Experts are of the view that since the IT industry thrives on individuals with a
vital knowledge base, the industry should help employees develop their knowledge
base further in addition to giving them appropriate monetary and other
compensation in order to retain talent. Combating attrition involves management
of people and a thorough understanding of the human psyche. High levels of
employee turnover occur due to a combination of various workplace environment
influences and personal choices made by the employees. In 2003, a National
Association of Software and Service Companies (NASSCOM) survey identified some
of the major drivers of attrition (Refer Table I)...
Effective recruitment strategies can help organizations in employee
retention. Companies following the traditional methods of recruitment
observed that a major drawback of the traditional selection processes was
either a poor response or a mismatch between company goals and individuals'
Compensation and Rewards
Incentives to employees play a vital role in motivating and retaining them
in the organization. Compensation and rewards in the IT industry have long
included a basic pay component along with a bonus pay when the company made
higher profits. Later firms initiated performance based pay that rewarded
the employee based on his contribution to the overall company profits...
Studies and surveys analyzing the psyche of the employee have found
that the work environment has a major impact on the behavior of an
employee. An effective retention strategy would involve
acknowledging the employee as the internal customer and aligning the
organizational strategies with employee needs and wants...
Employees differentiate a good employer from any other employer
through the feeling of 'wellbeing' that is generated at the
workplace. A balance between work and the personal goals and wants
of an employee contributes positively to the retention of
Learning & Growth
The dynamic nature of technology requires the IT industry to upgrade its
operations frequently. So, another way to retain employees is to help them
update their knowledge from time to time through training programs...
Surveys also identified poor leadership as one of the reasons for employee
attrition. It was observed that leaders incapable of motivating and guiding
employees pushed employees to change jobs frequently. Wipro initiated the 'Wipro
Leaders' Qualities Survey' in 1992...
By 2004, most Indian IT companies started positioning themselves as global
firms. Many companies already had offices in foreign countries. For instance,
Infosys had development centers in Canada, China and the Czech Republic...
Exhibit I: Indian IT Market 1997-2004
Exhibit II: Indian IT and Software Services: Export Revenue Ranking 2004-2005
Exhibit III: Attrition Rates of Indian Software Companies 2002
Exhibit IV: Overall Attrition Rates in the IT Industry
Exhibit V: Annual Demand for IT Professionals
Exhibit VI: Benefits of ESOPs
Exhibit VII: Organisations in India Offering ESOPs