main copy of employee attrition bms project

8/4/2019 MAIN COPY OF EMPLOYEE ATTRITION BMS PROJECT

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SRno.

TABLE OF CONTENTS PAGEno.

1 WHAT IS EMPLOYEE ATTRITION?ATTRITION CYCLE

2 COST OF ATTRITION.

3 ATTRITION RATE CALCULATION.

4 BENEFITS OF ATTRITION.

5 CONSEQUENCES OF ATTRITION.

6 ATTRITION SPREADING TO TRADITIONALSECTORS.

7 TALENT POACHING

8 TECHNIQUES FOR AVOIDINGATTRITION EXPENSE.

9 BETTER ECONOMIC CONDITION INSTIGATEDEMPLOYEE ATTRITION.

10 ATTRITION IN

LARSEN AND TOUBRO LIMITED [L&T ltd]

11 JOB DONE BY VARIOUS DISCIPLINES

IN [L&T ltd]

12 TOTAL EMPLOYEE DATA OF L&T ltdIN 2005-2006 & 2006-2007

13 APPOINTMENT & RESIGNATION IN2005-2006 & 2006-2007


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14 RESIGNED EMPLOYEE DATA

15 REASONS GIVEN BY RESIGNED

EMPLOYEE

16 SUGGESTION FOR IMPROVING ATTRITION

17 TOP 5 WAYS TO IMPROVE ATTRITION

18 CONCLUSION

19 REFERENCES


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Executive Summary

The study was conducted with a few objectives in mind which were to

study the HR practices in the organization, to find out the problems

faced by employees of the organization, to find out certain factors

responsible for high attrition rate in the organization and to suggest some

ways by which the company can retain its employees.

The most important factor behind employee attrition is Opportunity for

development and growth, second most important factor is Salary, third

most important factor is Job content and fourth most important factor is

Relationship with supervisor.

At the end I suggest certain activities that organization can take in order

to decrease attrition rate and retain employees


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Objectives

To understand the factors which are central to employee attrition?

To suggest certain activities that organization might undertake in order

to decrease attrition rate and retain employees.

A term used to describe voluntary and involuntary terminations, deaths,

and employee retirements that result in a reduction to the employer's

physical workforce.


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What is Employee Attrition?

A reduction in the number of employees through retirement, resignationor death is called Attrition. Attrition is also called total turnover or

wastage rate.

Why do Employees Leave the Organization?

It is said that people leave their bosses, not organizations. Whenemployees are happy with their superiors they choose to stay, if not they

look for a switch.

The following reasons to leave the Organization

Higher pay Work timings Career growth Higher education Relocation to other places Women leave the job after marriage to take up their house-hold

duties Work pressure Work Environment Poor performance. Losing faith on merger/acquisition Verbal abuse


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ATTRITION CYCLE

Attrition brings decreased productivity People leave causing others to work harder This contributes to more attrition, which contributes to increased

costs and lower revenue

This forces additional cost reduction and austerity measures This in turn makes working more difficult, causing the best

performers with the most external opportunities to leave

Employee attrition, a big cause for concern for firms, ranges between 15per cent and 20 per cent. A company is not hurt because a certain personhas left. The company is hurt because he/she takes away certainknowledge, and there is no ready replacement in the market.

Attrition, as such, is not a bad phenomenon. It has been known to existall along. However, when jobs were scarce, the technology change was

less rapid, voluntary attrition was small and companies managed it.However, with technology changing rapidly and manpower costsincreasing, attrition is high and hurts badly.


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Large players often use money power to lure talent from smaller players.Companies also use the `location bait to attract employees. While a

certain percentage of manpower turnovers is desirable to keep freshblood coming in, and removing dead wood, higher percentages aredefinitely not good indicators of an organizations culture and people

practices.

It is a challenge to find the right talent within constraints such aslocation, nature of work, compensation and benefits.

Fresh graduates joining an organization make it a point to leave withinthe first year. They equip themselves not for performing their current jobbut for attracting a new one. Many a time, there is migration from bigger

companies to smaller companies too, mainly because of the prestigeassociated with a certain project or a particular client. In some cases,smaller companies are even better paymasters than larger brands. Thesuccess rates of retention programs are much higher if the managementuses a direct, employee-focused, approach and is ready to investresources for the same.


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COST OF ATTRITION

(Employee attrition could affect 40% of company profits.)

Tangible recovery costs include recruiting, rehiring, and retraining. Infact, a new employee typically is a cost to the company until he or shereaches a threshold of productivity. In higher level technical andmanagement positions this can exceed 6 months. For companies that

have cut all expenses not deemed mission critical, such as training andrecruitment efforts, the lag in performance, additional cost, and stress onremaining employees creates a vicious downward spiral.

Equally critical to an organizations viability are its Vital Intangibles(Vis), which can take the form of informal relationships, networkingconnections, or a web of favors a key employee has spun during his orher tenurefavors from vendors or other business contacts that can be

called in as needed. Vis is hard to identify and may be even harder torecoup. Many companies will take the steps to protect trade secrets,intellectual property, copyrights and patents, but intangible assets areless obvious, though no less critical to an organization, and their loss isno less damaging.

Undocumented workarounds, tricks, tips and the knack that comefrom experience in multiple roles within the organization make upanother collection of Vis. These are the subtleties that allow an

employee to do a task more efficiently, thereby increasing theirperformanceand the companys. How much is this knowledge worthto your business?


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Cost of the person(s) who fills in while the position is vacant. Thiscan be either the cost of a temporary or the cost of existingemployees performing the vacant job as well as their own.

Cost of lost productivity at a minimum of 50% of the personscompensation and benefits cost for each week the position isvacant, even if there are people performing the work.

Cost of conducting an exit interview to include the time of theperson conducting the interview, the time of the person leaving, the

administrative costs of stopping payroll, benefit deductions, benefitenrollments, COBRA notification and administration, and the costof the various forms needed to process a resigning employee.

Cost of the manager who has to understand what work remains,and how to cover that work until a replacement is found.

Cost of training your company has invested in this employee whois leaving. Include internal training, external programs and externalacademic education.

Impact on departmental productivity because the person is leaving.

Cost of severance and benefits continuation provided to employeeswho are leaving that are eligible for coverage under theseprograms.


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Recruitment Costs

Cost of advertisements Cost of the internal recruiter's time to understand the position

requirements, develop and implement a sourcing strategy, reviewcandidates backgrounds, prepare for interviews, conductinterviews, prepare candidate assessments, conduct referencechecks, make the employment offer and notify unsuccessful

candidates. This can range from a minimum of 30 hours to over100 hours per position.

Cost of the hiring department (immediate supervisor, next levelmanager, peers and other people on the selection list) time toreview and explain position requirements, review candidates

background, conduct interviews, discuss their assessments andselect a finalist. Also include their time to do their own sourcing ofcandidates from networks, contacts and other referrals. This can

take upwards of 100 hours of total time. Cost of the various candidate pre-employment tests to help assess a

candidates' skills, abilities, aptitude, attitude, values and behaviors.


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Training Costs

Cost of orientation Cost of departmental training Cost of supervisory time spent in assigning, explaining and

reviewing work assignments and output. This represents lostproductivity of the supervisor. Consider the amount of time spentat 7 hours per week for at least 8 weeks.

Lost Productivity Costs

As the new employee is learning the new job, the company policies andpractices, etc. they are not fully productive. Use the following guidelinesto calculate the cost of this lost productivity:

Cost of coworkers and supervisory lost productivity due to theirtime spent on bringing the new employee "up to speed."

Cost of mistakes the new employee makes during this elongatedindoctrination period.


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New Hire Costs

Cost of bring the new person on board including the cost to put theperson on the payroll, establish computer and security passwordsand identification cards, business cards, internal and externalpublicity announcements, telephone hookups, cost of establishingemail accounts, costs of establishing credit card accounts, or

leasing other equipment such as cell phones, automobiles.


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ATTRITION RATE CALCULATION

Examples

Attrition rate= [No of resignations]/ [(No of emp. at yr start +No of emp. at yrend)/2]

Attrition Rate:

05-06:

[11]/ [(35+102)/2]

=17.5%

06-07:

[38]/ [(102+187)/2]

=26.29%

Sharp increase in attrition rate in 06-07 from 05-06

Resignations in project duration:

April 07- 4

May 07- 7

Resignation letters in May 07- 9


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Attrition Rate

The rate of shrinkage in size or number of employees is known as Attrition rate.It is usually expressed in percentage.

Common methodology in calculating Attrition RateThe approach to this calculation might vary from organization to organization.

While a few techniques are common, there are no proven theories.

The most commonly used formulae are :Total Number of Resigns per month (Whether voluntary or forced) X 100-----------------------------------------------------------------------------------------

(Total Number of employees at the beginning of the month + total number of newjoinerstotal number of resignations)

Total Terminations in a month-------------------------------------------------------------------------------------(Total Head Count at the beginning of the month) + (Total New Hires)

Total No. of employee left X 100

-------------------------------------------Total No .Of employees present

Number of employee separations-involuntary separations X 100-------------------------------------------------------------------------------------

*Average employee count(*Avg. employee count = January month strength + December month strength)


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Benefits Of Attrition

If all employees stay in the same organization for a very long time,most of them will be at the top of their pay scale which will resultin excessive manpower costs.

When certain employees leave, whose continuation of servicewould have negatively impacted productivity and profitability ofthe company, the company is benefited.

New employees bring new ideas, approaches, abilities & attitudeswhich can keep the organization from becoming stagnant.

There are also some people in the organization who have anegative and demoralizing influence on the work culture and teamspirit. This, in the long-term, is detrimental to organizationalhealth.

Desirable attrition also includes termination of employees withwhom the organization does not want to continue a relationship. Itbenefits the organization in the following ways:

o It removes bottleneck in the progress of the companyo It creates space for the entry of new talentso It assists in evolving high performance teams


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There are people who are not able to balance their performance asper expectations, lack potential for future or need disciplinaryaction. Furthermore, as the rewards are limited, business pressuresdo not allow the management to over-reward the performers, butwhen undesirable employees leave the company, the goodemployees can be given the share that they deserve.

Some companies believe attrition in any form is bad for an organizationfor it means that a wrong choice was made at the beginning whilerecruiting. Even good attrition indicates loss as recruitment is a timeconsuming and costly affair. The only positive point is that the

realization has initiated action that will lead to cutting loss.


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CONSEQUENCES OF ATTRITION

The potential effects of attrition in longitudinal research are addressedand a procedure for assessing its effects is recommended. Werecommend that researchers assess the effects of subject attrition on theirdata by assessing:

1. The presence of non-random sampling using multiple logisticregressions,

2. Mean differences on the studys variables between those whoresponded and did not respond to the subsequent data collection, (3) therestriction or enhancement of variances, and

4. Changes in relationships among variables due to attrition. Wedemonstrate the procedure using data collected from a random sample ofemployed adults in the US regarding job satisfaction, job characteristics,demographics, and mood. In our data, subject attrition led to non-random sampling, affected the means and variances of some of thevariables, but did not affect the relationships among the variables. Theeffects of subject attrition may be sample specific, but the procedure

recommended for assessing its effects may be used in other data sets andsubstantive areas.


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Example

Wipro had an attrition rate of about 13.4% up from an average of8.9% over the past three quarters. Hence, theHindu Business Linenoted that they were planning a salary hike for February along withpromotions to help prevent attrition from rising further whilerecruitment initiatives would happen on a demand basis and include amix of campus hires and science graduates along with experiencedtalent. Meanwhile, the Hindu Business Line quoted Girish Paranjpe,

the Joint-CEO of Wipros IT Services group, as saying that thecompanys bench strength was around 7,500 to 8,000 on an employeebase of about 103,000 while the industry bench strength standard isusually twice that.

However, another Hindu Business Line article noted that the brunt ofany rise in attrition rates will likely be borne by mid-size softwareoutsourcers who could see attrition rates reach the 15% level. Moreoverand since the big players have mostly not been hiring for some time,employees with midsize firms are more likely to consider jumping tolarger companies if they are offered the right opportunity.Meanwhile, utilization rates (that is, the number of employees billed perhundred verses those who are on the bench) are also increasing at the big3 IT services firms. According to the Hindu Business Line, utilizationrates rose from 67.3% to 68.8% at Infosys, 73.6% to 77.2% at TataConsultancy Services (TCS) and 70.8% to 73.2% at Wipro.Nevertheless, as both utilization and attrition rates rise; its time forcompanies to once again think about long-term strategies for retaining

employees. As Raman Roy, the chairman and managing director of BPOfirm Quattro, noted in the Financial Express, meddling with salary andbenefits is a short-term strategy (he chooses to focus on in-housetraining to create an efficient group of high achievers) while attrition ismerely a symptom and not a disease. In other words, its the symptom of

an increasingly healthier job market and economy for outsourcing.
http://www.thehindubusinessline.com/2010/01/21/stories/2010012152120400.htmhttp://www.thehindubusinessline.com/2010/01/21/stories/2010012152120400.htmhttp://www.thehindubusinessline.com/2010/01/21/stories/2010012153360100.htmhttp://outsourceportfolio.com/high-attrition-rate-attributed-to-pay-package/http://www.financialexpress.com/news/After-pink-slips-BPOs-play-retainer-card/589392/http://www.financialexpress.com/news/After-pink-slips-BPOs-play-retainer-card/589392/http://outsourceportfolio.com/high-attrition-rate-attributed-to-pay-package/http://www.thehindubusinessline.com/2010/01/21/stories/2010012153360100.htmhttp://www.thehindubusinessline.com/2010/01/21/stories/2010012152120400.htm


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Attrition spreading to traditional sectors as well

ATTRITION is not just rampant in the BPO sector, but it is fast catchingup in other traditional sectors such as manufacturing and engineering,public sector undertakings and services.

According to an Employee Vulnerable Study by NFO India, employeesin the traditional sectors are most dissatisfied and would switch jobs atthe first available opportunity. However, employees belonging to new-age sectors such as financial services, insurance and banking, FMCGand white-goods, IT and telecom seem to be relatively more satisfied.

The possible vulnerability of white-collar workers should ring alarmbells for HR heads. The major pitfalls were found to be lack of growthopportunities, dissatisfaction with job content, inadequate emphasis onpolicies and systems and interpersonal relationships.

There is a crying need for companies to engage the employees interestby creating a conducive environment for growth, learning, bolster `we-feeling and compensate as per industry standards. As the hidden costsincurred in attracting the right workforce and on-the-job training, isphenomenal.

While recruitment is up sharply from last year, anecdotal evidencesuggests employee attrition is on the rise again, causing more than a fewgray hairs in the manpower departments of engineering companies. Andhigher level technology companies such as chip design firms are findingthat the more specific the skill required, the harder it is to get. Thesecompanies also see salaries rising and fear that much of benefitsaccruing to Indian firms from lower employee costs may fade, thoughcompany heads do not see that happening in the next five years or so. To

be sure, employee costs arising from higher salaries are rising as theydid not during 2001 and 2002, but enough companies are willing to doleout more.


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Some Indian companies are already feeling the pinch. Satyam ComputerServices, the No.4 exporter, reported an employee attrition rate of almost20 percent in the quarter ended June 30, 2007, compared with about 17percent a year earlier.

To stem defections, Satyam raised its workers pay in India and otherlow-cost countries by 18 percent in July. Tata Consultancy and Infosysincreased wages by 15 percent in April.Wage inflation in India- Wages is going up at the rate of 10 to 15percent year after year.


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Talent Poaching

Losing employees to competitors is common; but now partners areincreasingly finding their employees poached by their own vendors anddistributors

The term employee poaching can be defined as an act of enticing keyemployees to move from one firm to a competitor. It has emerged as thebiggest HR challenge for enterprises, both big and small, across all

industry verticals.In the recent times, the aviation sector has been the worst hit, and state-owned airlines have lost several of their in-flight crew and ground staffto the new airlines. Retail is likely to emerge as the next hotspot forpoaching, as large players enter the fray and roll out their stores.

The IT industry has traditionally been a happy hunting ground forpoachers, for obvious reasons. Attrition rates of engineering, softwareand BPO companies have always been steep compared to the rest of the

industries.

Employee attrition is part of every manpower-intensive business. Thereis a misconception among employers that emoluments matter most inattracting talent. An employee changes jobs for many reasons. Retaininghuman resource, especially on whom much has been spent to hone theirskills, is a headache for firms. Job satisfaction is something that variesfrom individual to individual.

Job satisfaction and employee loyalty are better in companies that allowtheir staff the freedom to unleash their creativity and never fail toappreciate a job well done. Too much of interference and bossing stiflesgrowth and creativity, the motivation levels of employees plunges andthey look for the exit. An atmosphere of distrust too could lead toemployee attrition.


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It is in the institutions interest to provide a congenial atmosphere andtake initiatives that would keep the workforce morale high. Contentmentand job satisfaction certainly matter more than fat pay packets andperquisites though with the usual exceptions.

There are many factors that contribute to the problem of employeeturnover. Some of these factors cannot be directly controlled byorganizations, such as area economic or labor market conditions. Itappears that the high unemployment rate of graduates looking forprofessional work experience is a major force responsible for excessiveemployee turnover in India.

The level of turnover may exceed a companys capability to handle it

and can force a strategic crisis schedule slips, quality degradation,business process breakdown, delivery delays, and the resulting potentialof customer attrition.

The kind of treatment meted out to the new recruit by the organizationand co-workers during this crucial transition period can determine thecandidates decision to either continue in the job or call it quits.

Considering that it can cost a company between 50 and 150% of an

employees salary to find a suitable replacement, it is simpler and farmore economical to extend the red carpet treatment to new recruits, andgo all out to ensure that they fit in comfortably with the office culture.

Reports indicate that much of the voluntary turnover of companies takesplace within the first one year of employment, corroborating the widelyheld belief that first impressions play a significant role in anorganizations ability to find and retain talented employees.

During this time, newcomers are often quietly sizing up the organizationand testing waters to see if the job is an ideal fit. Not surprisingly,organizations that make them feel wanted and welcome are the ones theychoose to build their careers with.


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Techniques For Avoiding/Reducing Attrition

Expense

Mitigation Clause Make certain you get credit for re-soldrooms. If your hotel contract does not contain a provisioncrediting your organization for room nights resold by the hotelrequest that it be added to it.

Attrition Buyout If you are certain your event will have anattrition expense then offer an early payment in exchange for areduction to the liability. For example if you believe you will owe

$100K, negotiate to pay a smaller amount (i.e. $50K) severalmonths in advance. The hotel deposits the funds earning intereston them, and enhancing their cash flow.

Credit For No Shows if the hotel is collecting lost deposits forno shows this should be credited against the attrition obligation.

Off Site Catering Move off property Food & Beverage eventsback into hotel. This provides an alternative unexpected revenuestream to help offset the room shortfall.

Leverage Brand Relationship In a city where several hotelswith the same hotel company co-exist negotiate an agreementwhere your organization gets credit for rooms booked at all thehotels operated by the contracted brand, regardless of whether theywere contracted or not. As part of this arrangement, you mustconduct room audits with all the designated hotels. For cities withrelatively large hotel room inventories this technique is particularlyeffective.


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Bring Attendees Back to Contracted Hotel move attendeesthat have booked outside the block into the contracted hotel(s) andpay the rate difference. This will be less expensive than payingfull attrition on unused rooms and is a winning proposition foreveryone.

Convert Attrition Expense To Gift Certificates Attrition isconverted to gift certificates and then sold to the attendees togiveaway as incentives, etc. Every time a gift certificate is usedaproportionate reduction is made to the attrition obligation.

Future Events Booked into Attrition Hotel If yourorganization is able to place other future business into the affectedhotel, then you should be able to negotiate a reduction of theattrition obligation based upon that events projected value. Thisarrangement is most effective if you are able to provide newbusiness during the same calendar year.


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Attrition is instigated by good economic

conditions

Economy boom

Positive news about the economy- after 4-yr recession, the economy

appears to be on the rebound and is showing signs of sustainablemomentum. Economic indicators support this recovery: growth rate over8%

The current economic forces are creating an environment just right forpotential business disasterunexpected employee attrition and turnoverat a level many businesses have never experienced. Companies alreadyweakened by downsizing and cost cutting must be prepared to heed thesigns and take action if they are to survive, much less excel. Studieshave revealed the following:

83 percent of employees are likely to seek new employment as theeconomy booms.

48 percent of managers are likely to seek new employment withthe improving economy.

75 percent of those managers are actively looking out. 56 percent of HR professionals indicated it is likely that

voluntary turnover would rise due to the improving economy.

Source: Employee Vulnerable Study by NFO India

Although some of these factors are beyond companys direct control.

When good talent walks, chances of finding a suitable replacement areslim.


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Better economic conditions instigates employee

attrition because

Survival modeIn response to the recession, companies hunkereddown, tightened their belts, focused on cutting costs and cuttingcorners sometimes even customers. As a result, many

organizations as a whole have lost sight of or destroyed theirreason for being. Little emphasis is placed on preparing forexpansion opportunities as the economy recovers. With adecimated strategy and no visible commitment or activeengagement toward building the future, a companys high-potentialemployees have little incentive to stay when a competitor offers amore compelling future.

Career recession With the flattening and downsizing oforganizations, opportunities for career growth have been severelylimited both vertically and laterally. When advancementopportunities appear elsewhere, employees will be looking. Inaddition, some are contemplating business ventures of their own.

No investment in managers When people look for greenerpastures, theyre not necessarily looking for a new company. Asdocumented in the groundbreaking study by the GallupOrganization, the number one reason people look for anotherposition is to leave their manager, not because they dont like their

job or the company. Reduced investment in managementdevelopment ultimately leads to employee dissatisfaction withtheir manager, their primary reason for leaving.

Disenfranchised employees Many employees feel they havebeen taken advantage of: overworked, stifled, and burned out byexcessive hours and stress, only to be rewarded with reducedbenefits and/or pay. Lifetime employment no longer exists, and

company loyalty is becoming a thing of the past.


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Larsen & Toubro Limited

Larsen & Toubro Limited (L&T) -a U.S. Dollar 2.1 billion company - isIndia's largest integrated engineering and construction conglomerate.The Company also has interests in information technology, electricaland electronic products.

L&T offers proven solutions for oil and gas, refinery,petrochemical, fertilizer, chemical, cement, steel, powerand construction industries. The Company has established a reputationfor technological innovation and execution of multi-disciplinary projectsof great complexity. L&T is the only Indian company pre-qualified tohandle large process-intensive projects on an EPCbasis.

Equally impressive is the Company's customer orientation. L&T'stradition of service is widely acclaimed worldwide.


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L&T- Faridabad

L&T Engineering at Faridabad provides spectrum of engineeringservices from concept to commissioning for Oil and Gas Sector. DECDelhi is a

A knowledge based group teaming highly skilled professionals todesign and engineer projects worldwide.

Growing with a vision to be counted among the Worlds finestEngineering companies by consistently delivering Qualityengineering at a competitive price.

E&C DIVISION

L&T's Engineering & Construction (E&C) Division plays a critical rolein core sectors of the industry. Over the years, it has engineered,manufactured and delivered world-class plant and equipment to almostevery sector of the Indian Industry as well as to countries overseas.

The E&C Division possesses integrated strengths in process design,basic and detailed engineering, project management, equipmentfabrication, procurement, construction and commissioning. It

undertakes single point responsibility for execution of projects.Strategic alliances with world leaders enable L&T to access advancedknow-how and deliver projects that meet stringent quality requirementsand time schedules.


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L&T Engineering (LTen)

LTen is the engineering arm of L&Ts Engineering & Construction

(E&C) Division. L&T Engineering at Faridabad provides spectrum ofengineering services from concept to commissioning for Oil and GasSector. Services include: Technology evaluation, conceptual studies,basic design, detailed engineering and 3D modeling. It address the

complete value chain of engineering

Business Areas: Deep Water Offshore, Onshore Oil and Gas Processing,Refinery, Petrochemical, Reformers

Competitors: Bechtel, Saipem, Fluor, EIL


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Job done by various Disciplines

Process Engineering

The Process Engineering discipline is responsible for executingconceptual designs, front end engineering designs and detailedengineering. Process discipline supports entire spectrum of projects inOil and Gas sector.

Mechanical

Services range from design and engineering, preparation of MRs for

procurement, Bid analysis, vendor document reviews, site issues, troubleshooting etc.

Mechanical discipline is staffed by engineers with experience in Oil andGas Field projects, Refineries and Petrochemicals, Power andFabrication Industry.

Plant Design

Plant Design and piping discipline supports projects in Oil and Gassector. Its major strength lies in providing basic engineering and detail

engineering for various projects.

Civil & Structural

Civil Engineering discipline provides pre-bid / conceptual design,detailed design and solutions to field specific engineering issues for theentire spectrum of Oil and Gas industries. This discipline has expertisein Civil & Structural Engg. and well trained personnel to provide highquality engineering solutions and bring in values to clients.

Electrical

Electrical discipline supports basic engineering, detailed engineering andfield support for entire spectrum of Oil and Gas Projects. Discipline isstaffed with qualified personnel with knowledge of national /international codes and standards and software used to do the design.


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Project Controls

The Project Controls group is responsible for developing detailed Projectschedules and monitoring of projects. Primavera is the main softwareused. Project Control group supports projects by generating necessary

progress reports and invoicing.


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Total Employee Data

05-06:

Month Wise Report Of Total Strength Of Employees

Year Months Appointment Separations

Total

Strength

2004-

2005

MARCH'05 35

2005

2006

APR '05 6 0 41MAY'05 6 0 47

JUN '05 6 2 51JUL '05 6 0 57AUG'05 7 1 63SEP '05 4 1 66OCT '05 3 0 69NOV'05 1 2 68DEC '05 8 2 74JAN '06 3 0 77FEB '06 14 3 88MAR'06 14 0 102TOTAL 78 11


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06-07:

Month Wise Report Of Total Strength Of Employees

Year Months Appointment SeparationsTotal

Strength

2005-

2006

MARCH'06 102

2006

2007

APR '06 3 0 105MAY'06 2 4 103

JUN '06 3 2 (1 ADV) 105JUL '06 12 2 114AUG'06 29 2 141SEP '06 11 3 149OCT '06 23 3 169NOV'06 14 3 180DEC '06 12 2 190

JAN '07 1 2 189FEB '07 2 4 187MAR'07 13 13 (1 ADV) 187TOTAL 125 40 (2 ADV)


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APPOINTMENTS

05-06:

06-07:

0

2

4

6

8

10

12

14

No of app

APR

'05

MAY

'05

JUN

'05

JUL

'05

AUG

'05

SEP

'05

OCT

'05

NOV

'05

DEC

'05

JAN

'06

FEB

'06

MAR

'06

Month

MONTH WISE APPOINTMENTS

0

5

10

15

20

25

30

No of app

APR

'06

MAY

'06

JUN

'06

JUL

'06

AUG

'06

SEP

'06

OCT

'06

NOV

'06

DEC

'06

JAN

'07

FEB

'07

MAR

'07

Month

MONTH WISE APPOINTMENTS


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RESIGNATIONS

05-06

06-07:

0

0.5

1

1.5

2

2.5

3

No of resg

APR

'05

MAY

'05

JUN

'05

JUL

'05

AUG

'05

SEP

'05

OCT

'05

NOV

'05

DEC

'05

JAN

'06

FEB

'06

MAR

'06

Month

MONTH WISE RESIGNATIONS

0

2

4

6

8

10

12

No of resg

APR

'06

MAY

'06

JUN

'06

JUL

'06

AUG

'06

SEP

'06

OCT

'06

NOV

'06

DEC

'06

JAN

'07

FEB

'07

MAR

'07

Months



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STRENGTH

05-06:

06-07:

0

20

40

60

80

100

120

Tot strength

APR

'05

JUN

'05

AUG

'05

OCT

'05

DEC

'05

FEB

'06

Month

MONTH WISE STRENGTH (05-06)

Series1

0

20

40

60

80

100

120

140

160

180

200

Tot strength

APR

'06

MAY

'06

JUN

'06

JUL

'06

AUG

'06

SEP

'06

OCT

'06

NOV

'06

DEC

'06

JAN

'07

FEB

'07

MAR

'07

Month

MONTH WISE STRENGTH (06-07)


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This data suggests that in the year 05-06 there has been a heavy

recruitment drive and few resignations. Strength of the company

increased three fold from previous year. On the other hand, in the year

06-07 there has been a heavy recruitment drive but still the strength has

not matched the set targets as there are many resignations during the

year.


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RESIGNED EMPLOYEE DATA

Department facing highest attrition rate

L&T has 7 engineering departments: Civil, Mechanical, Piping,

Instrumentation, Process, Electrical and Projects

PIPING Dept had highest attrition (9) followed by CIVIL (8).Findings: Employees have left from each department. However highest

number of employees have left from the PIPING AND Civil

Departments. Projects and HR Department faces lowest attrition.


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Time-span with highest rate of attrition

Time-span of


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There are three divisions of grade in the company. Supervisory grade is

given to diploma holding employees, executive grade is given to degree

holding employees and managerial grade is higher than executive grade.

Executive Grade has highest attrition (24) followed by Supervisory

Grade (8). Very few resignations are from Managerial Grade (6).

Findings: Employees have left from each grade. However highest

number of employees have left from Executive grade. Managerial grade

faces lowest attrition. The probable reason for this is ESOPS being

offered to them.

Qualification wise attrition

L&T employs both engineers and draftsmen.

Highest attrition (31) was among engineers.

Findings: Employees with engineering qualification have left more than

those with draftsmanship qualification. This suggests loss of more

qualified manpower.

QUALIFICATION

31

7

ENG

DRAFT


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Month wise attrition

MARCH month had highest attrition (12) followed by FEBRUARY (4)

and MAY (4).

Findings: Employees have left in each month. Most employees have left

in the month of March, almost thrice the number from other months.

0

2

4

6

8

10

12

No of resg

APR

'06

MAY

'06

JUN

'06

JUL

'06

AUG

'06

SEP

'06

OCT

'06

NOV

'06

DEC

'06

JAN

'07

FEB

'07

MAR

'07

Months



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Monthly Attrition Rate

MARCH month had highest attrition (6.2%) followed by MAY (3.7%).

Findings: Employees have left in each month. Most employees have left

in the month of March, almost thrice the number from other months.

0

1

2

3

4

5

6

7

Percentage

APR

'06

MAY

'06

JUN

'06

JUL

'06

AUG

'06

SEP

'06

OCT

'06

NOV

'06

DEC

'06

JAN

'07

FEB

'07

MAR

'07

Month

Month Wise Attrition Rate


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Rating wise

Employees in L&T are rated after the completion of 11 months of their service in

the organization. Ratings given are Top, Middle, Lower and people who were not

rated fall in the Others rating category.

Highest attrition was from OTHERS Rating (17) followed by MIDDLE Rating (8).

Findings: Employees of each rating have left. However highest number of

employees have left from the OTHERS rating i.e. they were not rated before

leaving the organization as the rating of employees is done after completion of 1

year of service in the month of January . Some TOP rated people have also left the

organization which means highest loss to an organization.

0

2

4

6

8

10

12

1416

18

No of resg em p

TOP MIDDLE LOWER OTHERS

Rating

Rating


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Reasons given by resigned employees

Reasons were asked from the nine factors: salary, benefits, job content,

opportunity for development, relationship with supervisor, relationship

with peers, location of work place, management policies and work

culture, resources to do the job

Among resigned employees, 17 employees gave salary, 16 employees

gave opportunity for development and growth, 2 gave management

policies and 1 gave location of work place as a reason for leaving.

Findings: Salary and Opportunity for development and growth are thereasons given by most employees for leaving the company.

02

4

6

8

10

12

14

16

18

No of resg

emp

SAL BEN JOB OPP SUP PEE LOC MGM RES

Reason

Reason Wise


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SUGGESTION FOR IMPROVING ATTRITION

The most important factor that has come as a result of the employee

survey and unstructured interviews is Opportunity for development and

growth. This is one reason why many people leave. This is one area that

needs immediate attention.

Another very important factor is Salary. Salary is not competitive. This

point has been pointed out by many employees.

Suggestions:

Opportunity for Growth and Development

Induction process needs to be more effective and interesting.Employee expectations should not be raised too high

Provide 360 degree feedback. Online appraisal system (FAIR)needs to be more effective and fair

Recognize employees for good performance- MLP (managerialleadership program) and ELP (employee leadership program) are

to evaluate potential, but instead they should be performance based

Mentoring programs, on-line personal assessments


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Invest in training and development- programs should be frequentlyconducted and customized to needs of employees- Competency

Mapping.

Fresh graduates should be provided sufficient amount of trainingbefore job is assigned to them

Salary and Benefits

Adopt pay-banding- competitive with market rates

Standardized compensation for all business units (esp. within thesame center) and fair pay.

Higher base pay raise on performance- presently its a meageramount of a few hundreds.

Benefits like retention bonuses etc should be given


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General

Structured exit interviews should be conducted

Opinion surveys, feedback forums, employee suggestion box oremployee suggestion committee and employee satisfaction surveys

Holding meetings with employees on a regular basis to identifytheir desires and needs

Most importantly implementing the most promising

recommendations immediately


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Top 5 ways to improve attrition

Attrition is often seen as a health check for any business. If a high

number of people are leaving then something is wrong. The question iswhat, and what can be done to improve it. Here Steve Woosey of theProfessional Planning Forum shares his thoughts with us.

Contact centers are no different and with the negative images portrayedby the media, it is perhaps more important that any issues aroundattrition are dealt with.

At the Professional Planning Forum, we believe that a contact centre canbe a great place to work and our research into attrition shows some ofthe key areas for improvement. Research conducted over a number ofyears, and illustrated in the chart below, demonstrates how successfulorganizations are reducing their attrition.


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Skills DevelopmentWhen we look at attrition and how to improve it we are asking how can

I keep my staff motivated? If you refer to any motivational theory,

personal development is always a high motivator. So why would acontact centre be any different? Looking for ways to enhance the skillsof your employees is good for the business, the customer and theemployee.

Many centres use multi-skilling as a way to be more efficient; usedcorrectly, this can also be seen as a development tool. Employees wouldbe trained in new skills after certain periods of time and/or reaching acertain performance level. If communicated correctly, this gives

employees a sense of achievement and creates variety in a job. This canbe achieved without the need for financial reward, therefore providingmotivated staff, who will stay with the business longer as they movealong the skill path, whilst meeting the business need for efficiency.

CommunicationCommunication is key to any successful business! In contact centres

there is a need for everyone to understand the goals of the business. It is

important that employees feel part of the brand, and understand what thebusiness is striving for and the part that they have to play in making ithappen. Attrition rates are high in centres when employees feeldisengaged, nobody listens to me. There have been a number of good

communication examples where employee focus groups are used tomake change happen, employee champions are used to drive changeforward and give the employees a voice.

Targets need to be aligned and communicated effectively. Results needto be reported and discussed. Many centres now have web-basedtechnology to display performance stats and working patterns. The useof intranet sites to display information can also be very effective. Wemust use all the communication media we have available, and rememberthat what may not seem important to a manager may be crucial to anagent.


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Promotion/ProgressionMany now view contact centre work as a career, and with the varyingroles available, from the traditional path of Agent, Coach, Team Leaderor a support role in HR, Resource Planning, or Finance, there are many

opportunities. It is important, therefore, that at least some of thesevacancies are filled with internal candidates. This gives employees theknowledge that if they work hard and do well they have a chance toprogress.

It can also be useful to give people opportunities to try out new roles;try before you buy, if you like. This can be done through secondments,

day-in-the-life or development programmers. Many centres have

development opportunities designed at finding the next team leader fromthe agent population; these schemes could be extended to include themany other support roles available in todays contact centres.

Management StyleThis area is closely linked to communication. Does an employee feelvalued? do they want to come to work? There is an old adage: you

dont leave the business you leave your manager. How many times

have you heard someone say the jobs ok but the people are great?This shows how important management style is to employees. Thecontact centre should be a great place to work, with an element of funand hard work. The management approach will go a long way toachieving these goals.

Work-Life BalanceWork-life balance is not easy to achieve. Employees have to understandthat the business must meet its customers demands, while the business

must understand that employees have external pressures as well and doall it can to help them.


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The introduction of family-friendly legislation has forced many contactcentres to look at how they schedule staff. Contact centres have then

taken this more flexible approach and developed it for all employees,creating a number of lifestyle schedule options that give employeesmore choice, whilst still meeting the business needs. These schedulechoices are often created by the employees through focus groups, alwaysbearing in mind that the business needs must be met. All employees aredifferent and it would be wrong to assume we know what everyonewants or needs, so providing options is a great way of providing asuitable solution for all.

SummaryIf you understand what motivates employees and what de-motivatesthem, you then know which areas to focus on to improve attrition. Manybelieve that pay and benefits have a significant impact on their attritionrate. However, providing these are at an acceptable level, increasingthem will not have the desired effect. There is a disconnect betweenwhat we see on the exit questionnaires and the real reasons for employeeturnover, so it is important that we dig down and find the real reasons forleaving. Only then can you tackle them.


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CONCLUSION

Study of HR practices and employee attrition in the organization was agreat learning experience. It helped in understanding the intricacies of

HR role in an organization. The study helped in finding out the mostcritical reasons responsible for employee attrition in the organization. Itbrought various concerns of the employees to the forefront. Apart fromthe project there was also a lot of on-the-job training which helpedenhance HR skills and gain a better understanding of the functioning ofHR. It was an effective learning in combining the theoretical andpractical aspects relating to project.There has been immense learning in the field of employee retention. The

basics about attrition and retention, attrition calculation, cost of attrition,consequences of high attrition rate and reasons for attrition.The study helped in understanding the relative importance of variousfactors responsible for employee attrition, also revealed the fact that thatopportunity for development and growth is most important for theemployees of the organization. There is a crisis in human capitalmanagement. We need fundamental reform in order to address this crisisand ensure long-term ability to hire and manage a high-quality, high-performing workforce. Most employees are not motivated solely bymoney. Historically, firms have used money and financial rewards toretain employees. High tech employees are enjoying the fastest salaryprogression of almost any profession, yet they are changing jobsconstantly. Todays employees seek more than monetary compensation.

Research conducted in the company revealed that opportunity fordevelopment, salary, job content, relationship with supervisor areimportant reasons for employee attrition. The myth that salary is themost important reason for employee attrition was clarified as employees

are more concerned about opportunity for development. Salary is alsoimportant, salary needs to be competitive with the market rates, otherwise there is a high risk of loosing your employees to your competitors.I also learned that even though the salary might be high, an employeewould be willing to change job for better development opportunity.


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REFERENCES

Cherrington, David J. (1999). The Management of HumanResources

William, B.W. and Keith Davis. 1993. Human Resource andPersonnel Management. MC Grow - Hill.The Hindu Business linewww.google.comwww.managementparadise.comwww.Citihr.com
http://www.google.com/http://www.google.com/http://www.managementparadise.com/http://www.managementparadise.com/http://www.citihr.com/http://www.citihr.com/http://www.citihr.com/http://www.managementparadise.com/http://www.google.com/

main copy of employee attrition bms project

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