So the economy is booming, multinationals are flocking in and employment opportunities are there for the asking. Result: rampant job hopping, with attrition rates as high as 80 per cent in some sectors.

The low-skill call centre industry is the worst affected, with smaller BPOs reporting churn rates of 60-100 per cent, while those in the IT industry are 40-60 per cent, say industry experts. Traditional industries like manufacturing, retail and automobiles come next. While front-end employees in retail register a churn rate of 25-50 per cent, manufacturing reports 10-30 per cent.

“Managing attrition in the IT industry is both critical and challenging because availability of skilled professionals form the crux of this knowledge-intensive industry. Attrition rates in the sector are as high as 40-60 per cent and a Nasscom-McKinsey report estimates shortage of half a million skilled employees in the IT space by 2010,” says Sadhana Somasekhar, director and chief marketing officer, Focus Infotech, a strategic IT HR company.

With the phenomenon becoming pervasive in most booming industries, retaining employees is becoming a strategic priority, as churn adversely impacts bottomlines. “For every employee that leaves, the replacement cost amounts to Rs 25,000 for training alone,” explains Jitendra Tanna, director, Rapidigm (a Fujitsu consulting company, which sees attrition of 22 per cent every year).

Partha Iyengar, vice-president, Gartner India, says a shortage of skilled resources in areas like transaction process BPOs can impact revenues hard. “Currently, attrition rates in such BPOs are on the lower side, but as volumes grow, the shortage of resources will become severe. If churn crosses 50 per cent, revenue losses could be as high as 25 per cent,” he says.

... contd.