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International Journal of Management (IJM)– 6502(Print), ISSN 0976 – 6510(Online)
International Journal of Management (IJM), ISSN 0976
Volume 2, Number 1, Dec - Jan (2011), © IAEME
ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)                       IJM
Volume 2, Number 1, Dec - Jan (2011), pp. 01-14
© IAEME, http://www.iaeme.com/ijm.html                         ©IAEM               E

   CHALLENGES FOR HR MANAGERS IN INDIAN BPO
          INDUSTRY WITH RESPECT TO ATTRITION
                                     Hema Gulati
                                     Asst.Professor
                              Department of Management
                             DAV Institute of Management
                              Faridabad, Haryana-121001
                            E-Mail: gulati_hema@yahoo.com

                                   Dr.Sunita Bishnoi
                                     Assoc.Professor
                               Department of Management
                              DAV Institute of Management
                               Faridabad, Haryana-121001

ABSTRACT
       According to the study conducted by NASSCOM and Everest India, the Indian
BPO sector has been growing at more than 35 percent over the past three years and
currently estimated at US$ 26-29 billion and could grow nearly five-fold to reach US$50
billion in size by 2012. The IT enabled services (BPO) industry is being looked upon as
the next big employment generator. It is, no doubt, one of the toughest task for an HR
manager in this sector, to bridge the ever increasing demand and supply gap of
professionals. He has to find the right kind of people who can keep pace with the unique
work patterns in this industry. Adding to this is the challenge of maintaining consistency
in performance and keeping the motivation levels high, despite the monotonous work.
The toughest concern for an HR manager in India is, however, the high attrition rate
which is approximately 30-35 percent at present. In this regard an earnest attempt has
been made by taking 120 respondents from the BPO sector in NCR to study the various
challenges. The statistical tools like factor analysis, means are being used. It concluded
that attrition is the most challenging factor for all HR managers.
Key Words: Outsourcing, HR Challenges, Performance management, Talent
management, Work life balance, Leadership, Succession Planning



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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

ATTRITION:
        Attrition stands for a gradual reduction in work force without firing of personnel,
as when workers resign or retire and is not replaced. Business Dictionary states, Attrition
is “Unpredictable and uncontrollable, but normal, reduction of work force due to
resignations, retirement, sickness, or death”. As per the Longman Dictionary of
Contemporary English. Attrition happens “when people leave a company or course of
study and are not replaced.” As per The American Heritage Dictionary of the English
Language, “Attrition is a gradual, natural reduction in membership or personnel, as
through retirement, resignation, or death.” Dr. Paul Carr and Dr. Michael Hartsfield in
their article “Attrition as an HR Challenge“ (The Icfai Journal: HRM Review, March
2008) state that Attrition can be conceptualized in many forms but the two prominent
forms of attrition are: attrition due to employees leaving an organization; and employees
retiring from an organization.
OUTSOURCING: THE CONCEPT
        Outsourcing refers to the delegation of non-core operations from internal
production to an external entity specialized in the management of that operation. The
decision to outsource is often made to lower the firm costs, redirecting or conserving
energy directed at the competencies of a particular business, or to efficiently use
technology, resources, worldwide labor and capital. Typically outsourced business
segments include information technology, human resources, facilities and real estate
management, and accounting. Many companies also outsource customer support;
manufacturing and engineering to market have gained importance.
OUTSOURCING INDUSTRY AND THE PROBLEM OF ATTRITION
        The IT enabled services (BPO) industry is being looked upon as the next big
employment generator. It is, however, no easy task for an HR manager in this sector to
bridge the ever increasing demand and supply gap of professionals. He has to find the
right kind of people who can keep pace with the unique work patterns in this industry.
Adding to this is the issue of maintaining consistency in performance and keeping the
motivation levels high, despite the monotonous work. The toughest concern for an HR
manager in India is, however, the high attrition rate which is approximately 30-35
percent at present. It is true that this is far less than the prevalent attrition rate in the US


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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

market (around 70 percent), but keeping the recent growth of the industry in the country
in view, the challenge continues to be greater.
REVIEW OF LITERATURE
        Ranjit Shastri (2004) writes that while the steady supply of new recruits has
helped fuel the growth of call centers in India, attrition has held the industry back and a
major cause of attrition is the poor people skills of team leaders and senior management.
Niharika opines that continued high growth in an industry can be an issue because it
strains systems and governance processes that need time to mature and to be
institutionalized. Indian BPO industry is currently facing the challenges arising out of its
stupendous growth. Santoshi Sen Gupta and Aayushi Gupta (2008), study the challenges
posed to BPO organizations at various levels and find that at the lower management
level, the major challenges include meeting targets, dealing with customers and
maintaining work life balance; at middle level management the major challenges are to
motivate employees and handle attrition and absenteeism while at upper management
level, clients’ demands, motivation, competition and costs are the major challenges.
        While studying the causes of high attrition rate, Aashu Calappa, VP-HR, ICICI
OneSource, says that accountability puts employees under stress but companies are now
making efforts to help their employees cope with stress because it is an occupational
hazard. Prashant Chawla, COO, Integreon, a Mumbai-based KPO (2006), says that there
are three types of stress an employee may experience — tight deadlines, repetitive nature
of the job and late night shifts. Anupama D.Raina, (2006) mentions main reasons for
attrition are: health problems (43% respondents), physical strain, no time for personal
life, long working hours, odd shifts (42.35% respondents), long transit time, insufficient
leaves and slow growth, digestive problems (37% respondents) etc. Prof. M.Scalem &
Adarsh Ravindranathan, (2006) evaluate that major factors leading to high attrition rate
are: Poaching, hiring policies and HR systems, Monotony of the job, lack of career
movement and growth aspirations and nature of training. R.Raman (2006) mentioned
reasons for Drag Attrition as insecurities, vulnerabilities, very few chances of promotion,
no scope for skill up gradation, stress, chronic fatigue, health problems, loss of personal
life etc. where as for Drive Attrition are employer’s policy, policy for terminating the
employee, no entitlement for national holidays. Ramiya.bhas (2008) tries to find out the


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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

reasons for employee attrition other than compensation or salary and accordingly one of
the top reasons for talent attrition is “external equity of compensation.
        According to McKinsey & Co., the industry leaders who are setting best practices
in human resource management and retention actually pay less than the laggards and are
leveraging effective people management practices rather than higher compensation to
keep their teams intact. This is especially true in case of large players; where they
continue to employ 2,000 personnel every quarter–to bring down the sourcing cost
effectively. The BPO companies have tied-up with colleges to train the talent while they
are doing their college degree. This has proved to be an effective model for cost reduction
as well as manpower retention. Mr Anupam Prakash (2005) recommended a change in
the workforce profile through a change in the education system. Mr Dan Sandhu, CEO,
Vertex India (2005), felt attrition in BPOs was not 'the problem' but the output of other
problems in a company. He emphasizes the importance of bringing change in the
candidate's attitude to match the company's value structure. Girish Suryavanshi,
Associate VP, Mphasis (2006) said that though India is still a preferred outsourcing
destination, there is a need to improve infrastructure growth in the cities where BPOs
have a large presence.
        In the light of above stated facts, the relevance and significance of current
research paper is enhanced as its findings will help HR managers of BPO sector who
continuously strive to maintain balance between the demand and supply of competent
employees for their organizations. In order to understand the cause behind this rat race, it
is necessary to understand the major challenges HR managers face due to competitive
environment and their direct or indirect impact on the rate of attrition in the industry.
SIGNIFICANCE OF THE STUDY
The significance of the current paper lies in the fact that it is expected to
    •   Help the HR practitioners in BPO sector to get insight into the relationship
        between important HR challenges and their relationship with the most important
        challenge i.e. attrition
    •   Help the HR practitioners to focus on the right cause and to get insight to choose
        the right practice to overcome this evil




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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

RESEARCH OBJECTIVE
    •   To identify the factors highlighting the challenges in respect to HRM practices in
        BPO sector
    •   To analyze the nature of relationship between HRM challenges and demographic
        characteristics of the respondent.
RESEARCH METHODOLOGY
        The study is based on the primary data collected by way of administering a
structured questionnaire to the HRM practitioners of various BPO organizations in Delhi
and NCR regions. The BPO organizations were purposely sampled from both the
categories: Domestic BPOs and Multinational BPOs. The practitioners approached were
of all ranks and all departments of HRM: recruitment, training, salary administration,
strategy management etc. The questionnaire was sent to 150 practitioners but the usable
responses received were only 120 resulting into a response rate of 80 percent.
ANALYSIS AND INTERPRETATION:
        The study has included 50 variables; to identify the challenges which an HR
manager faces rated on 5 point scale. The statements are put for factor analysis by using
composite analysis method. Factor analysis resulted into 10 factors solution as HR
Challenges.
          Sr.No                     Factor Name                    Eigen Value
            1                         Attrition                       7.965
            2                  Interpersonal Relations                5.195
            3                    Talent Management                    4.157
            4                        Leadership                        3.31
            5                 Performance Management                  3.007
            6                     Worklife Balance                    2.695
            7              Changing Employee Expectation              2.243
            8                 New Industrial Approach                 2.087
            9                       Compensation                      1.961
            10                   Succession Planning                  1.763
        Factor 1: Attrition: This challenge has six issues related to Attrition. All deal
with the various dimensions of Attrition and highlight the importance that attrition is the
most important issue and a challenge for HR managers as the total Eigen value is 7.965.
        Factor 2: Interpersonal Relations:           This challenge has four issues related to
Interpersonal Relations. All deal with the various dimensions of Interpersonal Relations


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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

and highlight the importance that Interpersonal Relations is an important issue and a
challenge for HR managers as the total Eigen value is 5.195.
        Factor 3: Talent Management: This challenge has five issues related to Talent
Management. All deal with the various dimensions of Talent Management and highlight
the importance Talent Management is an important issue and a challenge for HR
managers as the total Eigen value is 4.157.
        Factor 4: Leadership: This challenge has four issues related to Leadership. All
deal with the various dimensions of Leadership and highlight the importance that
Leadership is an important issue and a challenge for HR managers as the total Eigen
value is 3.310.
        Factor 5: Performance Management: This challenge has five issues related to
performance management. All deal with the various dimensions of Performance
Management and highlight that Performance Management is the one of the important
issues and a challenge for HR managers as the total Eigen value is 3.007.
        Factor 6: Work Life Balance: This challenge has five issues related to Work Life
Balance dealing with its various dimensions and highlighting the importance that Work
Life Balance is an important issue and a challenge for HR managers as the total Eigen
value is 2.695.
        Factor 7: Changing Employee Expectations: This challenge has six issues related
to the various dimensions of Changing Employee Expectations and highlight the
importance that Changing Employee Expectations is an important issue and a challenge
for HR managers with the total Eigen value 2.243.
        Factor 8: New Industrial Approach: This challenge has eight issues related to the
various dimensions of New Industrial Approach and highlight that the New Industrial
Approach is an important issue and a challenge for HR managers with the total Eigen
value 2.087.
        Factor 9: Compensation: This challenge has four issues related to the various
dimensions of Compensation and highlight the importance that Compensation is an
important issue and a challenge for HR managers with the total Eigen value 1.961.
        Factor 10: Succession Planning: This challenge has three issues related to the
various dimensions of Succession Planning and highlight the importance that Succession



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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

Planning is an important issue and a challenge for HR managers with the total Eigen
value 1.7
RELATIONSHIP                  BETWEEN                HRM          CHALLENGES                   AND
DEMOGRAPHIC CHARACTERISTIC OF RESPONDENTS
        The second analysis of the study was conducted to find out the relationship of
various individual demographic factors and the listed ten challenges chosen on the basis
of review of the related studies available and factor analysis of the 50 statements
responded by HR managers on five point scale.
SAMPLE CHARACTERISTICS:
            The demographic profile of sampled respondents is shown in Table 1
 S.NO. DEMOGRAPHIC                  DESCRIPTION             FREQUENCIES               PERCENTAGE
         VARIABLE                                               (No. of
                                                             respondents)
         RESPONDENTS
    1    Gender                   Male                               44                    36.66%
                                  Female                             76                    63.33%
    2    Qualification of         Professional                      104                    86.66%
         respondents              Non-professionals                  16                    13.33%
    3    Age of respondents       21-25 years                        8                      6.66%
                                  26-30 years                        50                    41.60%
                                  31-35 years                        42                    35.00%
                                  36 years and above                 20                    16.66%

    4    Experience of        Less than I year                      20                     16.66%
         respondents in the   1-5 years                             62                     51.66%
         present organization 6-10 years                            30                       25%
                              Above 10 years                        8                       6.66%

    5    Total experience of      Less than I year                  6                        5%
         respondents              1-5 years                         68                     56.66%
                                  6-10 years                        36                       30%
                                  Above 10 years                    10                      8.33%


        Out of the total sampled respondents, 36.66% are males while 63.33% are
females. An analysis done on the basis of the qualification of the respondents reveals that
86.66% are professionally qualified while 13.33% are not professionally qualified. While
studying the age of the respondents, it has been observed that 6.66% are very young



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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

belonging to the age group of 21-25 years, 41.60% belong to the age group of 26-30
years, 35% belong to the age group of 31-35 years, 13.33% are of 36-40 years while
3.33% are of the age group of 41-45 years. On studying the experience of the respondent
in the present organization, it has been observed that 16.66% have less than one year,
51.66% have 1-5 years, 25% have 6-10 years and 6.66% have been with the organization
for more than ten years. On studying the total experience of the respondents, it has been
observed that only 5% have total experience of less than one year, 56.66% have 1-5
years, 30% have 6-10 years and 8.33% have more than ten years of total experience in the
field.
Relationship between Ten Challenges and Demographic factors of
Respondents:
     Table 2 Showing Means of Ten Challenges in relation to Gender of respondents:

            Performance   Work life Changing Employee New Industrial          Succession                            Inter-personal
Gender      Management    Balance Expectations          Approach Compensation Planning Leadership Talent Management Relationship Attrition
Male Mean       2.95       3.11            2.82           3.25       3.25        3.2      3.02           2.82            3.23      3.52
Female Mean     3.28       3.12            3.12           3.17       3.55        3.5      3.14           3.09            3.33      3.51
Total Mean      3.16       3.12            3.01            3.2       3.44        3.39      3.1           2.99            3.29      3.52

         On comparing the mean values of all the ten listed challenges within the gender
groups, we find that female HR professionals perceive performance management
(mean=3.28), work life balance (x =3.12), changing employee expectations (mean=3.12),
                                ¯
compensation (mean=3.55), succession planning (mean=3.50), leadership (mean=3.14),
talent management (mean=3.09) and interpersonal relationship management (3.33) more
challenging while they perceive new industrial approach (mean=3.17) and attrition
(mean=3.51) as less challenging. In contrast to this, male HR professionals perceive new
industrial approach (mean=3.25) and attrition (mean=3.52) more challenging and find
performance management (mean=2.95), work life balance (mean=3.11), changing
employee expectations (mean=2.82), compensation (mean=3.25), succession planning
(mean=3.20), leadership (mean=3.02), talent management (mean=2.82) and interpersonal
relationship management (3.23) as less challenging.




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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

  Table 3 Showing Means of Ten Challenges in relation to Qualification of respondents:


Qualification of   Performance Work life Changing Employee New Industrial          Succession            Talent Inter-Personal
Respondents        Management Balance Expectations           Approach Compensation Planning Leadership Management Relationship Attrition
Professionals Mean     3.16     3.19            3.03           3.16       3.49        3.4      3.13       3.02        3.27      3.57
Non-          Mean       3.13        2.62          2.88             3.44           3.12         3.31        2.88        2.81         3.44        3.19
Professionals
Total         Mean       3.16        3.12          3.01              3.2           3.44         3.39        3.1         2.99         3.29        3.52

           On comparing the mean values of all the ten listed challenges within the
qualification group, we find that professionally qualified HR professionals perceive
performance management (mean=3.16), work life balance (mean=3.19), changing
employee expectations (mean=3.03), compensation (mean=3.49), succession planning
(mean=3.40), leadership (mean=3.13), talent management (mean=3.02) and attrition
(3.57) as highly challenging while they perceive new industrial approach (mean=3.16)
and interpersonal relationship management (mean=3.27) as lesser challenging. In contrast
to this, HR professionals without professional qualification perceive new industrial
approach (mean=3.44) and interpersonal relationship management (mean=3.44) as highly
challenging and find performance management (mean=3.13), work life balance
(mean=2.62), changing employee expectations (mean=2.88), compensation (mean=3.12),
succession             planning (mean=3.31),                    leadership           (mean=2.88),             talent      management
(mean=2.81) and attrition (3.19) as lesser challenging.
          Table 4 Showing Means of Ten Challenges in relation to Age of respondents
                                                 Changing
                        Perforamce   Worklife    Employee      New Industrial                  Succesion              Talent   Inter personal
  Age of Respondents    Management   Balance    Expectations     Approach       Compensation    Planning Leadership Management Relationship Attrition
 21y-25y Mean              3.25       3.63           3             3.38             3.5           3.25      2.38       2.38         3.25      3.88
 26 y-30y Mean             3.46       3.14          3.3            3.6             3.96           3.22      3.3        3.3          3.14        4
 31y-35y Mean              2.88       3.02         2.93            3.31            3.02           3.02      2.86       2.86         3.12      3.07
 36y and Mean              2.95       3.05         2.45            3.35             2.7            2.9      2.75       2.75         4.05       3.1
  above
  Total       Mean         3.16        3.12        3.01            3.44             3.39         3.1        2.99        2.99        3.29        3.52

           On comparing the mean values of all the ten listed challenges within the age
groups, we find that very young HR professionals perceive work life balance
(mean=3.63) and leadership (mean= 3.25).New industrial approach (mean=3.60) and


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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

interpersonal relationship (mean=4.05) are the highest challenges for the senior HR
professionals of the age group 36-40 years                            while changing employee expectations
(mean=2.45),succession planning (mean=2.70), leadership (mean=2.90) and talent
management (mean=2.75) are least challenging for them. In contrast to this, young
professionals of age group 26-30 years perceive as the highest challenge in performance
management (mean=3.46), changing employee expectations (mean=3.30), compensation
(mean=3.60), succession planning (mean=3.96), talent management (mean=3.30) and
attrition(mean=4.00). In contrast to this, professionals of middle age group from 31-35
years of age find                  performance management (mean=2.88)                           , work life balance
(mean=3.02),                new industrial approach (mean=2.76) ,compensation (mean=3.31),
interpersonal relationship management (mean=3.12) and attrition (mean=3.07) as least
challenging
Table 5 Showing Means of Ten Challenges in relation to experience of respondents in the
                                same organization

                                                   Changing    New
    Experience in Present    Performance Work life Employee Industrial             Succession            Talent Inter-personal
         Organization        Management Balance Expectations Approach Compensation Planning Leadership Management Relationship Attrition
 less than one      Mean         3.29     3.38       3.33      3.38      3.33         3.38     3.38        3          3.05      3.76
      year
    1y-5y          Mean         3.44      3.19      3.23       3.24       3.56        3.77       3.11        3.29       3.27       3.74
   6y-10y          Mean         2.57      2.73      2.4        2.83       3.2         2.9        2.93        2.37        3.2       2.93
  above 10y        Mean         2.86      3.29      2.71       3.86       3.71        2.14       2.86          3        4.57       3.29
    Total          Mean         3.16      3.12      3.01        3.2       3.44        3.39        3.1        2.99       3.29       3.52


            On comparing the mean values of all the ten listed challenges within the
experience groups, we find that HR professionals with experience less than one year in
the same organization perceive work life balance (mean=3.38), changing employee
expectations (mean=3.33) and leadership (mean= 3.38) as the biggest challenges while
managing interpersonal relationship (mean=3.05) is the least challenging for them. For
the senior HR professionals of experience more than 10 years in the same organization,
while         new       industrial      approach           (mean=3.86),          compensation           (mean=3.71)      and
interpersonal relationship management (mean=4.57) are the biggest challenge, succession
planning (mean=2.14), leadership (mean=2.86) are the least challenging. The group of
professionals who have been working in the same organization for 1 y-5years perceive


                                                               10
International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

performance management (mean=3.44), succession planning (mean=3.77), talent
management (mean=3.29) and attrition (mean=3.74) as the most challenging while
professionals with 6y –10years of work experience in the same organization do not
perceive any challenge as biggest as compared to their counterparts. They find 7
challenges out of 10 as least: performance management (mean=2.57), work life balance
(mean=2.73), changing employee expectations (2.40), new industrial approach
(mean=2.83), compensation (mean=3.20), talent management (mean=2.37) and attrition
(mean=2.93).
Table 6 Showing Means of Ten Challenges in relation to Total experience of respondents

                                                   Changing        New
                        Performance   Work life    Employee      Industrial                   Succession                  Talent     Inter personal
Total Experience        Management    Balance     Expectations   Approach     Compensation     planning    Leadership   Management    Relationship Attrition
  Less than 1 Mean          3.67         4             3           3.33          3.67            3.67         3.67         2.33           3.33       3.5
   1-5 years     Mean       3.44       3.13          3.31          3.31          3.53            3.82         3.19         3.4            3.15      3.87
  6-10 years Mean           2.53       2.97          2.67          2.75          3.25            2.72           3          2.33           3.19      2.97
Above 10 years Mean         3.2          3            2.2            4            3.4             2.7          2.5          3              4.6       3.1

    Total       Mean       3.16         3.12         3.01           3.2           3.44           3.39         3.1          2.99          3.29         3.52



            On comparing the mean values of all the ten listed challenges within the
experience groups, we find that HR professionals with experience less than one year
perceive performance management (mean=3.67), work life balance (mean=4.00),
compensation (mean=3.67) and leadership (mean= 3.67) as the biggest challenges while
talent management (mean=2.33) is the least challenging for them. For the senior HR
professionals of experience more than 10 years while new industrial approach
(mean=4.00), compensation (mean=3.71) and interpersonal relationship management
(mean=4.60) are the biggest challenge, changing employee expectations (mean=2.20),
succession planning (mean=2.70) and leadership (mean=2.50) are the least challenging.
The group of professionals who have total experience of 1 y-5years perceive changing
employee            expectations            (mean=3.31),              succession             planning         (mean=3.82),             talent
management (mean=3.40) and attrition (mean=3.87) as the most challenging while
professionals with 6y –10years of work experience do not perceive any challenge as
biggest as compared to their counterparts. They find 6 challenges out of 10 as least:
performance management (mean=2.53), work life balance (mean=2.97), new industrial


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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

approach (mean=2.75), compensation (mean=3.25), talent management (mean=2.33) and
attrition (mean=2.97).

FINDINGS AND IMPLICATIONS OF THE STUDY
Gender:
        Females find compensation, succession planning and the problem of attrition
highly chalanging while their male counterpart find attrition as the most challenging.
Qualification of respondents:
        Professionally qualified respondents find attrition as the most challenging while
those who are not professionally qualified new industrial approach and interpersonal
relationships as most challenging.
Age of Respondents:
        Very young and young professionals find attrition as the most challenging while
middle age professionals find new industrial approach as most challenging while senior
professionals find interpersonal relations as most challenging.
Experience in the Present organization:
        Professionals who have spent less time(less than 5 years) with their present
organization find that attrition and succession planning are most challenging while who
have spent time more than 5 years in their present organization find managing inter
personal relations as the most challenging task.
Total Experience:
        Professionals who have experience less than 5 years find that attrition, work life
balance and succession planning are most challenging while who have experience more
than 5 years find managing inter personal relations and compensation as the most
challenging tasks.
CONCLUSION:
        As per our current research, many experts are of believe that all these challenges
can turn out to be a real dampener in the growth of this industry. This only raises the
responsibility of "finding the right candidate" and building a "conducive work
environment", which will be beneficial for the organization. The need is for those
individuals who can make a career out of this. All this can be the driving force for the


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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

companies to take necessary steps. HR managers need to put in efforts on the
development of their employees, building innovative retention and motivational schemes
(which was more money oriented so far) and making the environment livelier.
REFERENCES
1. “The American Heritage® Dictionary of the English Language”, (2009) Houghton
    Mifflin Company.
2. “The Evolution of BPO in India” 2005, Price Waterhouse Coopers.
3. Carr Paul and Hartsfield Michael 2008 “Attrition as an HR Challenge“(The Icfai
    Journal: HRM Review).
4. Shank John K., Spiegel Eric A. (1998), “Strategic Value Analysis for Competitive
    Advantage an Illustration from the Petroleum Industry,” Mckinsey Quarterly, First
    Quarter, Issue10, pp 32–39.
5. Prakash S. and Chowdhury R (2004), “Managing Attrition in BPO”, In search of
    Excellence, Cool Avenues.
6. “Employee Satisfaction Survey: Key Factors that create high levels of stress”2005,
    Data Quest, pp. 22-28.
7. Pillai Anandan, (2006)“Hr issues in BPO”, HRM Review, Journal of ICFAI Business
    School, Research Centre, Ahmedabad 21-29.
8. Raman R. (2006) “Strategies to retain human capital in Business Process Outsourcing
    (BPO) industry” Kohinoor Business School, Khandala, Working Paper .
9. Sharma Sanjeev, (2007)“Retention Strategies in ITES- BPO Industry”
10. Saxena Shabnam & Suneja Neelam (2008)”BPO Industry in India: HR Challenges in
    IT-Enabled Services” IMS Journal, Volume 5, No. 1 Jan.-June.
11. “Survey     of    Global     HR     Challenges:     Yesterday,      today    and    tomorrow”
    PricewaterhouseCoopers.
WEBSITES
•   www.businessdictionary.com/definition/attrition.html
•   www.sourcingline.com/resources/employee-attrition-in-india
•   www.timesofindia.indiatimes.com/Tech/Enterprise-IT/Services-Apps/New-trends-in-
    global-outsourcing/articleshow/6119450.cms
•   www.chrmglobal.com/Articles/295/1/Role-of-HR-in-BPO.html


                                                 13
International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

•   www.nasscom.in
•   www.financialexpress.com/news/attrition-rate-in-bpo-companies-is-7.8-points-
    higher-than-other-industries-in-india-hay-group/355924/
•   www.typepad.com/services/trackback/6a00d8356fb76c69e201156f80f22a970c
•   www.nasscom.org
•   www.merinews.com/article/high-bpo-attrition-blame-poor-compensation-
    package/140478.shtml
•   www.bpovoice.com ”Survey report: Outsourcing Challenge” 2009
•   www.coolavenues.com/knoe/hr/s1php
•   www.bpoindia.org/research/retention-strategies-call-center-industry.shtml
•   www.pwc.com
•   www.bpoindia.org/research/attrition.shtml.
•   www.dqindia.ciol.com




                                                 14

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Challenges for hr managers in indian bpo industry with respect to attrition

  • 1. International Journal of Management (IJM)– 6502(Print), ISSN 0976 – 6510(Online) International Journal of Management (IJM), ISSN 0976 Volume 2, Number 1, Dec - Jan (2011), © IAEME ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) IJM Volume 2, Number 1, Dec - Jan (2011), pp. 01-14 © IAEME, http://www.iaeme.com/ijm.html ©IAEM E CHALLENGES FOR HR MANAGERS IN INDIAN BPO INDUSTRY WITH RESPECT TO ATTRITION Hema Gulati Asst.Professor Department of Management DAV Institute of Management Faridabad, Haryana-121001 E-Mail: gulati_hema@yahoo.com Dr.Sunita Bishnoi Assoc.Professor Department of Management DAV Institute of Management Faridabad, Haryana-121001 ABSTRACT According to the study conducted by NASSCOM and Everest India, the Indian BPO sector has been growing at more than 35 percent over the past three years and currently estimated at US$ 26-29 billion and could grow nearly five-fold to reach US$50 billion in size by 2012. The IT enabled services (BPO) industry is being looked upon as the next big employment generator. It is, no doubt, one of the toughest task for an HR manager in this sector, to bridge the ever increasing demand and supply gap of professionals. He has to find the right kind of people who can keep pace with the unique work patterns in this industry. Adding to this is the challenge of maintaining consistency in performance and keeping the motivation levels high, despite the monotonous work. The toughest concern for an HR manager in India is, however, the high attrition rate which is approximately 30-35 percent at present. In this regard an earnest attempt has been made by taking 120 respondents from the BPO sector in NCR to study the various challenges. The statistical tools like factor analysis, means are being used. It concluded that attrition is the most challenging factor for all HR managers. Key Words: Outsourcing, HR Challenges, Performance management, Talent management, Work life balance, Leadership, Succession Planning 1
  • 2. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME ATTRITION: Attrition stands for a gradual reduction in work force without firing of personnel, as when workers resign or retire and is not replaced. Business Dictionary states, Attrition is “Unpredictable and uncontrollable, but normal, reduction of work force due to resignations, retirement, sickness, or death”. As per the Longman Dictionary of Contemporary English. Attrition happens “when people leave a company or course of study and are not replaced.” As per The American Heritage Dictionary of the English Language, “Attrition is a gradual, natural reduction in membership or personnel, as through retirement, resignation, or death.” Dr. Paul Carr and Dr. Michael Hartsfield in their article “Attrition as an HR Challenge“ (The Icfai Journal: HRM Review, March 2008) state that Attrition can be conceptualized in many forms but the two prominent forms of attrition are: attrition due to employees leaving an organization; and employees retiring from an organization. OUTSOURCING: THE CONCEPT Outsourcing refers to the delegation of non-core operations from internal production to an external entity specialized in the management of that operation. The decision to outsource is often made to lower the firm costs, redirecting or conserving energy directed at the competencies of a particular business, or to efficiently use technology, resources, worldwide labor and capital. Typically outsourced business segments include information technology, human resources, facilities and real estate management, and accounting. Many companies also outsource customer support; manufacturing and engineering to market have gained importance. OUTSOURCING INDUSTRY AND THE PROBLEM OF ATTRITION The IT enabled services (BPO) industry is being looked upon as the next big employment generator. It is, however, no easy task for an HR manager in this sector to bridge the ever increasing demand and supply gap of professionals. He has to find the right kind of people who can keep pace with the unique work patterns in this industry. Adding to this is the issue of maintaining consistency in performance and keeping the motivation levels high, despite the monotonous work. The toughest concern for an HR manager in India is, however, the high attrition rate which is approximately 30-35 percent at present. It is true that this is far less than the prevalent attrition rate in the US 2
  • 3. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME market (around 70 percent), but keeping the recent growth of the industry in the country in view, the challenge continues to be greater. REVIEW OF LITERATURE Ranjit Shastri (2004) writes that while the steady supply of new recruits has helped fuel the growth of call centers in India, attrition has held the industry back and a major cause of attrition is the poor people skills of team leaders and senior management. Niharika opines that continued high growth in an industry can be an issue because it strains systems and governance processes that need time to mature and to be institutionalized. Indian BPO industry is currently facing the challenges arising out of its stupendous growth. Santoshi Sen Gupta and Aayushi Gupta (2008), study the challenges posed to BPO organizations at various levels and find that at the lower management level, the major challenges include meeting targets, dealing with customers and maintaining work life balance; at middle level management the major challenges are to motivate employees and handle attrition and absenteeism while at upper management level, clients’ demands, motivation, competition and costs are the major challenges. While studying the causes of high attrition rate, Aashu Calappa, VP-HR, ICICI OneSource, says that accountability puts employees under stress but companies are now making efforts to help their employees cope with stress because it is an occupational hazard. Prashant Chawla, COO, Integreon, a Mumbai-based KPO (2006), says that there are three types of stress an employee may experience — tight deadlines, repetitive nature of the job and late night shifts. Anupama D.Raina, (2006) mentions main reasons for attrition are: health problems (43% respondents), physical strain, no time for personal life, long working hours, odd shifts (42.35% respondents), long transit time, insufficient leaves and slow growth, digestive problems (37% respondents) etc. Prof. M.Scalem & Adarsh Ravindranathan, (2006) evaluate that major factors leading to high attrition rate are: Poaching, hiring policies and HR systems, Monotony of the job, lack of career movement and growth aspirations and nature of training. R.Raman (2006) mentioned reasons for Drag Attrition as insecurities, vulnerabilities, very few chances of promotion, no scope for skill up gradation, stress, chronic fatigue, health problems, loss of personal life etc. where as for Drive Attrition are employer’s policy, policy for terminating the employee, no entitlement for national holidays. Ramiya.bhas (2008) tries to find out the 3
  • 4. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME reasons for employee attrition other than compensation or salary and accordingly one of the top reasons for talent attrition is “external equity of compensation. According to McKinsey & Co., the industry leaders who are setting best practices in human resource management and retention actually pay less than the laggards and are leveraging effective people management practices rather than higher compensation to keep their teams intact. This is especially true in case of large players; where they continue to employ 2,000 personnel every quarter–to bring down the sourcing cost effectively. The BPO companies have tied-up with colleges to train the talent while they are doing their college degree. This has proved to be an effective model for cost reduction as well as manpower retention. Mr Anupam Prakash (2005) recommended a change in the workforce profile through a change in the education system. Mr Dan Sandhu, CEO, Vertex India (2005), felt attrition in BPOs was not 'the problem' but the output of other problems in a company. He emphasizes the importance of bringing change in the candidate's attitude to match the company's value structure. Girish Suryavanshi, Associate VP, Mphasis (2006) said that though India is still a preferred outsourcing destination, there is a need to improve infrastructure growth in the cities where BPOs have a large presence. In the light of above stated facts, the relevance and significance of current research paper is enhanced as its findings will help HR managers of BPO sector who continuously strive to maintain balance between the demand and supply of competent employees for their organizations. In order to understand the cause behind this rat race, it is necessary to understand the major challenges HR managers face due to competitive environment and their direct or indirect impact on the rate of attrition in the industry. SIGNIFICANCE OF THE STUDY The significance of the current paper lies in the fact that it is expected to • Help the HR practitioners in BPO sector to get insight into the relationship between important HR challenges and their relationship with the most important challenge i.e. attrition • Help the HR practitioners to focus on the right cause and to get insight to choose the right practice to overcome this evil 4
  • 5. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME RESEARCH OBJECTIVE • To identify the factors highlighting the challenges in respect to HRM practices in BPO sector • To analyze the nature of relationship between HRM challenges and demographic characteristics of the respondent. RESEARCH METHODOLOGY The study is based on the primary data collected by way of administering a structured questionnaire to the HRM practitioners of various BPO organizations in Delhi and NCR regions. The BPO organizations were purposely sampled from both the categories: Domestic BPOs and Multinational BPOs. The practitioners approached were of all ranks and all departments of HRM: recruitment, training, salary administration, strategy management etc. The questionnaire was sent to 150 practitioners but the usable responses received were only 120 resulting into a response rate of 80 percent. ANALYSIS AND INTERPRETATION: The study has included 50 variables; to identify the challenges which an HR manager faces rated on 5 point scale. The statements are put for factor analysis by using composite analysis method. Factor analysis resulted into 10 factors solution as HR Challenges. Sr.No Factor Name Eigen Value 1 Attrition 7.965 2 Interpersonal Relations 5.195 3 Talent Management 4.157 4 Leadership 3.31 5 Performance Management 3.007 6 Worklife Balance 2.695 7 Changing Employee Expectation 2.243 8 New Industrial Approach 2.087 9 Compensation 1.961 10 Succession Planning 1.763 Factor 1: Attrition: This challenge has six issues related to Attrition. All deal with the various dimensions of Attrition and highlight the importance that attrition is the most important issue and a challenge for HR managers as the total Eigen value is 7.965. Factor 2: Interpersonal Relations: This challenge has four issues related to Interpersonal Relations. All deal with the various dimensions of Interpersonal Relations 5
  • 6. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME and highlight the importance that Interpersonal Relations is an important issue and a challenge for HR managers as the total Eigen value is 5.195. Factor 3: Talent Management: This challenge has five issues related to Talent Management. All deal with the various dimensions of Talent Management and highlight the importance Talent Management is an important issue and a challenge for HR managers as the total Eigen value is 4.157. Factor 4: Leadership: This challenge has four issues related to Leadership. All deal with the various dimensions of Leadership and highlight the importance that Leadership is an important issue and a challenge for HR managers as the total Eigen value is 3.310. Factor 5: Performance Management: This challenge has five issues related to performance management. All deal with the various dimensions of Performance Management and highlight that Performance Management is the one of the important issues and a challenge for HR managers as the total Eigen value is 3.007. Factor 6: Work Life Balance: This challenge has five issues related to Work Life Balance dealing with its various dimensions and highlighting the importance that Work Life Balance is an important issue and a challenge for HR managers as the total Eigen value is 2.695. Factor 7: Changing Employee Expectations: This challenge has six issues related to the various dimensions of Changing Employee Expectations and highlight the importance that Changing Employee Expectations is an important issue and a challenge for HR managers with the total Eigen value 2.243. Factor 8: New Industrial Approach: This challenge has eight issues related to the various dimensions of New Industrial Approach and highlight that the New Industrial Approach is an important issue and a challenge for HR managers with the total Eigen value 2.087. Factor 9: Compensation: This challenge has four issues related to the various dimensions of Compensation and highlight the importance that Compensation is an important issue and a challenge for HR managers with the total Eigen value 1.961. Factor 10: Succession Planning: This challenge has three issues related to the various dimensions of Succession Planning and highlight the importance that Succession 6
  • 7. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME Planning is an important issue and a challenge for HR managers with the total Eigen value 1.7 RELATIONSHIP BETWEEN HRM CHALLENGES AND DEMOGRAPHIC CHARACTERISTIC OF RESPONDENTS The second analysis of the study was conducted to find out the relationship of various individual demographic factors and the listed ten challenges chosen on the basis of review of the related studies available and factor analysis of the 50 statements responded by HR managers on five point scale. SAMPLE CHARACTERISTICS: The demographic profile of sampled respondents is shown in Table 1 S.NO. DEMOGRAPHIC DESCRIPTION FREQUENCIES PERCENTAGE VARIABLE (No. of respondents) RESPONDENTS 1 Gender Male 44 36.66% Female 76 63.33% 2 Qualification of Professional 104 86.66% respondents Non-professionals 16 13.33% 3 Age of respondents 21-25 years 8 6.66% 26-30 years 50 41.60% 31-35 years 42 35.00% 36 years and above 20 16.66% 4 Experience of Less than I year 20 16.66% respondents in the 1-5 years 62 51.66% present organization 6-10 years 30 25% Above 10 years 8 6.66% 5 Total experience of Less than I year 6 5% respondents 1-5 years 68 56.66% 6-10 years 36 30% Above 10 years 10 8.33% Out of the total sampled respondents, 36.66% are males while 63.33% are females. An analysis done on the basis of the qualification of the respondents reveals that 86.66% are professionally qualified while 13.33% are not professionally qualified. While studying the age of the respondents, it has been observed that 6.66% are very young 7
  • 8. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME belonging to the age group of 21-25 years, 41.60% belong to the age group of 26-30 years, 35% belong to the age group of 31-35 years, 13.33% are of 36-40 years while 3.33% are of the age group of 41-45 years. On studying the experience of the respondent in the present organization, it has been observed that 16.66% have less than one year, 51.66% have 1-5 years, 25% have 6-10 years and 6.66% have been with the organization for more than ten years. On studying the total experience of the respondents, it has been observed that only 5% have total experience of less than one year, 56.66% have 1-5 years, 30% have 6-10 years and 8.33% have more than ten years of total experience in the field. Relationship between Ten Challenges and Demographic factors of Respondents: Table 2 Showing Means of Ten Challenges in relation to Gender of respondents: Performance Work life Changing Employee New Industrial Succession Inter-personal Gender Management Balance Expectations Approach Compensation Planning Leadership Talent Management Relationship Attrition Male Mean 2.95 3.11 2.82 3.25 3.25 3.2 3.02 2.82 3.23 3.52 Female Mean 3.28 3.12 3.12 3.17 3.55 3.5 3.14 3.09 3.33 3.51 Total Mean 3.16 3.12 3.01 3.2 3.44 3.39 3.1 2.99 3.29 3.52 On comparing the mean values of all the ten listed challenges within the gender groups, we find that female HR professionals perceive performance management (mean=3.28), work life balance (x =3.12), changing employee expectations (mean=3.12), ¯ compensation (mean=3.55), succession planning (mean=3.50), leadership (mean=3.14), talent management (mean=3.09) and interpersonal relationship management (3.33) more challenging while they perceive new industrial approach (mean=3.17) and attrition (mean=3.51) as less challenging. In contrast to this, male HR professionals perceive new industrial approach (mean=3.25) and attrition (mean=3.52) more challenging and find performance management (mean=2.95), work life balance (mean=3.11), changing employee expectations (mean=2.82), compensation (mean=3.25), succession planning (mean=3.20), leadership (mean=3.02), talent management (mean=2.82) and interpersonal relationship management (3.23) as less challenging. 8
  • 9. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME Table 3 Showing Means of Ten Challenges in relation to Qualification of respondents: Qualification of Performance Work life Changing Employee New Industrial Succession Talent Inter-Personal Respondents Management Balance Expectations Approach Compensation Planning Leadership Management Relationship Attrition Professionals Mean 3.16 3.19 3.03 3.16 3.49 3.4 3.13 3.02 3.27 3.57 Non- Mean 3.13 2.62 2.88 3.44 3.12 3.31 2.88 2.81 3.44 3.19 Professionals Total Mean 3.16 3.12 3.01 3.2 3.44 3.39 3.1 2.99 3.29 3.52 On comparing the mean values of all the ten listed challenges within the qualification group, we find that professionally qualified HR professionals perceive performance management (mean=3.16), work life balance (mean=3.19), changing employee expectations (mean=3.03), compensation (mean=3.49), succession planning (mean=3.40), leadership (mean=3.13), talent management (mean=3.02) and attrition (3.57) as highly challenging while they perceive new industrial approach (mean=3.16) and interpersonal relationship management (mean=3.27) as lesser challenging. In contrast to this, HR professionals without professional qualification perceive new industrial approach (mean=3.44) and interpersonal relationship management (mean=3.44) as highly challenging and find performance management (mean=3.13), work life balance (mean=2.62), changing employee expectations (mean=2.88), compensation (mean=3.12), succession planning (mean=3.31), leadership (mean=2.88), talent management (mean=2.81) and attrition (3.19) as lesser challenging. Table 4 Showing Means of Ten Challenges in relation to Age of respondents Changing Perforamce Worklife Employee New Industrial Succesion Talent Inter personal Age of Respondents Management Balance Expectations Approach Compensation Planning Leadership Management Relationship Attrition 21y-25y Mean 3.25 3.63 3 3.38 3.5 3.25 2.38 2.38 3.25 3.88 26 y-30y Mean 3.46 3.14 3.3 3.6 3.96 3.22 3.3 3.3 3.14 4 31y-35y Mean 2.88 3.02 2.93 3.31 3.02 3.02 2.86 2.86 3.12 3.07 36y and Mean 2.95 3.05 2.45 3.35 2.7 2.9 2.75 2.75 4.05 3.1 above Total Mean 3.16 3.12 3.01 3.44 3.39 3.1 2.99 2.99 3.29 3.52 On comparing the mean values of all the ten listed challenges within the age groups, we find that very young HR professionals perceive work life balance (mean=3.63) and leadership (mean= 3.25).New industrial approach (mean=3.60) and 9
  • 10. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME interpersonal relationship (mean=4.05) are the highest challenges for the senior HR professionals of the age group 36-40 years while changing employee expectations (mean=2.45),succession planning (mean=2.70), leadership (mean=2.90) and talent management (mean=2.75) are least challenging for them. In contrast to this, young professionals of age group 26-30 years perceive as the highest challenge in performance management (mean=3.46), changing employee expectations (mean=3.30), compensation (mean=3.60), succession planning (mean=3.96), talent management (mean=3.30) and attrition(mean=4.00). In contrast to this, professionals of middle age group from 31-35 years of age find performance management (mean=2.88) , work life balance (mean=3.02), new industrial approach (mean=2.76) ,compensation (mean=3.31), interpersonal relationship management (mean=3.12) and attrition (mean=3.07) as least challenging Table 5 Showing Means of Ten Challenges in relation to experience of respondents in the same organization Changing New Experience in Present Performance Work life Employee Industrial Succession Talent Inter-personal Organization Management Balance Expectations Approach Compensation Planning Leadership Management Relationship Attrition less than one Mean 3.29 3.38 3.33 3.38 3.33 3.38 3.38 3 3.05 3.76 year 1y-5y Mean 3.44 3.19 3.23 3.24 3.56 3.77 3.11 3.29 3.27 3.74 6y-10y Mean 2.57 2.73 2.4 2.83 3.2 2.9 2.93 2.37 3.2 2.93 above 10y Mean 2.86 3.29 2.71 3.86 3.71 2.14 2.86 3 4.57 3.29 Total Mean 3.16 3.12 3.01 3.2 3.44 3.39 3.1 2.99 3.29 3.52 On comparing the mean values of all the ten listed challenges within the experience groups, we find that HR professionals with experience less than one year in the same organization perceive work life balance (mean=3.38), changing employee expectations (mean=3.33) and leadership (mean= 3.38) as the biggest challenges while managing interpersonal relationship (mean=3.05) is the least challenging for them. For the senior HR professionals of experience more than 10 years in the same organization, while new industrial approach (mean=3.86), compensation (mean=3.71) and interpersonal relationship management (mean=4.57) are the biggest challenge, succession planning (mean=2.14), leadership (mean=2.86) are the least challenging. The group of professionals who have been working in the same organization for 1 y-5years perceive 10
  • 11. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME performance management (mean=3.44), succession planning (mean=3.77), talent management (mean=3.29) and attrition (mean=3.74) as the most challenging while professionals with 6y –10years of work experience in the same organization do not perceive any challenge as biggest as compared to their counterparts. They find 7 challenges out of 10 as least: performance management (mean=2.57), work life balance (mean=2.73), changing employee expectations (2.40), new industrial approach (mean=2.83), compensation (mean=3.20), talent management (mean=2.37) and attrition (mean=2.93). Table 6 Showing Means of Ten Challenges in relation to Total experience of respondents Changing New Performance Work life Employee Industrial Succession Talent Inter personal Total Experience Management Balance Expectations Approach Compensation planning Leadership Management Relationship Attrition Less than 1 Mean 3.67 4 3 3.33 3.67 3.67 3.67 2.33 3.33 3.5 1-5 years Mean 3.44 3.13 3.31 3.31 3.53 3.82 3.19 3.4 3.15 3.87 6-10 years Mean 2.53 2.97 2.67 2.75 3.25 2.72 3 2.33 3.19 2.97 Above 10 years Mean 3.2 3 2.2 4 3.4 2.7 2.5 3 4.6 3.1 Total Mean 3.16 3.12 3.01 3.2 3.44 3.39 3.1 2.99 3.29 3.52 On comparing the mean values of all the ten listed challenges within the experience groups, we find that HR professionals with experience less than one year perceive performance management (mean=3.67), work life balance (mean=4.00), compensation (mean=3.67) and leadership (mean= 3.67) as the biggest challenges while talent management (mean=2.33) is the least challenging for them. For the senior HR professionals of experience more than 10 years while new industrial approach (mean=4.00), compensation (mean=3.71) and interpersonal relationship management (mean=4.60) are the biggest challenge, changing employee expectations (mean=2.20), succession planning (mean=2.70) and leadership (mean=2.50) are the least challenging. The group of professionals who have total experience of 1 y-5years perceive changing employee expectations (mean=3.31), succession planning (mean=3.82), talent management (mean=3.40) and attrition (mean=3.87) as the most challenging while professionals with 6y –10years of work experience do not perceive any challenge as biggest as compared to their counterparts. They find 6 challenges out of 10 as least: performance management (mean=2.53), work life balance (mean=2.97), new industrial 11
  • 12. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME approach (mean=2.75), compensation (mean=3.25), talent management (mean=2.33) and attrition (mean=2.97). FINDINGS AND IMPLICATIONS OF THE STUDY Gender: Females find compensation, succession planning and the problem of attrition highly chalanging while their male counterpart find attrition as the most challenging. Qualification of respondents: Professionally qualified respondents find attrition as the most challenging while those who are not professionally qualified new industrial approach and interpersonal relationships as most challenging. Age of Respondents: Very young and young professionals find attrition as the most challenging while middle age professionals find new industrial approach as most challenging while senior professionals find interpersonal relations as most challenging. Experience in the Present organization: Professionals who have spent less time(less than 5 years) with their present organization find that attrition and succession planning are most challenging while who have spent time more than 5 years in their present organization find managing inter personal relations as the most challenging task. Total Experience: Professionals who have experience less than 5 years find that attrition, work life balance and succession planning are most challenging while who have experience more than 5 years find managing inter personal relations and compensation as the most challenging tasks. CONCLUSION: As per our current research, many experts are of believe that all these challenges can turn out to be a real dampener in the growth of this industry. This only raises the responsibility of "finding the right candidate" and building a "conducive work environment", which will be beneficial for the organization. The need is for those individuals who can make a career out of this. All this can be the driving force for the 12
  • 13. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME companies to take necessary steps. HR managers need to put in efforts on the development of their employees, building innovative retention and motivational schemes (which was more money oriented so far) and making the environment livelier. REFERENCES 1. “The American Heritage® Dictionary of the English Language”, (2009) Houghton Mifflin Company. 2. “The Evolution of BPO in India” 2005, Price Waterhouse Coopers. 3. Carr Paul and Hartsfield Michael 2008 “Attrition as an HR Challenge“(The Icfai Journal: HRM Review). 4. Shank John K., Spiegel Eric A. (1998), “Strategic Value Analysis for Competitive Advantage an Illustration from the Petroleum Industry,” Mckinsey Quarterly, First Quarter, Issue10, pp 32–39. 5. Prakash S. and Chowdhury R (2004), “Managing Attrition in BPO”, In search of Excellence, Cool Avenues. 6. “Employee Satisfaction Survey: Key Factors that create high levels of stress”2005, Data Quest, pp. 22-28. 7. Pillai Anandan, (2006)“Hr issues in BPO”, HRM Review, Journal of ICFAI Business School, Research Centre, Ahmedabad 21-29. 8. Raman R. (2006) “Strategies to retain human capital in Business Process Outsourcing (BPO) industry” Kohinoor Business School, Khandala, Working Paper . 9. Sharma Sanjeev, (2007)“Retention Strategies in ITES- BPO Industry” 10. Saxena Shabnam & Suneja Neelam (2008)”BPO Industry in India: HR Challenges in IT-Enabled Services” IMS Journal, Volume 5, No. 1 Jan.-June. 11. “Survey of Global HR Challenges: Yesterday, today and tomorrow” PricewaterhouseCoopers. WEBSITES • www.businessdictionary.com/definition/attrition.html • www.sourcingline.com/resources/employee-attrition-in-india • www.timesofindia.indiatimes.com/Tech/Enterprise-IT/Services-Apps/New-trends-in- global-outsourcing/articleshow/6119450.cms • www.chrmglobal.com/Articles/295/1/Role-of-HR-in-BPO.html 13
  • 14. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME • www.nasscom.in • www.financialexpress.com/news/attrition-rate-in-bpo-companies-is-7.8-points- higher-than-other-industries-in-india-hay-group/355924/ • www.typepad.com/services/trackback/6a00d8356fb76c69e201156f80f22a970c • www.nasscom.org • www.merinews.com/article/high-bpo-attrition-blame-poor-compensation- package/140478.shtml • www.bpovoice.com ”Survey report: Outsourcing Challenge” 2009 • www.coolavenues.com/knoe/hr/s1php • www.bpoindia.org/research/retention-strategies-call-center-industry.shtml • www.pwc.com • www.bpoindia.org/research/attrition.shtml. • www.dqindia.ciol.com 14