Road ahead

New Delhi, Oct. 11: The next job is only a hop, skip and jump away — that’s what most employees in India think.

With most organisations experiencing a 20 per cent employee turnover in 2005 (5 per cent higher than China at 15 per cent), job-hopping seems to have become more fashionable than ever.

A study on attrition rate by Hewitt Associates, a global human resources (HR) services company, says the main reason behind employee turnover or attrition is inequity of compensation. A high of 59 per cent of participating organisations said they had lost employees to companies offering higher salaries.

Nishchae Suri, head, Hewitt’s Talent and Organization Consulting Analytics Practice, said, “Pay has emerged as a popular and effective lever for attracting premium talent, and organisations are now offering increasingly lucrative packages that people find difficult to refuse in today’s highly responsive employee market. This has led to dramatic salary inflation and rising talent costs, which is a cause for serious concern.”

Limited growth opportunities and role stagnation were the second and third reasons for high churn among employees, respectively.

However, according to Manpower India, an international HR consultancy, the biggest reason why executives leave their jobs is because they feel they are not receiving enough training in new skills.

What employees want most is training in relevant skills, the Manpower study said. The second item on the list was career development. Money actually came third or later on the list.

“It is difficult to identify a specific reason for job hopping. Although, most HR personnel would like to think it is the compensation package, issues like career growth, lack of challenges in the job profile and proper training sometimes become bigger reasons,” said Suraj Pathak, senior consultant, MaFoi Management Consultants Limited.

With India Inc’s growth story still at a nascent stage, industry experts think there are sufficient strategies available to reverse the high attrition trend and make corporate India an attractive employer.

According to analysts at Manpower India, the first step to retain employees is to make the development of talent a key component of leadership responsibility. “Organisations can give incentives to make sure employee development happens within the company.”