East Asian Journal of Multidisciplinary Research (EAJMR)

Vol. 1, No. 7, 2022: 1333-1342

An Empirical Study of Employee Retention in the Information

Technology Sector in Bangalore City

N Krishnamoorthy¹, Ambreen Aisha²*

¹Head and Associate Professor, Department of Management, Sri Vasavi College,
Bharathiar University, Erode, Tamil Nadu, India
²Research Scholar, Department of Management, Sri Vasavi College, Bharathiar
University, Erode, Tamil Nadu, India,

ABSTRACT : Employee retention refers to the ability of an organization to retain

its employees. Each research investigation is expected to make a definitive
contribution to the existing literature. The contribution of this study would be
providing some gap-filling information in the field of Employees attrition and
retention in service industry in general and IT Sector in particular. Satisfaction of
employees is a major problem and due to this reason service sector have high
switching level of jobs. Though, companies are investing a lot on the HR practices
to improve attrition rate it is suggested to think from the point of view of the
employees. Present study were the employees of the IT sector; especially
software engineers of various IT companies in Bangalore city. Respondents were
selected randomly. Employees were mainly from TCS, Tech Mahindra,
Honeywell, Caterpillar, IBM. The information of this research will be useful to
service industry in their HR practices and add new information to literature. It
will help the management of the IT Sector to develop their new strategies of
retention. The study found the influence of HR policies, compensation and
benefits, work pressure and relationship with the superiors on employee
retention.
Keywords: Retention, IT Sector, HR practices, Employees attrition

Submitted : 05-08-2022 ; Revised : 14-08-2022 ; Accepted : 25-08-2022

*Corresponding Author :

ISSN-E: 2828-1519 1333

( https://journal.formosapublisher.org/index.php/eajmr/index
Krishnamoorthy, Aisha

INTRODUCTION
Employee retention is a business- management term referring to efforts by
employers to retain current employees in their workforce. Effective employee
retention is a systematic effort by employers to create and foster an environment
that encourages current employees to remain employed by having policies and
practices in place that address their diverse needs. Also of concern are the costs
of employee turnover (including hiring costs, training costs and productivity
loss). Replacement costs usually are 2.5 times the salary of the individual. The
costs associated with turnover may include lost customers and business and
damaged morale.
Employee retention refers to policies and practices companies use to
prevent valuable employees from leaving their jobs. How to retain valuable
employees is one of the biggest problems that plague companies in the
competitive marketplace. Not too long ago, companies accepted the “revolving
door policy” as part of doing. There are different human resources practices
employed by software companies to increase the retention level (Khan et al.,
2014). In employee retention one more aspect is training and development and
this is the most important parameter in the human resource management
(Maqsood Haider 2015 and Rasli, A.M., Norhalim, N., Kowang, T.O., Qureshi,
M.I. 2014).
Cost is defined as “recruiting expense, orientation and training cost,
decreased productivity until the new employees gain knowledge and expertise
in their domain and also the loss of clients who were dedicated and loyal to the
leaving employees” (Kay, 2000). Nowadays human capital is gaining importance
because organizations can have a competitive advantage through their
distinctiveness and role of human resource productivity increased due to
development of various ERP’s (Holland et al. 2007, Roberts, N., Outley, C. (2002).

BACKGROUND OF THE STUDY

IT industry started was in Mumbai in 1967 with TCS. Indian IT industry
development and contribution to worlds information technology sector is of
highest reputation like metro cities Mumbai, Delhi, Chennai, Hyderabad and
Bangalore have become favorite destination all the Indian multinational
companies like Infosys, TCS, Wipro, Tech mahendra, etc (Indian Mirror Report
2020) Indian IT industry contributes 5.8% of the country’s GDP while providing
employment to with significant workforce. Annual revenues from outsourcing
operation in India were up to US $ 220 billion by the year 2021. As a result, the
industry’s workforce consists of a much larger proportion of engineers and other
highly-skilled technical workers, relative to other industries, especially since
product creation requires creativity, expertise, and precision (Global edge report
2020).
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 East Asian Journal of Multidisciplinary Research (EAJMR)
Vol. 1, No. 7, 2022 : 1333-1342

IT industry facing many challenges facing due to lack of expertise,

knowledge, experience and long term sustainability etc. This can be overcome by
various precautions taken by human resource management. For the purpose of
retaining employees, the employers must use those practices which are in favor
of the both of them and that will lead towards organization standards (Khan, F.,
Yusoff, R.M., Khan, A. 2014).

LITERATURE REVIEW
It is defined to be employee retention is great asset for the company.
Employee retention is generally the level of commitment involved an employee
has towards their company and its core values and beliefs. Hunt (2019) research
on marketing channel, which shows that organizations often look beyond the
concept of satisfaction to developing trust and ensure long term relationships
with their employees.
Rousseau (2017) argues that, for retention strategies to be effective, it is
important to manage employee’s expectations. The psychological contract
focuses on employee subjective interpretations and evaluation of inducements
and how they affect their intentions to stay. Fostering and nurturing employee
commitment is a strategy employed by organizations in retaining their valued
human capital.
Schneider and Bowen (1999) suggested that, in some cases, service
suppliers may be unable to retain even those employees who are satisfied. Thus,
satisfaction itself may not be sufficient enough to ensure long-term workers
commitment to an organization.
Shanley (1990) there is no dearth of opportunities for a talented person. There are
many organizations which are looking for such employees. If a person is not
satisfied by the job he’s doing, he may switch over to some other more suitable
job. In today’s environment it becomes very important for organizations to retain
their employees. The reason may be personal or professional
Samganakkan, (2010) In his article he identified how the human resource
management practices such as training, appraisal etc effect the employee, their
intention to stay and their motivation. According to his research training is an
important determinant of employee motivation and retention. He identified that
compensation should be such which force the employees to stay in the
organization as retention is an important matter for the organizations
effectiveness.
According to Bashir et al., (2009) Indus journal of management and social
science, after doing the survey from the telecom industry of Pakistan, the results
have showed that salary, working environment and the benefits (rewards) are
three factors which affect the employee turnover and correlated with each other.

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Krishnamoorthy, Aisha

This study also faces some limitations, which included time constraints and the
resource constraints. This study also found support for the independent variable
with employee turnover. The negative correlation has been found for the salary,
benefits and work environment. So organizations need to focus on how to reduce
strains in the workplace and salary plans

RESEARCH METHODOLOGY
Subjects of the present study were the employees of the IT sector;
especially software engineers of various IT companies in Bangalore city.
Respondents were selected randomly. Employees were mainly from TCS, Tech
Mahindra, Honeywell, Caterpillar, IBM. Overall 200 questionnaires were
distributed. Finally, 125 (62.5%) questionnaires were analysed. 75 (37.5%)
questionnaires were rejected as they were not properly filled.
Various dimensions associated with employees‟ retention like HR
policies, compensation & benefits, work pressure, and relations with superiors
were explored. There were overall 24 statements; each statement was in the form
of a dichotomous question, i.e., it had to be answered in either „Yes‟ or „No‟.
There were two parts of the questionnaire. First part had 18 statements
distributed amongst the above- mentioned four dimensions, while 6 statements
pointedly explored the causes for high attrition.

Table 1 : Data Analysis and Interpretation

Demographic profile of the respondents

Total no. of respondents 125 %

Males 110 88
Females 15 12

Age brackets
20 -25 32 25.6
26-30 53 42.4
31-35 18 14.4
36-40 13 10.4
41 and above 9 7.2

Educational qualifications
Graduation 59 47.2
Post-graduation (Academic) 26 20.8
Post-graduation 40 32
(Professional)

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 East Asian Journal of Multidisciplinary Research (EAJMR)
Vol. 1, No. 7, 2022 : 1333-1342

Years of experience
0 to 2 86 68.8
2 to 4 23 18.4
4 to 6 11 8.8
6 to 8 5 4
8 and above 0 0

Monthly income (Rs.)

5000 – 15000 14 11.2
15000-25000 24 19.2
25000 - 35000 53 42.4
35000 - 45000 23 18.4
Above 45000 11 8.8

Table 2 : Issues in employee retention in IT Sector

HR Policies Yes No Yes No (%)
(%)
1 Employee-centred HR policies 110 15 88 12
2 Efforts to keep the workforce motivated 87 38 69.6 30.4
3 Satisfaction with working hours 14 111 11.2 88.8
4 Security of job 50 75 40 60
5 Resolution of grievances 91 34 72.8 27.2

Compensation & benefits Yes No Yes No (%)

(%)
1 Salaries are at par with others 102 23 81.6 18.4
at the same level doing
similar job
2 Adequate perks 108 17 86.4 13.6
3 Post-retirement benefits 33 92 26.4 73.6
4 Linking of performance with adequate 117 8 93.6 6.4
rewards
5 Foreign trips 78 47 62.4 37.6
Work Yes No Yes No (%)
Pressure (%)
1 Stress of target completion 73 52 58.4 41.6
2 Fluctuating targets 110 15 88 12
3 Unnecessary paperwork 31 94 24.8 75.2

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Krishnamoorthy, Aisha

4 Excessive competition in the IT industry 98 27 78.4 21.6

Relations with superior Yes No Yes No (%)
(%)
1 Meeting the superior's expectations 89 36 71.2 28.8
2 Recognition of efforts by the superiors 61 64 48.8 51.2
3 Accessibility of superiors 105 20 84 16
4 Compatibility with immediate superior 97 28 77.6 22.4

In above table shown that 88% of respondents believe that HR policies

are employee-centred while 22% believe that they are not. It is found that 76% of
respondents are getting the right amount of accurate information at the right time
and 24% of respondents are not getting right amount of accurate information at
right time. 71.2% of respondents are able to meet their superior‟s expectations
and 28.8% respondents are not able to meet their superior‟s expectations and
81.6% of respondents feel that their pay is at par with employees handling similar
responsibilities, and 18.4% of respondents feels that their pay is less in
comparison with the employees of other companies handling similar
responsibilities or doing same jobs. 93.6% employees believe that performance is
nicely linked with their rewards, 86.4 believe they get enough perks, and 62.4%
respondents even get to go on foreign trips as part of their performance bonus.

Table 3 : Major causes of attrition of employees

1 Working hours 88.8% employees are not happy
2 Job security 60% employees feel they are not secure about their
jobs
88% feel their targets keep fluctuating and they are
3 Fluctuating targets not very sure about what would be expected from
them next time.
Lack of post- 73.6% employees feel they do not get post retirement
4 retirement benefits. They are also apprehensive about their social
benefits security.
More than 91% (114) employees feel that though their
5 Overall work compensation, incentives and perquisites are
stress attractive but there
is a lot of work stress especially in the months of
March and September.
6 Better About 76% (95) employees switch job because
opportunities of better opportunities in other rival companies

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 East Asian Journal of Multidisciplinary Research (EAJMR)
Vol. 1, No. 7, 2022 : 1333-1342

In above table shown that overall stress from the work (91%) , working
hours (88.8%), fluctuating targets (88%), better opportunities with other
companies (76%) and lack of post-retirement benefits and other social- security
norms (73.6%) have emerged as the main causes of high attrition in the
pharmaceuticals sector. The overall results from the research show that high
proportion of male employees are willing to go under training, more preferably
“on job training”. Both male and female employees consider that duration
defines the effectiveness of training programs. Rewards, especially financial
rewards have received highly positive feedback from the females. Supervisory
support has also a crucial role to play in employee retention according to the
research findings. Female employees consider supervisory support and financial
rewards more important for them as compared to men.

CONCLUSION
According to our study and research, we conclude with the responses
gained by distributing questionnaires among current employees in the IT sector.
In today‟s business environment clearly the long-term winners will be the
companies that provide a flexible and challenging work environment along with
employee recognition and rewards. (Verma K. Shekhar, 2009). If employees are
asked to share the risks then they have to share the rewards as well. Due to
growing expectations among employees at all levels, a majority of employees at
all levels want to have an improved quality of work life. As per the growth
projections of the Indian IT sector, companies are required to retain their human
resources. In this context, employee retention has become the strategic focus and
compelling necessity of businesses today. Thus, ignoring the problem of
mounting attrition level can have devastating consequences for the business.
Organizations can afford to ignore the problem at their own peril.

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