Tuesday, April 25, 2006

Industry Concerns-Attrition Part 1

As a part of the Indian IT Services industry, I am naturally concerned with the high rates of attrition and the dearth of real talent here. The latest results highlight the issue, wherein all the Indian IT players reported attrition from 13-20%. That means that every 1 in 5 people that the organization invests in is leaving. That is an alarming number, but one that we have lived with over the past few years of rapid growth. More alarming though is that the middle management level is seeing high churn rates (If you have the numbers on this, kindly give me a pointer) and is stretched wafer thin.

The way the industry has traditionally tackled this issue is to hike salaries. The salaries offshore are set to grow 15-25% in the next fiscal, so the trend is continuing. I believe that this is the incorrect, very short term solution and will create problems going forward. We have to do much more if we are really sincere about arresting attrition, especially within the performers and key executives.

To even begin to address this issue, first there has to be a commitment to changing the mindset of looking at employees as statistics, as a number, and treating them like we would our customers—with transparent & consistent policies, quick issue resolution, no red tape, consistent & concise communication, and delivery on promises. Here are the things I would focus on from a long term perspective:

TEAMING: I haven’t seen, or heard of, any organization which has effective teaming practices. As humans, we tend to stick to our networks, preserve our connections. Here is what I propose we should do to promote teaming
  1. Give people a clear goal. All good, cohesive teams are characterized by their striving towards a definite, clear objective which takes precedence on their own agendas. The goal should be finite, unambiguous and measurable. Choose the measures carefully. I will discuss this more fully in another post. This is half your job done.

  2. Promote constructive dialog amongst people, providing a platform for free expression and positive conflict. Rather than artificial harmony, I would rather have honest conflict and difference of opinion. It is easier said than done, though, and the challenge is to encourage people to participate, to have an opinion, to share honest views rather than saying what they think their managers want them to say.

  3. Inculcate trust among team members. Have frequent team meetings, where all members are encouraged to share good news, but particularly concerns and apprehensions. Demonstrate action on alleviating those concerns.

  4. Encourage honest criticism and feedback. This will promote issue based actions rather than people based. This is much tougher than it sounds; people are sensitive to criticism and tend not to appreciate it. But to focus solely on the above stated goals without getting sidelined by personal issues, it is imperative that this be tackled.

  5. Have clear, transparent accountability.

This is just one of the things that organizations need to focus on in order to arrest attrition. This is preceded though by recruitment, often the root of most, if not all, evils, which I will talk about in another post.

If you are interested in this topic, you might also find interesting this post by David Kirkpatrick on HCL’s innovative pratices on this front, this interview with Wipro’s Azim Premji and the Idea Market at Rite-Solutions. I have also written about this earlier.


Anonymous Neeta Mohandas said...

Perhaps i am cynical.....but the concept of having frequent team meetings to encourage a team building sounds very good theoretically. In practice I think IT industry is characterized by meetings every other hour, unfruitful occassions where everyone files into a room and then walks out after an hour none the wiser.
I agree wholeheartedly that HR should address the disease rather than the symptoms. Right person for the right job, inculcating a feeling of belonging to a company, establishing a feel good environment in the work place are a few initiatives that could be a step in the right direction. Honest criticism and feedback and an open environment to share opinions or views would prevail in an environment where people are confident of their own abilities, secure in the knowledge that a negative consequence will not occur and with a mature mental make up. Easier said than done, but to create such an environment is where lead by example plays a major role. For eg - every year a fresh batch joins MBA colleges world over, the freshman batch for the major part are clueless as to why they are there and what they are to do and yet every year when an MBA batch graduates they are typical in characteristic with a sprinkle of outright brilliant finance/marketing brains, the typical free riders, the drifters and the mediocre’s. I think the industry should emulate this model.

Look forward to part 2 of this blog! :)

11:18 PM  

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