Growth of the IT Sector in India

maturation of the IT Sector in IndiaACKNOWLEDGEMENTSI would like to thank my supervisor JONATHAN C WESTLAKE for his insuperable guidance and trem depotous encouragement throughout this investigate. Without him I couldnt ram stiff results in this inquiry. His precious inputs and valuable suggestions helped me throughout my research.I would like to thank my portray leader PHILLMICKLEBURGH for his wonderful support and advice in technical and personal matters throughout my course and project run.I would like to thank the hold outing quite a little (in development Technology) for their valuable duration for giving me requires info. Last nonwithstanding not the to the lowest degree I would like to thank all in all my family and fri deaths for helping me in so many another(prenominal) an early(a)(prenominal) shipway and for just being there when I needed that moment of extra strength to carry on.It is pleasure to ac fellowship contri unlessions of all laster up peo ple. question OVERVIEWThe whole research was divided into five chapters for the flexibility of reader to put on this research meaningful and better understanding of what it explains. All these five chapters ar be to make this research appropriate and each chapter has its own importance in this research to make the necessary findings.The first chapter contains brief description about this research, origin to cultivation technology industry in India and describes corrasion meaning. Then this chapter describes draw a bead on of this research, fundamental aim, objectives, research questions to be investigated in this research and the methodology applied to get effective result and necessary findings.The blink of an eye chapter contains information about lit review of this research, which contains the collection of data from researches d unmatched previously link up to this surmountic. This data has been still from books, journals, articles, web sources and magazines.The third chapter describes well about the research methodology and explains how the investigator apply contrasting tokens of methods to collect patriarchal and thirdhand data. The data has been collected from employees and managers of different data Technology organizations in India. Two different questionnaires have been prepargond by the tec to collect the data. bingle is for employees to collect required data and second atomic sum up 53 is for managers to investigate the depth of the enigmas and related solutions of this research. A cheeseparing chemical reaction from the employees and managers made this research process easy to get the accu prise information required.The 4th chapter is the evolution part of this research. The information collected as means of primary data and immature-grade data, has been snapd by the researcher to find the required answers for research questions. The analysed data is presented in the form of tables and pie diagrams.Fifth chapter is the finale report of this project, which is useful for IT organizations in India to pr crimsont and reduce the friction graze. The recommendations were prep atomic number 18d on the basis of primary data, secondary data and analysis part of this research. The focus earth-closet use these suggestions as upcoming strategies to curb the abrasion in their organizations.RESEARCH INTRODUCTIONIT (Information Technology) industry is prosperous in India. The ingathering of IT sector in India represents the potential of IT industry to action at world class levels. Internationally famed companies and locally self-made small-medium coat companies atomic number 18 competing in developing crude computer software with in this enormous industry in India. These companies operate on brinyly in two divisions, i.e. Technical (development of software) and obligate (HR, Marketing and Finance). Big giants throughout the world are competing to get their software projects through from Indian c ompanies due to some prominent private roads, which include Cheap repel and Technical excellence. Taking advantage of these incoming clients, Indian companies are not leaving any stvirtuoso unturned to provide the lift character reference service.thither are many reasons behind this growth of Information Technology commercialise in India. These reasons belong to social, economical, technical and political issues. There are many Universities religious offering courses on science and mathematics and this conformation of upbringing system fixed a great tension on increased number of science and engineer students. gibe to the NASSCOM (National Association of software program and Services Companies) of India These Universities are pumping out roughly 0.2 million engineering graduates e actually year. This population constitutes one of the greatest assets of Indian IT market. nonetheless(prenominal) though there is shortfall of black marketers due to brain drain with many skilled persisters interested to unravel all overseas for better pay and living conditions. Software services sector occupied nearly seventy percent of technical industry of India and its abundant skilled man power is attracting international software companies to stern end their operations in India. The advantage of Indias foulend operations is geostrategic position which offers 247 services and reduction in turnaround clippings by leveraging time zone differences. Recently government of India set down new ministry for Information Technology which established comfortable environment for growth in IT developments and attracted many transnational companies by providing greater range of facilities with cheaper equal. According to the NASSCOM watch IT industry win the revenue of US $17 billion in 2008 there by capturing 12% of world market and expected growth of nearly 16.5% by the end of year 2009.Though the in a grittyer place points are considered as positive attributes in the growth and development of Indian software industry, so too, the negative impact comes into interpret in the form of contriteness (Loss of Employees/ Work force), which can be explained in harm of biggish growth of the number of companies attracting talent/ work force (people) which is finally ahead(p) to confusion among the work force in deciding the association to work for dep destination upon the offers made by them. detrition can be defined as the out flow of employees from an organisation due to various reasons. This research expire behind total to identify the reasons behind the dangerous friction levels in IT industry with in India and allow for suggest possible solutions to fight this problem. The change magnitude growth of the industry is leading to equal opportunities for in undergo and experience work force. Since the companies rely on senior and experienced workforce for the projects, there is an unhealthy competition among them to attract the so cal led senior and experienced workforce which is finally leading to friction.This research paper fetchly lays emphasis on the importance of considering contrition in perspective of individuals and organization because attrition destroys the place of business, causes companies to lose knowledge there by leading to never ending cycle of hiring. The researcher here stressd on the reasons behind the attrition levels in IT industry in India and the possible solutions to curb it. Questionnaires used in this research serve as channels to understand the specific reasons behind attrition.RESEARCH stateReasons behind the increase in attrition rate in the Indian IT Industries focussing Employee Turnover and techniques to reduce the Attrition.RESEARCH AIMThe main purpose of this research is to investigate the reason behind the day to day increasing Attrition rate in the Indian subcontinent with respect to the IT industry and there- by develop a report with the factors bear uponing attriti on and possible solutions to overcome these issues.RESEARCH QUESTIONSThe proposed research questions are as followsWhat are the reasons behind in high spirits attrition rate in the IT sector of Indian sub continent?What factors determine the attrition rate?How can this attrition rate be reduced in IT organizations perspective?OBJECTIVIESThe main objective of this research paper is to determine the relationship amid good kind resource practices and the reasons behind the employee attrition.To analyse various factors that affect an individuals decision to bring fundament the bacon a descent for a better fortune, including individual related, trade related and organisational related.To discover various threats and issues those impact the business capital punishment, organisational health and rise in business cost, thus emphasising the importance of attrition in perspective of IT organisations.To esteem the issues those affect the performance of the industry and minimise the a ttrition rate and also to analyse the techniques of motivation those will help in reducing the identical?ACTIVITIES TO ACHIVE THE aimPrimary data collection will be do by conducting online survey with managers and employees in the organisation the main reason being to gather faultless information. Moreover, small-arm collecting primary data if the researcher can get to refer any of the old staff who have retired or who have left over(p) the organisation due to some reason, researcher would collect information from them to enquire the reason behind their exit from the organisation and their experiences while they were working for the organisation, the difference amidst their old and new organisation they have joined, whether they are satisfied at the new work place and their expectations from the new company.Conducting a survey with employees would result in measuring the level of satisfaction they have attained in the organisation. To achieve the above task two different que stionnaires aimed specifically at managers and employees respectively moderate to the collection of relevant information to understand the problem of attrition in the organisations perspective.The secondary data collection in this research will be done by reading books, journals, web sources, articles, magazines and collecting the old data which is related to human resource care etc related to the research topic.Thus, data analysis of the information gathered would bring in a clear picture of the reasons behind the increasing attrition rate.THE RESEARCH METHODOLOGYTo study the previous works done (on this research topic), making a list of them and analysing them by means of literature review.Discovering the designations where in attrition is more(prenominal) than than and creating the attrition chart by conducting organization study.Conducting a telephone line satisfaction survey and evaluating the work environment by interviewing IT employees and spreading questionnaires.Cond ucting a survey with managers to have a look at enlisting process, benefits, upbringing and motivation techniques implemented in the organization to cut down the level of attrition.Considering the reasons for attrition by the analysis of interview data.Suggesting and implementing techniques on how to reduce the attrition.LITERATURE palingenesisAttrition in Indian IT sector is rising drastically due to fast globalisation and high economic growth. According to the researcher, the attrition is occurring mainly among technically skilled persons due to vast growth of opportunities and booming job market. This booming job market is creating enthusiasm not only among the graduates but also among the around satisfied employees. Due to this act organizations are unable to predict the start of attrition. One of the main reasons put forth for attrition is external inequity of compensation. The affect of attrition is seen in the form financial imbalances in organisations, which can be equi librate by reducing attrition through retention of employees which is possible by the diligence of people in managerial positions.ATTRITION IN INDIAAlmost all major business sectors in India are facing high attrition rates these include BPO (Business Process Outsourcing), Telecom sector, Retail sector, Services sector, Biotechnology and Pharmaceutical. Attrition rates in different sectors for 2007 are uttern below.Source online http//www.qcin.org/nbqp/qualityindia/Vol-3-No1/retaining.htmAs say in the figure 1, BPO sector is the worst affiliated by attrition and IT sector is at ninth place with the attrition rate of 27%. This shows attrition in India is an enormous problem with wide range of concerns. As this research is contract by only concentrating on IT sector, a brief introduction was wedded below as a table about top Indian IT organizations. bug online www.economictimes.indiatimes.com/photo/4835043.cmsThe above table provides overview about working human resources in top I T organizations. Thousands of organizations were equipped with human resources as main source of business.Arup Chowdary, CIO of Everyday Industries explains major challenges are in terms of resources. The kind of attrition that we have in the IT industry today is one of the business challenges. It is extremely heavy that the resources that are set apartn into the project actually continue for a longer period of time, which is not really the reference because the IT industry so volatile. So one is managing resources and number two is reading those resources with adequate means to come to the market standards .This statement gives clear indication of attrition affect on Indian IT industry.According to the CCI (Chambers of Commerce of India) research study in India, attrition rate for 2007 was 27% and for 2008 was 29%, and jibe to Hewitt Associates survey for 2009-2010 most companies continued to experience attrition rates in range of a function digits despite economic downturn.A ccording to the India Attrition study 2008, which was done among October 2008 and March 2009 by partnership between BT and massesSoft, key drivers for employees leaving their jobs are opportunity or vocation growth, salary, image of work, training or development, family circumstances, current job dissatisfaction, health, work load and working environment. According to this survey highest percentage of people are leaving their jobs for vocation growth and next for salary. Among the people who leave IT organizations, more number of people is top performers (45%) of whole employees.Figure 3 Leaver type across Indian IT industry .REASONS FOR ATTRITIONAccording to researcher, the major reasons for attrition other than monetary reasons (high salaries) are thought to be The aspect of exploring new avenues by the employees where they get a bigger opportunity to hone their existing skills. galore(postnominal) employees, who work in IT sector, leave behind their interests and finally wh en they identify the clichd constitution of these jobs they willingly opt out and look for something novel and exciting even if it cost their occupational groups.According to Dr. A. Oliver Bright, causes for attrition vary from one organizational level to another. Considering at senior focussing level many firms chase the dearth of top talent in business, this berth results in senior managers getting new offers with more compensation than existing job. At medium level, employees seek to move from one zone to another like moving from technical component part to managerial map or slower moving sector to faster one. At junior level, hike in salary and demand for employees in the market make employees to move to another job. There is a rapid development in Indian IT business sector, because many organizations from the USA and the UK outsource their work to Indian companies, thus resulting in the rise of opportunities. Hence people want to reach the top of the career at faster pace. It makes the employees to skip from one company to another.Employee as reason for attritionAn employee might get the feeling of insecurity regarding his job if the care neglects his career ladder. There are chances of an employee leaving the organisation if the so called training does not emphasise on his area of work and career growth. The communication gap between higher managerial personnel and the employees could be another possible reason of attrition. another(prenominal) reason is the delay of intra-organisational promotions, which if offered by a different organisation will lead to the mischief of employees (attrition). Employees tend to leave the organisation if they are not move in projects, which can be avoided by focussing on their growth. several(prenominal) reasons for attrition could be due to the employee himself/herself. The employee might not have grasped the job visibleness at the start of his/her tenure and/or the profile was not explained in detail by the c ompany. Poor work habits of employees from their previous job get carried over to their new jobs which disturbs their comfort zone. As explained earlier due to insufficient knowledge about the job profile the employee might not be competitive twain in his/her organizational skills and interpersonal skills. This leads to improper job handling. A wretched job fit, which is explained by the inversely proportional relationship between the new job preferences and the employee attitude/interest.High female staff attrition is great problem these days in IT organizations as many number of female employees quit their jobs to give focus on their families even their salary is with six digits. WIPRO joint chief operating officer Mr Vaswani says male to female ratio is almost same at entry level, but women employees drops to about fifteen to twenty percent at middle management levels and further about five to ten percent at senior management levels, and he continuous that it is a exhalation w hen trained and talented employee leaves. shortly Infosys employs 33.4% of women, TCS 30% and Wipro 29%. A women project manager says I had to stretch myself and the squad till late nights to fit into clients time zone. Women also quit at mid level because their priorities change. They want to show their excellence as a homemaker, which was the case with me.To reduce this attrition organizations increased maternity leave, offering work from home policies for women, relocating them if their husbands get transferred, trying to be gender neutral and making easier to women for working.Source online http//economictimes.indiatimes.com/ news program/News-By-Industry/Jobs/TCS-Wipro-Infosys-go-all-out-to-check-high-female-staff-attrition/articleshow/5324809.cms?curpg=2.Accessed on 13/12/2009Ashok Arora, executive director for HR, Ashoka Leylands says high end talent is always high on aspiration their worry is not one of survival, but how fast they climb up the corporate ladder. Management p eople tend to lose them every time if they do not reasonably cover their concerns.The reasons behind people changing their jobsEmployees expect more salary and more compensation than within their present position.Overseas opportunities, which may give hike in salary and position. A higher position in Indian nuance means status and respect.If employees want to change their locations for personal and family reasons. Especially in India family plays a crucial role where a family decision can change the career path of a young professional and make employee to change his/her job (Dr. Elena Groznaya).People are interested in new technologies rather than working with same technology.To balance the social life and flexibility with working hours.Taking into account the company image and incoming growth of the organization.Employees will be self actuate to leave the company because of job insecurity, no freedom of decision making, relationship with peers, less compensation packages and la ck of motivation.Management as cause of reasonIt is very important for the management to meet the expectation of employees, if there is any such kind of problem or communication gap between management and employees thus the persons would like to leave the organization. Another reason for attrition in organization is if management fails at satisfying employee ineluctably and management does not follow arrange policies or does not have appropriate tools to manage the employee related tasks whence this stake leads to further dissatisfaction.Azim Premji (CEO, WIPRO Technologies) stated that when talented people leave organizations despite of high salaries, they dont leave the organizations but they leave their managers. When there is continuous process of good employees resigning their jobs then management should have a look at their immediate supervisor. payoff of Indian IT industry is the avail skill of large number of human resources in market, when managers show their concern as plenty of fish in the pond towards their employees by not considering their personal values then there is chance of increase rate of attrition rate. When first time employees face difficulties with their managers they look forward to do work that situation, second time they will think about leaving, but third time they will look for external opportunity.Job profile as a cause of reasonJob profile may cause the increase in attrition by considering the following factors. While dealing with the outsourced projects the employees have to work according to the time zone of client place, employees have to work by change of location most of the time to reach their targets, and if the employee is not satisfied with his job profile all these factors push the employees to look for a different alternative.REFLECTING FACTORS OF ATTRITIONAccording to the researcher high attrition level may cause the employees to feel doubtful and leave the organization, while lower rate of attrition will ac t as a retention policy. High attrition level indicates the poor ability of organization to hold its people.Attrition is unfortunately viewed as a management tarnish when in fact it could well be a enlisting break. (MONISHA ADVANI, CEO, EMMAY HR)sourcehttp//www.expresscomputeronline.com/20050822/technologylife01.shtml)Attrition level not only reflects the flaws in recruitment strategies but also training methods, retention strategies, work culture and company value in the market.CALUCULATING EMPLOYEE ATTRIRIONIt is very much important to concentrate on the rate of attrition in an organization which can be achieved by analysis and debate for. According to Sudiptha dev calculation of employee attrition may vary from one organization to another. Anil Naronha one of the director and HR of Novell software limited states that the standard method used to calculate the attrition of employees is dividing the number of employees who left during the year by the average number employed for th at year.According to the researcher it is very important to consider the reference problem while calculating the attrition level of employees by going back to the hiring stage. Fresher ( freshly recruited) attrition level will be mensural by considering the number of these employees left and critical level attrition will be calculated when key persons leave.Some organizations may not consider the attrition of beginners when they leave the organization for higher studies and moreover, termination of employees (whose performance is not met to the standards) is also not considered as attrition. But these exemptions depend on the policies/ methods followed by the organizations to calculate the levels of attrition.COST OF ATTRITIONThere are both visible and invisible costs associated with attrition. The invisible costs are low production rate which in turn creates loss in future sales, loss of clients and degradation of brand name in the market, loss of clients and affects that person had with industry. Visible costs are the costs due to workforce leaving the organization, recruitment costs, training costs, loss of productivity costs and new engross costs etc. Costs due to loss of workforce includes the cost of the temporary recruitment to fill in while the position is vacant, compensation and benefits, administrative costs like clearing the benefits and stopping the payroll and cost of befuddled knowledge. Every person who leaves an organization ferments its ambassador, for better or for worse.When employees leave the organization continuously, it is important to consider the recruitment process which in turn will become a never ending cycle. Recruitment costs include cost of advertisement, employee referral costs and agency cost.Recruitment is a long-run process which consists of many stages and tasks to perform. These locomote include understanding the requirements of position, advertising the vacancies, search for new talent, checking the background of applicants, preparing and conducting interviews and notify results to candidates whether they are successful or not.Training is the next aspect to consider which involves high costs. It is an important task to hire a person who conducts the taste which includes the cost of orientation materials. Cost for training material includes cost of hardware, software and printing manuals.By considering the above factors one can lead to a conclusion that there are massive costs associated with attrition.TECHNIQUES TO REDUCE THE ATTRIRIONThe attrition levels can be reducedby the spry input from HR people of the concerned organizations. Since they are the first line of contact for employees, they need to emphasise on the necessity to communicate with employees very often, motive them and identifying any troubles and disturbances which if not done will gradually encourage the employee to leave the organisation. When the management neglects career ladder of an employee, that person might get th e feeling of future insecurity. This can be reduced by conducting well brisk training sessions to mitigate employee skills and attitude. Some of the solutions that have been implemented successfully by the organisations in late years to reduce attrition include, work-life balance, recognition and corporate brand building, healthy work environment, continuous employee learning (Subramaniam 2005).It is very important to follow the effective recruitment strategies rather than following traditional recruitment methods. This can help the company to remediate the response between organization goals and individual expectations to reduce the attrition level.The type of Indian IT market can be called as people driven business, because it is a huge industry which is mainly depend on Human resources. So it is big challenge for human resource department to handle high flowing of employees coming in and going out of the organizations.Padmaja Alaganandan, Principal Consultant, Mercer HR Cons ulting, India says recruitment should be strategic to scale back organizations business targets because of their inability to recruit quality talent at the pace and scale called for. In such organizations with large scale of hiring, recruitment needs to be seen as a separate function with strong linkage to the business.Compensation and rewards play vital role in IT organisations to motivate and satisfy the employees. When a company makes high profits, it should make an effort to recognise the contribution of employees in this success by releasing bonuses which will lead to a positive employee response in future endeavours. Dr Elena Groznaya(freelance researcher and advisor in the field of intercultural relations and diversity management) suggested some motivation methods, they are extrusive motivation by money (pay rises, bonus and promotion), by showing long-term perspective towards employee including the family and enabling personal development. In order to motivate staff, experts claim that it is important to recognise set of values and needs, those vary in each crabby culture. According to the classical theory of Maslow the hierarchy of needs includes Psychological, survival needsSafety and security needsSocial needs of acceptanceEsteem and course credit needsSelf-actualization and self-development needsMajor impacts on the employee behaviour are organizational culture and working environment. Providing good work environment and acknowledging the employee as a customer is an effective technique to reduce the attrition level.A good employer can be differentiated from other employers by thoroughly looking at the priorities of them, while considering the goals and needs of employees. Maintaining work-life balance among the employees is the main technique to reduce the attrition level.The temperament of IT industry is to upgrade its operations frequently to achieve the business requirements and for this there is a need of dynamic change in deploying and usi ng the upgraded technologies. To achieve the above requirements the management needs to take measures to help employees to update their knowledge through training programs from time to time.It is important to identify top performers to reward and retain them, but have goting them secure and motivated becomes a key challenge. One of the best ways is to engage them by implementing strong career program for them. One of the top companies of India, National Information Technology, has implemented structured staff communication program which includes diurnal sessions with business heads, skip level meeting, star performing bonus for high level performers and national or business level recognition programme. On other hand identify non performers to put on performance related exercises. To keep employees engaged there is need for staff involvement programmes like pre festive events, in-house sports activities and intimacy in outside activities.According to the WIPRO leaders quality surv ey, perfect leading is one of the techniques to reduce attrition levels.Marcia Robinson and Ravi Kalakota (2005) suggested seven strategies for recruiting and retaining employees.Spend time developing and remove marking incentives which include free transportation, education allowances, health related allowances, bonuses and performance based appraisals.The main problem in Indian IT industry is that most of the newly recruited students/employees are leaving the organization to pursue masters/ higher studies. This situation can be overcome by the organisations, through the provision of subsidies for the higher education of beginner employees, to improve their knowledge in their area of expertise.Change the locations of work by sending the projects to places where labour and real estGrowth of the IT Sector in IndiaGrowth of the IT Sector in IndiaACKNOWLEDGEMENTSI would like to thank my supervisor JONATHAN C WESTLAKE for his insurmountable guidance and tremendous encouragement throug hout this research. Without him I couldnt get effective results in this research. His precious inputs and valuable suggestions helped me throughout my research.I would like to thank my award leader PHILLMICKLEBURGH for his wonderful support and advice in technical and personal matters throughout my course and project work.I would like to thank the working people (in Information Technology) for their valuable time for giving me requires data. Last but not the least I would like to thank all my family and friends for helping me in so many ways and for just being there when I needed that bit of extra strength to carry on.It is pleasure to acknowledge contributions of all above people.RESEARCH OVERVIEWThe whole research was divided into five chapters for the flexibility of reader to make this research meaningful and better understanding of what it explains. All these five chapters are interrelated to make this research appropriate and each chapter has its own importance in this research to make the necessary findings.The first chapter contains brief description about this research, introduction to information technology industry in India and describes attrition meaning. Then this chapter describes purpose of this research, fundamental aim, objectives, research questions to be investigated in this research and the methodology applied to get effective result and necessary findings.The second chapter contains information about literature review of this research, which contains the collection of data from researches done previously related to this topic. This data has been collected from books, journals, articles, web sources and magazines.The third chapter describes well about the research methodology and explains how the researcher used different types of methods to collect primary and secondary data. The data has been collected from employees and managers of different Information Technology organizations in India. Two different questionnaires have been prepared by the researcher to collect the data. One is for employees to collect required data and second one is for managers to investigate the depth of the problems and related solutions of this research. A good response from the employees and managers made this research process easy to get the accurate information required.The fourth chapter is the evolution part of this research. The information collected as means of primary data and secondary data, has been analysed by the researcher to find the required answers for research questions. The analysed data is presented in the form of tables and pie diagrams.Fifth chapter is the finale report of this project, which is useful for IT organizations in India to prevent and reduce the Attrition rate. The recommendations were prepared on the basis of primary data, secondary data and analysis part of this research. The management can use these suggestions as upcoming strategies to curb the attrition in their organizations.RESEARCH INTRODUCTIONIT (Info rmation Technology) industry is booming in India. The growth of IT sector in India represents the potential of IT industry to perform at world class levels. Internationally famed companies and locally self-made small-medium sized companies are competing in developing new software with in this huge industry in India. These companies function mainly in two divisions, i.e. Technical (development of software) and Support (HR, Marketing and Finance). Big giants throughout the world are competing to get their software projects done from Indian companies due to some prominent reasons, which include Cheap Labour and Technical excellence. Taking advantage of these incoming clients, Indian companies are not leaving any stone unturned to provide the top quality service.There are many reasons behind this growth of Information Technology market in India. These reasons belong to social, economical, technical and political issues. There are many Universities offering courses on science and mathema tics and this kind of education system placed a great emphasis on increased number of science and engineering students. According to the NASSCOM (National Association of Software and Services Companies) of India These Universities are pumping out nearly 0.2 million engineering graduates every year. This population constitutes one of the greatest assets of Indian IT market. Even though there is shortfall of workers due to brain drain with many skilled workers interested to move overseas for better pay and living conditions. Software services sector occupied nearly seventy percent of technical industry of India and its abundant skilled man power is attracting international software companies to back end their operations in India. The advantage of Indias backend operations is geostrategic location which offers 247 services and reduction in turnaround times by leveraging time zone differences. Recently government of India set down new ministry for Information Technology which establishe d comfortable environment for growth in IT developments and attracted many multinational companies by providing greater range of facilities with cheaper costs. According to the NASSCOM survey IT industry attained the revenue of US $17 billion in 2008 there by capturing 12% of world market and expected growth of nearly 16.5% by the end of year 2009.Though the above points are considered as positive attributes in the growth and development of Indian software industry, so also, the negative impact comes into picture in the form of ATTRITION (Loss of Employees/ Work force), which can be explained in terms of large growth of the number of companies attracting talent/ work force (people) which is finally leading to confusion among the work force in deciding the company to work for depending upon the offers made by them.Attrition can be defined as the out flow of employees from an organisation due to various reasons. This research will contribute to identify the reasons behind the dangerou s attrition levels in IT industry with in India and will suggest possible solutions to fight this problem. The increasing growth of the industry is leading to equal opportunities for inexperienced and experienced workforce. Since the companies rely on senior and experienced workforce for the projects, there is an unhealthy competition among them to attract the so called senior and experienced workforce which is finally leading to attrition.This research paper clearly lays emphasis on the importance of considering attrition in perspective of individuals and organization because attrition destroys the value of business, causes companies to lose knowledge there by leading to never ending cycle of hiring. The researcher here emphasised on the reasons behind the attrition levels in IT industry in India and the possible solutions to curb it. Questionnaires used in this research serve as channels to understand the specific reasons behind attrition.RESEARCH TITLEReasons behind the increase in attrition rate in the Indian IT Industries focussing Employee Turnover and techniques to reduce the Attrition.RESEARCH AIMThe main purpose of this research is to investigate the reason behind the day to day increasing Attrition rate in the Indian subcontinent with respect to the IT industry and there- by develop a report with the factors affecting attrition and possible solutions to overcome these issues.RESEARCH QUESTIONSThe proposed research questions are as followsWhat are the reasons behind high attrition rate in the IT sector of Indian sub continent?What factors determine the attrition rate?How can this attrition rate be reduced in IT organizations perspective?OBJECTIVIESThe main objective of this research paper is to determine the relationship between good human resource practices and the reasons behind the employee attrition.To analyse various factors that affect an individuals decision to leave a job for a better opportunity, including individual related, job related and organizational related.To discover various threats and issues those impact the business performance, organisational health and rise in business cost, thus emphasising the importance of attrition in perspective of IT organisations.To evaluate the issues those affect the performance of the industry and minimise the attrition rate and also to analyse the techniques of motivation those will help in reducing the same?ACTIVITIES TO ACHIVE THE OBJECTIVEPrimary data collection will be done by conducting online survey with managers and employees in the organisation the main reason being to gather accurate information. Moreover, while collecting primary data if the researcher can get to meet any of the old staff who have retired or who have left the organisation due to some reason, researcher would collect information from them to enquire the reason behind their exit from the organisation and their experiences while they were working for the organisation, the difference between their old and new organisation they have joined, whether they are satisfied at the new work place and their expectations from the new company.Conducting a survey with employees would result in measuring the level of satisfaction they have attained in the organisation. To achieve the above task two different questionnaires aimed specifically at managers and employees respectively contribute to the collection of relevant information to understand the problem of attrition in the organisations perspective.The secondary data collection in this research will be done by reading books, journals, web sources, articles, magazines and collecting the old data which is related to human resource management etc related to the research topic.Thus, data analysis of the information gathered would bring in a clear picture of the reasons behind the increasing attrition rate.THE RESEARCH METHODOLOGYTo study the previous works done (on this research topic), making a list of them and analysing them by means of literat ure review.Discovering the designations where in attrition is more and creating the attrition chart by conducting organization study.Conducting a job satisfaction survey and evaluating the work environment by interviewing IT employees and spreading questionnaires.Conducting a survey with managers to have a look at recruitment process, benefits, training and motivation techniques implemented in the organization to cut down the level of attrition.Considering the reasons for attrition by the analysis of interview data.Suggesting and implementing techniques on how to reduce the attrition.LITERATURE REVIEWAttrition in Indian IT sector is rising drastically due to rapid globalisation and high economic growth. According to the researcher, the attrition is occurring mainly among technically skilled persons due to vast growth of opportunities and booming job market. This booming job market is creating enthusiasm not only among the graduates but also among the most satisfied employees. Due to this act organizations are unable to predict the start of attrition. One of the main reasons put forth for attrition is external inequity of compensation. The affect of attrition is seen in the form financial imbalances in organisations, which can be balanced by reducing attrition through retention of employees which is possible by the diligence of people in managerial positions.ATTRITION IN INDIAAlmost all major business sectors in India are facing high attrition rates these include BPO (Business Process Outsourcing), Telecom sector, Retail sector, Services sector, Biotechnology and Pharmaceutical. Attrition rates in different sectors for 2007 are shown below.Source online http//www.qcin.org/nbqp/qualityindia/Vol-3-No1/retaining.htmAs evidence in the figure 1, BPO sector is the worst affiliated by attrition and IT sector is at ninth place with the attrition rate of 27%. This shows attrition in India is an enormous problem with wide range of concerns. As this research is narrowed b y only concentrating on IT sector, a brief introduction was granted below as a table about top Indian IT organizations.SOURCE online www.economictimes.indiatimes.com/photo/4835043.cmsThe above table provides overview about working human resources in top IT organizations. Thousands of organizations were equipped with human resources as main source of business.Arup Chowdary, CIO of Everyday Industries explains major challenges are in terms of resources. The kind of attrition that we have in the IT industry today is one of the business challenges. It is extremely important that the resources that are given into the project actually continue for a longer period of time, which is not really the case because the IT industry so volatile. So one is managing resources and number two is training those resources with adequate means to come to the market standards .This statement gives clear indication of attrition affect on Indian IT industry.According to the CCI (Chambers of Commerce of Indi a) research study in India, attrition rate for 2007 was 27% and for 2008 was 29%, and according to Hewitt Associates survey for 2009-2010 most companies continued to experience attrition rates in double digits despite economic downturn.According to the India Attrition study 2008, which was done between October 2008 and March 2009 by partnership between BT and PeopleSoft, key drivers for employees leaving their jobs are opportunity or career growth, salary, type of work, training or development, family circumstances, current job dissatisfaction, health, work load and working environment. According to this survey highest percentage of people are leaving their jobs for career growth and next for salary. Among the people who leave IT organizations, more number of people is top performers (45%) of whole employees.Figure 3 Leaver type across Indian IT industry .REASONS FOR ATTRITIONAccording to researcher, the major reasons for attrition other than monetary reasons (high salaries) are tho ught to be The aspect of exploring new avenues by the employees where they get a bigger opportunity to hone their existing skills. Many employees, who work in IT sector, leave behind their interests and finally when they identify the clichd nature of these jobs they willingly opt out and look for something novel and exciting even if it costs their careers.According to Dr. A. Oliver Bright, causes for attrition vary from one organizational level to another. Considering at senior management level many firms chase the dearth of top talent in business, this situation results in senior managers getting new offers with more compensation than existing job. At medium level, employees seek to move from one zone to another like moving from technical role to managerial role or slower moving sector to faster one. At junior level, hike in salary and demand for employees in the market make employees to move to another job. There is a rapid development in Indian IT business sector, because many or ganizations from the USA and the UK outsource their work to Indian companies, thus resulting in the rise of opportunities. Hence people want to reach the top of the career at faster pace. It makes the employees to skip from one company to another.Employee as reason for attritionAn employee might get the feeling of insecurity regarding his job if the management neglects his career ladder. There are chances of an employee leaving the organisation if the so called training does not emphasise on his area of work and career growth. The communication gap between higher managerial personnel and the employees could be another possible reason of attrition. Another reason is the delay of intra-organisational promotions, which if offered by a different organisation will lead to the loss of employees (attrition). Employees tend to leave the organisation if they are not engaged in projects, which can be avoided by focussing on their growth. Several reasons for attrition could be due to the emplo yee himself/herself. The employee might not have grasped the job profile at the start of his/her tenure and/or the profile was not explained in detail by the company. Poor work habits of employees from their previous job get carried over to their new jobs which disturbs their comfort zone. As explained earlier due to insufficient knowledge about the job profile the employee might not be competitive both in his/her organizational skills and interpersonal skills. This leads to improper job handling. A poor job fit, which is explained by the inversely proportional relationship between the new job preferences and the employee attitude/interest.High female staff attrition is great problem these days in IT organizations as many number of female employees quit their jobs to give focus on their families even their salary is with six digits. WIPRO joint CEO Mr Vaswani says male to female ratio is almost same at entry level, but women employees drops to about fifteen to twenty percent at midd le management levels and further about five to ten percent at senior management levels, and he continuous that it is a loss when trained and talented employee leaves. Currently Infosys employs 33.4% of women, TCS 30% and Wipro 29%. A women project manager says I had to stretch myself and the team till late nights to fit into clients time zone. Women also quit at mid level because their priorities change. They want to show their excellence as a homemaker, which was the case with me.To reduce this attrition organizations increased maternity leave, offering work from home policies for women, relocating them if their husbands get transferred, trying to be gender neutral and making easier to women for working.Source online http//economictimes.indiatimes.com/News/News-By-Industry/Jobs/TCS-Wipro-Infosys-go-all-out-to-check-high-female-staff-attrition/articleshow/5324809.cms?curpg=2.Accessed on 13/12/2009Ashok Arora, executive director for HR, Ashoka Leylands says high end talent is always high on aspiration their worry is not one of survival, but how fast they climb up the corporate ladder. Management people tend to lose them every time if they do not reasonably address their concerns.The reasons behind people changing their jobsEmployees expect more salary and more compensation than within their present position.Overseas opportunities, which may give hike in salary and position. A higher position in Indian culture means status and respect.If employees want to change their locations for personal and family reasons. Especially in India family plays a crucial role where a family decision can change the career path of a young professional and make employee to change his/her job (Dr. Elena Groznaya).People are interested in new technologies rather than working with same technology.To balance the social life and flexibility with working hours.Taking into account the company image and future growth of the organization.Employees will be self motivated to leave the company b ecause of job insecurity, no freedom of decision making, relationship with peers, less compensation packages and lack of motivation.Management as cause of reasonIt is very important for the management to meet the expectation of employees, if there is any such kind of problem or communication gap between management and employees then the persons would like to leave the organization. Another reason for attrition in organization is if management fails at satisfying employee needs and management does not follow correct policies or does not have appropriate tools to manage the employee related tasks then this situation leads to further dissatisfaction.Azim Premji (CEO, WIPRO Technologies) stated that when talented people leave organizations despite of high salaries, they dont leave the organizations but they leave their managers. When there is continuous process of good employees resigning their jobs then management should have a look at their immediate supervisor. Advantage of Indian IT industry is the availability of large number of human resources in market, when managers show their concern as plenty of fish in the pond towards their employees by not considering their personal values then there is chance of increase rate of attrition rate. When first time employees face difficulties with their managers they look forward to solve that situation, second time they will think about leaving, but third time they will look for external opportunity.Job profile as a cause of reasonJob profile may cause the increase in attrition by considering the following factors. While dealing with the outsourced projects the employees have to work according to the time zone of client place, employees have to work by travelling most of the time to reach their targets, and if the employee is not satisfied with his job profile all these factors push the employees to look for a different alternative.REFLECTING FACTORS OF ATTRITIONAccording to the researcher high attrition level may cause the employees to feel insecure and leave the organization, while lower rate of attrition will act as a retention policy. High attrition level indicates the poor ability of organization to hold its people.Attrition is unfortunately viewed as a management flaw when in fact it could well be a recruitment error. (MONISHA ADVANI, CEO, EMMAY HR)sourcehttp//www.expresscomputeronline.com/20050822/technologylife01.shtml)Attrition level not only reflects the flaws in recruitment strategies but also training methods, retention strategies, work culture and company value in the market.CALUCULATING EMPLOYEE ATTRIRIONIt is very much important to concentrate on the rate of attrition in an organization which can be achieved by analysis and debate for. According to Sudiptha dev calculation of employee attrition may vary from one organization to another. Anil Naronha one of the director and HR of Novell software limited states that the standard method used to calculate the attrition of employees is di viding the number of employees who left during the year by the average number employed for that year.According to the researcher it is very important to consider the root problem while calculating the attrition level of employees by going back to the hiring stage. Fresher (newly recruited) attrition level will be calculated by considering the number of these employees left and critical level attrition will be calculated when key persons leave.Some organizations may not consider the attrition of beginners when they leave the organization for higher studies and moreover, termination of employees (whose performance is not met to the standards) is also not considered as attrition. But these exemptions depend on the policies/ methods followed by the organizations to calculate the levels of attrition.COST OF ATTRITIONThere are both visible and invisible costs associated with attrition. The invisible costs are low production rate which in turn creates loss in future sales, loss of customer s and degradation of brand name in the market, loss of clients and contacts that person had with industry. Visible costs are the costs due to workforce leaving the organization, recruitment costs, training costs, loss of productivity costs and new hire costs etc. Costs due to loss of workforce includes the cost of the temporary recruitment to fill in while the position is vacant, compensation and benefits, administrative costs like clearing the benefits and stopping the payroll and cost of lost knowledge. Every person who leaves an organization becomes its ambassador, for better or for worse.When employees leave the organization continuously, it is important to consider the recruitment process which in turn will become a never ending cycle. Recruitment costs include cost of advertisement, employee referral costs and agency cost.Recruitment is a long-term process which consists of many stages and tasks to perform. These steps include understanding the requirements of position, advert ising the vacancies, search for new talent, checking the background of applicants, preparing and conducting interviews and notify results to candidates whether they are successful or not.Training is the next aspect to consider which involves high costs. It is an important task to hire a person who conducts the orientation which includes the cost of orientation materials. Cost for training material includes cost of hardware, software and printing manuals.By considering the above factors one can lead to a conclusion that there are massive costs associated with attrition.TECHNIQUES TO REDUCE THE ATTRIRIONThe attrition levels can be reducedby the active input from HR people of the concerned organizations. Since they are the first line of contact for employees, they need to emphasise on the necessity to communicate with employees very often, motivating them and identifying any troubles and disturbances which if not done will gradually encourage the employee to leave the organisation. Whe n the management neglects career ladder of an employee, that person might get the feeling of future insecurity. This can be reduced by conducting well prepared training sessions to improve employee skills and attitude. Some of the solutions that have been implemented successfully by the organisations in recent years to reduce attrition include, work-life balance, recognition and corporate brand building, healthy work environment, continuous employee learning (Subramaniam 2005).It is very important to follow the effective recruitment strategies rather than following traditional recruitment methods. This can help the company to improve the response between organization goals and individual expectations to reduce the attrition level.The type of Indian IT market can be called as people driven business, because it is a huge industry which is mainly depend on Human resources. So it is big challenge for human resource department to handle high stream of employees coming in and going out of the organizations.Padmaja Alaganandan, Principal Consultant, Mercer HR Consulting, India says recruitment should be strategic to scale back organizations business targets because of their inability to recruit quality talent at the pace and scale called for. In such organizations with large scale of hiring, recruitment needs to be seen as a separate function with strong linkage to the business.Compensation and rewards play vital role in IT organisations to motivate and satisfy the employees. When a company makes high profits, it should make an effort to recognise the contribution of employees in this success by releasing bonuses which will lead to a positive employee response in future endeavours. Dr Elena Groznaya(freelance researcher and consultant in the field of intercultural relations and diversity management) suggested some motivation methods, they are extrusive motivation by money (pay rises, bonus and promotion), by showing long-term perspective towards employee including th e family and enabling personal development. In order to motivate staff, experts claim that it is important to recognise set of values and needs, those vary in each particular culture. According to the classical theory of Maslow the hierarchy of needs includes Psychological, survival needsSafety and security needsSocial needs of acceptanceEsteem and acknowledgment needsSelf-actualization and self-development needsMajor impacts on the employee behaviour are organizational culture and working environment. Providing good work environment and acknowledging the employee as a customer is an effective technique to reduce the attrition level.A good employer can be differentiated from other employers by thoroughly looking at the priorities of them, while considering the goals and needs of employees. Maintaining work-life balance among the employees is the main technique to reduce the attrition level.The nature of IT industry is to upgrade its operations frequently to achieve the business requ irements and for this there is a need of dynamic change in deploying and using the upgraded technologies. To achieve the above requirements the management needs to take measures to help employees to update their knowledge through training programs from time to time.It is important to identify top performers to reward and retain them, but keeping them secure and motivated becomes a key challenge. One of the best ways is to engage them by implementing strong career program for them. One of the top companies of India, National Information Technology, has implemented structured staff communication program which includes periodic sessions with business heads, skip level meeting, star performing bonus for high level performers and national or business level recognition programme. On other hand identify non performers to put on performance related exercises. To keep employees engaged there is need for staff involvement programmes like pre festive events, in-house sports activities and part icipation in outside activities.According to the WIPRO leaders quality survey, perfect leadership is one of the techniques to reduce attrition levels.Marcia Robinson and Ravi Kalakota (2005) suggested seven strategies for recruiting and retaining employees.Spend time developing and Bench marking incentives which include free transportation, education allowances, health related allowances, bonuses and performance based appraisals.The main problem in Indian IT industry is that most of the newly recruited students/employees are leaving the organization to pursue masters/ higher studies. This situation can be overcome by the organisations, through the provision of subsidies for the higher education of beginner employees, to improve their knowledge in their area of expertise.Change the locations of work by sending the projects to places where labour and real est