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Attrition in IT industry.

April 10, 2013

TITLE OF THE PAPER: ATTRITION IN IT INDUSTRY, CHENNAI 

AUTHOR: MAHISHA SURA MARDHINI

 Abstract:

Attrition is one of  important problem the IT industries are facing now a days. Thus, I have done research on this subject.

The primary objective of this research is to study the attrition in IT industry in Chennai.

The secondary objective of this study is know what are the reasons for the employees to leave their jobs, to evaluate how the employees are valued to the organization and to prove that the organization policies should be supportive to the staffs working there.

I have used the Descriptive Research design for the research.

Also, have collected primary and secondary to do this research.

The sampling unit used is the IT industry, the sample size of the research is 20.

I have used Questionnaire for collecting the data’s.

Percentage Analysis and Chi square are the two statistical tools used for Analysis.

The study reveals that the employees are leaving the organization because of the work stress and the company policies are supportive to the employees.

INTRODUCTION:

Attrition: A reduction in the number of employees through retirement, resignation or death. Employee turnover is an enormous problem for any company and creates negative bottom-line impacts. The costs associated with employee turnover show up in such areas as advertising for new employees and the time and money necessary to screen the applicants, training new employees, lost productivity, decreased accuracy and quality of work among the employees left behind who are upset about their colleague’s departure, using expensive contract and temporary employees to do the work until a permanent employee is hired, and the expenses associated with replacing lost business.

Employee turnover costs can amount to thousands of dollars, annually. It can also prevent companies from pursuing their growth opportunities and acquiring new business & Attrition rate is the rate of shrinkage in size or number

 Types of attrition:

There are three types as follows:

 Market Driven – based on the demand for a particular skill or ability in temporarily low supply(self-correcting in normal markets). The typical initial reaction by employers to market driven attrition is to increase wages, offer better benefits, escape the market by relocation or site migration or relax hiring standards.

Workload or Stress Driven – on the actual capacity to perform the work required. This is when there are not enough of the right people.

Process Driven – variables associated with job design and/or the organization. In some industries and organizations there is a belief that attrition has always been there and always will be there. Addressing this scenario produces the most lasting results.

Attrition Cycle & drivers

Typically, in organizations experiencing systemic or chronic attrition, a cycle develops as:

Attrition normally brings decreased productivity. People leave causing others to work  harder. This contributes to more attrition, which contributes to increasing costs, lowe revenue. This often forces additional cost reductions and austerity measures on an organization. This in turn makes working more difficult, causing the best performers with the most external opportunities, to leave.

There are two primary drivers of voluntary attrition. These are, no one likes to feel inadequate and, in most organizations, it is easier to leave than stay and try to alleviate the  problem. People feel inadequate when communication is either incomplete or unreliable.

Choices are either absent or insufficient. Often, the challenges in these situations are unclear, unsatisfying or overwhelming. People will give up trying to change things when promises are not specific, not kept or are not fulfilled in a timely manner. Additionally, when expectations are thwarted, changed arbitrarily or unfulfilled, people will lose motivation.

Other common demotivators are when commitments are unacknowledged, vague or incompatible.

Rarely do organizations create environments where employees can meaningfully participate in activities, which will reduce turnover. Attrition is commonly thought of as people

terminating employment. Another form of classifying types of attrition are:

•   Empty Chair Attrition: Employees quit and leave

•   Warm Chair Attrition: Employees quit and stay.

OBJECTIVE OF THE RESEARCH :

Primary Objective:

A Study on attrition in IT industry, Chennai.

Secondary Objective:

To know the major reasons for employees to leave their jobs.

To evaluate how an employee is valued as a part of this office.

To study  whether the  promoting respect and fair treatment among all staff is a high priority of this office.

To find  whether  the communication between staff and management is effective.

To study whether  the workload in this office is distributed equitably.

To evaluate whether the employee know exactly what is expected of him/her as an employee.

RESEARCH METHODOLOGY

Research methodology is a science of studying how research is done scientifically. Methodology helps to understand not only the products of scientific inquiry but the process itself. Aims to describe and analyse methods, throw light on their limitations and resources, clarify their presuppositions and consequences.

Research Design:

This research is of descriptive. In descriptive research, we have sufficient data on the concept and research material. Because many research have been done on the same concept. Therefore, nothing new is in this concept while I am going to study. I have used questionnaire method for collecting data.

Sources of data:

The data used in this research involves both primary and secondary.

Primary data:

Primary data are directly collected from the original sources. The primary data is collected in the form of responses from the employees using survey method.

Secondary data:

Secondary data is the data that has already been collected by someone else for a different purpose of yours.

Sampling Techniques:

Sample Unit:

The sampling unit is IT industry, Chennai.

 Sample size:

My sample size is 20.

Tools used for data collection:

 Questionnaire:

A questionnaire is sent to the person concerned with request to answer the question and return the questionnaire. A questionnaire consists of a number of question printed or typed in a definite order on a form. The respondents have to answer the question on their own. I have used like scale which consists of 10 question and respondents have to answer for the questions asked.

Tools used for Analysis:

 Statistical tool:

Percentage Analysis:

 Percentage analysis is the method to represent raw streams of data as a percentage for better understanding of data collected.

Chi-square Test:

 The measure of chi-square enables us to find out the degree of discrepancy between observed frequencies and theoretical frequencies is due to error of sampling or due to chance.

 ANALYSIS:

Survey research was conducted for the collection of data from a representative sample of Chennai employee’s in IT industry.

The data collected have been analysed.

The age-wise classification of the respondents is depicted in the table.

Age wise                                      No. of respondents                                     Percentage

Below 22                                                   9                                                          45

22 – 24                                                       4                                                         20

25 – 27                                                       3                                                         15

28 – 30                                                       2                                                         10

Above 30                                                   2                                                         10

Interference:

From the above table, it is interfered that 45% of the respondents are of age below 22, 10 % of the respondents are of age group 28 – 30 and above 30.

The table showing whether the office has policies that are supportive to its staff.

Opinion                                                No. of respondents                                    Percentage

Strongly Agree                                             3                                                                 15

Agree                                                                4                                                                20

Neither Agree Nor Disagree                    6                                                                 30

Strongly Disagree                                        2                                                                 10

Disagree                                                           5                                                                 25

TESTING OF HYPOTHESIS

The hypothesis assumed in the study has been tested with help of chi-square test.

The formula used is X2 = ∑(O-E)2/E

Age of the respondent

The office has policies that are supportive to its staff

Strongly Agree Agree Neither Agree Nor Disagree Strongly Disagree Disagree
Below 22 1 2 3 - 3
22 – 24 1 - 2 - 1
25 – 27 1 1 1 - -
28 – 30 - - - 1 1
Above 30 1 - - 1 -

The expected frequencies can be calculated using the formula.

Expected frequency = ( Row Total x Column Total) / Grand Total.

The expected frequencies are,

Age of the respondent

The office has policies that are supportive to its staff

Strongly Agree Agree Neither Agree Nor Disagree Strongly Disagree Disagree
Below 22 1.8 1.35 2.7 0.9 2.25
22 – 24 0.8 0.6 1.2 0.4 1
25 – 27 0.6 0.45 0.9 0.3 0.75
28 – 30 0.4 0.3 0.6 0.2 0.5
Above 30 0.4 0.3 0.6 0.2 0.5

When applying X2,

O E O-E (O-E)2 (O-E)2/E
1 1.8 -0.8 0.64 0.35
1 0.8 0.2 0.4 0.5
1 0.6 0.4 0.16 0.26
- 0.4 -0.4 0.16 0.4
1 0.4 0.6 0.36 0.9
2 1.35 0.65 0.42 0.31
- 0.6 -0.6 0.36 0.6
1 0.45 0.55 0.30 0.67
- 0.3 -0.3 0.9 0.3
- 0.3 -0.3 0.9 0.3
3 2.7 0.3 0.9 0.33
2 1.2 0.8 0.64 0.53
1 0.9 0.1 0.1 0.1
- 0.6 -0.6 0.36 0.6
- 0.6 -0.6 0.36 0.6
- 0.9 -0.9 0.81 0.9
- 0.4 -0.4 0.16 0.4
- 0.3 -0.3 0.9 0.3
1 0.2 0.8 0.64 0.32
1 0.2 0.8 0.64 0.32
3 2.25 0.75 0.56 0.24
1 1 0 0 0
- 0.75 -0.75 0.56 0.74
1 0.5 0.5 0.25 0.5
- 0.5 -0.5 0.25 0.5
Total 10.97

Calculated Value = X2 = ∑(O-E)2/E

X2 = 10.97

Degree of freedom

=   (r-1) (c-1)

=   (5-1) (5-1)

=   (4) (4)

=   16

Level of significant = 0.05

Table value of  16  =  26.30.

Conclusion:

The table value of X2 for 16 d.f at 0.05% level of significance is 26.30. The calculated value of X2 (10.97) is less than the table value. Thus H0 is accepted. Thus, there is no relationship between the age of the respondents and the office has policies that are supportive to its staff.

FINDINGS:

  • It is found that most of the respondents leave the job due to work stress and few respondents leave their job due to continue their Higher Education.
  • It is observed that the respondents agree that the employee is valued as a part in his office and  few of the respondents Disagree that the employee is valued as a part in his office.
  • Most of the respondents agree that the employee are fairly treated and respected and few of the respondents Disagree that the employees are fairly treated and respected.
  • It is found that most of the respondents Agree that the employee have a clear sense of future direction in this office and few of the respondents Strongly Disagree that the  employee have a clear sense of future direction in this office.
  • Most of the respondents Agree that the office has policies that are supportive to its staff and few of  the respondents Disagree that the  office  has policies that are supportive to its staff.
  • It is observed that most of the respondents agree that the work load in this office is distributed equitably and  only few of the respondents Disagree that the  work load in this
  • office is distributed equitably.
  • Most of the respondents Agree that the employee exactly know what is expected from his/her as an employee and only few of the respondents Disagree that the employee exactly know what is expected from his/her as an employee.

SUGGESTIONS:

  • Working conditions should be improved.
  • Employee should be valued as a part in his office.
  • The communication between the staff and the management should be effective.
  • The office policies should be supportive to the employees.
  • Workloads in the office should be distributed equally.
  • There should be a regular staff meeting conducted by the management.
  • Employees should be given constructive feedback about the work performed.

CONCLUSION:

To conclude, IT firms need to understand that now, the case is not about giving more salaries and preventing the employees from leaving.

Employees need much more than what is obvious. A long-term relationship needs to be established with its employees.

Moreover, employees in this sector need a lot of personal space and a well thought-out career growth plan.Also, HR practices are needed to be fine-tuned so as to get the right kind of employees. Some of the strategies suggested in this paper can be very easily implemented without any cost to the company.

Some other strategies are not so easily implantable, but are very important for the growth of this sector, and are necessary for benefiting the country on the whole.

 

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