Literature Synthesis
Employee turnover essentially means people leaving organisations; this is today a major organisational phenomenon in the IT/ITES industry. The core construct of this research project is however to analyse the factors that enable employee retention which can also be interpreted to be the factors that contribute to the increase in employee attrition rate. There are many other constructs that support the main theme of the research project. Employee Loyalty and Employee Satisfaction can have the most direct impact on employee retention within an organization. Researchers have time and again indentified the need for both academic and industrial research on the subject of employee retention. (Mak and Sockel, 2001) suggested that in today’s business environment the relationship between organisations and there IS departments is fast changing leading to a state of undermining the retention of IS workforce consequently effecting the productivity of the IS departments. Losing IT personnel as expressed by (O.Longenecker and Scazzero, 2003) can be a cost of doing business and the actual cost might be 2.5 times their individual annual salary. According to (Stokes, 2000) due to the scarcity of skilled IT workforce employee retention has become a factor of strategic importance to gain competitive advantage in the IT industry. Stokes has also identified that better job opportunities and ever increasing competition is a major cause factor of attrition which has been tempting the IS/IT personnel to change the companies more often. (Lockwood and Ansari, 1999) in their research study identified that the key motivators and controllers of employee retention has changed dramatically between the present day IT employees to the IT personnel of past generation. A similar view is expressed by (Bhatnagar, 2007) in her research, where she emphasises that the IT/ITES industry has grown at a tremendous rate that, not only is recruiting highly skilled IT workforce important but also to retain them in the organisation to sustain a skilled competitive advantage in the ever growing IT market.
Employee loyalty can be understood as the organisational commitment the employee has with the organisation(Mak and Sockel, 2001). (Sheridan, 1992) expressed employee loyalty as to be in direct impact with organisational culture where he described that organisation culture with emphasis on teamwork and interpersonal relationships to have higher retention rate and greater employee loyalty. (Rob Duboff and Heaton., 1999) have also indicated that employee loyalty is a key constraint that has a direct impact on the employee retention in the service based industry. Along with Employee Loyalty, employee satisfaction also has a significant impact on employee retention. (Mobley, 1977) in his research paper identified that employee job satisfaction has a direct impact on the employee turnover and retention. Mobley expressed through his understanding of the psychology of withdrawal decision process that employee dissatisfaction stimulated the thought of quitting. Similar idea was expressed by (Bhatnagar, 2007) in her research paper that Employee dissatisfaction due to unclear Internal Job Postings, Unusual Work profile, personal factors and lack of clear Career opportunities only increase the rate of attrition and employee turnover in the Indian ITES sector. (P.Carayon et al., 2006) emphasised that if the organisation had to increase the employee retention rate in an organisation then there was great need to increase the Quality of Work Life (QWL) parameter within the organisation which would inturn increase the employee satisfaction rate. (Porter and Steers, 1973) suggested in their writing that employee job satisfaction has been consistently and inversely related to employee turnover.
(Mak and Sockel, 2001) suggested that employee motivation can also be a key factor affecting the employee retention in the organisation. Mak and Sockel have also identified three key motivation theories that can explain the relationship between motivation and retention. Sutherland in his 2001 article highlighted that the motivation factors are different for IS and non-IS employees. He states that the skills and competency requirements are different for IS employees which is why their motivation factors are also quite different.(Ramlall, 2004) has deeply studied the motivation theories and the underlying link between employee motivation and employee retention. He concluded in his research that for any organisation to have an effective employee retention strategy, the key employee motivators are to be identified. (Bhatnagar, 2007) on the other hand identified that employee engagement in the organisation can also have a significant impact on the employee retention rates. She also indentified that employee retention rate is low in the Indian ITES sector in the first six months due to the low motivation factor of the employee base and high stress levels in terms of training and initial performance requirements. (Ross, 2005) in his article highlighted that the war of employee retention begins at the time of recruitment itself, with companies recruiting employees whose talents and interests fit with both the long-term and short-term needs of the organization. Expressing a similar view is (Lockwood and Ansari, 1999) in their article where they have suggested that IT retention strategy is part of the IT recruitment strategy. (Sheridan, 1992) has also suggested that the organisations have to understand the person-organisation cultural fit conditions in the recruitment stage itself to control attrition. A key strategic step to control attrition identified by (Bhatnagar, 2007) is the concept of blacklist where an industry standard list of frequently job changing employees would be created and such identified employees would be withheld from recruitment for a particular period of time. Although the interim and after effects of such a concept is much arguable, but NASSCOM (National Association of Software Service Companies) has been considering such a concept as a necessity to increase employee retention rates.
References
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LOCKWOOD, D. & ANSARI, A. (1999) Recruiting and retaining scarce Information technology talent : a focus study group. Industrial Management & Data Systems, 6.
MAK, B. & SOCKEL, H. (2001) A confirmatory factor analysis of IS employee motivation and retention. Information & Management Journal, 38, 265-276.
MOBLEY, W. (1977) Intermediate Linkages in the Relationship Between Job Satisfaction and Employee Turnover. Journal of Applied Psychology, 62, 237-240.
O.LONGENECKER, C. & SCAZZERO, J. A. (2003) The turnover and retention of IT Managers in rapidly changing organizations. Information Systems Management.
P.CARAYON, J.SCHOEPKE, P.L.T.HOONAKKER, M.C.HAIMS & M.BRUNNETTE (2006) Evaluating causes and consequences of turnover intention among IT Workers: the development of a questionnaire survey. Behaviour and Information Technology, 25, 381-397.
PORTER, L. & STEERS, R. (1973) Organizational, Work and Personal Factors in Employee Turnover and Absenteeism. Psychological Bulletin, 80, 151-176.
RAMLALL, S. (2004) A Review of motivation theories and their implications for employee retention within organizations. Journal of American Academy of Business, 52-63.
ROB DUBOFF & HEATON., C. (1999) Employee Loyalty : A key link to value growth. Strategy & Leadership, 27, 8-12.
ROSS, J. A. (2005) Dealing with the Real Reasons People Leave. Harvard Management Update, 10, 3-5.
SHERIDAN, J. (1992) Organizational culture and Employee Retention. Academy of Management Journal 35, 1036-1056.
STOKES, S. L. (2000) Attracting and Keeping IT Talent. Information Systems Management, 8-16.
