IT industry in India is one of the largest sectors for increasing foreign exchange earnings of the country. The technological advancement and the availability of skilled resources in the Industry have been growing in double digits since last two decades. Certain IT hubs have become favorites of entrepreneurs to start a new venture, one of them being Pune. Pune is host to around 3000 technology companies, providing much needed employment to Engineers, Computer & Science Graduates also contributing immensely towards the revenue generation for the nation. The growth of IT industry in Pune is fuelled by the availability of skilled workforce as well as trained resources for immediate deployment on the job. The improved Infrastructure, favorable climate, secured environment and support from the Government has also added to the exponential growth. The advent of a host of start up’s has fuelled huge demand for the IT engineers, which has put pressure on the existing companies for retaining them. The starting salaries have improved multifold for the Fresh graduate engineers or trained and ready to deploy engineers. In the year (2004-5) the starting offer used to be around 3 to 4lacs, which has leaped to 13-14lacs in (2018-2019). In an IT company the main contributionfor growth comes from SE’s and constant advancement of technology means, you have to be adaptable to deliver as per the clients requirements or modified demands.
IT companies are hugely affected by the employee turnover as it is the Intellectual Capital and dependency on the IT engineers is almost 100%. High attrition ratio leads to drain on the company resources, add to that recruitment of an alternate employee is not an easy task it also adds to stress on the recruitment team. The competitive environment in the IT sector has lead to diminishing margins as a result of higher wages and perks. Most the industry sectors got to battle increasing employee attrition rates globally and also the Indian industries, too. According to ISSN 2320-5407 International Journal of Advanced Research (2014), Volume 2, Issue 3, 650-656 India is that the third largest in the world in the software companies with technically competent workforce. IT companies attracts best of the talent in INDIA, for it is sector which generates maximum job openings and the salary offered are higher as compared to the other domains like, Engineering, Construction, Electrical and Telecom.
Management support and employee commitment is the key to retain and nurture the talented workforce. The HR policies have undergone multiple changes to motivate, upgrade, support and develop the employees into an asset for the organization. The Employee commitment in an IT company helps in maintaining the work commitment and develops the bond between peers which creates a healthy team spirit. The Management approach is very crucial for retention of the talented SE’s, it is their policies that will be very important for long duration of stay in the company. The employees do not continue lifelong in a single company, but in an IT industry around 3 to 5 years is the average stay in a company, which is considered healthy.
The important factors which influence the mind of the software professionals are Competitive Salary, Competitive Work, and Good Exposure to Latest Technology, Healthy Work Environment, Proper Work Life Balance, Motivation, Learning, Promotion, Growth, and Appreciation for Hard work and office culture along with flexible work hours. Motivational factors include variables like recognition and environment of openness where employees get valued and respectful treatment. Developmental aspect of employees has significant impact on talent retention. Training and career development opportunities to attract and retain best talent in organization should be one of the key factors. The ever growing numbers of IT companies and the kind of employment opportunities it is generating acts as a temptation to change for better growth and personal benefits, it is equally aided by the growing influence of social media like ( Glassdoor, Quora, LinkedIn, Facebook). Growth opportunities include personal and professional growth along with an opportunity to work onsite. Work related factors includes flexibility, work from home option and effective leave policy also healthy work environment where amicable superior and subordinate relationships encourage employees freely express their new ideas.
HR Managers / Employers views on talent retention
The analysis of HR’s feedback shows that around 75% of the IT organizations based out of Pune have an above average attrition ratio which is between 11 to 25 %. The important factors responsible for attrition are Growth and challenges, internal stagnation on long term projects. Relocation of Spouse to other city, Family obligations, in case of female staff mostly post marriage and also some of the employees have an issue with local travel. Onsite opportunities or global role is also one of the major reasons for job switch. The Midsized IT firms, Services Based Companies, IT Process Oriented, Legacy tech based firms are the ones which are severely affected. Some of the companies which are not able to match the high salary structures of the start-ups also have high attrition ratio.
The challenges that the HR managers face in order to retain skilled resources can be summarized as under
1. HR needs to Partner more to understand Business dynamics to help and retain employees, Attrition is only counter productive when good/productive employees leave the organization.
2. Sourcing the right candidate
3. Onboarding the new candidate
4. Training and ensuring the new joinee gets productive at the earliest
5. Early exits cause loss of man hours and money due to wrong hiring practices companies.
6. Many Recruiters today do not follow right hiring practices, where candidates with high CTC demand, instability in career and unjustified reasons for job change are also getting new employment.
Today almost all good companies have great benefits but have attrition issues. Rather than working towards thinking out of box solutions to retain employees, HR should adopt fair hiring practices and should develop strong expertise in resource planning.
Technology Candidates don’t understand the other side of the story; it becomes difficult for HR to convince the business challenges. Impractical packages offered by big MNC’s and few funded Startups which small companies cannot offer. The Millenniums have multiple expectations, satisfying all is difficult
Recommendations and Suggestions
The analysis and findings of the study suggest multiple measures to control the Attrition. Some are Re-skilling/Up-skilling, Retention Bonus, Flexibility in working hours, Work from Home option, Award/Reward and reorganization, challenging and interesting job assignments, Project rotation at mid – senior level where dissatisfaction based on redundancy starts. Today in spite of providing great work environment, growth opportunities, benefits and salary, people leave company as they want quick monetary growth.
Based on the discussion with few HR Mgrsit is recommended that all companies should have common understanding and coordination for Planning resources to meet ad-hoc business demands.Adoption of good hiring practices and not to hire candidates with unjustified CTC demand or instability in career just to cave in due to talent crunch. IT company should also have pay-scale based on experience and technology background, this can be regulated by Nasscom / Minimum wages act .The Midsize IT companies have opined that all companies should maintain records in national skill registry. Hiring decision should be strictly on the basis of NSR records and ethics are to given due weightage. The Management should train recruiters to hire right talent by following fair hiring practicesunfortunately, due to unplanned business demands; it has become difficult for recruiters to follow right hiring practices. I strongly believe planning of resources and adoption of good hiring practices will help IT sector to reduce attrition. Social media also is one the factors that has affected the talent retention. The ambition to work onsite is one of the driving forces to change the job also managing work life balance.
In conclusion we can say that Employee Engagement, Transparent processes, Open and collaborative culture, Rewards, Creating sense of belongingness, Good Leave policy ( 22-30 in a year), Attractive Insurance and Medical policy and personal touch for mid size company is key for talent retention.