Technical Services Recruitment and Retention

There has been a dramatic shift in the expectations of employees in the organised and globally linked sectors of the economy. An unprecedented rise in the disposable income coupled with a declining dependency ratio, has led to young professionals becoming extremely mobile. The problem is critically evident in the off shoring industry where the average retention period of an employee is considered to be around six to eight months. And the retention of senior level executives is an additional challenge. The attrition rates are highest in information technology (IT) (30-35%), business process outsourcing (BPO) (35-40%), insurance (35-40%), retail and fast moving consumer goods (FMCG) (20-30%), and manufacturing and engineering (10-15%) (Chatterjee 2006). Over the past decade, there has been a sea change in the area of Indian technical services and the associated HRM practices of recruitment and retention. While the higher education system in the country has remained overwhelming poor in infrastructure and weak in becoming revitalised to grapple with the global imperatives, there has been a mushrooming of private educational institutions. The recruitment problem is further deepened by the emergence of a new culture of job hopping amongst employers who can demonstrate their world class competencies. This phenomenon of turnover has seen a chain reaction in entry level salaries, and an increase in graduates has created significant social and economic disruption to the Indian labour market. A likely scenario from this rampant activity is that the Indian HR scene will be negatively impacted in the next decade unless the deregulation and autonomy of the higher education sectors is initiated somewhat immediately. An example of this widening gap between the university system and market need has become a serious impediment in several new industries in India. For an example, it has been reported in the popular press (Time 2007), out of 13 million people who applied to work at IT company Infosys last year, just 2% were qualified indicating a sign of stress in the university system that graduates 2.5 million a year. (p.33).

One of the most concerning issues for HR managers in India is the high staff turnover. In industries like call centres, staff attrition is the single biggest issue. The industry has grown from zero employment to an employer of quarter of a million young English speaking, well educated and ambitious people. The point is well made by Slater (2007), who wrote. Attrition is highest in traditional customer service jobs, where young people find themselves having to spend all night on the phone, often with irate callers. In other areas such as claims processing or accounting, the turnover rate is much lower. More worrying for many companies is the merry go round in supervising and management jobs, as new centers are only too willing to pay higher salaries to hijack experienced staff. (p.34). The issue of retention is much more critical in the high value adding BPO sector such as R&D activities. This $40 billion industry has one of the highest attrition rates of around 20 to 25 per cent. The service laden BPO and Hord industry have the highest attrition rates. Many companies are developing innovative incentive packages in countering this job hopping phenomenon. Table below illustrates some of these initiatives by leading companies in India.

Examples of Retention Strategies for young Professionals in Indias BPO and Services Sectors Name of the Company Retention Strategy A choice of working in over 170 offices across 40 countries in a variety of areas. Paternity leave for adoption of a girl child Discounts on group parties Identification of potential talented staff ICICI Bank Alternative stock options Quicker promotion WIPRO Wings Within programme where Have been able to achieve higher retention rate. Has led to a higher Impact

Tata Consulting Services(TCS)

Significant impact on job hopping achieved

Examples of Retention Strategies for young Professionals in Indias BPO and Services Sectors Name of the Company Retention Strategy existing employees get a chance to quit their current job role and join a different firm within WIPRO Fostering a sense of belongingness, creative artistic and social activities for the employees and their families. Impact

retention rate.

INFOSYS

Moderate Retentions rate increase achieved.

Excellent sporting and wellness facilities Microsoft-India Employees allowed to choose flexible working schedule Moving people across functions and sections in assisting employees find their area of interest
Culture change valuing innovation and talent over age and experience Mahindra & Co Institutionalising a practice called reverse mentoring where young people are given opportunities of mentoring their seniors

Struggling to minimise job hopping

Stabilised job hopping significantly

A dramatic shift in recruitment practices has been taking place as globally pretend Indian companies as well as global technical services rivals have made India a battlefield of recruitment for the best workers. For example, IBMs workforce in India has more than doubled in two years to a cadre of 53,000. This outcome has come with the elimination of 20,000 jobs in high cost markets like the U.S., Europe and Japan. The R&D centre of IBM is staffed by 3,000 world class engineers and is being recognised for its ability to innovate on all areas from simple processes, softwares, semiconductors as well as supercomputers. It is interesting to note that

IBM has dominated the recruitment market in technical services in India during 2006. This leading company recruited 10,000 employees out of a total of 25,000 people who were recruited to the technical services industry. The prominence of IBM as an employer of technically qualified personnel has been acknowledged in the popular press (Business Week 2007). In Pune, a rapidly developing IT centre near Mumbai, the company has been dispatching vans with signs saying, IBM is hiring, to the gates of the rivals at lunch time. Their hit rate is pretty good laments a manager at a tech firm that has lost employees to IBM.

Chatterjee, S.R. (2006). Human resource management in India. In A. Nankervis, Chatterjee, S.R. & J. Coffey (Eds.), Perspectives of human resource management in the Asia Pacific (41-62). Pearson Prentice Hall: Malaysia. Business Week. (2007). A Red-HA Big Blue in India, Sept 3. Avaliable: http://businessweek.com/magazine/content/07_36/b4048052.htm

Slater, J. (2004). Job-hopping central: Far East Economic Review, 8(1),34. Time. (2007),pg:33 Special Report: 60 years of Independence, 170(6), 4-42.

Original article Recruiting the Wrong Salespeople Are the Job Ads to Blame?

Brian

P.

Mathews

and

Tom

Redman

Available online 6 September 2001. Abstract The salesperson is central to the success of many organisations, yet job turnover in this role is reported as being excessive. Recruitment of these key individuals must be given a high priority, and practice should be as effective as is practical. This research examines the extent to which the job advertisement may be a contributory factor to this problem, by examining what recruiters say that they look for in today's salesperson and evaluating the potential effectiveness of advertisements placed in the printed media in the United Kingdom. Results indicate that advertised sales jobs tend to be for unqualified, relatively inexperienced, individuals, and who are relatively poorly paid. Recruitment of high quality staff to sales posts is further limited by advertisements that lack information of fundamental importance to potential applicants. Hence, at least some of the blame for poor sales staff can be attributed to the advertising of the posts and to the nature of posts that are advertised.

Address correspondence to B. P. Mathews, Luton Business School, University of Luton, Park Square, Luton LU1 3JU, United Kingdom; email: brian.mathews@luton.ac.uk

Recruiting costs minimization

Companies are not leaving any stone unturned and thereby are spending a lot on resources in the process for getting the huge talent requirements and to get the best of the lot. Recruitment costs are becoming increasingly heavy on the pockets and there is a dire need for them to look for something cheap without compromising on the quality of recruits. And with the rise in costs, they are growing more cautions about recruitment expenditure. There is an age old adage Give and Take or you gain some, you lose some. And this adage seems to be put in practice by many companies. Organizations are using a host of innovative and at the same time, run-of-themill methods to hire employees. But in order to be effective and innovative, the compromise has been settled on the high costs. The hiring costs have shot up manifolds and companies have started to get affected in their P&L accounts. The average recruitment cost per employee can range anywhere between Rs 50,000 to 60 lakhs, depending on the position. So how do companies hire fresh talent? They usually have a host of methods ranging from internal movements where the company advertisers the position within the organization. This method is considered to be very cost effective as the employee is already a cultural fit and the talent stays within the organization. They also advertise in the mainstream press though it is usually as it includes not only the advertising cost but also the cost of processing, screening and interviewing the candidates. Many other companies have on-campus and off-campus initiatives for hiring fresh graduates. They also use an optimum channel mix strategy for hiring experienced people. The channels of hiring would include in-house technical recruiters using portals and own network, employee referral program, placement consultants etc. Recruitment costs are taking up a major part of the annual budgets of the organizations and are engaging a lot of resources. Companies are working in the direction of reducing these costs so as to save on the costs and allocate funds towards strategic project. The best way to minimize recruitment cost is to make sure the role of consultancy agencies is reduced to the minimum. Recruitment agencies

are the best forms of cost effective hiring as one can outsource the headache to a specialist firm and only pay on successful completion of the assignment. `Companies are working on reducing the average cost per hire by relying on employee referrals, innovative recruiting mechanisms and reducing the reliance on head-hunters. The average cost per hire is approximately Rs 30,000-40,000. To recruit the best talent along with a faster turnaround time companies are creating a planning schedule for all critical positions and identify people (insiders) for such positions which impact business. In some cases organizations maintain a three great candidate ratio for each position and relevant database. Such initiatives can reduce Recruiting costs. Companies have devised actions plans which suit their needs best and at the same time cut the recruitment costs without compromising on the quality. Most of the recruitment at senior levels is done through contacts. Recruit through employee referral scheme has become a Right feature which helps us in getting the right person for the right job at a very nominal cost spent on recruiting. Internal referral is the most effective and cheapest mode of recruitment. Employees are encouraged to refer people for different positions. It ensures to attract the best talent and also gives an empowering signal to employees about their engagement within the company. One of the most cost effective modes of recruitment is the daily walk-in interviews that conducted at companys offices. This way, recruiters will be able to capture the profiles of a significant number of potential candidates that help the recruitment process. Walk-ins are undoubtedly the best and inexpensive mode of hiring, and it has proved effective in volume hiring by many HR managers.

You are in: PersonnelToday.com > Latest News

LATEST NEWS
Email a friend Printer Friendly Comment on this Article

Research finds poor recruitment practices lose employers customers as well as potential recruits
02 April 2007 00:00

Poor recruitment practices are damaging brands, turning off potential employees and losing customers, new research has found. An online survey of 2,560 working age adults by recruitment outsourcing provider Capital Consulting indicated companies are not handling the recruitment process as well as they could. One in four jobseekers said they had been badly treated when applying for a job. The main gripes from jobseekers about the recruitment process involved a lack of communication. Half were aggrieved that no reason was given for not being offered the job. And half found the lack of acknowledgment of their application the most annoying part of the process. Not only do poor recruitment practices alienate the individual jobseeker, but the jobseekers then share their bad experiences with other people. One-third tell between three and five people, and a quarter tell more than six. More than half of jobseekers also said they would actively avoid buying products and services from a company that treated them poorly. Marisa Kacary, marketing director at Capital Consulting, said: A huge amount of money and effort is directed at delivering brand strategies to existing and potential customers, but that same attention is clearly not being carried through to current and potential employees. If you treat people poorly during the recruitment process, you could lose them as customers, and they are only too happy to tell others about their bad experience with your organisation, too. Mike Berry (About this Author)

Recruitment and Employment Confederation statistics show recruitment agency complaints rose by 25% in 2006
19 March 2007 16:00This article first appeared in Personnel Today magazine. Subscribe online and save 20%.

Official complaints against recruitment agencies rose by 25% in 2006, according to figures from the Recruitment and Employment Confederation (REC). The REC's professional standards team handled 685 complaints and enquiries in 2006, half of which involved grievances against members. Its annual complaints report found temporary workers continued to complain the most, accounting for about half of all gripes.

However, the last quarter of 2006 showed a sharp rise in the number of complaints from candidates for permanent jobs and from clients, two groups with little representation in complaint figures in the past. Most complaints about the conduct of REC members involved some element of dissatisfaction with customer service and agency complaint-handling practices. The REC represents more than 8,000 corporate businesses and 5,500 recruitment consultants. The organisation expelled three corporate members and one individual member during 2006, and issued one reprimand.

Bad recruitment practices damage organisations' employer brand for potential employees and customers
09 March 2007 11:30

Poor recruitment practices are losing customers as well as potential employees for thousands of firms, according to research. Recruitment provider Capital Consulting found that one in four jobseekers felt they had been treated badly when they applied for a job. It also discovered that more than half of jobseekers stop buying goods or services from companies that treat them poorly. And disgruntled applicants spread their message far and wide, with 55% telling more than three others of their bad experience. Marisa Kacary, marketing director at Capital Consulting, said: With the war for talent raging more fiercely than ever, a good employer brand is increasingly critical to an organisations commercial success. As our research shows, if you treat people poorly during the recruitment process, you could lose them as customers, and they would be only too happy to tell others about their bad experience with your organisation, too. Jobseekers main gripes about the recruitment process involved a lack of communication. One in two were aggrieved that no reason was given for not being offered the job, and roughly the same proportion said the lack of feedback following an interview was their main irritation. However, more than one-third said they were asked irrelevant or stupid questions at interview; and 30% were asked to do irrelevant tests. Greg Pitcher (About this Author)

Bad recruitment practice can put graduates off

12 December 2006 00:00This article first appeared in Personnel Today magazine. Subscribe online and save 20%.

As your article on recruiting Generation Y rightly points out (Personnel Today, 21 November), new graduates can, indeed, be tough customers, as they want instant career gratification and can be difficult to retain. It is worrying, therefore, that more than one-third of graduate jobseekers have switched brands following a negative experience while job hunting. Some employers are putting off potential employees before they have even set foot in the door with bad recruitment processes, such as poor communication and slow responses. Members of Generation Y are avid communicators, hence the success of chat rooms, messaging, MySpace, etc. They have to be involved to remain interested. If a potential employer fails to provide good communication and feedback, it is highly likely that they will lose the candidate. Patrice Barbedette Founder, Jobpartners

Graduate starting salaries set to increase by just 2% in 2007

30 January 2007 08:12This article first appeared in Personnel Today magazine. Subscribe online and save 20%.

Starting salaries for graduates are expected to rise by just 2.1% this year - the smallest increase in six years, research out today (Tuesday) has found. The twice-yearly Graduate Recruitment Survey, published by the Association of Graduate Recruiters (AGR), shows the median graduate starting salary in 2007 is expected to be 23,431. But graduate vacancies are predicted to grow for the fourth year running. The survey of 211 leading employers found the number of vacancies for graduates entering the job market in 2007 is predicted to increase by 15.1%, significantly higher than last year's actual vacancy increase of 5.2%. The rise in the number of vacancies continues to provide recruiters with challenges - more than 40% of those surveyed anticipated difficulties in filling all positions in 2007. Despite fierce competition between recruiters for the best talent, less than 20% believe shortfalls are attributable to their starting salaries not being competitive. Employers cited a number of recruitment challenges, including:

Lack of applicants with the right combination of skills, for example team-working and leadership Lack of applicants with the right qualifications for specific job roles Issues with specific geographical locations Applicants' perceptions of the industry sector.

Carl Gilleard, chief executive of the AGR, said: "Once again, we are seeing an increase in the number of graduate-level vacancies, which is great news for anyone applying for a graduate job this year.

"There is, however, a continuing anticipation that there will be some difficulty in filling these vacancies. The main shortfalls appear to be in industries where specific qualifications are essential and where applicants are unable to demonstrate the right combination of 'softer' skills, such as team-working, in addition to their academic achievements." What graduates can expect

Vacancy levels: The highest growth in graduate vacancies is predicted to be in investment banks or for fund managers and accountancy or professional services firms. Increases have also been predicted within transport and logistics, construction, telecommunications and the public sector. Starting salaries: The largest increases are reported by organisations from the fast-moving consumer goods sector, oil and energy, water, and utilities, followed by those in banking and financial services, and construction companies. Bonuses and allowance: This year is predicted to see a decrease in the number of organisations offering lump sum payments for graduates, although a significant 35.4% will continue to do so, with the median amount paid out staying at 2,000.

Source: AGR Graduate Recruitment Survey 2007 Mike Berry (About this Author)

Saving on Recruiting costs

Recruiting talent is seeing a new high as organizations are spending a lot to attract the right talent. Industry experts suggest possible cost savings methods. Organizations are using a host of innovative and at the same time run-of-the-mill methods to hire employees. But in order to be effective and innovative, the compromise has been settled on the high cots. The hiring costs have shot up manifold and companies have started to pinch pockets. Experts say that the average recruitment cost per employee can range anywhere between Rs 50,000 to 60 lakhs depending on the positions. Industries usually hire using a host of methods ranging from internal movements where the company advertises the position within the organization. This method is considered to be very cost effective as the employee is already a cultural fit and the talent stays within the organization. They also advertise in the mainstream press though it is usually expensive as it includes not only the advertising cost but also the cost of processing, screening and interviewing the candidates.

Many organizations have on-campus and off campus interviews for hiring fresh graduates or post graduates of professional courses. They also use an optimum channel mix strategy for hiring experienced people. The channels of hiring would include in-house technical recruiters using portals and own network, employee referral program, placement consultants etc. Recruitment costs are taking up a major part of annual budgets of the organizations and are engaging a lot of resources. Companies are working in the direction of reducing these costs so as to save on the costs and allocate funds towards strategic projects. The best way to minimize recruitment cost is to make sure the minimum. Recruitment agencies possibly are the best firms of cost effective hiring as one can outsource the headache to a specialist firm and only pay on successful completion of the assignment. Companies are working on reducing the average cost per hire by relying on employee referrals, innovative recruiting mechanisms, and reducing the reliance on head-hunters the average cost per hire is approximately Rs30,000 to 40,000. To recruit the best talent along with a faster turnaround time, some organizations have created a pipeline for all critical positions and the mapping has been done for all such positions, which impact business. Since they maintain a three candidate ratio for each position, they have a good database already in the system. These initiatives automatically reduce cost. Companies have devised action plans which suit their needs best and at the same time cut the recruitment costs without compromising on the quality. Many multinational organizations have subscribed to job portals. Most of the recruitment at junior and middle management levels is done though these job portals resulting in reduction in cost and increase in the process speed. Most of the recruitments at senior levels are done through contacts. They also recruit through employee referral scheme, which helps them in getting the right person for the right job at a very nominal cost spent on recruiting. Internal referral is the most effective and cheapest mode of recruitment. Companies encourage their employees to refer people for different positions. It

ensures that they attract the best talent and also gives an empowering signal to employees about their engagement within the country. For many organizations employee referrals are the cheapest modes of recruitment. One of the most cost effective modes of recruitment is the daily walk-in interviews that most firms conduct at their offices. This way, they are able to capture the profiles of a significant number of potential candidates that help in recruitment process. Walk-ins are undoubtedly the best and inexpensive mode of hiring and it has proved effective in volume hiring. Organizations are saving on the high recruitment bills but at the same time are not ready to comprise on talent. The outcome is the development of a few innovative and cost effective recruitment models.