NFO MBL ATT-TRACK 2001 ATTRITION & SATISFACTION OF KNOWLEDGE WORKERS

1. NFO MBL ATT-TRACK 2001 ATTRITION & SATISFACTION OF KNOWLEDGE WORKERS A Study by NFO MBL INDIA (Human Resources) Details of Findings June 2001

2. The world is fast moving towards the knowledge economy where knowledge / information will be valued most. Knowledge workers are people with individual proficiency where profitability of the employer is directly linked with the personal efficiency and competency of the employees. Knowledge industry is a people driven industry; here the economy evolves around people. These companies do not manufacture products. They innovate, create, and extend services. Background

3. Example Software/Projects handled by a team of programmers/ individuals is a product of the knowledge industry; here the specialized skills & knowledge of the individuals have gone into the final product, i.e., the software. The success or failure of the software depends on the efficiency with which it has been designed. It has become important for organisation to recruit, train and retain knowledge workers because they will be the growth engines in the new economy. Organisations have already started facing problems in balancing the demand/ supply of knowledge workers. Under these circumstances it becomes very important to retain the talent.

4. The critical problem we have in hand today is : • How to deal with the problem of high attrition in people • driven organizations? • To find the solution for the above problem we need to get • insights on the following: • Why are knowledge professionals the most frequent • job hoppers? • What are the major reasons for a high rate of attrition in • the knowledge industry? • This study is an attempt to find answers to the above issues.

5. Methodology Over 150 executives were identified who were looking for a change in job. The target respondents were those knowledge workers who were in professions like Software, Project Management, Research, Consultancy etc. A specially designed semi-structured questionnaire containing various closed and open-ended questions was sent to them using e-mail. Information Areas in the questionnaire covered ·Issues relating to their employment in general ·Reasons for looking for a change ·Various parameters considered while looking for a change and their relative importance. ·Satisfaction on the above parameters from existing employment Qualitative inputs were also taken from experts dealing with knowledge workers including a few leading HR consultants.

6. Sample Size Age Group 20-25 Years = 49 26-30 Years = 79 31 + Years = 22 Education Graduates = 59 MBA’s/ Pg.'s = 91 Location Metro = 114 Non Metro = 36 Region North/East = 70 West/South = 80 Experience 2-5 Years = 105 6-8 Years = 30 9 + Years = 15 Gender Male = 110 Female = 40

7. Knowledge Industry Hughes Software NIIT Aptech Newgen Software CMC Zenith Computers SIS Infotech ITM Infotech India Infoline Dishnet DSL Princeton Software Thomson Financial Research Unisearch SSI Vedic Infosys Datamatics Boston Education APEX Time Technologies Lotus Technologies People From Other Industries Doing Knowledge/StrategicWork Britannia Tatafone Vintage Cards Duncans Daewoo Motors TCI Dallal Street Suman Motels KBC Bank Koshika Telecom IMS Health GE Capital CRB Maitri Media Real Value Leading Edge Technologies Matrix Information Indian Shaving Products Integrated Enterprises All India Respondents From

9. OVERALL SATISFACTION : AGE Top two & bottom two box scores 38% 28% 24% 22% 21% 0% Dissatisfaction with the current job is higher among older employees

10. OVERALL SATISFACTION : EXPERIENCE 31% Top two & bottom two box scores 21% 20% 17% 13% 0% Dissatisfaction with present job increases with tenure of experience.

11. Satisfaction - Education Top two & bottom two boxes scores 62% 56% 44% 38% Comparatively Post Graduates are more dissatisfied than Graduates in their present employment.

12. Satisfaction - Gender Top two & bottom two boxes scores 27% 27% 27% 17% Satisfaction with their present job is lower among males

13. Satisfaction - By :METRO / NON METRO Top two & bottom two boxes scores 62% 59% 41% 38% There is no significant difference in satisfaction levels among Knowledge workers living in metros or non-metros

14. Satisfaction : By Region Top two & bottom two boxes scores 35% 24% 23% 22% 18% 14% 13% 0% Dissatisfaction is higher in North. In East knowledge workers are more content since the is no dissatisfaction at all . West and South are very similar as far as job satisfaction is concerned

15. Would you recommend your present company as an employer to your friends? About 1/5 of the knowledge workers would not even recommend their present company as an employer to their friends.

16. Would you apply for a job with your present company again? About 3/4 of the respondents WOULD NOT like to re-apply in their present company .

17. How strongly you identify your present employer as a company? Over 1/2 the respondents strongly identify their present employer as a company.

18. How do you rate your colleagues motivation levels at your present location? Companies do lot of initiatives to motivate knowledge workers. However 32% of respondents still believe that their colleagues are not motivated .

19. How would you assess the overall achievements of your present company? Knowledge industry is performing well except software companies because of recent US slowdown. Employees are seem to be quite satisfied with the performance of their companies.

20. Eight Important Reasons For Leaving • Knowledge workers indicated the extent to which these • reasons were responsible for their desire of leaving • Job Content • Work Practices • Career Development • Organization Culture • Compensation & Benefits • Interpersonal Reasons • Personal Reasons • Situational Mishappenings

21. Attrition Reasons for Knowledge Workers

22. Prime Reasons for Attrition of Knowledge Workers Sno Factors Respondents 1 Career Development 17% 2 Job Content 16% 3 Compensation & Benefits 15% 4 Work Practices 15% 5 Organization Culture 13% 6 Interpersonal Reasons 11% 7 Personal Reasons 8% 8 Situational Mishappenings 5%

23. IMPORTANCE OF VARIOUS FACTORS TO EMPLOYEES FOR EMPLOYMENT IN A COMPANY

24. IMPORTANCE OF VARIOUS FACTORS FOR EMPLOYMENT Knowledge Workers were asked to rate the importance of various factors for employment in any company and their Satisfaction on those factors. 1Interpersonal Relationship 2 Work Climate 3 Hygiene - Facilities/Support/Resources 4 Compensation & Benefits 5 Quality Work Practices 6 Training & Development 7 Rules & Regulations 8 Job Content 9 Communication 10 Company’s Image

25. Interpersonal Relationship

26. Work Climate

27. Hygiene - Support / Tools / Resources

28. Compensation & Benefits

29. Quality Work Practices

30. Training & Development

31. Rules & Regulations

32. Job Content

33. Communication

34. Company’s Image

35. IMPORTANCE OF FACTORS & SATISFACTION WITH PRESENT EMPLOYER In %AGE

37. Dissatisfaction Factors Top Five 1 Job Content 2 Interpersonal Relationships 3 Work Climate 4 Training & Development 5 Communication Bottom Five • Work Practices • Hygiene – Tools Resources & Facilities • Company's Image • Compensation & Benefits • Rules & Regulations

38. Knowledge workers are fairly paid, hence compensation is not a major dissatisfaction factor. Companies provide them ample facilities, tools & resources to execute their work. Quality work practices are also at place to motivate and retain knowledge workers. Rules & Regulations are not among the concern factors Knowledge workers want clearly defined role with a challenging job consisting of new learning's to upgrade their existing knowledge. They also want peace of mind, a conducive work environment with good interpersonal relationships with their superiors, peers and other colleagues. Communication is observed as one among top five dissatisfaction factors. A free flow of communication, sharing information, achievements of individuals across the company are a few areas of concern

40. Among female respondents factors like Compensation & Personal Reasons carried more importance in relation to other factors. • “Job content” ranks highest as a reason for attrition in case of respondents in age group of 31+,while in age group of 26-30,it is the least important cause for attrition. • “Career development” is the most important reason for respondents in age group of 20-25 & 26-30 while it stands at the 2nd place in case of respondents from age group of 31+. • Both in metros as well as non metros ,”Career Development” is the most important aspect.Though “Work Practices” stand second in case of attrition reasons for non –metros,but in metros ,it happens to be least important. • Though the knowledge workers ranked “Compensation & Benefits” at No- 7 in terms of importance their satisfaction on this factor is quite low at 27%. If a higher compensation offered by a competitor makes them leave their current job. This is also evident because there happens to be a huge gap between “demand and supply” of knowledge workers , their prices keep escalating.

41. With HR getting a lot of focus in the current times , companies are trying to follow the best HR practices to bring in efficiency. So, “The Quality of Work Practices” existing in a company is raked at No 3 in terms of importance and also is among the top reasons for knowledge workers leaving their current job. • The attrition reasons such as “Career Development ,Job Content & Work practices” are same for both male and female respondents. However, it is observed that factors like “Interpersonal reasons” & “Personal Reasons” carry more weightage as attrition reasons for females as compared to males. • Though Career development tops as an attrition reason for people from all age groups , work practices and career development show as important attrition factors for respondents with work experience of 9+

42. Mr. Gautam Nath, Director – Corporate Services & Human Resources, NFO MBL India insinuates the following factors to retain knowledge workers: - Clearly defined roles: where every employee knows what his function is, what is expected of him, what are his goals and what is the level of authority that he has been given to fulfill his responsibility. - Suggestions and ideas from employees(Kaizen) : where employees are encouraged to give innovative and good ideas and they are rewarded for giving a good idea even if it is not implemented. Emphasis is laid to allow employees experiment new ideas & new ways of doing the routine tasks. - Effective downward & upward communication: Employees are made to feel importance of communication. They are encouraged and helped to develop a good and efficient communication and feedback system in the organization. Regular feedback about happenings in various departments is also needed.

43. - Value-driven organization: Surprisingly, many respondents feel that Value system plays a vital role in developing the company’s culture and it enhances the commitment and association of knowledge workers in the organization. Value-driven organizations witness lower attrition in comparison to other organizations. - Bonding & Cohesion: Knowledge workers do not want to see their company as just an employer but they want themselves to be identified with the organization. As sense of identity develops, belongingness, better public image, cohesion and bonding with the organization grow. They enjoy working with their peers and also make best their friends at their work place. - Productivity linked rewards: Productivity linked reward system for employees always works better among knowledge workers. - Training & Development: Knowledge workers always look for personal development and growth through continuos learning and regular training and development programmes for employees. Other than these practices, other important areas are efficient process management, establishment of a knowledge management system and proper performance appraisal systems.

44. Mr. Alok Mittal, Chief Operating Officer, JobsAhead.com says - • High Attrition in IT/Knowledge based industry is because of two main • reasons – • ¨A big gap in demand and supply – Here people are less and the opportunities are more. Therefore people can switch jobs quite frequently and it becomes very difficult for companies to retain people for a longer period • ¨Value System - Value system of the companies contributes in a major way in controlling attrition but very few companies are actually concerned about it. • There are certain other issues like Company’s Image, new technologies and of course the compensation package that are also key factors for high attrition. • His message to job hoppers is - If you are maximizing opportunities, Job-hopping is not a bad idea. You definitely need to have certain objectives and your movements should be in line with those set objectives.

45. Mr. Prakash Kewalramani, Head, Impact Management Services, Mumbai & Founder of management development and career planning portal www.successfulmanagers.com says - • 1.Knowledge workers are highly educated and ambitious. They wish to learn and work on the latest/emerging technologies & projects. Hence, they continuously look for organizations that can offer them such opportunities; • 2.Being highly ambitious, they constantly look for assignments that offer them: • a) vertical growth; • b) higher motivational/hygiene factors; • c) opportunities to work for prestigious/world-class •      organizations. • d) overseas (preferably US-based) assignments/projects;

46. Till recently (i.e. before the IT meltdown in USA), knowledge workers were in a happy situation since there was a massive global shortage and a demand-supply gap for high-quality/experienced skilled professionals. Hence, they were able to get "fancy" assignments, salaries, ESOPs quite easily. Today, the situation is greatly changed. Although, the overall global demand for software professionals has reduced substantially, there still is demand for professionals in specific skill-sets (e.g./SAP; CRM; TELECOM; NETWORKING; BANKING SOFTWARE; CALL-CENTRE MANAGEMENT etc.). His advice to Job Seekers: Upgrade (reorient) your skills to those currently in demand. Be open to assignments in other countries (besides USA) like Germany, France, Ireland, UK, Singapore, Korea, Japan, Middle East, Australia and not the least in India itself!

47. Mr. Mustafa, Principal Consultant, Mafoi Management Consultants Ltd, Chennai adds - Attrition in different sectors happens because of different reasons. In IT, change has become a buzzword. Hence, everything is expected to change in short periods. IT companies expecting high attrition design many of their policies to suit the situation. One of the reasons for attrition, thus, is paradoxically, the company themselves who hold short-term visions and expectations. In IT, compensation has moved from being one of the prime movers to being a hygiene factor - but it is not the vital component. Increasingly, continuous learning (often through a bigger span of control) has become a key determinant for a person to stay or move on. Earlier loyalty was in the context of individual’s dedication towards the organization. Today the context has changed. Loyalty is expected towards the function and one’s own expertise. Organizations want to keep their people on the cutting edge in terms of technology and markets. Hence there is a strong need for new learning inherent in the work and perhaps is the strongest determinant of attrition.

48. Views of Mr. Ronesh Puri, Head, Executive Access (One of the largest Executive Search firms in South Asia) : • High attrition in the knowledge industry is a worldwide phenomenon. There are certain factors that affect it, like Job content, Job relevancy, Regional economy, and Compensation that is fueled by the demand and supply factor. Companies need to take proactive step to control the attrition rate. • Few years ago, lot of people were coming to us for overseas jobs and their objective was to earn Rs. 4-5 Crore in a few years and to take an early retirement. They were seeing only the silver side of the screen. From this year onwards, there is a phenomenal decline in this aspiration and the same people are returning back to India at a lower designation and with a lower salary. • We do not consider the resumes of frequent job hoppers seriously as it shows their poor decision-making capability, stability and seriousness. Also people should not limit themselves to just one kind of experience. At one stage, to learn new technologies and experience, movement is a healthy step.

49. Mr Sandeep Kataria, Chief Executive, Advanced Corporate Services, New Delhi says -High attrition in knowledge industry is due to:·Supply and Demand Gap: Companies are always in a haste to complete projects/ commitments in hand, and are willing to pay a higher price to tempt qualified and trained professionals.·High Profit Margins & Low Manpower cost: Especially in the IT industry, manpower cost is a small component of the price they are charging from their clients. Therefore, the recruiters can afford to offer very attractive packages.·Lack of commitment to Long Term Employment: Unfortunately most of the S/W development companies don’t want to keep high overheads once the project is complete. Therefore, both the employer and employee do not mind short stays.ØHe would like to address Job Hoppers saying - Rolling stones do not gather moss. For the medium and senior level positions-the employers are very careful in short listing and ultimately hiring only those professionals who have shown stability in their career path. One should stay for atleast 2-4 years with an organization (if it is good company and one has a good job profile) before making a change –irrespective of current trends and temptation.

50. Conclusion With factors like Job Content & Career Development having a lot of importance among knowledge workers, it is just not compensation that holds them to their jobs. They look for avenues that would assure a vertical growth in their career. Clearly defined roles, Values, Communication, Cohesion & Bonding with the organization, Reward/Recognition & of course new learning opportunities take the front seat in comparison to compensation which has been reduced to the status of a hygiene factor. Due of the huge demand and supply gap in case of knowledge professionals, price does not remain an issue. Knowledge professionals look for jobs which are challenging and which ensure learning of new skills.