High Attrition Rate Continues To Plague Services: ASSOCHAM Survey

Unabated level of attrition rate continues to plague India Inc and spreading fast from IT and ITes to other service sectors such as civil aviation, financial services, retail and engineering, according to an ASSOCHAM Eco Pulse Study. The highlights of the study are:-

• While the attrition rate in IT and ITes sector has slowed by 10 per cent to fall in the range of 25-30 per cent in the year 2007 as compared to 35-40 per cent rate in previous year but the services sector at the crucial juncture of their growth including civil aviation, financial services and retail are facing tough times in retaining their staff.
• Big time consolidation in the civil aviation sector has fuelled attrition to an unmanageable level of 46 per cent as the pilots and cabin crew spot opportunities in growing demand by domestic as well as foreign airlines.
• Dearth of professionals, technical nature of operations, increasing finance-KPOs and attractive salary packages have led to rising job hopping at entry and middle level in the financial services sector. The attrition level has increased from 32 per cent in the year 2006 to 44 per cent in the current year.
• Banking, trading and real estates are facing maximum problem due to the job changing by the human resource.
• Massive expansion in the retail sector is accompanied with rapidly increasing attrition rate to even to the extent of 50 per cent in few cases. The companies now prefer to sign bonds for three years as they are imparting them the necessary training and specialized knowledge of retail functions.
• Growth in construction activities in the economy has led to surge in demand for engineers, resulting into increase in their movement across companies at rate of 25 per cent. The engineering companies are sorting to pay hikes and growth assurance, to curtail the attrition level.
• Level of attrition rate in the manufacturing sector has remained almost same at 20 per cent in 2007 as previous year. The functional areas like those of production, maintenance and safety controls, bear highest attrition problem.
• Loss of intellectual property is one of the most challenging problems faced by the companies as an upshot of attrition. Hospitality, IT, hospitals, engineering sectors are worst affected sectors in terms of intellectual property loss especially in absence of any laws to protect interest of an organization from employee turnover.
• The Study has found that the maximum of attrition is taking place among the employees who are in age group of 26 to 30 years. It found that the segment of employees who are most vulnerable to change are with experience range between 2 to 4 years.
• The most stable chunk of employees is found to be in age 39 to 45 years as they find themselves to be unsettled in their jobs and companies that they have been associated.
• Attrition trend also reveals that women employees are less prone to frequent job changing than their male counterparts. For every 10 males jumping the fence by changing the job, there was only 2 females crossing over.
• The immediate gains in salary package was found to be responsible for job change in almost all the sectors, however the growth potential remains an important reason prompting employee movement.