Global Talent Metrics Pvt.

Ltd Center for Talent Research Indian Institute of

Management, Bangalore

India’s First and Comprehensive Research on Talent Attrition

INTRODUCTION

Employee attrition and candidate absconding are significant business concerns for
organizations, one even bigger than attracting talent. A survey of 33,000 employers
from 23 countries found that 40% of them had difficulty
finding and hiring the desired talent (Manpower Inc, 2006)
and approximately 90% of nearly 7,000 managers indicated Development, 
talent acquisition and retention were becoming more difficult Design and 
(Axelrod, Handfield-Jones and Welsh, 2001).
Implementation 
Employee attrition is a serious issue, especially in today’s of an assessment 
knowledge-driven marketplace where employees are the most model that can 
important human capital assets; attrition impacts an
predict EARLY 
organization’s competitive advantage.
attrition (0‐6 
Annual attrition rates in the IT/ITes industry are estimated to
months) risk 
be in the range 20 to 80 percent, 15% for high-skilled IT
services and on average 40% in the BPO industry. candidates would 
results in 
The tangible costs of employee attrition would be the cost of
significant 
training new employees, the recruitment and selection costs,
shareholder value 
adjustment time, possible product and/or service quality
by increasing 
problems, costs of agency workers/ temporary staff (Morrell,
managerial 
Loan-Clarke, and Wilkinson, 2004a), the cost of training, the
effectiveness, HR 
cost of loss productivity, the cost of lost knowledge and the cost organizational 
of the position remaining vacant till a suitable replacement is productivity and 
found. (Sharma 2007). The intangible costs, which may be better manpower 
even more significant than the tangibles, involve the effect of planning 
turnover on organizational culture, employee morale, social
capital or organizational memory (Morrell, Loan-Clarke, and Wilkinson 2004a). All
these costs would significantly take away the profitability and the competitive advantage
of the firm.

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 Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
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The organizational costs associated with turnover in terms of hiring, training, and
productivity loss costs can add up to more than 5% of an organization’s operating costs
according to a study by Waldman, Kelly, Aurora & Smith, 2004).

It is imperative for organizations to understand what attracts and retains a potential

candidate and predict attrition early in the recruitment process to curtail significant loss
of productivity among hiring managers, recruiters and eventual
loss of revenue and moneys.
THE RESEARCH 
The STAR™ (System for Talent Attraction and Retention)
IDENTIFIED 3 
research was aimed to design such a predictive model.
INDIVIDUAL 
DIMENSIONS AND 8 
OBJECTIVE OF THE REPORT ORGANIZATIONAL 

FACTORS BASED ON 
This report is India’s first and most comprehensive research on
66 ITEMS AND 
a) Key attributes (brand, salary. Job security etc.) that
UTILIZES CROSS 
are important to candidates in a potential employer.
b) Job candidate’s preferences/needs from their DISCIPLINARY 
employer or company
APPROACH TO 
c) Understanding if the needs are uni- dimensional or
multi-dimensional and MODEL THEIR 
if INFLUENCE  ON A 

d) multidimensional to develop practical and meaningful PROSPECTIVE 

clusters/segments based on preferences EMPLOYEE’S 
e) Reasons for Early Attrition (Leave within the first 9
months). It focuses on the psychographics, DECISION  TO  GET 
demographics and sociological factors impacting a INTERESTED,  
candidate/employee decision to stay or leave.
f) Understanding if there are their simple variables like SELECT, STAY  OR 
gender, age, number of previous jobs that can be a LEAVE A COMPANY.  
good predictor of attrition risk

If Not

Develop a match making model that can assist predict high attrition
risk candidates at the time of sourcing and selection.

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 Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
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METHODOLOGY AND DATA

Preliminary theoretical research was conducted prior to the empirical investigation. A

theoretical model, called the STAR Select Model, see appendix, was developed based on
a literature review of research papers and projects conducted globally in the area of
attrition, brand selection and predictive modelling.

The empirical research was conducted in three phases over a period of 18 months:

Phase One (Interviews and Focus Groups) - The empirical data for the first phase
of STAR research was collected through qualitative research from eight organizations in
India. The STAR team gathered perceptions of both job incumbents and senior
executives/managers on reasons for employee turnover through a series of in-depth,
one-on-one interviews and focus groups. The team met with 626 CXOs, GMs, Vice-
Presidents, HR executives, heads of operations, line managers and job incumbents over
a period of six weeks in 2007.

Phase Two Surveys – Based on the outcomes of the interviews and focus groups a
survey was designed and was rolled out as a pilot study; the web based questionnaire
was administered to job incumbents across the country and generated 971 responses.
Factor and Cluster Analysis was conducted to develop a final version of the survey called
STAR™ Personal Consumer survey. This survey was administered to job incumbents
across the country and 5067 responses were received. Respondents represented a wide
cross-section of the population across with various age ranges, work experience and job
titles, companies of various size in India. Few notable examples are: Accenture,
Cognizant, Wipro, Infosys, Cisco Systems, LogicaCMG, Dell, WNS, KLA Tencor, Kotak
Bank, ABN AMRO, Deutsche Bank, ICICI Bank, Price Waterhouse Coopers, Deloitte,
Goldman Sachs, Thomson Financials, Airtel, Motorola and Nokia Siemens

Statistical analyses including Descriptive statistics, ANOVA and Independent T-test,

were performed to determine if observed factors causing attrition were statistically
significant. Analyses by employees’ gender, age, marital status, parental status, place of
residence, place of origin, number of previous employers, duration of employment with
previous employers were conducted, and significant findings are noted in this report
where appropriate.

Phase Three– The research findings helped develop a system and a predictive model
that can predict attrition risk early in the sourcing and selection process. This model

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 Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
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incorporates needs and preferences of candidates as well as a ‘company culture profile’

of the organization to be matched with the candidate profile.

STAR™ INDIVIDUAL FACTORS:

Category Dimension Findings/Items

Psychological Personality - Need for recognition
Attitudes - Need for coaching and support on technical aspects
Values - Need for advice or support on career decisions
Beliefs - Security/stability versus risk taking
Demographical Age - college studies/degree
Marital status - size of the company (previous employment)
Parental status - place of study
Geography - place of first employment
Family - place where parents stay
(nuclear/joint) - sibling status (first born, second born)
- Travel distance work/home
Sociological Peers - Brand of the organization as perceived by family and friends
Community - Peers perception of area of work, salary, technology and
organization
STAR ™ ORGANIZATIONAL FACTORS:

JOB CONTENT - Clarity, expectations, technologies/products, learning

opportunities, challenging, interesting work
CAREER GROWTH - Promotions, training, overseas postings

COMPANY POLICIES e.g., salary scales, bond of retention, performance rating

and rewards, personal e-mail access at work, employee benefits.
PLACEMENT AND TRANSFER - time waiting for assignment/job task,
mismatch between training and assignments, posting in secondary towns or
other cities or branches, night shift, task allocation, transfers to other teams
CULTURE e.g., quality of work life, freedom, monitoring, helpful managers,
communication, feedback, peer (colleagues) support.
TOP MANAGEMENT e.g., visibility of top management, recognition and
appreciation from top management.
MANAGERIAL SUPPORT e.g., concern for people preferences, cooperation,
mentoring, appreciation, career guidance.
BRAND IMAGE OF THE COMPANY e.g., the reputation of the company; how
well known and social prestige associated with the company and accepted it is.

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 Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
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KEY FINDINGS

Summary of the findings:

1) ATTRITION IS NOT A PERSONALITY OR

BEHAVIORAL TRAIT OR STAR CLUSTERS
DEMOGRAPHICALLY ORDAINED. 2/3rd of the Indian
• At an aggregate level there is insignificant White Collar
difference between respondents that have workforce can be
categorized into 6
had one employer in five years vs. two or distinct employee
more employers in two years in what they preference clusters
value (motivators) when deciding to join, based on of
stay or leave an employer. combination of factors
(they value) or
motivators when
2) DIFFERENT STROKES FOR DIFFERENT selecting, staying with
FOLKS or leaving a company.
• Candidates and employees have
MULTIDIMENSIONAL sociological and The risk of Attrition is
psychographic needs and can be clustered into interplay of these
multi-dimensional
distinct segments/clusters (discussed later in needs with and
the report). These segments can be effectively employer’s
used to match their needs with employers competitive position
ability to meet them to reduce attrition. to satisfy or meet
These clusters are not distinguishable by a them.
single demographic characteristic like age,
gender, marital status and region. To improve selection
• and reduce attrition
3) DEMOGRAPHICS ARE POOR PREDICTORS employers first need
OF PREFERENCES. to understand where
• Statistically there is no significant difference they stand
in what people value when selecting a competitively in the
company based on their age, gender, region. marketplace in terms
of providing these
4) WORK FORCE IS LESS MERCENARY THAN motivators and hire
EMPLOYERS BELIEVE THEY ARE. individuals from the
STAR Clusters that
• Only 9% of the respondents rate salary as the
best match to their
only motivator/factor selecting or deciding to
offerings.
stay or leave an employer.

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 Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
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5) MORE PEOPLE ARE CAREER DRIVEN THAN GREEDY

• 67% of the people rate career advancement issues more important than
salary related factors when selecting or deciding to stay or leave an
employer.

6) MOST PEOPLE PRIORITIZE CAREER RELATED ISSUES OVER

FAMILY ORIENTED ISSUES
• While people often use family oriented reasons as a “convenient”
explanation for their departure, only 15% rate family oriented issues as
important reason to select, stay or leave a company.

7) REASONS WHY PEOPLE SELECT OR LEAVE A COMPANY ARE

SIMILAR BUT DIFFERENT FROM WHY THEY STAY IN A COMPANY.
• Most common factors to select or leave a company are career growth and
pay related while most common motivator to stay are relationships and
recognition oriented.

THE STAR CLUSTERS/ SEGMENTS:

STAR (tm) PREFERENCE  CLUSTERS ( %age of respondents)

HIGH

LOW
Demanding (1 6 %) Work not Pay (1 1 %) Start Up  (1 2%) Just a Job (1 3%) Mercenaries (9%) Cash & Brand (5%)

Pay and Benefits Company Brand/Image Career Growth/Learning Relationship / Recognition from Supervisor

Demanders – These candidates are demanding and have very high expectation from
their employers. They want the best pay, at a top brand company which can offer them
high growth career path; they need constant recognition from their supervisors.

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Work not Pay – These candidates want high carreer growth, challenging work, at a
prestigious company with good management. This compnay does not necessarily pay
the best in the market – e.g Tatas, Brilas.

Start Ups – These candidates look for exciting work, learning, fast growth and value
relationships. They do not value pay and brand and thus are ideal for smaller high
growth companies of high growth divisions ( corporate start-ups) of larger companies
that can provide challenging work and growth.

Mercenaries - 9% of the Indian white collar work force is purely motivated by pay.
These candidates want the highest pay irrespective of what work they do and where they
do it. These employees will be unhappy if they feel their employer is not the best pay
master. In certain ways it is easy to satisfy them as they are diven by one factor: pay.

Cash and Brand – These candidates are like mercenaries, except they are conscious
about the brand name of the company. They work for social gratification and seek the
best pay but only at companies with good brand images.

Just a Job - These candidates are opposite of Demanders. They are just looking for a
job that pays OK and have relatively low expectation across other factors

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OTHER FINDINGS

Pay, contrary to popular notion is not the top reason for attrition. Lack of
Career Growth opportunities and recognition from supervisors are more
compelling drivers for attrition.

50% or more people rate the following four reasons important or very important
factors in selecting or leaving a company

• Clarity of Career Path

• Relationship with and recognition from supervisor
• Career Growth Opportunities
• Pay

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 Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
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1. 70% of the respondents do not consider family oriented events as important factors
to leave a company, although employees conveniently use family oriented events
like – marriage, child birth, need to stay closer to family – as explanations for
departure
2. Relationships with peers are one of the top three reasons why employees stay with a
company.
3. People who have held stable jobs vs. who have moved across employers are not very
different in terms of tracking the importance of factors to select or stay or leave an
employer. Both category of respondents have similar scores and identical ranking of
the STAR™ factors:

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STAR ORGANIZATION PROFILE

Just as people are different and multidimensional in what they value when SELECTING,
STAYING WITH OR LEAVING A COMPANY, employers/companies are diverse in
terms of what they offer on the key STAR™ factors in comparison to their talent
competitors.

The following is an example of a STAR ORGANIZATION PROFILE of two companies

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EMPLOYEE ATTRITION REDUCTION RECOMMENDATIONS:

Employers need to distinguish between efforts they out to reduce attrition vs. they put in
place to increase engagement. Employers need to understand where they stand
competitively in the marketplace in terms of the STAR factors.

The seeds of attrition are sowed at the time of sourcing and selection. Employers need to
provide tools to recruiters not to just skills but tools to match candidate’s STAR Needs
with the company’s strengths. The match process starts….

Employees need to provide tools to managers to guide them what drive a new employee
so that new joiners do not become disappointed and leave within the first six months.
Employers need to understand what they are good at offering to prospective employees.

Banks should focus on hiring more people from Cluster Work not Pay and Start-up
segment as the bank is not the best pay master but provides string brand, carrier growth
and supervisor relationships

STARSELECT™ (SYSTEM FOR TALENT ATTRACTION AND RETENTION)

STARSELECT is a psychometric tool that helps organizations to isolate high attrition

risk candidates early in the selection process and also helps in managing attrition risks
in their existing talent pool by identifying high risk candidates.

The main objective is to eliminate cost associated with early attrition and to
monitor talent engagement levels within the company to develop a more robust talent
supply chain management system.

This attitudinal and behavior measurement tool designed for global

organizations and specifically adapted for Indian conditions, has been utilized by
over 500,000 job applicants and 20,000 managers.

Objectives of STARSELECT

1. Understand the organizational, job and personal factors that contribute to an

individual’s decision to “stay” or “leave” the organization.

2. Understand the complex demographic, psychographics, behavioral, vocational

and other variables that contribute to

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a. An individual’s propensity to stay or leave and

b. An individual’s actual decision to stay or leave.

3. Develop a reliable model and validate a comprehensive tool that will help
organizations based in India better predict, manage and control turnover.

STARSELECT Model

STAR™ Modeller 

STAR™ Retention Predictive Risk Score

STAR™ Retention Risk Band

STAR™ Profile

FEATURES & BENEFITS OF STARSELECT™

ƒ STARSELECT ™ increases recruiter efficiency and enhance managerial hiring

productivity.
ƒ Reduce early attrition by 20-70%
ƒ STARSELECT™ is the first and only validated psychometric and behavioral test
bank developed for India and based on pure India data set for better results

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ƒ STARSELECT ™ is based on models that have been tested and proven over the
last 30 years and current used by leading Fortune 50 companies in selection and
hiring.
ƒ STARSELECT is proven and validated by leading research institutions.
ƒ STARSELECT™ is flexible in that the organization’s Cultural Retention Index
(CRI) will have an impact on the profiles of applicants who will fit your particular
organization.
ƒ STARSELECT™ is designed for high volume screening.
ƒ STARSELECT™ is easy to use; it can be plugged into your career portal for
reliable rapid pres screening or it is easy to use so that your talent acquisition
team can learn the system quickly and there is no need for psychologists or
outside experts.
ƒ STARSELECT™ will help you develop deep understanding of issues impacting
talent engagement for YOUR organization.

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