International Journal of Management (IJM)

Volume 11, Issue 12, December 2020, pp. 1621-1629. Article ID: IJM_11_12_148
Available online at http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=11&IType=12
Journal Impact Factor (2020): 10.1471 (Calculated by GISI) www.jifactor.com
ISSN Print: 0976-6502 and ISSN Online: 0976-6510
DOI: 10.34218/IJM.11.12.2020.148

© IAEME Publication Scopus Indexed

EMPLOYEE RETENTION STRATEGIES - IN

INDIAN INFORMATION TECHNOLOGY
SECTOR
Manju Dhillon
Assistant Professor, Department of Business Administration, Maharaja Surajmal Institute,
IP University, Delhi, India.

ABSTRACT
Employee turnover is biggest challenge for every organization. Even though all
types of the organizations are technology driven, yet human resources are required to
run the technology. With all round development in each and every area of the
economy, there is stiff competition in the market. With this development and
competition, there are lots and lots of avenues and opportunities available in the
hands of the human resources. Nowadays the biggest challenge of organizations is not
only managing its employees but also retaining its talented employees. Indian IT
sector; which is one of major contributors to the economy is also affected by the
problem of employee retention. In order to address the issue of employee retention,
companies adopt some retention strategies. In this paper, we will find out the retention
strategies being followed in Indian IT sector. Primary data is collected from five IT
companies i.e. Wipro, Infosys, HCL, Accenture and TCS, of Indian IT sector. The
suitable statistical tools are used to draw the conclusion. The study can serve a great
deal for HR departments of Indian IT sector in order to reduce attrition.
Key words: Employee turnover, HR problems, Retention strategies and Indian IT
sector
Cite this Article: Manju Dhillon, Employee Retention Strategies- In Indian
Information Technology Sector, International Journal of Management, 11(12), 2020,
pp 1621-1629.
http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=11&IType=12

1. INTRODUCTION
Employee turnover is defined as the ratio of the number of workers replaced in a given time
period to the average number of workers. Wood (1992) defines turnover as a replacement
cycle, in which a new employee has to be hired and trained against a vacancy, either
voluntarily or involuntarily. Price (1977) defines turnover as the ratio of the number of
organizational members who have left during the period being considered which is divided by
the average number of people in that organization during the period. Bliss (2004) argues that

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 Manju Dhillon

cost associated with employee turnover can be: recruitment costs, training costs, lost
productivity costs, new hire costs, and lost sales costs. Each employee walking out of the door
cost the company under different heads such as; training, education, licensing and experience
lost. The cost is doubled with replacement hiring as the same costs occur with the new recruit.
The cost of advertising, moving, and hiring is approximated to one third of annual salary of
hired employee. The time is another cost that company has to bear in addition to the money.
Time of HR and other department heads is wasted in hiring which otherwise could have been
utilized for more productive purposes. Further the time gap between an employee leaving and
another employee joining costs the company a significant amount of work of that duration.
Team dynamics is another major problem caused by uncontrolled attrition. It is very difficult
to infuse a new member and build a new team every now and then for the project. The
understanding of a team gets shattered by attrition. The changing team dynamics leave a
negative effect on overall productivity of the team and company. Since the new employee
takes time to match the pace of the team and he/she may not delivery the desired output in
terms of time or quality immediately. The momentum of team output gets a significant hit by
attrition. Losing on the continuity of the business is yet another cost that a company has to
bear. A client may be dealt by an employee of the company and the client has a good
relationship and confidence in the particular employee, when the employees change
frequently the client loses its confidence in the company in such cases.
As discussed above, the employee turnover affects the overall performance of the
company from several directions. Therefore the companies do not want to let employee
turnover rate go beyond control and try to implement several retention strategies. The major
retention strategies are management support, training and development programmes, rewards
and recognition, attractive fringe benefits, workers participation in management activities,
onsite opportunities and flexible working hours. Though companies take several steps towards
these four important issues impacting retention, it is very important to understand the
employees’ perspective on these strategies.
In this paper, an attempt is made to look in to employees’ perspective on these retention
strategies with respect to five major IT companies, i.e., TCS, Accenture, Wipro, HCL and
Infosys.

2. LITERATURE REVIEW
A number of authors have worked on retention strategies and their impact on reducing rate of
attrition such as, (Ross and Zander, 1957) concluded that if personal needs of the employees
are satisfied then there are more chances that the employees will not leave the organization.
The study also suggests that there is less relation between the salary and satisfaction.
Employer’s job is to identify the needs of Individuals and fulfil them that can benefit both the
organization and the employee as a whole. Mobley, et, al, 1979) suggest to understand the
psychology of the employees and try to eliminate the variable that causes attrition. The study
suggests to look into the retention strategies that can lead to satisfaction in present and the
strategies that can attract the personnel in the future. There are consequences of employee
turnover some are positive and some are negative, the negative consequences are role
centrality, cohesiveness of work group, tightness of labor market and levels in organizational
hierarchy and the positive consequences are internal growth of the organization, career
orientation and role performance curve (Barry, 1980). The study also recommends to evaluate
each alternative carefully and then implement according to the situation. (Muchinsky and
Murrow, 1980) stated that turnover must be viewed as a dynamic process involving socio,
economical and psychological factors. Employers must find out the factors under these three
heads to understand the process of attrition. The study also recommends that the employee

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 Employee Retention Strategies- In Indian Information Technology Sector

seeking voluntary retirement might be leaving because of existing opportunities. So, this
becomes a determinant for the other employees. (Michaels and Spector, 1982) analyzed two
variables organizational commitment and confirmed pre-employment expectancies. The study
says that it has a positive impact on the organizational commitment other than that
consideration by superior led to maximum satisfaction amongst the employees. Factors like
salary, tenure and organizational level has no relation with the above model. Mowday (1984)
explains that the managers should study rigoursly to know the reason why employees left the
organization and try to eliminate the variables that results in employee turnover and managers
should have a clear idea which strategy is best and the right time to implement it. The study
also says that it will become a necessity rather than choice if the attrition rate is likely to be
high in the future. It has become a challenge for the managers to retain the employees after
the introduction of computers as supply of skilled labor is less and demand is more.
Employees switch between companies and use it as a tool for career advancement.(Carstenand
Specter,1987) proposes that there is weak relationship between satisfaction and turnover at the
time of high unemployment and vice versa. In other words, the study says that even people
are dissatisfied with their current job they don’t think of switching as there are less
alternatives and if there are more alternatives and employees are not satisfied, they plan to
move from one company to another. (Campion, 1991) analyses three aspects of organizational
consequences named functionality, availability and utility. This study measures the turnover
Intentions of employees in the organizations It has also says that the companies are deficient
in Information as they usually takes one factor for the turnover. (Sheridan, 1992) finds that
organizations that value inter-personal relationships are more likely to retain employees for
longer duration as compared to companies that value work based values. There was a
significant difference of 14 months duration in both the organizations. The study also says
that the companies cannot skip on the replacement cost but they can delay the cost of
replacement cost by increasing the survival period of employees in the organization. Different
kind of people are suitable for different kinds of organizations and if the policies, functioning
and culture doesn't suit them they soon leave the organization. So the employer's job is to find
the right fit employees for the organization so they can manage to reduce heavy cost and time
of recruiting at short intervals. Managers must find employees that fit to the organization
culture. (Hall, 1993) finds that there are six Intangible resources named culture, networks,
data bases, reputation, employee Know-how that have implications on the management.
These six intangible resources ensures the success of the organization as it makes employees
feel that the organization cares for them and feeling of belongingness compels them to work
with more efficiency and thereby earning profits. However, manager’s job is to identify which
factors influence the employees the most and try to make it feasible for everyone working
there. (Despres and Hiltrop, 1995) proposed that managers should not focus only on financial
Incentives but should emphasize on finding ways to encourage intrinsic factors that leads to
motivation. Knowledge has become a key factor for successful functioning of any
organization. Employers need to find ways to retain these kinds of workforce for the smooth
functioning. Compensation and reward systems can play a significant role in achieving the
same. Further (Fey, Bjorkman, and Pavlovskaya, 2000) provides with different variables for
retention of managerial and non-managerial employees. Job security, performance are the
most significant variables in retaining the talent and at the non-managerial level and
promotions on merit and firm’s performance are the key factors at the managerial level. Apart
from these there are several other factors as well that contributes in reducing employee
turnover such as high salaries, technical sessions etc. (Kim, 2005) stated that it is very
important to retain talented and competent employees in the organization to achieve goals
with efficiency. The study proposes variables such as work exhaustion, participation in
management, opportunities for growth and advancement have significant impact on the

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 Manju Dhillon

employee’s intention to stay. Salary does not have a significant Impact on the retention. The
research on retention strategies and the impact of these strategies can be observed in Ghosh
(2011 and 2015) different retention strategies are followed at different organizations.

3. OBJECTIVES OF THE STUDY

There is significant variation in retention strategies from company to company

4. RESEARCH METHODOLOGY
As discussed above the objective of the paper is to identify and study the employee retention
strategies in Indian IT sector. A questionnaire is developed on the basis of Literature review,
in total 15 statements were included in the questionnaire along with necessary demographics.
These statements are given by;
D.1 Management support for higher education is available.
D.2 Training and Development programs are provided.
D.3 Rewards and Recognition given to deserving employees.
D.4 Attractive fringe benefits are provided.
D.5 Workers participation in management activities.
D.6 Onsite opportunities are provided.
D.7 Mentoring and Coaching sessions are given to employees.
D.8 Flexible work timing is available.
D.9 Availability of day-care facility.
D.10 Promotion opportunities are provided.
D.11 Good welfare measures are taken.
D.12 Pleasant working environment is ensured.
D.13 New assignments and job rotations are available.
D.14 Career development opportunities are available.
D.15 Location transfer with promotion is given.
The statements are measured through a well-defined five point Likert scale of agreement.
In total 660 responses are collected, after pilot testing 50 questionnaires. The frequency
distribution of sample with respect to companies is as following;

Table 1 Distribution of Companies

Company Frequency Percent Valid Percent Cumulative
Percent
TCS 232 35.2 35.2 35.2
Valid Wipro 134 20.3 20.3 55.5
Infosys 121 18.3 18.3 73.8
Accenture 114 17.3 17.3 91.1
HCL 59 8.9 8.9 100.0
Total 660 100.0 100.0 100.0

Table 2 Overall Reliability Statistics of Retention Strategies

Variables Description Number of items Cronbach’s
D Retention Strategies 15 0.851
The sample distribution is aligned with the employee strength of the Company. As
mentioned, the questionnaire is filled by 660 employees. The testing has shown a good
reliability of the instrument i.e. 0.851 and a good internal validity as the inter-item correlation
remained high amongst the statements. Following tables present the result.

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 Employee Retention Strategies- In Indian Information Technology Sector

Table 3 Reliability Statistics for Variables

Variable Description Number of Items Cronbach's Alpha
if Item Deleted
Management support for higher education is
D.1 1 0.829
available.
D.2 Training and Development programs are provided. 1 0.841
Rewards and Recognition given to deserving
D.3 1 0.842
employees
D.4 Attractive fringe benefits are provided. 1 0.844
D.5 Workers participation in management activities 1 0.846
D.6 Onsite opportunities are provided. 1 0.844
Mentoring and Coaching sessions are given to
D.7 1 0.843
employees
D.8 Flexible work timing is available 1 0.844
D.9 Availability of day-care facility 1 0.844
D.10 Promotion opportunities are provided 1 0.842
D.11 Good welfare measures are taken 1 0.845
D.12 Pleasant working environment is ensured 1 0.841
D.13 New assignments and job rotations are available 1 0.846
D.14 Career development opportunities are available. 1 0.842
D.15 Location transfer with promotion is given. 1 0.842

Table 4 Inter-Item Correlation Matrix for Retention Strategies

D.1 D.2 D.3 D.4 D.5 D.6 D.7 D.8 D.9 D.10 D.11 D.12 D.13 D.14 D.15
D.1 1.000
D.2 .368 1.000
D.3 .394 .273 1.000
D.4 .377 .247 .288 1.000
D.5 .344 .273 .246 .211 1.000
D.6 .358 .265 .248 .207 .240 1.000
D.7 .366 .277 .255 .275 .197 .268 1.000
D.8 .369 .316 .196 .297 .220 .298 .288 1.000
D.9 .365 .242 .359 .237 .208 .303 .239 .228 1.000
D.10 .403 .393 .268 .294 .297 .213 .284 .232 .201 1.000
D.11 .359 .280 .170 .235 .222 .219 .302 .223 .258 .267 1.000
D.12 .436 .317 .307 .300 .197 .303 .318 .223 .327 .222 .271 1.000
D.13 .342 .245 .239 .113 .238 .224 .235 .242 .241 .230 .213 .230 1.000
D.14 .424 .304 .306 .304 .275 .304 .256 .274 .210 .246 .210 .261 .241 1.000
D.15 .413 .252 .316 .268 .205 .251 .238 .242 .223 .326 .251 .259 .289 .308 1.000
The positive correlations among the items clearly indicate the inter-item reliability and we
can be assured that the items are measuring the related construct. After testing the reliability
and validity of the data, the data is coded in SPSS 20.0 for analysis. Following alternate
hypotheses related to objective is constructed and tested in the paper;
Ha: There is significant variation in retention strategies from company to company

5. RESULT AND DISCUSSION

In this section the data analysis is presented. Two important statistical measures are used for
analysis here. First the comparison of mean scores is analyzed with respect to each statement
so that level of agreement for each statement can be compared. Later the statistical

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 Manju Dhillon

significance of the different levels of agreement is analyzed using analysis of variance. First
the means are compared for overall retention strategies and the analysis is presented.
There are five companies under study TCS, Accenture, Infosys, Wipro and HCL. The
average of turnover intentions of employees working with these companies (Table 5). From
table above it can be observed that in TCS the highest agreement appeared on the statements,
“Rewards and Recognition given to deserving employees”, this could be the prime strategy
for TCS, it is also observed during the study that reward and recognition are major
components in employee retention. On the other hand Wipro focuses most on, “Location
transfer with promotion is given”, this clearly shows that Wipro works on change of
environment more rather than any other component. This may be due to the fact that
stagnancy of work in IT sectors is debated over the period of time and change of environment
and location may provide an employee breathe of freshness. In Infosys highest focus is on
providing onsite opportunities and hence the highest agreement appeared on the statement,
“Onsite opportunities are provided”. This retention strategy can only work with the industry if
it has enough options overseas. There is a charm amongst employees in working onsite and
hence the retention strategies revolve around this in Infosys. Further in Accenture the highest
agreement is observed on, “Good welfare measures are taken”. It seems that the Accenture
believed in providing welfare to employees and their Families. There are many companies
that succeeded in high employee retention by focusing on employee welfare. This strategy
provides employees a stress free environment and through this

Table 5 Statistical distribution of retention strategies

Company D.1 D.2 D.3 D.4 D.5 D.6 D.7 D.8 D.9 D.10 D.11 D.12 D.13 D.14 D.15
Mean 2.88 2.91 3.04 2.93 2.93 2.88 2.96 3.01 3.00 2.83 2.86 2.95 2.97 2.95 2.94
N 232 232 232 232 232 232 232 232 232 232 232 232 232 232 232
TCS
Std.
1.405 1.046 1.029 1.042 1.015 1.038 .993 1.002 1.036 1.047 .988 .999 .982 .995 1.075
Deviation
Mean 2.87 3.00 2.99 2.93 2.96 3.04 3.06 2.88 2.95 2.88 2.84 3.04 2.88 2.79 3.07
N 134 134 134 134 134 134 134 134 134 134 134 134 134 134 134
Wipro
Std.
1.392 .931 1.019 .982 .934 .984 .976 1.001 .972 1.001 .994 .942 1.008 1.001 1.005
Deviation
Mean 3.04 2.99 3.02 2.93 2.94 3.07 2.88 3.14 3.01 2.98 2.80 2.87 2.94 2.93 2.95
N 121 121 121 121 121 121 121 121 121 121 121 121 121 121 121
Infosys
Std.
1.417 1.025 .966 .938 .982 1.002 1.046 1.015 .967 1.053 1.026 1.044 1.055 1.014 .953
Deviation
Mean 3.05 2.91 2.83 2.98 2.96 2.96 2.94 2.84 2.82 3.01 3.15 3.03 3.14 2.93 2.93
N 114 114 114 114 114 114 114 114 114 114 114 114 114 114 114
Accenture
Std.
1.408 1.113 .964 1.076 1.043 1.051 1.020 1.006 .985 1.005 .967 1.004 1.008 1.122 1.007
Deviation
Mean 3.05 3.08 3.00 3.10 3.00 3.00 3.12 3.07 2.98 2.92 3.10 3.07 2.75 3.15 2.83
N 59 59 59 59 59 59 59 59 59 59 59 59 59 59 59
HCL
Std.
1.432 .980 .975 1.037 1.106 1.151 1.122 1.007 1.098 1.125 .952 .937 .950 1.087 1.045
Deviation
The company may reduce the attrition rate. Last but not the least HCL focuses mostly on,
“Career development opportunities”, this may be due to the fact that in contemporary
competitive environment employees also look forward to strengthen their resume i.e. personal
growth is an important factor for many of the employees, this could be the fact that HCL is
focusing on employee development more than anything else. Further statistical significance of
these difference of opinions is tested using analysis of variance, following table presents the
results.
It can be observed from the analysis of variance table that only, “Workers participation in
management activities” is non-significantly vary from company to company i.e. more or less

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 Employee Retention Strategies- In Indian Information Technology Sector

all five companies follow this retention strategy with same intensity. Rest of all retention
strategies vary from company to company significantly.

Table 6 Analysis of Variance for Retention Strategies

Sum of Squares Df Mean Square F Sig.
Between Groups 47.790 4 11.948 6.030 .000
D.1 Within Groups 13067.649 655 1.981
Total 13115.439 659
Between Groups 22.075 4 5.519 5.240 .000
D.2 Within Groups 6946.046 655 1.053
Total 6968.121 659
Between Groups 36.053 4 9.013 9.016 .000
D.3 Within Groups 6593.205 655 1.000
Total 6629.258 659
Between Groups 17.551 4 4.388 4.239 .002
D.4 Within Groups 6826.934 655 1.035
Total 6844.485 659
Between Groups 2.838 4 .710 .700 .592
D.5 Within Groups 6681.647 655 1.013
Total 6684.485 659
Between Groups 36.423 4 9.106 8.519 .000
D.6 Within Groups 7049.198 655 1.069
Total 7085.621 659
Between Groups 33.660 4 8.415 8.146 .000
D.7 Within Groups 6812.931 655 1.033
Total 6846.591 659
Between Groups 72.994 4 18.249 18.056 .000
D.8 Within Groups 6665.490 655 1.011
Total 6738.485 659
Between Groups 28.797 4 7.199 7.085 .000
D.9 Within Groups 6700.960 655 1.016
Total 6729.758 659
Between Groups 32.942 4 8.235 7.627 .000
D.10 Within Groups 7120.680 655 1.080
Total 7153.621 659
Between Groups 114.600 4 28.650 29.258 .000
D.11 Within Groups 6457.885 655 .979
Total 6572.485 659
Between Groups 28.852 4 7.213 7.333 .000
D.12 Within Groups 6487.269 655 .984
Total 6516.121 659
Between Groups 73.419 4 18.355 18.245 .000
D.13 Within Groups 6634.702 655 1.006
Total 6708.121 659
Between Groups 55.842 4 13.961 13.136 .000
D.14 Within Groups 7009.249 655 1.063
Total 7065.091 659
Between Groups 29.957 4 7.489 7.130 .000
D.15 Within Groups 6927.301 655 1.050
Total 6957.258 659
Hence the null hypothesis is not rejected for D.5 (Workers participation in management
activities) and it is rejected for rest of the statements (table -6). This shows that there is a
statistically significant difference in agreement when it comes to workers participation in
management activities. The highest agreement on the statement is observed in HCL with a
mean score of 3.

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 Manju Dhillon

6. CONCLUSION
In TCS the highest agreement appeared on the statements, “Rewards and Recognition given to
deserving employees”, this could be the prime strategy for TCS, it is also observed during the
study that reward and recognition are major components in employee retention. On the other
hand Wipro focuses most on, “Location transfer with promotion is given”, this clearly shows
that Wipro works on change of environment more rather than any other component. This may
be due to the fact that stagnancy of work in IT sectors is debated over the period of time and
change of environment and location may provide an employee breathe of freshness. In Infosys
highest focus is on providing onsite opportunities and hence the highest agreement appeared
on the statement, “Onsite opportunities are provided”. This retention strategy can only work
with the industry if it has enough options overseas. There is a charm amongst employees in
working onsite and hence the retention strategies revolve around this in Infosys. Further in
Accenture the highest agreement is observed on, “Good welfare measures are taken”. It seems
that the Accenture believed in providing welfare to employees and their Families. There are
many companies that succeeded in high employee retention by focusing on employee welfare.
This strategy provides employees a stress free environment. The HCL focuses mostly on,
“Career development opportunities”, this may be due to the fact that in contemporary
competitive environment employees also look forward to strengthen their resume i.e. personal
growth is an important factor for many of the employees. The results obtained in the paper are
very useful for HR managers who are seeking a solution for reducing the rate of employee
turnover and further the study can be carried out on the gap that are identified in this paper.

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