Tag Archives: India

Understanding CTC and your Actual Salary

14 Dec

15fin3Whether you are joining your first job or changing jobs, it is important to understand the difference between cost to company (CTC) and take home salary. It will help you in negotiate better with the HR and in structuring your salary.

One of the most commonly used terms by companies, yet least understood by its employees is ‘cost to company’ or CTC. The CTC, as quoted by employers and the take home pay are two different amounts.

Also salary hikes in the form of an increased CTC does not necessarily increase the monthly salary. So what exactly is CTC and as an employee what all are you entitled for?

This article aims to clarify the confusion that often arise in employees’ minds when it comes to salary structures.

 

Lets Understand about the CTC (Cost To Company)

Demystifying cost to company

Ravi Bhushan, a fresh software graduate, joined a top notch IT company. For his first job, he was extremely happy with the total CTC of Rs 6,00,000.

On the basis of this CTC, Ravi made lavish plans to spend his first month’s salary. Expensive gifts for family, a swanky new bike and the latest mobile phone. But when he got his first salary, he realised some of his plans had to wait.

His take home salary was nowhere close to his estimation. He approached his HR, who then explained the breakup of his CTC, which he had just glanced over at the time of joining.

Here’s what his HR manager explained to him:

The cost to company refers to the total expenditure a company would have to incur to employ you.

It includes monetary and non-monetary benefits, such as monthly pay, training costs, accommodation, telephone, medical reimbursements or other expenses, borne by the company to keep you employed. The total CTC need not be the actual salary in hand at the end of the month.

It is simply a sum of various components put together.

Components of CTC

Companies offer various attractive components in the CTC to retain and boost the morale of the employees. Whereas some salary components are fully taxable some are fully tax-exempt. The composition of your CTC and a few of its components could be grouped as below.

1. Fixed salary

This is the major part of your CTC and forms part of your monthly take home. It commonly consists of the following:

Basic salary: The actual pay you receive for rendering your services to the company. This is a taxable amount.

Dearness allowance: A taxable amount, this is paid to compensate for the rising cost of living.

House rent allowance (or HRA): Paid to meet expenses of renting a house. The least of the following is exempt from tax.

Actual HRA received:

  • 50 per cent of salary (basic + DA) if residing in a metropolitan city, or else 40 per cent
  • The amount by which rent exceeds 1/10th of salary (basic + DA)

Conveyance allowance: Paid for daily commute expenses. Up to an amount of Rs 800 per month is exempt from tax.

2. Reimbursements

This is the part of your CTC, paid as reimbursements through billed claims.

Meal coupons: Many companies provide their employees with subsidised meal coupons in their cafeterias. Such costs incurred by companies in the form of subsidies are included in the CTC. Meal coupons are tax exempt provided it is not in the form of cash.

Mobile/Telephone bills: Telephone or mobile expenditure up to a certain limit is reimbursed by many companies through a billed claim, and is a taxable amount.

Medical reimbursements: Paid either monthly or yearly, for medicines and medical treatment. The entire amount is taxable. However, up to Rs 15,000 could be tax exempt, if bills are produced.

3. Retirement benefits

This is available to you only on retirement or resignation.

These include:

Provident fund: Employers contribute an amount equal 12 per cent to the provident fund account. This employer’s contribution though received only on retirement or resignation, is an expense incurred by the company every month and thus is included in your CTC.

Gratuity: Companies manage gratuity through a fund maintained by an insurance company. The payment towards the gratuity annually is sometimes shown in CTC.

4. Other benefits and perks

Leave travel allowance: It is the cost of travel anywhere in India for employees on leave. Tax exemption if allowed twice in a block of four calendar years.

Medical allowance: Some companies offer medical care through health facilities for employees and their families. The cost of providing this benefit to the employee could also form part of CTC.

Contribution to insurance and pension: Premiums paid by companies on behalf of employees for health, life insurance and Employees Pension Scheme, could form a part of the CTC.

Miscellaneous benefits: Other perks which companies include under CTC could be electricity, servant, furnishings, credit cards and housing.

Bonus: This is the benefit paid on satisfactory work performance for employee motivation. Though this amount is not assured to the employee, most companies include the maximum amount that can be paid as bonus, to the CTC. The two types of bonuses that are normally paid out are:

1. Fixed annual bonus: Paid on the basis of employee performance, either monthly or in most cases annually, it is a fully taxable amount.

2. Productivity linked variable bonus: Complete bonus amount is paid only on 100 per cent achievement of target, nevertheless it still is included as part of your CTC.

 

Moral of the Story :- Lessons learnt

Each company too has its own way of calculating the cost to company. Let us revisit Ravi’s case.

Ravi realised, that an attractive CTC does not necessarily indicate a heavy monthly take home. Benefits like training and development, whether undertaken by him or not was still considered part of his CTC. Here is what one should keep in mind:

One must take time to find out what the actual benefits are by asking for the break-up of the CTC so as to know the entitlement.

If you are just joining the company, try to negotiate with the HR as to opting out of some facilities in exchange for increasing the take home.

Understand the expenditure limits and tax angle of perks and benefits, and use them smartly.

Here is a Sample Salary Breakup of a MID – LEVEL Manager

080822082723_mid-level-manager

 

Thanks and Regards,

Pinal Mehta

Source:- Rediff Files

HR Article :- 9 Qualities that will Rock your career

7 Dec

Qualities of the employeeSuccess in life is always relative. Some people are happy with small achievements while there are others who won’t be satisfied until mountains are moved.

Regardless of our ambitions, our career spans through a series of jobs and experiences that truly polish our personality and will. While we all have defining moments that will determine our core beliefs around hard work, persistence, determination, etc., these are all simply components of a greater foundation that defines ‘you’. A rocking rise through corporate ranks involves a radical understanding and possible change in your attitude and behaviors.

There are millions of brilliant people who pursue aggressive career paths and have their sights set on great achievement. While their ability is nothing short of genius, many lack the soft skills that could put them over the top. These are the traits, qualities and understandings are what make good people great. Practical and time tested, mastering and practicing the following qualities will make if difficult for success to elude you.

  1. Out of Box Thinking
    Many dislike this term but the concept is for real. All it requires is thinking of problems though a different set of eyes, or different dimension. This is why many brainstorming sessions fail; most people sit and think of work problems in the context of what it means to the company, not the user, not the environment, etc. Sit back and try to solve the problem from the eyes of a 6 year old, turn things upside down, and absolutely challenge the norm. Go outside and sit in a subway station (or somewhere you generally don’t sit to work) and think about why other solutions not worked? What has worked?

    Remember the best ideas come from people who are hands-on with their work. When everyone thinks and recommends a lackluster way, lackluster results will follow. Change your surroundings, change your views, change your thought process and come up with a killer idea!

  2. Taking Ownership
    When no one is willing to own it, be the first to grab the opportunity. A process involving various stakeholders normally loses vision and momentum. A process with a good leader, input from others, and true direction, has a much better chance of success. Be the person that jumps in and takes on a new project (just don’t over-commit). An ability to own and work towards success is a skill which gives long lasting returns.
  3. Eagerness to Learn
    After a certain period, a job becomes monotonous and people become bored and eventually even lazy. They lose all the zeal to learn new things and although they won’t admit this, their actions would make you believe they have thrown in the towel and are satisfied with a status quo life and career. If you really want to move ahead, don’t get into this rut. Don’t tune out.

    Always remain eager to learn; you never know what knowledge or capability will push you up in your career. Remember, you need an open mindset and positive attitude to approach work. If you are constantly learning, it will be tough to be or appear to be interested in mediocrity.

  4. An Eye for Detail
    If you are hands on with your work there is no reason why you won’t know the intricacies involved. Therefore, have the confidence needed to make difficult choices. When you master something and know the minute details, your logic and ideas will be highly regarded. While people love to argue, they get easily impressed by intelligent reasoning too.
  5. Willingness to Help
    Much of life is give and take. Work is no exception. If you are the person that is constantly stepping out of your comfort zone in order to help others, people (most) will return the favor when you ask. That’s the key though, you have to be willing to help someone and not too proud to ask them for help when you need it.
  6. Networking
    Your network should never be restricted to people in your domain but it should span other departments too. Again, break away from comfort and get engaged with someone from a different department. When you sell yourself in the market, you need people who can vouch for you and the broader the network, the better. A strong network always gives you an upper hand, not only to receive but also influence the information flow.
  7. Solution Seeking Mindset
    People love to mention and talk about problems. However, when you ask for their solutions to those problems, they aren’t willing to go on record with sweeping changes. The majority of employees lack an attitude to solve issues and love to keep them burning for long time, almost to encourage sympathy. It is these times that a positive mindset can send the right vibes across and can really give you a lot of attention. Don’t avoid complainers, listen to them just long enough to hear the problem, then try to come up with a solution.
  8. Humility
    Arrogance has its own advantages but it never attracts more people than the magic done by humility. When you know your work and are humble about it than there is no reason that you would not get the desired appreciation. Humility needs to be pitched with much care lest it lets people take undue advantage of you. Strike the right balance and you would see its real magic.
  9. Being Practical
    Human beings are emotional and many fall for popular decisions. A practical decision made at right time with right attitude has the ability to shower you with long lasting fame. Remember, the people who are at the top are nothing but practical.

It is a jungle out there where you not only need to survive but flourish too. Develop the killer attitude for success and no one would ever dare to stop you.

Always

  1. Work Hard, Work Smart
  2. Make sure the world knows about it
  3. Make sure to sell it in right manner to right people

Go, Get Success

 

Regards,

Pinal Mehta

HR Article :- 7 Effective Ways to recognize your People

1 Dec

Employee recognition is a much talked about, but often overlooked part of the workplace. Recognizing and rewarding your employees can be a slippery slope to navigate and sometimes it seems that managers either get it, or they don’t. If recognition is not sincere and genuine, your employees will know it.

 

 

7 Tips for Recognizing Your Peeps – this list isn’t about expensive ways to reward your employees because we know you can figure that out, but more subtle no-cost ideas that educate, motivate and inspire your team because a happy, invested team will always outperform a bunch of bitter Betty’s!

7 Tips for Recognizing Your Peeps

  1. Give ‘Em the 411: Informed peeps are empowered. Many managers make the mistake of keeping all the information to themselves. Instead, share information with your team. Fill them in on how your organization is doing, what the future holds and how they play a part in it. By giving your peeps information, you empower them to make informed, confident decisions and choices, which not only benefit them, but your organization.
  2. Miss (or Mr.) Independent: How many people like being micromanaged? Not too many! Employees value independence, so give it to them. When you work with your peeps to tell them what needs to be done and then give them the ability to decide how to do it, you increase their independence and ability to take more ownership of their role.
  3. Be Gumby: Everyone appreciates flexibility in their work whether it’s working flex hours, working from home or something else. This can be very motivating and shows you trust your peeps. In workplaces where this may not be possible, find ways to be flexible and your employees will respond.
  4. Give Me More: We all know training and development happen in real-time, on the job. Provide your peeps lots of opportunities to grow and learn by investing in their development and provide them stretch goals. It shows your peeps that you trust, respect and want the best for them. You’ll be rewarded when they perform at higher levels with each opportunity.
  5. Decisions, Decisions: How does it feel when all the decisions are made for you? Not so much eh? Well, your peeps are closer than anyone to the work they do so they are really the best decision makers. Sometimes as managers we make the mistake of deciding for our employees. Take a step back and ask them what they think and what they recommend. They’ll be more involved in the process and therefore more invested in the outcome.
  6. How Am I Doing? Everyone wants to know how they are doing at any time so hold frequent check-ins throughout the year so you can have honest conversations about your peeps performance. Take the time to share what they are doing well and what could use some work. Also, remember to share great feedback with the leadership team of your company so they’re aware of the contributions your peeps are making. The more feedback you give your employees, the more they will be equipped to respond to the needs of your organization.
  7. Celebrate! Often we are so busy strategizing, working and executing that we cruise through the year without taking the time to celebrate all the success along the way. Remember, if you celebrate often you’ll get more back in return and you’ll foster a culture of recognition.

How are you recognizing your peeps? I’d love to hear.

Regards,

Pinal Mehta

Humour – Indian Can’t be Terrorists

19 Nov

1. We are always late; we would have missed all 4 flights.

2. We would talk loudly and bring attention to ourselves.

3. With free food & drinks on the plane, we would forget why we’re There

4. We talk with our hands;therefore we would have to put our weapons down.

5. We would ALL want to fly the plane.

6. We would argue and start a fight in the plane.


7. We can’t keep a secret; we would have told everyone a week before doing it.

8. We would have put our country’s flag on the windshield.

9. We would have postponed the mission because a cricket match was going on that day


10. We would all have fallen over each other to be in the photograph being taken with one of the hostages.

Regards,

Pinal Mehta

Minimum Wages – Abstract

16 Nov

Minimum Wages (Central) Rules

FORM IX-A

(Rule 22)

Notice

Abstracts of the Minimum Wages Act, 1948 and the
rules made thereunder

I. Whom the Act affects

1. (a) The Act applies to persons engaged in scheduled employments or in specified class of work in respect of which minimum wages have been fixed.

(b) No employee can give up by contract or agreement his rights in so far as it purports so reduce the minimum rates of wages fixed under the Act.

II. Definition of wages

(1) ‘Wages’ means all remuneration payable to an employed person on the fulfilment of his contract of employment and includes house rent allowance. It excludes–

(i) the value of any house-accommodation, supply of light, water, medical attendance or any other amenity or any service extended by general or special order of the appropriate Govt.;

(ii) contribution paid by the employer to any Pension Fund or Provident Fund or under any scheme of Social Insurance;

(iii) the travelling allowance or the value of any travelling concession;

(iv) the sum paid to the person employed to defray special expenses entailed by him by nature of his employment;

(v) gratuity payable on discharge.

(2) The minimum rate of wages may consist of–

(i) a basic rate of wages and special allowance called the cost of living allowance;

(ii) a basic rate of wages with or without a cost of living allowance and the cash value of any concessions, like supplies of essential commodities at concession rates; and

(iii) an all-inclusive rate comprising basic rate, cost of living allowance and cash value of concession, if any.

(3) The minimum wages payable to employees of scheduled employments notified under Section 5, read with Section 3 or as revised from time to time under Section 10, read with Section 3, may be–

(a) a minimum time rate,

(b) a minimum piece rate,

(c) a guaranteed time rate,

(d) an overtime rate,

differing with (1) different scheduled employments, (2) different classes or work, (3) different localities, (4) different wage-periods, and (5) different age groups.

III. Computation and conditions of payment

The employer shall pay to every employee engaged in scheduled employment under him wages at a rate not less than the minimum rate of wages fixed for that class of employee.

The minimum wages payable under this Act shall be paid in cash unless the Government authorises payment thereof either wholly or partly in kind.

Wage-period shall be fixed for the payment of wages at intervals not exceeding one month or such other larger period as may be prescribed.

Wage shall be paid on a working day within seven days of the end of the wage-period or within ten days if 1000 or more persons are employed.

The wages of a person discharged shall be paid not later than the second working day after his discharge.

If an employee is employed on any day for a period less than the normal working day, he shall be entitled to receive wages for a full normal working day provided his failure to work is not caused by his unwillingness to work but by the omission of the employer to provide him with work for that period.

Where an employee does two or more classes of work to each of which a different minimum rate of wages is applicable, the employer shall pay to such employee in respect of the time respectively occupied in each such class of work, wages at not less than the minimum rate in force in respect of each such class.

Where an employees is employed on piece work for which minimum time rate and not a minimum piece-rate has been fixed, the employer shall pay to such employee wages at not less than the minimum time rate.

IV. Hours of work and holidays

The number of hours which shall constitute a normal working day shall be –

(a) in the case of an adult, 9 hours,

(b) in the case of a child, 4 ½ hours.

The working day of an adult worker inclusive of the intervals of rest shall not exceed twelve hours on any day.

The employer shall allow a day of rest with wages to the employees every week. Ordinarily, Sunday will be the weekly day of rest, but any other day of the week may be fixed as such rest day. No employee shall be required to work on a day fixed as rest day, unless he is paid wages for that day at the overtime rate and is also allowed a substituted rest day with wages. (See Rules 23).

When a worker works in an employment for more than nine hours on any day or for more than forty-eight hours in any week, he shall in respect of overtime worked be entitled to wages in scheduled employment other than agriculture, at double the ordinary rate of wages.

V. Fines and deductions

No deduction shall be made from wages except those authorised by or under the rules.

Deductions from the wages shall be one or more of the following kinds, namely:

(i) Fines: An employed person shall be explained personally and also in writing the act or omission in respect of which the fine is proposed to be imposed and given an opportunity to offer any explanation in the presence of another person. The amount of the said fine shall also be intimated to him. It shall be subject to such limits as may be specified in this behalf by the Central Government. It shall be utilised in accordance with the directions of the Central Government;

(ii) deductions for absence from duty;

(iii) deductions for damage to or loss of goods entrusted to the employee for custody, or for loss of money for which he is required to account, where such damage or loss is directly attributable to his neglect or default. The employed person shall be explained personally and also in writing the damage or loss, in respect of which the deduction is proposed to be made and given an opportunity to offer any explanation in the presence of another person. The amount of the said deduction shall also be intimated to him. It shall be subject to such limits as may be specified in this behalf by the Central Government.;

(iv) deductions for house-accommodations supplied by the employer or by the State Government or any authority constituted by a State Government for providing housing accommodation.

(v) deductions for such amenities and services supplied by the employer as the Central Government may by general or special order authorise. These will not include the supply of tools and protectives required for the purposes of employment;

(vi) deductions for recovery of advances or for adjustment of overpayment of wages. Such advances shall not exceed an amount equal to wages for two calendar months of the employed person and the monthly instalment of deduction shall not exceed one-fourth of the wages earned in that month;

(vii) deductions of income-tax payable by the employed person;

(viii)deductions required to be made by order of court or other competent authority;

(ix) deductions for subscription to and for repayment of advances from any provident fund;

(x) deductions for payment to co-operative societies or deductions for recovery of loans advanced by an employer from out of a fund maintained for the purpose by the employer and approved in this behalf by the Central Government or deductions made with the written authorisation of the person employed, for payment of any premium on his like insurance policy to the Life Insurance Corporation of India established under the Life Insurance Act, 1956 (31 of 1956);

(xi) deductions for recovery or adjustment of amount other than wages, paid to the employed person in error or in excess of what is due to him;

Provided that prior approval of the Inspector or any other officer authorised by the Central Government in this behalf is obtained in writing before making the deductions, unless the employee gives his consent in writing to such deduction;

(xii) deductions made with the written authorisation of the employed person (which may be given once generally and not necessarily every time a deduction is made) for the purchase of securities of the Government of India or of any State Government or for being deposited in any Post Officer Savings Bank in furtherance of any Savings Scheme of any such Government.

Every employer shall send annually a return in Form III showing the deduction from wages so as to reach the Inspector not later than the 1st February following the end of the year to which it relates.

VI. Maintenance of registers and records

Every employer shall maintain at the workspot a register or wages in the form prescribed specifying the following particulars for each period in respect of each employed person:

(a) the minimum rates of wages payable,

(b) the number of days in which overtime was worked,

(c) the gross wages,

(d) all deductions made from wages,

(e) the wages actually paid and the date of payment.

Every employer shall issue wage-slips in the form prescribed containing prescribed particulars to every person employed.

Every employer shall get the signature or the thumb-impression of every person employed on the wage-book and wage-slips.

Entries in the wage-book and wage-slips shall be properly authenticated by the employer or his agent.

A muster-roll, register of fines, register of deductions for damage or loss and register or overtime shall be maintained by every employer at the workspot in the form prescribed.

Every employer shall keep exhibited at main entrance to the establishment and its office, notice in English and in a language understood by a majority of the workers of the following particulars in a clean and legible form:

(a) minimum rate of wages,

(b) abstracts of the Acts and the rules made thereunder,

(c) name and address of the Inspector.

Register of wages, muster-roll, register of fines, register of deductions for damage or loss and register of overtime shall be preserved for a period of three years after the date of last entry made therein.

All registers and records required to be maintained by an employer under the rules shall be produced on demand before the Inspector provided that where an establishment has been closed, the Inspector may demand the production of the registers and records in his office or such other place as may be nearer to the employers.

VII. Inspectors

An Inspector can enter in any premises and can exercise powers of Inspector (including examination of document and taking of evidence) as he may deem necessary for carrying out the purposes of the Act.

VIII. Claims and complaints

Where an employee is paid less than the minimum rates of wages fixed for his class of work, or less than the amount due to him under the provisions of this Act, he can make an application in the prescribed form within six months to the Authority appointed for the purpose. An application delayed beyond this period may be admitted if the authority is satisfied that the applicant had sufficient cause for not making the application within such period.

Any legal practitioner, official of a registered trade union, Inspector under the Act or other person acting with the permission of the authority can make the complaint on behalf of an employed person.

(A single application may be presented on behalf of or in respect of a group of employed persons whose wages have been delayed, if they are borne on the same establishment and their claim relates to the same wage-period or periods.)

(A complaint under Section 22(a) relating to payment of less than the minimum rates of wages or less than the amount due to an employee under the provisions of the Act can be made to the court only after an application in respect of the facts constituting the offence has been presented under Section 20 and has been granted wholly or in part, and the appropriate Government or an officer authorised by it in this behalf has sanctioned the making to the complaint:

A complaint under Section 22(b) or 22(a) regarding contravention of the provisions relating to hours of work and weekly day of rest or other miscellaneous offences relating to maintenance of registers, submission of returns etc., can be made to the court by or with the sanction of an Inspector. The time-limits for making such complaints is one month from the date of grant of sanction by the Inspector, in the case of offence falling under Section 22(b) and six months from the date on which the offence is alleged to have been committed, in the case of offences falling under Section 22(a).)

IX. Action by the Authority

The Authority may direct the payment of the amount by which the minimum wages payable exceed the amount actually paid together with the payment of compensation not exceeding ten times the amount of such excess. The Authority may direct payment of compensation in cases where the excess is paid before the disposal of the application.

If a malicious or vexatious complaint is made, the Authority may impose a penalty not exceeding Rs. 50 on the application and order that it be paid to the employer.

Every direction of the authority shall be final.

X. Penalties for offence under the Act

Any employer who pays to any employee less than the amount due to him under the provisions of this Act or infringes any order or rules in respect of normal working day, weekly holiday, shall be punishable with imprisonment of either description for a term which may extend to six months or with fine which may extend to five hundred rupees or with both.

Any employer who contravenes any provision of the Act or of any rule or order made thereunder shall, if no other penalty is provided for such contravention by the Act, be punishable with fine which may extend to five hundred rupees. If the person committing any offence under the Act is a company, every person who at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. No such person will be liable to punishment, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

Any director, manager, secretary or other officer of the company with whose consent or connivance an offence has been committed is liable to be proceeded against and punished under the Act.

Note.—(a) “company” means any body corporate and includes a firm or other association of individuals,

(b) “director” in relation to a firm means a partner in the firm.

Regards,

Pinal Mehta

Innovative Retention Strategies in Indian BPO

10 Oct

Retention of Key employees is critical to the long term health and success of any organization. It is a known fact that retaining your best employees ensures customer satisfaction, increased product sales, satisfied colleagues and reporting staff, effective succession planning and deeply imbedded organizational knowledge and learning.

Employee retention matters as organizational issues such as training time and investment; lost knowledge; insecure employees and a costly candidate search are involved. Hence failing to retain a key employee is a costly proposition for an organisation. Various estimates suggest that losing a middle manager in most organizations costs up to five times of his salary.

The BPOs in India face an enormous challenge in reducing attrition rate and this being a nascent industry needs to draw parallels, examples from other industry practices as well as develop innovative Employee Relation Initiatives as highlighted below. This has been classified into three groups

1. The Corporate level

2. Managerial/supervisory level

3. Employee Recognition Initiatives

Here this article attempts to highlight the strategies for the corporate level.

Corporate Level Retention strategies:-

Relevance of Retention Strategies in the Indian BPO Industry vis-à-vis other industries is very critical to its existence for the following reasons –

· To bring stability in business and increase customer service process.
· Nasscom has estimated that the Indian ITES industry will gross over $5.7 billion by 2005 (based on a conservative year-on-year growth of 65 percent by Nasscom).
· Staff/employee satisfaction translates directly into money quite quickly in the BPO industry compared to other industries.
· To reduce the pressure on the recruiting process.
· Recent acquisition deals both domestic & overseas by BPOs makes it even more critical to stabilize their back end operations to service new customers.

Before we proceed its important to understand the underlying reasons for high attrition rates, which are pretty steep and are around 40-50%. Currently it is about 35% in non-voice and 45% in voice call centers. About 80% of them look for better careers within the same industry. Agents want to become team leaders. Team leaders want to become supervisors. Supervisors want the job of the CEO. Based on my discussions with the experts in the BPO industry, literature and data available, the following trends are seen as below.

There are varied reasons for the same and the major reasons for attrition rate are(based on author’s sample study):-

· Money – 10%
· Night shifts – 35%
· Monotonous/boring job – 30%
· Others – 25%

As seen above from the above data, HR Strategist at the Corporate Level of the BPO Industry indeed have a huge challenge before them and their approach has to be proactive and they have to develop Innovative Employee Relation Initiatives as mentioned hereon.

· A satisfied employee knows clearly what is expected from him every day at work. Changing expectations keeps people on the edge and creates unhealthy stress. This creates insecurity and makes the employee feel unsuccessful. An employees deliverables at work must be communicated to him clearly and thoroughly.

· The quality of the supervision an employee receives is critical to employee retention. Frequent employee complaints center on these areas.

–lack of clarity about expectations,
–lack of clarity about benefits pertaining to performance based incentives.
–lack of feedback about performance,
–failure to provide a framework within which the employee perceives he can succeed.

· The ability of the employee to speak his or her mind freely within the organization is another key factor. Have meetings or dinner once a month, to share the company’s vision, the industry’s growth and where they see themselves in this scheme of things.

· Using psychometric tests to get people who can work at night and handle the monotony.

· Talent and skill utilization is another environmental factor your key employees seek in your workplace. You just need to know their skills, talent and experience, and take the time to tap into it

· The perception of fairness and equitable treatment is important.

· When an employee is failing at work, Refer to W. Edward Deming’s question, “What is about the work system that is causing the person to fail?” Most frequently, if the employee knows what they are supposed to do, then the answer is time, tools, training, temperament or talent. The easiest to solve, and the ones most affecting employee retention, are tools, time and training. The employee must have the tools, time and training necessary to do their job well – or they will move to an employer who provides them.

· Another important factor is focus on the process than on the person especially when the employee is not failing at work.

· Implement Competency Models which should be well integrated with HR processes like Selection & Recruitments, Training, Performance appraisal and potential Appraisal.

· A common complaint or lament during an exit interview is that the employee never felt senior managers knew he/she existed. In my experience I knew the MD of a company who knew the first names of all staff including workers to that extent he used to enquire about the well being of the family members if it was casually mentioned that wife or children aren’t keeping well. Senior managers refer to the president of a small company or a department or division head in a larger company. They have to take time to meet with new employees to learn about their talents, abilities and skills. Meet with each employee periodically. They will have more useful information and keep their fingers on the pulse of organization. It’s a critical tool to help employees feel welcomed, acknowledged and loyal.

· The Senior Managers to be involved in the recruitment process if the Recruitment team has identified potential and cultural fit candidates.

· Involve the advisors or team leaders in the interviewing panels.

· In Company presentations to potential candidates, encourage the employees to share their experiences.

· Your staff members must feel rewarded, recognized and appreciated. Frequently saying thank you goes a long way. Monetary rewards, bonuses and gifts make the thank you even more appreciated. Understandable raises, tied to accomplishments and achievements help to retain staff.

· Select the right people in the first place through behavior-based testing and competency screening.

· Draw lessons from the Indian Army, for their command and control leadership where the troops are highly skilled, motivated and morale is high. The comparisons is drawn as both(BPO & army) have large numbers of employees and army’s style of leadership may not relevant to BPOs but it must be understood & gathered that military organizations are team oriented with continuous training. Troops expands their skills and experience capabilities they never dreamed possible, produces a highly motivated and efficient organization. Learning opportunity and responsibility is the key.

· Offer an attractive, competitive, benefits package.

· Provide opportunities for people to share their knowledge via training sessions, presentations, mentoring others and team assignments.

· Demonstrate respect for employees at all times. Treat the employees well & provide dignity of job; follow the maxim of Mr. Marriott that “Ladies & Gentlemen serve the Ladies & Gentlemen”.

· If a key employee resigns, it should be taken up on a priority basis and kept confidential as far as possible and the senior management should meet the employee to discuss his reasons for leaving and evaluate if his issues bear merit and whether they can be resolved

· Exit Interviews: Outsource this process to external consultants to get a realistic and unbiased feedback. This can be a great source of information regarding the shortcomings in a management system.

· People want to enjoy their work. Make work fun. Engage, employ the special talents of each individual.

· BPOs should endeavour to implement work-life balance initiatives to reinforce the retention strategies. Innovative and practical employee policies pertaining to flexible working schemes, granting compassionate and urgency leave, providing healthcare for self, family and dependants, etc. Work-life balance policies would have a positive impact on:
Attracting high calibre recruits
Retaining skilled employees
Reduce recruitment costs
Improve employee morale
Maintain a competitive edge

· Listen to employees’ ideas; never ridicule them.

· Offer performance feedback and praise good efforts and results.

· Implement organizational culture measurement tools like Adversity Quotient (AQ).

· Recognize and celebrate their success.

· Staff adequately so overtime is minimized for those who don’t want it and people don’t wear themselves out.

· Get them involved in social causes and fund drives like Tsunami Disaster Relief. Provide a meaning or a cause to their lives.

· Nurture and celebrate organization traditions like Diwali, Holi ,Christmas etc.

· Communicate goals, roles and responsibilities so that people know what is expected of them and feel a part of the crowd.

· According to research by the Gallup organization, encourage employees to have good, even best, friends, at work.

· Encourage humour & laughter in workplace to deal with stress which will ensure that the employees are happy which gets reflected in their services especially critical in voice based transaction.

· Feeling valued by their manager in the workplace is a key to high employee motivation and morale.

· Reach out to the families of the potential candidates with sustained and focused messages in the media about the excellent prospects in the BPO Industry. There is an example of this instances- Late Rai Bahadur Mohan Singh Oberoi, Chairman of the Oberoi Group in efforts to makes sure that many women joined his company went to educational institutions and elicited women’s parents to come to the hotel. He told them “ I will walk you in and show you what your daughters will do with us, please help us to train them”.

· Excellent Career Growth prospects. –

Encourage & groom employees to take up higher positions/openings. If not fulfilled then they will look outside the organization.

Look for talents within the organization and encourage them. For instance, if a person has the potential to be a trainer, groom & develop the employee.

· Night shifts
1. Have people from other walks of life to talk about their experiences. Other professions like Army, Medicine, and shop floor workers also have to work in night shifts.
2. Have doctors to advise & guide them about their biological clocks and ways & means to deal with them.
3. Dietary advice:- Do’s and don’ts.
4. Create the passion that they are doing a yeomen service to the nation by bringing the much-required Foreign Exchange.
5. They are helping people (clients) to make their life easier.
6. Special lights in the office/workplace to ensure their bodies get sufficient vitamin D.
7. One distinct disadvantage of night shifts is the sense of disorientation with friends and family members. Concentrate on this problem and develop innovative solutions and ways to deal with it.

· Focused Training & Development Programs
For Associates & Team Leaders
· A session on Transactional Analysis during the induction period so that both are made aware of the causes for Communication breakdowns & conflicts which affect their mental behavior and stress which needs to be tackled at the earliest in the right manner.
· Those who are working on services verticals – like Banking & Financial services to be imparted training/knowledge of Vedic Maths, which would help them, calculate the figures quickly without using calculators.
· Creativity & Innovation– Its all about Attitude! A job can be as monotonous or exciting as you think/believe it to be, as it is all a state of mind. Look for excitement in the job process as it is not just answering the queries or solving the problems of customers but learning more about the customer through his voice accent or visualizing his environment/culture.
· Encourage the best performers to share their experiences with others and mentor others.

The emphasis is to create the desire to learn, enjoy and be passionate about the work they do.

· Meditation Room or deep breath exercises for Associates & Team Leaders – the emphasis is that they should never be in the stress mode or upset while attending calls of a customer.
· Hire outstation candidates (from small towns like Amravati, Latur,Nashik etc) and provide them with shared accommodation.

Conclusion

It is HR’s job, though not HR’s job alone, to champion and shepherd effective human resource management practices at both the strategic and day-to-day levels. That is, to be effective, human resource management practices must be grounded in two ways. First, they must reflect company wide commitments as to how it will manage and relate to its employees. Secondly, HR must implement these commitments so that the ideals of the enterprise and deeds of its agents are congruent.

HR to play a key role in the development and execution of the Business Strategy of an Organisation. It should evolve from a transactional support role to partnering in the organization’s business strategy.

An Article by Rajat Joshi