Attrition Management

PRIYA* don’t quit … : BPO Retention Planning Tool Background: The young Business Process Outsourcing Industry in India has been struggling with high attrition rates right from the word go. The high cost of attrition in the established B.P.O. Organizations – whose major challenge is to ramp up & train the workforce quickly to translate the business opportunity into revenue Dollars – has already been felt & documented extensively in the media. Every BPO organization seems to be trying to reduce their attrition, percentage point by percentage point. There is a feeling, especially among HR Managers, that while there are market dynamics involved in the demand–supply gap, there certainly is a need to find better ways to retain the young & well trained workforce at the Agent level. PRIYA (Proactive Retention Interventions among Young Associates) is a conceptual model that has evolved from HR practices based on intuitive common sense. It works. While this author has thought through the Tool elaborated here, a lot of ideas and practices used in it owe their existence to various HR & Business Leaders across BPO organizations. Hence this is truly a piece of collaborative development and should therefore be shared freely for the benefit of this new growth space. Let us begin by reviewing the numerous innovative HR initiatives & interventions that are constantly being tried by most industry leaders today (Example: Tie up with distance learning MBA programmes, providing discotheques / ‘fun at work’, etc.). Somehow none of these interventions seem to work consistently across an organization, nor can they be said to be having a highly significant impact across the board on the attrition level in the targeted employee population in a BPO organization handling diverse variety of work. What works for one organization, seems to be an impossibility to even consider in another organization. While these HR interventions & initiatives certainly work in pockets, there are some limitations in their approach: Page 1 of 20 ________________________________________________________________________

1. Business Imperative: The current attrition management outlook assumes that the absolute attrition percentages are of utmost importance. Logically however, the Clients would be more worried about the organization’s ability to meet the SLAs (Service Level Agreement) consistently, and not the absolute attrition percentage levels. (Yes, lower attrition percentages help quite a lot in that!) 2. Cost–Benefit: The cost–benefit of these HR initiatives are very difficult to calculate at the design stage. (Usually the cost calculations do not capture the disproportionate amount of time the senior management spends in creating, validating, implementing & troubleshooting these initiatives – specially in terms of the opportunity cost due to time spent away from the business opportunity) 3. Effectiveness & Impact: The effectiveness of an initiative is very difficult to predict, and the actual impact is usually out of whack with the originally estimated level. The choice of initiatives is usually someone’s preference / gut feel – instead of a very rigorous business decision. (Since some of these initiatives work, there is a sort of organizational legitimacy granted to this “deciding by gut feel” when it comes to HR interventions related decision-making.) 4. Monitoring & Control: These initiatives / interventions tend to get out of control quite quickly, and it takes a Herculean effort for the organizational leadership to rein it in. The organizational leadership also does not have very clear decision-making data to choose between similar / overlapping interventions or to stop ineffective interventions. The ‘in-process’ monitoring of these initiatives / interventions is quite difficult given the biases of the implementers & their varying levels of buy-in. 5. Implementation: The success of most of these HR interventions is driven by the passion of the implementers, specially the first level managers. This does create a possibility of a less effective initiative being continued without knowing clearly that there was a better one available, and would have had a higher organizational impact, given the quality of involvement of the first level managers. 6. Focus: These initiatives / interventions are usually backward looking. They are typically driven by the data from exit interviews of the preceding month / quarter. Also given the fact that the reasons ‘why people leave’ are known to be different from ‘why people stay’, organizations might be aiming the interventions at the ‘wrong’ Page 2 of 20 ________________________________________________________________________

population, if not also a significantly smaller one! Reliability of exit interview data is another issue, as call-back validation is typically not a standard practice. One really does not know how many employees actually joined the organization next door instead of that MBA they said they wanted to join. 7. Linkage & Alignment: These HR interventions usually do not provide any linkages to other HR & business processes in the organization & hence to that extent do not add value. Their alignment to the overall HR framework is therefore tenuous at best, if not completely out of sync. It is in this context that this Retention Planning Tool is extremely powerful, while being very simple to understand (almost intuitive) & easy to implement.

The Retention Planning Tool: The concept of this tool is very simple: The ‘Value to Company-Probability of Leaving’ Matrix

Probability of Leaving

Value to Company

High

Medium

Low

High

Q1

Q2

Q3

Medium

Q4

Q5

Q6

Low

Q7

Q8

Q9

Figure [1] •

Identify the individuals in each service delivery ‘team’

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Plot the position of each of these agents (by the first level Reporting Manager & the Business HR) in this matrix based on the given parameters.

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Prepare & implement specific action plans (by the first & second level Reporting Managers & the Business HR) for enhancing retention for each individual based on their position in this matrix.

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Create this matrix for each ‘Service Delivery Team’ in the organization & add up the numbers for each quadrant to understand what is the most appropriate HR initiative / intervention that is required.

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Monitor & Review these matrixes periodically for any changes & to obtain decision-making data for discontinuing, modifying, continuing or initiating new interventions.

The mapping of each individual in the Service Delivery Team is based on the following Parameters: Value to Company: Every individual in each Service Delivery Team to be rated as High / Medium / Low based on: 1. Current Performance: Productivity, Quality & ‘overall value to the Team’ (If this person leaves, how much will it impact the motivation, stretch & ‘feel good characteristics’ in the team?). 2. Criticality of the person to the process: is there a high chance of the Client migrating the process back / canceling the contract if this person leaves? Is this one person handling a critical sub process / language / front-end that no one else in the current team can handle? In such a case, even if the person is of ‘medium value to company’ from point 1 above, he / she should be moved to the high value category. 3. Longer-term Value: Does this person being part of this process enhance my organization’s chance of getting more business (upstream / downstream processes) from the same Client? Does this individual possess relevant experience / qualification / aptitude for moving into higher value roles likely to emerge in the near future – even if for some other Client / team in the organization? Probability of Leaving:

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Every individual in each Service Delivery Team to be rated as High / Medium / Low on probability of leaving based on the following 16 parameters. A ‘High’ rating in even one parameter would result in a ‘high Probability of leaving’ individual. Also please note the correlations & dependencies within these factors, some of which have been pointed out. This evaluation assumes that the Business HR person & the 1st Level Reporting Manager possess a tacit understanding of each individual’s ‘Value System’1 (the person’s predisposition to act in a certain way in a specific situation according to the highest operating value that the person holds). 1. Working relationship with Reporting Manager: Good / indifferent / strained? 2. Performance rank vs. salary position in the team: Is he / she getting paid the most in the team if he / she is the top performer? Individual salary & performance data is no secret as the team members share them with each other regardless of their appointment letter instructing them not to! 3. Behavioral and cultural fit in the team: Good / Bad / Ugly? (Shows high correlation with the team diversity mix, especially with respect to gender). There typically will be more team issues in an all female / male team. A good diversity mix always helps. (Given the typical age profile, there will always be some cases of hormonal overdrive!) 4. Workplace Location: Is this his / her hometown? What is the extent of his / her wanting to move back to his / her hometown? (Has high dependency with 5. There is typically a lot of parental pressure on the unmarried woman working in the night shift to leave / shift job to the hometown) 5. Gender Related: Male / Female a. Marital Status: Has high correlation with attrition of women due to relocation because of marriage. b. Work timing: Day / night. Has high correlation with attrition of women due to health reasons. (There appears to be a higher than average number of disturbance in menstrual cycles & miscarriages for women working in the night shifts.)

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c. Spouse’s work timing: Same / different (If different, has very high correlation with attrition due to health reasons for women) d. Living with in-laws: There is a 100% correlation of attrition for married women working in the night shift & living with in-laws. The in-laws expectations from the daughter-in-law (preparing breakfast & lunch, attending to the door / phone, housework – since she’s at home – irrespective of the fact that it is her peak sleeping time) will force the women to leave her job within about 2 months. Spouse’s work timings can further complicate her situation. 6. Aspiration& capability for Higher Education: Aspiration alone is a bad indicator. Most associates would either intuitively give up on the tough competition for opportunities in Premiere Business Schools that they really aspire for, or, simply would not currently have the financial capability to take a break for preparation or a full time course. It is only after about 3 years of working that they would be willing to consider a distance learning option as the only feasible option. 7. Promotion Prospects: Internal opportunity availability for vertical movement in the near future. Is my organization growing fast? Is the new business it is getting similar to my current work? Do they believe in giving a chance to me rather than hiring someone above me from the outside? Is the process for promotion fair & does it happen with a high enough frequency (half yearly)? 8. Opportunity: Internal competition vs. likelihood of getting a higher position in another organization immediately. Are there any startups where I can ‘encash’ my experience today? If I stay, what are my realistic prospects for moving up compared to my peer group? 9. Training / mentoring / exposure for growth & learning : Adequate / inadequate 10. Grievances: Any unresolved / ongoing HR or organizational issues 11. Reward & Recognition: Have you found an excuse yet to reward & recognize this individual for what he / she does really well at work? 12. Need for the job: financial, social or personal compulsions to continue working.

Time Required:

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The first time round, it typically takes about 3 to 5 hours of discussion between the 1st Level Reporting Manager & Business HR to consolidate the mapping of 10 to 15 people. Subsequent reviews take about 1 hour for a team of 10 to 15 people. The time required to analyze the mapping & to chalk out a retention plan will depend completely on the actual details of the mapping as will be brought out below & in the case study.

Matrix Analysis: The distribution of the population in the various quadrants (Q1 to Q9) of the Matrix is an indication of the effectiveness of your Organization’s HR & Training Processes. •

If the Matrix Quadrants Q2, Q3, Q5 & Q6 together contain 70 to 80 % of your population, you are extremely lucky. By some happy accident your organization’s people processes work reasonably well & you are in a good position to initiate ‘interventions’ which will basically try to move people in the direction of the arrows & out from Q3 through promotions as illustrated below (Q7, 8 & 9through Performance Management, Q4, 5 & 6 through Skills Training & Q1, 2 & 3 through Developmental Training & engagement activities):

Probability of Leaving High High

Value to Company Medium Low

Q1

Promotions

Medium Low Q2 Q3 70 to 80 % of the Team

Q4

Q5

Q6

Q7

Q8

Q9

Figure [2]

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•

If however the numbers are not so kind, while you will need to still have the above ‘interventions’ going, you would be well advised to create ‘initiatives’ that will create people movement along the arrows as illustrated below.

Redeployed gainfully (depending on the Probability Factor identified)

Probability of Leaving High

Value to Company Medium Low

High Q1 Q4 Q7

Medium Q2

Low Q3

Q5

Q6

Q8

Q9

Training intervention for skill up gradation

From internal pool / bench

PIP / Exit

Figure [3] In other words, you will need to create a well deliberated ‘Churn’ in the team to achieve the desired balance within a fixed timeframe (typically 30 to 45 days) in order to be able to manage the possible attrition much more proactively & effectively. •

A lot of interesting dynamics emerges as you analyse the mapping. Examples: o Those most in need of training are in Q5, 6, 8 & 9. The Q1, 2, & 3s however resent these “uncommitted / still on the learning-curve” individuals being away from work ‘enjoying a good time in training’. Hence ensuring Developmental Training for the next role to those in Q2 & 3 is imperative shortly after the Q 5, 6, 8 & 9s’ come back from their skill up gradation training & the heat is turned on them to perform. Q1s’ need to be given all the high impact short term assignments (depending on the actual probability factor of course) which they will usually love to take up

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and complete within timelines for the value it adds to their capabilities & CVs’ – for internal / external movement. o Are the people decision makers aware of the biggest contributors in the organization (Q 1,2,3,5,6)? Have these people had a one–on–one with HR / Reporting Managers (First Level & Skip Level) / Business & Quality Leaders within the last one month / quarter? Have those on PIP (Performance Improvement Plan) felt the heat directly from the skip level & HR? If not, there’s likely to be trouble ahead. o What are the other processes on which this team can be cross-trained? Where else in the organization can the restive population from my team be moved in a planned manner? Which other teams should I keep an eye on to create cross-training for my process & backups for attrition / absenteeism / high volumes in my team. Be prepared for the ‘Churn’ much before it becomes imperative. o All attrition can be traced back to this matrix in order to understand whether that particular individual’s issues were understood / managed right. •

In effect, the preparation of the Matrix is only the first step to an interesting journey. Once ready, the Matrix will instantly give you the numbers & impact of any planned intervention or initiative. E.g.: Is the ‘fun at work’ initiative likely to retain my high value employees or some others? How many people are likely to enroll for a sponsored MBA Programme; a sponsored vs. a reimbursed one; or would my team’s best performers rather have deferred cash payments instead of the MBA programme? Which ‘Internal Job Posting’ is just right for my team member & I should inform & encourage her for the same? Example: The organization decided to implement a 3-year distance learning MBA programme on a conditional reimbursement model. My Matrix clearly told me the realistic number of people likely to opt for it, their value to the company and how many would choose not to join because of other factors as discovered while plotting the Probability of Leaving. I found that the prime reason why the targeted population would

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not join was due to cash flow constraints. At Rs 7000 per month take home, most of them were not in a position to spare Rs. 1500 per month for this ambitious project. The ones who were in a position to spare the cash typically wanted to do a full time MBA from a premier institute for the earning opportunity & entry level / lateral managerial roles through the superior placement opportunities. (Based on this same matrix, the data indicated that allocating the budgeted organizational expense to the performance based variable monthly income* would have been more effective in creating higher retention at that compensation level.) One of the Service Delivery Leaders however saw it as a simple matter of implementation and instructed his Operations AVPs & Managers that he needed 2% of the population to enroll. After the ‘Yes Sir’, sure enough, there were 36 names identified who would write the entrance test & enroll. And sure enough, the final tally of people who did join was zero. I suspect that even if a few of these associates were cajoled into filling up the form & paying up the Rs. 200 for the entrance test, they were likely to take pains to flunk the selection test! •

The Matrix therefore gives a clear picture of the current health as well as the necessary interventions & initiatives required in the team. Instead of trying to force fit interventions & initiatives designed by someone high up, the Matrix data flows up & creates a much better “mass – customized” approach for focusing clearly on the relevant issues & actions.

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A Case Study: Let us consider a typical distribution matrix for a team of 23 agents, 12 Male, 11 Female. Value to Company High Name Performance PF1 H PM2 M PM3 M PM4 H PM5 H PF6 H PF7 H PF8 M PF9 M PM10 M PM11 M PF12 M PF13 M PM14 M PM15 M PF16 M PF17 M PM18 M PM19 M PM20 L PF21 L PM22 L PF23 L

Medium Criticality L H L L H L L L L L L L L L L L L L L L L L L

Low Future Need L L H M M L L L L L L L L L L L L L L L L L L

Figure [4]

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High 'H'

Probability of Leaving Name

PF1 PM2 PM3 PM4 PM5 PF6 PF7 PF8 PF9 PM10 PM11 PF12 PF13 PM14 PM15 PF16 PF17 PM18 PM19 PM20 PF21 PM22 PF23

Relationship Performance with Rptg Vs. Salary Mgr Rank

Team Fit

Location

Gender Related Marital Status Work Timing Spouse's Living with work timing in-laws

Higher Education

Promotion Prospects

External Opportunity

T&D

Grievances

Medium 'M' Low 'L' Rewards & Financial Recognitions need for Job

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Figure[5] Page 12 of 20 ________________________________________________________________________

Team Matrix: Risk of Leaving High High

Value to Company Medium

Low

Q1 PF1, PM2

Medium Q2 PM3 PM4

Low Q3 PM5, PF6, PF7

Q4 Q5 Q6 PF8, PF9, PF12, PF13, PM14, PF16, PF17, PM10, PM11 PM15 PM18, PM19 Q7 PM20

Q8 PF21

P stands for Person;

Q9 PM22, PF23

M/F

for male / female

Figure [6]

Case Study: The typical outcome Name

PF1

Brief Profile Plan Outstanding performer, has had Manager to resolve difference across the table, disagreements with Manager, was Skip level Manager to have one on one to give not nominated to the last comfort that her performance is recognized, HR Leadership Development to ensure nomination to the Leadership Training, Conscious of external development & assertiveness training. Set clear opportunities, family reasonably expectations on lead time to let the Ops well off, is expecting to get Manager & HR know of any developments on married within this year the marriage front.

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PM2

PM3

PM4

PM5

PF6

Good performer, has had a fight HR & Skip Level Manager to help Manager in with the Manager as he did not creating a dialogue, explaining the context of allow him to apply for an Internal the decisions. All three to commit to working Job Posting for his hometown out a solution in the medium term ( 6 months - 1 location as he had not completed year) for exploring his movement to his the stipulated 1 year in the hometown. This would be subject to the process. His father is not keeping condition that he would be ensuring a backup by well and wants him to return to training P6 & P7 for the critical sub process that hometown. Manager denied him he alone is currently handling. HR to leave last time as 2 team members proactively seek details of Processess at his hometown location operations & keep him were scheduled for process training & 2 for six sigma updated of future opportunities as well as introduce him / forward his CV to key decision training. makers for the same. Good performer. Worried about HR & Skip Level Manager to ensure that the his prospects of growth within the transition expected later would have him team. Has capability & prior handling a meaty role. Encourage him to think experience in a higher end through & start creating collaterals, put him in downstream process project touch with the Transition Manager for this next which is likely to be transitioned project. HR to ensure immediate salary in the next 6 months. Salary needs rationalization. to be rationalized

Outstanding performer, is also highly critical to another subprocess. Process owner (client) always wants to speak to him directly & goes by his word. Needs to be retained.

HR to ensure immediate rationalization of his salary with performance. Create engagement at work by providing additional responsibilities like involving in a Six Sigma Green Belt Project, Shift Utilization initiative for the team etc.

Outstanding performer, stable, also critical for another sub process.

Ideal person to be groomed for promotion to Team Leader / Manager in a structured manner. Manager to start involving him in resolving people issues, communications, interface with Clients, internal functions & enhance situational exposure. 2nd person to be groomed for promotion to Team Leader / Manager in a structured manner.

Outstanding performer, stable. Outstanding performer, stable.

PF7

3rd person to be groomed for promotion to Team Leader / Manager in a structured manner. Create healthy competition with P5, & P6 but let all know that there is room for all three.

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PF8

PF9

Average performer, attitude Counsel, be ready to backfill problems, peer group does not like her behavior, has been having health problems due to night shift Only married person, does not HR to immediately try for internal movement to participate in team activities or another day process.Be ready to backfill at short extend help & support to other notice. team members, is keen to wind up quickly & reach home.

Has joined team later as a Counsel. Buddy with P5, 6 & 7. Ensure P5, 6 & backfill. Issues with Manager, 7 get evaluated on how they handle this case & Salary, Peers, Location. Unable to give them active coaching in handling it right. adjust. Be ready to backfill.Communicate to P5, 6 & 7 PM10 that they will need to stretch additionally if this person leaves without notice, and there is a gap before the backfill is allocated. Average performer. More keen on Counsel & help in delivering better performance PM11 moving up the ladder than in the on the job. current job. PF12 PF13 PM14 PM15 PF16 PF17 PM18 PM19

Average performers.

Ensure hygiene issues are taken care of. Train for & create & communicate for higher performance on the job. Provide additional responsibilities to P16, 17, 18 & 19 for SPOCs (Single Point of Contact) for the team's HR, Training, Tech, Logistics, MIS etc.

High expectations, team fit issues, Encourage exit after counseling. higher education aspiration, does PM20 not need the job

PF21

Uncommitted, high expectation, Explore redeployment to home location, counsel team fit issues / Exit

PM22 Unmotivated Unmotivated PF23

30 day Performance Improvement Plan (PIP) / redeployment / exit in that order as there seem to be no other major issues.

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Conclusion: While this paper recommends using this Matrix for the BPO space at the Agent level, the model is sufficiently robust to be used across levels and across different types of industries – simply by modifying the parameters appropriately. I however think that for industries / levels where attrition percentages are less than 10% and the attrition impact is not so critical or immediate in meeting customer expectations; this tool would be more useful in creating the organization’s HR strategy for People Development.

Caution: Every powerful tool has the possibility of bringing harm due to misuse. When using the Matrix, please ensure the following: 1. Ensure absolute privacy of the data: Share this data internally strictly on a need to know basis, & wherever necessary provide the complete context to each individual & not just the one or two factors that can be vividly recalled. Even stricter privacy to be maintained to prevent this data becoming known to the team members. 2. Respect individual merit & right to self-determination: Do not let this data unduly influence your decision-making in terms of recommendations for promotions, assignments, hiring etc. Do address the legitimate business need without compromising on the organization’s values & ethical practices. (Example: if your organization practices the value of being an equal opportunity employer, amongst two candidates, you certainly cannot discriminate by not hiring one person because she is an unmarried female working away from her hometown. Please remember, each individual is different and is not necessarily likely to behave in a fashion as brought out by correlations in historical data)

Value System: a person’s predisposition to act in a certain way in a specific situation according to the highest relevant operating value that the person holds). Page 16 of 20 ________________________________________________________________________

Remember the scene in the movie “Deewar” where young Amitabh tries to unsuccessfully steal a loaf of bread? On being caught & thrashed, he tries to explain that he was not a thief, but he could simply not watch his ill mother & younger brother go hungry. What it tells us about the young Amitabh’s character in terms of his value system is that his operating value of ‘being unable to see his family members in distress’ is higher than his operating value of ‘not stealing’. Hence under the circumstance, though he did not want to steal, the higher operating value forced him to. People with similar social & economic backgrounds tend to have the same or very similar set of values. However the order in which these values operate within each person (The higher or lower weightage a person assigns to each value) could be very different. Example: Person 1 & Person 2 could have the same top 3 work related operating values of financial betterment (money), fairplay & status. The actual order however could be: Person 1

Person 2

[1] Fairplay

[1] Status

[2] Money

[2] Money

[3] Status

[3] Fairplay

To an external opportunity, both these individuals are likely to respond very differently: If Person 1 has had reason to feel unfairly treated in the current organization, he / she is likely to actively look out for an external opportunity, and will move if the money is better even if it is at the same level. Person 2 however is likely to consider opportunities only at a higher designation, and might move for a higher designation even if the money is not significantly higher. The PRIYA model assumes that the Ops Manager & Business HR have a fairly accurate understanding of each team member’s value system based on their interactions & past behaviors. Their evaluation of each associate’s probability of leaving therefore would be only as accurate as their understanding of each of their associates’ value system. *Performance based variable monthly income: A typical scenario: •

Budget : X % of Team CTC#.

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Payout : Monthly.

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Coverage: 50% of the population every, month. Over the long term, almost 90% will get paid, even if a small amount, even if only once in the year, specially when the volumes fluctuate.

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Applicability : Revenue generating process which has ‘stabilized’ (is meeting customer specifications consistently for at least two consecutive monthly reviews).

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Working : Based on Volume & Accuracy. Volume: To be eligible, an individual needs to perform at an output which is at-least Above the team median for last month OR Above the current month’s customer required / baseline volume average for the team – whichever is higher (y1). Accuracy: Above customer specified baseline accuracy. (x1) Slabs: Different slabs can be created with higher monetary rewards for higher levels of customer satisfaction. Example, the slab below can be for Customer Satisfaction (or Overall Engagement Effectiveness) between 80 to 90 %; a higher payout can be designed along similar lines for 91 to 95% & so on.

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y3 (y3>>y1)

5P

6P

7P

y2 (y2>y1)

3P

4P

5P

y1

P

2P

3P

Volume

x1

x2 (x2>x1)

x3 (x3>>x1)

Accuracy Figure [A] •

Sample Values Min Amount: P = Rs.250 Step Function: Additional amount of P on Accuracy, 2P on Volume

y3 (y3>>y1)

Rs.1250

Rs.1500

Rs.1750

y2 (y2>y1)

Rs.750

Rs.1000

Rs.1250

y1

Rs.250

Rs.500

Rs.750

Volume

x1

x2 (x2>x1)

x3 (x3>>x1)

Accuracy Figure [B] (#With the above distribution in Figure [B], based on actual experience, annual payout can be budgeted @ Rs. 1000 per agent per month, approximately 15% of CTC)

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•

Options: The following can be appropriately chosen for achieving desirable team behavioral outcomes: Min amount (P), step function (can be kept constant or can be varied) & the incremental values for higher customer satisfaction / engagement effectiveness index. The minimum amount & step function can be changed on a monthly basis as per the situation in the team for driving required behavior* (i.e., higher accuracy, higher volume, higher Customer Satisfaction or all). *Above sample values will drive higher volume The actual values for volume & accuracy have to be specified by the Operations Manager for the Process based on previous month’s results & current month’s imperatives / forecast. This will need to be made known to the agents at the beginning of the month along with the payouts for the last month. (The payout period will need to align with payroll cut-off date, or will need to use projected data).

In case of teams having issues with salaries - this design can be used to create a customized performance based incentive system using “Goal – seek” iterations for bringing the total take home (Salary-Rank) of an associate in alignment with his / her Performance-Rank immediately. This can reduce attrition due to the time consuming process typically required in making any salary corrections.

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