This year retention would not be a huge challenge, but if the upturn sustains then the next year would see increased incidence of attrition
Ashok Reddy, Managing Director, TeamLease Services
1. The last Teamlease employment outlook report for the Jan-Mar ’10 quarter shows a significant attrition trend across sectors and cities esp. the metros. What would you attribute this to?
In the downturn, people stayed in a job they had rather than explore external opportunities and risk their career. Now that the job market has started to see an upturn with companies coming back to hire people are encouraged to move out from their current jobs and take up other opportunities.
Also, the opening of the job market puts the element of negotiating for salaries back in the hands of the candidates/employees and this leads to attrition.
2. If we look at sector-specific attrition trend, we have Infrastructure topping the list, which isn’t the usual. How would you reason this?
Infrastructure is getting a huge fillip by virtue of available funds and also the government focus. India has a long way to go on the infrastructure front and by virtue of the fact that it is a relatively new industry, talent is limited. A lot of poaching is being witnessed in this sector and hence the increased attrition.
3. We have seen the regional and the sectoral trend of attrition, what about the roles and levels that are witnessing the trend? Is the attrition confined to certain functions and employee level?
At this point in time the market recovery is across industry, across locations and across levels and hence the opportunities are widespread leading to a more broad based demand and attrition. It is certainly not confined to any specific function or position.
4. What retention measures and initiatives are you seeing employers use? Anything interesting and out of the box?
Attrition is not something that can be eliminated; it is something that companies learn to live with. However, multiple actions can be taken to reduce the incidence of attrition and that is directed towards paying for performance, variable incentives, role and responsibility play, ESOPs etc.
5. Prior to the recession, compensation was the biggest puller and used heavily as a retention tool. Would that continue to be the case?
Compensation would be a key retention tool, but drive is to make it a combination of fixed and variable. The latter would ensure organizations are rewarding people for performance and ensuring they eat what they kill.
6. Do you see/anticipate retention being a major challenge for this year or is it likely to be an employer’s market as some industry experts are suggesting?
Demand has started to come back into the market, but it still is with cautious optimism. Corporates want to see how the current upturn plays itself out before taking a more long term decision around headcounts and permanency. Think this year would not be a huge challenge on retention, but if the upturn sustains then the next year would see increased incidence of attrition.
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