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Why is the BPO attrition rate so high?
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Why is the BPO attrition rate so high?
The HayGroup recently completed its 2008 "BPO Sector Special Survey," which attempts to answer this question
Why is the BPO attrition rate so high?
That the Indian BPO companies suffer from the chronic problem of a high attrition rate is a given. The question is why is the rate so high and what can we do about it. The HayGroup recently completed its 2008 "BPO Sector Special Survey," which attempts to answer these questions.
The study focused on the compensation and benefits of almost 39,000 Indian jobs in the BPO sector. The Ky fidings of the study were:
-- The salary structure is not competitive in BPO firms as compared to the rest of the Indian market.
-- The short-term variable component was just 4% last year while the rest of India`s workers enjoyed 10%. Such a low figure does not give any scope in creating incentive programs to encourage employees to work harder or stay at the organization.
-- The attrition rate at BPOs last year was 23.5% compared to 15% in the general market. -- The benefits package mainly focused on retirement benefits, which clearly does not mean much of an incentive for a 20 year old. The employee gets the money at age 60. So retirement benefits like PF do not encourage employees to stay at one company.
HayGroup stated that companies need to learn from the findings of the study and create more realistic pay policies and more aligned to the employee expectations. Companies need to focus on the take-home pay and offer a higher rate if performance-based incentives if they hope to retain talent. The study also suggested innovative options like stock options or deferred and retention bonuses if money was tight.
The need for a more focused approach to career planning was also clearly highlighted. Employees will stay longer when they see that they can move up to a better job at the same company. The report suggested sponsoring post-graduate education programs for employees and this in turn will “lock” the employee into the organization.
Other findings of the study were:
-- Many BPO workers use the money they earn to fund a post-graduate degree.
-- The BPO work is attractive to younger workers giving them a new-found freedom and a unique lifestyle.
-- Many of the jobs are monotonous. The HayGroup suggests cross-training employees in other processes to provide a respite.
Source:
http://www.bpowatchindia.com/bpo_industry_report/indian_bpo/january-06-2009/why_
Why is the BPO attrition rate so high?
That the Indian BPO companies suffer from the chronic problem of a high attrition rate is a given. The question is why is the rate so high and what can we do about it. The HayGroup recently completed its 2008 "BPO Sector Special Survey," which attempts to answer these questions.
The study focused on the compensation and benefits of almost 39,000 Indian jobs in the BPO sector. The Ky fidings of the study were:
-- The salary structure is not competitive in BPO firms as compared to the rest of the Indian market.
-- The short-term variable component was just 4% last year while the rest of India`s workers enjoyed 10%. Such a low figure does not give any scope in creating incentive programs to encourage employees to work harder or stay at the organization.
-- The attrition rate at BPOs last year was 23.5% compared to 15% in the general market. -- The benefits package mainly focused on retirement benefits, which clearly does not mean much of an incentive for a 20 year old. The employee gets the money at age 60. So retirement benefits like PF do not encourage employees to stay at one company.
HayGroup stated that companies need to learn from the findings of the study and create more realistic pay policies and more aligned to the employee expectations. Companies need to focus on the take-home pay and offer a higher rate if performance-based incentives if they hope to retain talent. The study also suggested innovative options like stock options or deferred and retention bonuses if money was tight.
The need for a more focused approach to career planning was also clearly highlighted. Employees will stay longer when they see that they can move up to a better job at the same company. The report suggested sponsoring post-graduate education programs for employees and this in turn will “lock” the employee into the organization.
Other findings of the study were:
-- Many BPO workers use the money they earn to fund a post-graduate degree.
-- The BPO work is attractive to younger workers giving them a new-found freedom and a unique lifestyle.
-- Many of the jobs are monotonous. The HayGroup suggests cross-training employees in other processes to provide a respite.
Source:
http://www.bpowatchindia.com/bpo_industry_report/indian_bpo/january-06-2009/why_
