High Attrition Rate
Among Employees in
Infosys Limited
B y ,
A r j u n A M e n o n
P G P / 1 6 / 0 7 2
S E C T I O N B
B U S I N E S S R E S E A R C H
P R O P O S A L
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Contents
PROPOSED TITLE ........................................................................................................................ 3
ABSTRACT .................................................................................................................................... 3
INTRODUCTION .......................................................................................................................... 4
PROBLEM STRUCTURING ......................................................................................................... 5
LITERATURE REVIEW ............................................................................................................... 7
RESEARCH OBJECTIVE ........................................................................................................... 10
RESEARCH QUESTION ............................................................................................................. 10
PROPOSED METHODOLOGY .................................................................................................. 10
CAUSAL LOOP MODEL ............................................................................................................ 12
LIMITATIONS ............................................................................................................................. 14
FUTURE SCOPE.......................................................................................................................... 14
REFERENCE ................................................................................................................................ 15
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1. PROPOSED TITLE
High attrition rate among Employees in Infosys Limited
2. ABSTRACT
This paper examines the high attrition rate among the employees in Infosys. The problem
structuring involves stakeholder analysis using the systems approach which consists of stake
holder map, stake holder chart and then considers the specific stakes of a few stake holders. The
methodology proposed through this model involves a system of survey and personal interviews
in order to obtain data from the respondents and using that to analyze the problem. Different
variables which have an impact on attrition rate are considered in the model. The analysis of the
problem is based on the qualitative data thus obtained.. A causal loop model has been prepared to
depict the relationship among the various variables examined. The paper concludes by
suggesting a few recommendations based upon the results and observations of the analysis in
order to reduce the attrition rate of the employees.
Keywords:
Stakeholder analysis, Systems Approach, Causal Loop Model, Variables
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3. INTRODUCTION
Infosys was founded in 1981 and has grown to become the third largest India based IT services
company by 2012 revenues in the past 32 years. Aided by the liberal government policies, an
educated English Speaking Population and a growing demand for outsourced IT services has
helped Infosys in registering a spectacular growth within a relatively short span of time. Infosys
has a global footprint with 67 offices and 69 development centers in US, India, China, Australia,
Japan, Middle East, UK, Germany, France, Switzerland, Netherlands, Poland, Canada and many
other countries. Infosys and its subsidiaries have 155,629 employees as on Dec 31, 2012.
However, over the past 2-3 years, the firm is witnessing a shocking increase in the attrition rates.
Even though the attrition rates are high for the software industry in general, Infosys’ figure of
14.9% in the first quarter of 2012 is the highest compared to its peers.
A major share of the Infosys recruitment process is through campus hiring. The attrition
rates have disturbed the attractiveness of the company among the students in the engineering
colleges as well. The loss of talent pool is affecting the productivity of the firm. The companies
expected revenue growth of 8-10% is lower than the Nasscom forecast for the industry of 11-
14%.
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4. PROBLEM STRUCTURING
Stake holder Analysis:
Stake holder map
Specific Stakeholder Chart
HIGH ATTRITION RATE AMONG EMPLOYEES IN INFOSYS
EMPLOYER COMMUNITY
CLIENTS
EMPLOYEES SUPPLIERS
COMPETITORS
SHAREHOLDERS
COMMUNITY
Beneficiaries of Infosys
Foundation
Families of the employees
CLIENTS
Honeywell
ICICI Bank
Spirit Aerosystems
Etc.
Management
Human Resources
Administration
Accounts
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Stakes of Stakeholders
The stakes of one of the divisions under each of the stakeholders have been considered
COMPETITORS
TCS
Cognizant
Accenture
Shareholders
Employers
Financial Institutions
Common People
Suppliers
Hardware Vendors
Infrastructure Providers
Recruitment Agencies
Employees
Reporting Managers
Peer Group
Subordinates
Employer
Training and
Recruitment
Community
Transfer of
Resources and
Culture
Competitors
Award of New
Contracts
Clients
Talented workers
being employed
for their project
Shareholders
Higher confidence
from better and
bigger intake
Suppliers
Frequent change
In the
requirements
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5. LITERATURE REVIEW
“THE INDIAN SOFTWARE SERVICES INDUSTRY” by Ashish Arora, V.S.Arunachalam,Jai
Asundi and Ronald Fernandes is a thorough study on the growth of software service sector in
India ,the factors that contributed to it and its impact on the Indian economy. It gives a
foundation on how crucial conducting a study on the problem of attrition which is plaguing a
prominent firm like Infosys is.
“MANAGING GROWTH: HUMAN RESOURCE MANAGEMENT CHALLENGES FACING
THE INDIAN SOFTWARE INDUSTRY” by Narendra.M.Agarwal, Naresh Khatri and
R.Srinivasan deals with the challenges with respect to Human Resource Management faced by
the Indian Software Industry. The paper identifies high turnover as the most crucial problem and
maps the reasons for it. Thus, it throws light on the fact that the problem faced by Infosys may
not be organization specific.
“ANTECEDENTS TO IT PERSONNELS INTENTION TO LEAVE: A SYSTEMATIC
LITERATURE REVIEW” by Amir Hussein Ghapanchi and Aybuke Aurum studies the various
IT turnover drivers and classify them into various categories and suggest which of them are
relevant for an IT manager to check the problem of attrition.
“THE CAUSAL ORDER OF JOB SATISFACTION AND ORGANISATIONAL COMMITMENT
IN MODELS OF EMPLOYEE TURNOVER” by Douglas B Currivan tries to establish a causal
order among the two key determinants of turnover, Job Satisfaction and Organizational
Commitment. It analyses four different models by changing the order. Through the use of sample
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survey and panel interviews the data is collected. The study concludes that there is no significant
relation between satisfaction and commitment but they have a causal relationship with turnover.
“NON-LINEAR GROWTH: THE ROAD AHEAD FOR INDIAN IT OUTSOURCING
COMPANIES:THE INFOSYS EXPERIENCE” by YLR Murthi discusses about the need of
disruptive innovations in the Indian IT outsourcing industry. Author conducts an interview with
Former Infosys CEO S Gopalakrishnan. It throws light on the importance of manpower in the
midst of trying to create non-linear revenues through technologies like cloud computing.
“MANPOWER PLANNING AND EMPLOYEE ATTRITION ANALYTICS” (A Markov Analysis
Attempt for Attrition-Rate Prediction and Stabilization) by Suvro Raychaudhuri the author has
focussed on the trend of considering employees as internal customers and manpower attrition has
been considered similar to customer switching problems. The paper looks into the usage of
Markovian analysis to predict attrition which forms a base for manpower planning.
“ATTRITION RATE: CHALLENGE BEFORE THE ORGANISATION” by Randhir Kumar
Singh focuses upon the seriousness about the concern considering employees as human capital.
focuses upon the tangible costs incurred because of replacement of employees and this includes ,
recruitment and selection costs ,cost due to training new employees, possible product quality
problems, adjustment time etc. The literature concludes by stating that although it’s feasible to
cover the tangible losses at a certain expense, it’s not feasible to cover the intangible expenses.
“ROLES OF PERCEIVED EXCHANGE QUALITY AND ORGANISATIONAL
IDENTIFICATION IN PREDICTING TURNOVER INTENTION” by Manish Kumar and
Shailendra Singh focuses on how the environment in which the employee-manager exchange as
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well as the general communication takes place and how this affects turnover.. It also examines
the importance of organizational identification in regulating attrition.
“CULTURE,EMPLOYEE WORK OUTCOMES AND PERFORMANCE:AN EMPIRICAL
ANALYSIS OF INDIAN SOFTWARE FIRMS” by Jossy Mathew, Emmanuel Ogbonna,
Lloyd.C.Harris deals with how important organizational culture is in determining the
productivity, satisfaction and quality of work which are direct indicators of turnover. It conducts
a study through surveys and concludes that there is a strong relationship between the culture and
the organizational performance.
“EXPLORING TALENT MANAGEMENT IN INDIA: THE NEGLECTED ROLE OF INTRINSIC
REWARDS” by Walter G Tymon,Stephen A Stumpf, Jonathan P Doh deals with the challenge
of talent management and retention and how critical it is to a firms success. The model discussed
in the paper proves that Intrinsic rewards are crtitical to employee retention and job
performance.Companies Social responsibility and the pride employees have in the company are
discussed. The paper concludes by saying that hygiene factors have a bigger say in winning the
war on talent and retaining your employees.
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6. RESEARCH OBJECTIVE
To suggest suitable strategies in order to reduce the attrition rate among the employees in Infosys
Limited
7. RESEARCH QUESTION
1. What are the factors contributing to the job satisfaction of the employees?
2. What is the extent of balance between personal and professional life for the employees in
software industry?
3. Are there any specific reasons for higher attrition in Infosys when compared to other
software companies?
8. PROPOSED METHODOLOGY AND METHODS:
As it is a model requiring descriptive research and primary data for validation, Survey and
personal interviews would be the tools used to carry out the research process.
1: Survey
A survey shall be floated among the current employees as well as the former employees. The
survey shall mainly focus upon the different factors pertaining to job satisfaction. It would judge
certain aspects on a qualitative basis using likert scale, semantic differential scale etc. A few
sample questions in the survey would be as follows:
1. The job gives you sufficient time in order to have a proper balance between personal life
and professional life
Disagree _ _ _ _ _ _ _ Agree
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2. Enough opportunities are available for promotion and growth in the organisation.
Strongly Agree _
Agree _
Neutral –
Disagree _
Strongly Disagree _
3. The wages offered matches the industry standards
Strongly Agree _
Agree _
Neutral –
Disagree _
Strongly Disagree _
In a similar fashion, other variables like sense of responsibility, location of job etc shall also be
tested.. The survey format for the current employees and previous employees would be slightly
different. The survey for previous employees would focus more on the reasons for their
movement.
2 : Personal Interview:
Personal face to face interviews shall be conducted for a sample of respondents. This is being
done in order to get a wider picture about the situation and to cover up those factors which
cannot be encompassed within the ambit of the survey. The interviews shall be semi structured,
i.e. a few questions shall be pre determined e.g. what do you find the best about the organisation,
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why did you leave the organisation (in case of former employees) etc. But the rest would be
unstructured and spontaneous to an extent so that the respondents can express the real scenario.
Few questions would also cover external environment e.g. given a chance, would you like to
shift to a new company, if yes why and to which company? (In case of current employees) &
what do you find different in your new organisation as compared to previous organisation (in
case of former employees). Such questions would also give an idea about the potential
competitors and a scope for comparison of the system followed in both the companies. The
respondents would be selected through simple random sampling from the group of respondents
who responded to the survey.
Apart from this, there would be an interview of the managers as well. This would give an
employer level view of the problem.
The data would be analyzed after collecting it. The different responses obtained would be given
specific weights which would then be used to compute the variances. A correlation analysis can
also be performed to test the relationship between two variables keeping the rest constant. These
would help to estimate the relationship of all variables with respect to job satisfaction which
would then determine the attrition rate. For eg:- if the general reply to the question on salary
levels is that they are low, then an appropriate strategy can be developed to tackle the same. In
this way, the analysis can be carried out and conclusions derived about the attrition rate.
9. CAUSAL LOOP MODEL
Variables Considered are:-
1. Salary 5. Work-Life Balance
2. `Promotions 6. Comfortable peer group
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3. Attrition Rate 7. Sense of responsibility
4. Job Satisfaction 8. External Oppurtunity
SIGNIFICANCE OF THE CAUSAL LOOP MODEL:
+ + + +
+ +
+ +
+
Overall sign of the model is positive.
The model is based on the responses obtained from the correspondents. Hence its
validity is more than the results obtained only from secondary data.
It strives to give a broad view of the scenario by providing data from current, future and
prospective employees.
Promotions
Comfortable
Peer Group Work Life
Balance
Attrition
Rate Job
Satisfaction
Salary
External
Oppurtunity Sense of
Responsibility
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The survey rightly segregates the problems faced by the software industry as a whole
and the organization specific issues.
10. LIMITATIONS:
Responses can be biased given the nature of the survey and the employees fear of losing
the job by giving a bad feedback
The factors discussed in the survey may not be exhaustive. There can be many other
factors which may not be visible in first hand.
The responses are person specific. It can be biased by the personality traits.
11. FUTURE SCOPE:
The model can be extended and used to analyze the attrition rate in the software industry
as a whole.
More number of variables can be included to enhance the accuracy and effectiveness of
the model.
A feedback model can be developed. This can be used to give the feedbacks based on the
result to the inputs and based on that, it can be restructured
The model can be used to prevent the phenomenon of higher attrition rates in the future
by taking suitable corrective actions.
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12. REFERENCE:
1. Company Website: http:/www.infosys.com// [ Dt: 27.02.2013]
2. Arora,A.,Arunachalam,V,S.,Asundi,J., Fernandes,R 2000. THE INDIAN SOFTWARE
SERVICES INDUSTRY, Carnegie Mellon University, Pittsburgh, Unpublished Manuscript.
3. Agarwal,N,M., Khatri, N., Srinivasan,R 2012. MANAGING GROWTH: HUMAN
RESOURCE MANAGEMENT CHALLENGES FACING THE INDIAN SOFTWARE
INDUSTRY, Journal of World Business 47(1): 159-166.
4. Ghapanchi,A., Aurum,A 2011. ANTECEDENTS TO IT PERSONNELS INTENTION TO
LEAVE: A SYSTEMATIC LITERATURE REVIEW, The Journal of Systems and Software
84(1): 238-249.
5. Currivan, Douglas 2010. THE CAUSAL ORDER OF JOB SATISFACTION AND
ORGANISATIONAL COMMITMENT IN MODELS OF EMPLOYEE TURNOVER,
Human Resource Management Review 9(4): 495-524.
6. Moorthi, YLR 2011. NON-LINEAR GROWTH: THE ROAD AHEAD FOR INDIAN
OUTSOURCING COMPANIES, IIMB Management Review 91-102.
7. Mathew,J.Ogbonna, E., Harris, Lloyd 2012. CULTURE,EMPLOYEE WORK OUTCOMES
AND PERFORMANCE:AN EMPIRICAL ANALYSIS OF INDIAN SOFTWARE FIRMS,
Journal of World Business 47(1): 194-203
8. Attrition Rate: Challenge before the Organisation By Randhir Kumar Singh
(http://www.indianmba.com/Faculty_Column/FC1143/fc1143.html Dt. 27.02.2012 )
9. MANPOWER PLANNING AND EMPLOYEE ATTRITION ANALYTICS - A Markov
Analysis Attempt for Attrition-Rate Prediction and Stabilization –by Survo Raychoudhuri
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(http://hrera.com/contributions1/ATTRITION%20METRICS_TechEval.html#_Toc5590500
2 Dt. 27.02.2012)
10. Kumar, Manish.,Singh S 2012. ROLES OF PERCEIVED EXCHANGE QUALITY AND
ORGANISATIONAL IDENTIFICATION IN PREDICTING TURNOVER INTENTION,
IIMB Management Review 24(1): 5-15.
11. Tymon,G.,Stumpf, Stephen., Doh, J 2010. EXPLORING TALENT MANAGEMENT IN
INDIA: THE NEGLECTED ROLE OF INTRINSIC REWARDS, Journal of World
Business, 45(2): 109-121.
