Attrition analysis: CIO lookout for 2010

The recession is tapering off, job market is picking up, and some of your best employees are quitting. It's time you did an attrition analysis, isn't it?

Recession showed us a time when CIOs struggled with issues such as limited IT budgets and lack of IT projects. CIOs had to brush up their management and leadership skills to keep motivation levels within their teams. The recession lasted for almost two years, the after-effects of which were felt during the time of appraisals. With few vacancies in the job market, IT personnel had no option but to accept the reality of no revision in salaries. Since attrition did not pose a major problem as such, IT heads felt no need for any attrition analysis at this point  of time.

The recession seems to have passed now, and there's a lot of buzz in the industry as the job market starts to open. As a consequence, retaining the talent pool is now considered to be the next big challenge for companies. To tackle this, CIOs now feel the need to perform attrition analysis and design strategies to retain their star staffers.

Attrition analysis concerns
Ranjit Satyanath, the general manager of technology & e-commerce for Shoppers' Stop, says that attrition can pose serious problems for CIOs across verticals. "Finding the right talent with the right capabilities is difficult, especially in the field of information technology. Last year, employees were advised not to expect upward revisions with respect to grade or increments, advice which most of them accepted, given the global scenario. However, with growth returning, people will expect salary increases, regardless of how they have performed. Managing these expectations could be major challenges, especially with growing opportunities."

Employee retention tips
• Empower your workforce with challenging assignments.
• Have a transparent and fair rating system.
• Don't wait for the appraisal cycle to give feedback.
• Ensure parity in compensation.
• Ensure that work is fun by combining it with innovation.

 Seconding this view is G Radhakrishna Pillai, the CIO of Super Religare Laboratories. "The last two years were stable with respect to attrition, but now things have reversed. Hiring is happening in all sectors. In addition, all major IT consulting companies are accelerating their hiring processes, so it is going to be a key concern this year." This is why attrition analysis is a need of the hour for Indian CIOs.
 
Retention strategies
Attrition analysis and employee retention strategies have to be initiated at the top of the pyramid. The management's role becomes crucial in terms of communicating with employees. "In tough times, it's best if an organization initiates dialog with its employees to make them understand the company's situation. It becomes important to engage with the workforce, give them a fair idea of the challenges ahead, and how the management proposes to see the company through," advises Satyanath.

Apart from this, a lot will depend on how companies give increments and bonuses. "Bonuses will be a function of the organization's profitability. Considering the gloomy phase last year, we cannot expect great bonuses. But we are definitely out of uncertainty now," says Pillai.

Most of the CIOs we spoke to felt that, more than financial rewards, it is professional and work satisfaction that keeps the morale of employees high. Attrition analysis can help at this point by identifying reasons for disgruntlement. "People are hungry for work, especially in IT. Assigning them new roles, giving them new projects, or reworking standby projects will definitely generate more interest in the team," opines Mehriar Patel, the general manager and head of IT, HR & administration for Globus Stores.  
   

Naturally, a lot depends on the company's HR policy and how employee-friendly it is. "The attrition rate could go up in organizations where employees were not managed well during the economic strife. Several companies laid off part of their workforce with little warning, or chopped salaries across the board. Such companies are going to find it tough," predicts Satyanath.

By contrast, companies where the management encourages a healthy dialog with the workforce (as well as proper attrition analysis) may not face an exodus due to the return of growth. For instance, Rajesh Uppal, the CIO of Maruti Udyog, is not really worried about attrition. He's quite confident that his would be the least-affected company. "We have the right systems and policies in place, and these are sensitive toward our manpower. Even during recession, we gave good increments to our employees. Hence I don't see any significant change as far as employee movement is concerned."

Remarks Pillai: "Companies which were affected by the recession should now look at rewarding the employees who have been with the company through thick and thin. They should link compensation with performance, and reward high-performing individuals."

Apart from this, it's advisable to have a backup plan in place to tackle any attrition situations that may arise. Outsourcing non-core activities and non-strategic IT jobs could be one of the options. Within the IT organization, involve more functional teams so that you have backup for handling functional issues.

In an attrition scenario, succession planning becomes crucial. "The cost of losing talent is considerable in terms of the investment made in training and grooming the candidate," points out Uppal. "At Maruti, we have career planning policies for employees who are groomed to handle higher-level responsibilities. This way we are prepared for attrition."  

For Patel of Globus, attrition analysis leads to a different conclusion. According to him, the movement of employees will bring in fresh and new talent. Till last year, people were sticking to their jobs, so 2010 is definitely going to be a new start for them.

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