retention is one of the issues which
occupies the CEO's attention the most. The survey however shows that not many
organizations have a dedicated team to look into manpower retention issues.
Indeed it is surprising that most companies have placed manpower management
under the care of the HR department, which does not appear to be the best
practice. The need of the hour is to devote more time and budgets to address the
issue proactively.”

A completely different and somewhat radical point of view came from RK
Malhotra of Velosis Systems. According to him, “Though manpower retention is
very important we have stopped fighting it now. Any employee who wants to leave
will do so and there are very limited ways by which we can stop them. That is
the reason why we have accepted attrition as fait accompli. So our priority
instead of retention in induction, is to get new people in quickly so that the
work goes on without a glitch.”

Important enough?

While most respondents do believe that retaining talent is very important
for them, the irony of the situation is that they are hardly doing anything
about it. As Saket Kapur of Delhi-based Green Vision said, “Employee retention
is a memory resident activity, which is always on mind.” Green Vision is one of
the 14 percent of companies who participated in the survey and have a dedicated
person driving the retention activity.

In 61 percent of the organizations retention activities are part of HR while
the remaining 25 percent have no one driving the retention process. While enough
has been written about the various kinds of activities that are available to
retain the employee, still the onus of taking them from the book and
incorporating them in business has clearly not been a priority of most SPs.

Perhaps that best explains why most of them do not even have a budget for
such activities. Most of the respondents felt that going for a company picnic
once in a while or sharing lunch would help in bonding and thus would help in
retaining employees.

One of the respondents in the survey states that the retention activity
starts once they have the resignation. According to the respondent, “The
organization takes performers seriously and HR analyses the performance of every
employee once it has a resignation. Retention as a rule is practiced for every
performer and requires an exit interview with the Divisional Head (typically at
a CXO level). The CEO himself does the exit interview for senior people. Based
on the factors influencing the decision of the outgoing employee as brought out
in such exit interviews, rectification is done where required and performing
employees are retained.”

This means the processes typically starts working once a good employee leaves
and then new benchmarks are set for the rest of the employees. This is also
probably the reason why 39 percent of companies surveyed had not budgeted for
retention activities at all.

22 percent had no fixed budget and decided depending upon requirements and
situation. The rest (39 percent) had a fixed budget, which started from Rs 1
lakh and went up to Rs 8-10 lakh per annum.

Timing is everything

With the growing rate of attrition, the top level has to get involved in the
retaining the employees. In the session at SP Summit, Malhotra of DQ Channels
revealed how he spends at least one-third of his time on HR issues. Prateek Garg
of Progressive Infotech, who has a base of 800 people, agreed that personal
involvement always works and shared how he spends at least 20 percent of his
time overseeing manpower issues and his HR personnel report directly to him.

But that does not hold true for everyone. According to the survey direct
involvement of most SPs in the retention activity is very low. 32 percent
respondents said that the time they spent on retention activity was not fixed;
29 percent spent 10 percent of their time on retention; 18 percent said that
they spent 20 percent of their time on retention activity, while 11 percent
spent 30 percent of their time driving retention activity.

The remaining seven percent people had no direct involvement with retention
activities and let their teams formulate any such plan or policy while three
percent of the people said retention as an activity was always on the mind, but
it was difficult to quantify the time.

Employee costs

Well this was kind of a given. The employee costs are rising YoY,
considering the attrition rates and shortage of skilled manpower that is a
given. Salary does play an important role when employees decide whether to
change or not.

The survey threw up stuff on expected lines. Of the respondents interviewed
86 percent said it was increasing at the rate of 10-20 percent YoY. The rest 14
percent said it was constant and that was primarily because their companies were
growing and the increased revenues were helping them in keeping the employee
costs constant.

Once you compare that with the revenues that these companies generated the
picture in growing employee costs becomes much clearer and showcases the
prohibitive levels that salaries are reaching.

Of the people contacted, 33 percent said that five to 10 percent of their
total revenue went in to funding employee cost. For 19 percent it went up to 15
to 20 percent of their total revenues. What was probably surprising was that
there were 15 percent people whose 50 percent of revenue went into employee
costs.

Employees stickiness

The rising salary costs across the spectrum obviously show that a growth in
salary is what many employees are looking at when they think of switching jobs.
But the pertinent question is whether salary is the only thing that makes an
employee leave or stay with a company.

What are the things that makes people stick? Are incentives (in terms of
foreign travel or new cars, latest gadgets), appraisals and family or group
activities, the magic mantras that will help in retaining people? Well the
answer is yes and no. While these things might be important, the survey showed
that it was how an employee perceives his growth in the organization that is
definitive factor when he or she decides to make a shift.

When asked that apart from higher salaries what is the thing that makes
people stick with a company a substantial 48 percent of the people thought
'Clear Growth Path' was the most important reason why people chose to stick to a
company.

As Saurin Shah of Ashtech Infotech revealed, “Training and mentoring of
employees is very important. That apart we provide incentives for soft skill
improvements. But most importantly we help people define personal goals and
interline them with their growth plans in the company.”

Another company that is doing a lot on similar terms in Bangalore-based Value
Point. Sharing the company's policies RS Shanbagh said, “We try and focus on how
everyone in the organization can create wealth, specially non-sales force. That
apart we regularly groom our trusted employees to occupy higher positions in the
company. At the managerial level we are always looking at empowering them by
bringing a sense of ownership.”

He further added that the company almost always distributes most of the
awards, rewards, benefits, foreign tours, holiday and other vouchers received
from vendors to its employees. They are also thinking of giving ESOPs to the
employees whenever the company goes for an IPO.

“We have hired a highly experienced, motivated, industry knowledgeable,
balanced HR Head to bring in global best practices in our organization, that
apart we also look at extending moral and financial help during employee's
critical situations like marriage in the family, buying sites, building own
house, medical emergencies etc, “Shanbagh added.

Ownership

Another important factor that makes people stick with a company is when
employees are given 'Ownership or decision making power'. Of the people
surveyed, 26 percent thought that when an employee has decision making power in
the company, or a sense of ownership of the project, then he/she is less likely
to look out for other option.

This fact was very succinctly put by G Balakrishnan of Mumbai-based Ontrack
Solutions. “First and foremost people desire to know how they would grow in the
company. When we take in fresh talent on board or even people with very little
experience we make sure that they know the kind of growth that they can get with
us for the next five to six years. We ensure that respective managers spend
quality time with every employee every month, so that we are tuned in to their
aspirations,” he stated.

The personal touch is what even Malhotra of Velosis advocates. According to
him, “I personally interact with senior people to make sure that they are happy
and comfortable in their job roles. If someone in any team is facing problems
with the boss or with work we also organize counseling for the person. That
apart we have incentive schemes and quarterly programs for employees, which
involve their families also. We are no Infosys or Wipro that we can have clubs
but we try and add a personal touch to activities.”

There is another approach that Sudhir Kothari of Kolkata-based Embee Software
propagates. “We provide employees a platform of entrepreneurship, which allows
them to learn and grow with the organization. We encourage decision making at
every level, which gets monitored and measured,” he explained.

Boss factor

Another factor that is an important reason why people stay or leave any
organization is their equation with the boss. At least 30 percent of the
respondents thought that 'Work environment and equation with boss' were
important factors that made people stick with a company.

A fact corroborated by a recent survey done by the Florida State University's
(FSU) College of Business that states that employees don't leave their job or
company, they leave their boss. The survey, which came out last year and created
quite a stir, has been done by Wayne Hochwarter, an associate professor of
management in FSU with doctoral students Paul Harvey and Jason Stoner.
Hochwarter surveyed more than 700 people who work in a variety of jobs about
their opinions of supervisor treatment on the job.

According to the researchers, employees stuck in an abusive relationship
experienced more exhaustion, job tension, nervousness, depression and mistrust.
They also were less likely to take on additional tasks, such as working longer
or on weekends, and were generally less satisfied with their job. Also,
employees were more likely to leave if involved in an abusive relationship than
if dissatisfied with the pay.

A surprising offshoot of the survey was that more than half the people
surveyed, 52 percent thought that 'Getting the desired job role' was the least
important thing when people think about moving from a company or taking on a new
job.

A thing was perhaps best explained by Kshitij Desai of Ahmedabad-based Shani
Peripherals, “First and foremost important motivational factor is how is your
boss. Then the employee sees whether he has the power to make decisions about
the work that has been assigned to him as independent decisions always boost the
confidence level of an employee and ultimately increase the motivation towards
work. Then only do people think about work environment, and getting desired
work.”

What the employee wants?

To answer that question lets detract a bit from the topic at hand. To put it
in a nutshell it's as confusing or as easy as finding 'What a woman wants'. In
the immensely watchable Hollywood

flick 'What Women Want' despite his magical powers Mel Gibson was unable to find
the answer, and when he loses those said powers, the answer was right in front
of him.

The same thing happened with the survey. When we went looking for answers
they were there with the respondents themselves. The people who had been talking
about attrition and difficulty in retaining good employees all along were the
ones who ultimately showcased ways and means by which a meritorious employee can
be retained. The problem perhaps was trying to find the time to sit and think
through.

Five questions anyone?

So to make it easier for you, here are five simple questions you should ask
yourselves:

• Do your employees know what is the next level of growth that they will
  get?
• Do they have clear power to take decisions?
• Do they feel that someone cares?
• Is HR an integral part of your managers work and are they trained to
  handle it?
• Is people engagement a proactive process in your organization?

These five simple questions will give you all the answers that you need to
decipher what your employee wants and what you should do to retain the talent
that is being snitched by the multinational corporations.

Perhaps it was best summed up by Malhotra of CyberMedia when he said,
"Improvement is not about knowing the answers. It is about knowing the right
questions."

SHIVANGI YADAV

shivangiy@cybermedia.co.in

(With inputs from Piyali Guha, NR Sethuraman and Amrita Tejasvi)