This is the downside of the booming India story, where companies are facing attrition levels exceeding 20 per cent, especially in the services sector.
NEW DELHI: Here today, gone tomorrow. This is the downside of the booming India story, where companies are facing attrition levels exceeding 20 per cent, especially in the services sector.
A survey carried out by the Delhi-based Associated Chambers of Commerce and Industry (Assocham), which polled 160 leading human resources (HR) heads in India Inc, found that the attrition rate is highest among employees in the 26-30 age group. Employees with experience levels of two to four years are the most vulnerable to poaching by rivals. But women employees are five times more stable than men.
If HR heads expect sympathy for their predicament, it may be as hard to find as a stable employee. “Companies are to blame for attrition,” said Hastha Krishnan, CEO, Ma Foi Global Search Services, an HR consulting firm. “Earlier they had ethical boundaries, but now that they have fuelled the war for talent, it has become a free-for-all situation.”
According to Nirupama VG, managing director, Adastra Consultants, attrition is the outcome of the huge gap between demand and supply. “The overall job market is taking a huge leap. Corporations are hiring people based more on business demands rather than skills,” Nirupama said.
With two million jobs opening up in the retail sector, and another half a million in the business and knowledge process outsourcing (BPO and KPO) sectors over the next three years, it is no surprise that employees are busy shopping around for the next job offer.
If employers are looking for more stable hires, they will have to look at increasing their intake of women employees. The survey discovered that for every 10 males jumping ship for better prospects, there were only two women crossing over.
More than half the HR managers surveyed said women with families made for stable employees even though they had to juggle two roles. “Women look for stability and build on something for sustained growth,” Krishnan said. “Similarly, in the corporate world, they do not like being a rolling stone.”
With India joining the globalisation bandwagon, the movement of workforces across national boundaries has added to the rising level of employee turnover, according to 72 per cent of the survey respondents.
So why do people job-hop so frequently? Immediate gains in salary packages were found to be responsible for job switches in 61 per cent of the cases. Growth potential was cited as another major reason, said Assocham president Venugopal N Dhoot.
Another significant finding is that growth companies face higher attrition rates compared to established companies, with 65 per cent of senior HR executives agreeing with that notion. HR experts say annual attrition levels up to 10-12 per cent are healthy for a company.
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