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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.
1y
Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
Management, Bangalore
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).
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
If Not
Develop a match making model that can assist predict high attrition
risk candidates at the time of sourcing and selection.
2y
Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
Management, Bangalore
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
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
3y
Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
Management, Bangalore
4y
Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
Management, Bangalore
KEY FINDINGS
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Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
Management, Bangalore
HIGH
LOW
Demanding (1 6 %) Work not Pay (1 1 %) Start Up (1 2%) Just a Job (1 3%) Mercenaries (9%) Cash & Brand (5%)
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.
6y
Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
Management, Bangalore
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
7y
Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
Management, Bangalore
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
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Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
Management, Bangalore
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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Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
Management, Bangalore
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.
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Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
Management, Bangalore
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
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.
Objectives of STARSELECT
11 y
Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
Management, Bangalore
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™ Profile
12 y
Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
Management, Bangalore
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.
STARSELECT is proven and validated by leading research institutions.
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.
STARSELECT™ is designed for high volume screening.
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.
STARSELECT™ will help you develop deep understanding of issues impacting
talent engagement for YOUR organization.
13 y
Global Talent Metrics Pvt. Ltd Center for Talent Research Indian Institute of
Management, Bangalore
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