BANGALORE: Though the demand for IT workers will continue to far outpace supply, retaining productive employees must be a priority for technology companies to cut cost and become competitive. "The most immediate concern facing the industry is the increasing levels of attrition," says the National Association of Software and Service Companies (Nasscom), India's IT industry umbrella group. "Managing attrition is becoming increasingly important because staffing costs are one of the largest expenses regularly charged to the budget of a company in the IT/ITES sector," said the report made available to IANS. India has managed to carve a niche for itself in the fiercely competitive global software and services market mainly because of its high quality and cost effective pool of skilled knowledge workers. From a base of 6,800 software and services workers in 1985-86, the number of professionals in the industry is estimated to have increased to 650,000 by March 31, 2003. The Nasscom report said other than the natural rate of the attrition, poaching of employees, burn out and high stress environments are causing an increasing churn rate in the industry. India's booming call centres, which provide a wide range of back-office services to global corporate giants such as General Electric, British Telecom, Citibank and American Express, have an attrition rate of 30 to 35 percent, the report said. "When one counts salaries, benefits, bonuses, training and other personnel costs, companies invest a great deal of resources in their employees. "Thus, attrition becomes a two-fold issue, one that's cost related and the second, retaining much needed and often, experienced talent," it added. The lobby group said the reason behind the high turnover rate was a "combination of workplace environmental influences and personal choices" that people make. "Irregular hours and mealtimes, lack of rest resulting in physical strain, and high stress environments cause employees to burn out and re-evaluate their willingness to work in places like call centres," it said. "Poorly prepared management can also potentially communicate an undesirable message of apathy and frustration to employees, which can be detrimental to the health of the services being offered." The report said companies must follow an "improvement cycle of professional development followed by performance measurement" to reduce workforce attrition. "Recognition and reward are powerful motivators. It is virtually important to base a reward and recognition system on standards that everyone understands and can choose to demonstrate. "Evaluating performance of employees, and rewarding high performers, is an imperative managerial task that is critical to the success or failure of a service centric company," it said. "Reducing workforce attrition will directly affect the bottom line of any call centre's profitability."
Source: IANS