At a time of high attrition, how do companies keep employees motivated and loyal -- possibly their most critical challenge? Through better compensation, improved opportunities for growth, or superior organisational values and culture -- or a mix of all of these?
Says Sudheesh Venkatesh, head of HR for Tesco (the world's fourth largest retailer) in India, "Research has shown that people look for three value-adds in a job -- economic, social and educational." Efforts at retention must revolve around these three factors, he says.
At the junior level it is economic value-add (monetary benefits) that employees prize most, at the middle level (those with experience of six years or more) it is career growth, and in the higher echelons it is a sense of contribution to the firm that matters most. Social value-add, which plays perhaps the biggest role, is everything that makes employees feel they work for a reputed firm.
To retain young talent, says Venkatesh, it is also important to keep them excited about their jobs by keeping up a steady flow of new challenges. Since a good number of employees are in their early- to mid-twenties, refresher training and support for higher education also helps. Tesco, for example, has tied up with IIM-Bangalore to offer a course on retail the Tesco Retail Certification Programme that aims to impart a knowledge of contemporary retail management issues to its employees in India.
IIM-Bangalore will provide academic inputs, while Integrated Retail Management Consulting will conduct workshops to reinforce the learning. A pilot batch of 30 Tesco employees from its IT services, business services and enabling services has enrolled. The 70-hour programme includes classes in shop layout and design, and supply chain management.
According to Sudhakar Balakrishnan, Director and COO, Adecco India, "The money spent on training is money well-spent. It helps retain employees, who feel that the employer is keen on their professional growth. They tend to stay on for long and perhaps build a career." (Adecco is one of the world's largest human resources solutions firms.)
Since internal growth helps raise motivation levels, firms like the BPOs help with skill development and continuing education.
Murlidhar S, co-founder and director-operations, MeritTrac (which claims to be India's largest skills assessment firm), says big firms build employee loyalty in different ways from small ones. Large establishments take the route of career management, which, he says, 'involves giving employees a sense of upward movement'.
Smaller firms use innovative HR practices. These may involve building a unique company culture -- creating a 'passionate' organisation, for example -- and being different in the way the firm does things.
There is a need for a strong culture of uniqueness and a clear definition of culture. Building a buzz around the firm is important when it comes to building employee loyalty. For instance, MindTree's logo has been developed by a spastic child. Such instances help develop a sense of pride among employees, notes Muralidhar.
Bangalore-based Infosys, meanwhile, 'believes in rewarding high performers', says a company spokesperson. Its high-performance work ethic forms the foundation for performance management and reward mechanisms. The company's incentive pay scheme enables goal sharing and profit sharing with employees. It has strong linkages on the one hand with the performance of the company, the unit and the individual, and with the company's topline and bottomline on the other.
The company has a three-pronged approach to making value additions to employees learning value-add, financial value-add and emotional value-add. Learning value-add involves continuous learning opportunities and exposure to diverse technologies and challenging assignments; financial value-add is through competitive salaries and variable pay; and emotional value-add is ensured through a fair and rewarding work environment and a supportive culture built in Infosys, adds the spokesperson.
Attrition is a reality that cannot be ignored, but building employee loyalty is clearly a means by which to mitigate its severity.