EMPLOYEE TURNOVER IN “IT” INDUSTRY WITH SPECIAL ...

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International Journal of Multidisciplinary Research

Vol.2 Issue 7, July 2012, ISSN 2231 5780

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EMPLOYEE TURNOVER IN “IT” INDUSTRY WITH SPECIAL

REFERENCE TO CHENNAI CITY-AN EXPLORATORY STUDY

MRS. E. DEEPA*; MRS. M. STELLA**

*Assistant Professor,

Vivekanandha College of Engineering for Women,

Elayapalayam,Tiruchengode,

Tamilnadu.

**Assistant Professor,

Vivekanandha College of Engineering for Women,

Elayapalayam,Tiruchengode,

Tamilnadu.

ABSTRACT

The research paper entitled EMPLOYEE TURNOVER IN IT INDUSTRY WITH

SPECIAL REFERENCE TO CHENNAI CITY-AN EXPLORATORY STUDY. The

objective of this article is to find the level of job satisfaction, safety measures, retaining the

employees, working conditions & work load and its reason for Employees Turnover in IT

Industries. The employee turnover springs up as a vital issue in IT businesses. The

researchers had taken 250 respondents as their sample size from universe and descriptive

research design was adopted. This research study uses various methods to analyze the

reasons and causes for employee turnover in IT businesses. The tools used are Chi-square

analysis, weighted average method, T-test and F-test. Based on the analysis and

interpretation, it is inferred that the IT Industry has to implement the Retention Plan by

compensation Policies, Changes in work Requirements & improvement in working

conditions.

KEYWORDS: Level of job satisfaction, safety measures, retaining the employees,

Working conditions & work load.

______________________________________________________________________________

INTRODUCTION

EMPLOYEE TURNOVER

Employee turnover is a ratio comparison of the number of employees a company must

replace in a given time period to the average number of total employees. A huge concern to

most companies, employee turnover is a costly expense especially in lower paying job roles,

for which the employee turnover rate is highest. Many factors play a role in the employee

turnover rate of any company, and these can stem from both the employer and the

employees. Wages, company benefits, employee attendance, and job performance are all

factors that play a significant role in employee turnover.

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CAUSES OF TURNOVER

There are a number of factors that contribute to employee turnover. We explore

some of these factors in more detail below.

1. THE ECONOMY: Some minimum wage workers report leaving one job for

another that pays only 50 cents an hour more. Obviously, in a better economy the

availability of alternative jobs plays a role in turnover, but this tends to be

overstated in exit interviews.

2. THE PERFORMANCE OF THE ORGANIZATION - an organization perceived

to be in economic difficulty will also raise the specter of impending layoffs.

Workers believe that it is rational to seek other employment.

3. THE ORGANIZATIONAL CULTURE - much has been written about

organizational culture. It is sufficient to note here that the reward system, the

strength of leadership, the ability of the organizations to elicit a sense of

commitment on the part of workers, and its development of a sense of shared

goals, among other factors, will influence such indices of job satisfaction as

turnover intentions and turnover rate.

4. THE CHARACTERISTICS OF THE JOB - some jobs are intrinsically more

attractive than others. A job's attractiveness will be affected by many

characteristics, including its repetitiveness, challenge, danger, perceived

importance, and capacity to elicit a sense of accomplishment. A job's status is

also important, as are many other factors.

5. UNREALISTIC EXPECTATIONS - Another factor is the unrealistic

expectations and general lack of knowledge that many job applicants has about

the job at the time that they receive an offer. When these unrealistic expectations

are not realized, the worker becomes disillusioned and decides to quit.

6. DEMOGRAPHICS - empirical studies have demonstrated that turnover is

associated in particular situations with demographic and biographical

characteristics of workers. But to use lifestyle factors (e.g. smoking) or past

employment history (e.g. many job changes) as an explicit basis for screening

applicants, it is important for legality and fairness to job applicants to verify such

bio-data empirically.

7. THE PERSON - These include both personal and trait-based factors. Personal

factors include things such as changes in family situation, a desire to learn a new

skill or trade, or an unsolicited job offer. These traits are some of the same

characteristics that predict job performance and counterproductive behaviors

such as loafing, absenteeism, theft, substance abuse on the job, and sabotage of

employer's equipment or production. These traits can be measured and used in

employee screening to identify individuals showing lower probability of turnover.

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ABOUT THE INDUSTRY

THE INDIAN IT INDUSTRY

The Information Technology (IT) sector in India holds the distinction of advancing

the country into the new-age economy. The growth momentum attained by the overall

economy since the late 1990s to a great extent can be owed to the IT sector, well supported

by a liberalized policy regime with reduction in telecommunication cost and import duties

on hardware and software. Perceptible is the transformation since liberalization – India

today is the world leader in information technology and business outsourcing.

Correspondingly, the industry’s contribution to India’s GDP has grown significantly from

1.2% in 1999-2000 to around 4.8% in FY06, and has been estimated to cross 5% in FY07.

The sector has been growing at an annual rate of 28% per annum since FY01.

EMERGING TRENDS IN THE INDIAN IT SERVICES INDUSTRY

While the global IT players are aggressively scaling up their operations in India,

due to the advantages that the Indian industry offers, the Indian IT companies are also

preparing to tap the global market. The companies are witnessing significant change with

regard to their service offerings and geographical concentration. Today, companies are

expanding their service offerings from application development and maintenance to high

end services like testing, consulting and engineering designing. The global delivery model

has not only facilitated the companies in delivering quality of work but also helped them to

control costs.

Presently, the Indian IT companies are on a hiring spree which indicates their

bullishness on their order flows. All the major players have increased their manpower by

15-50%, and the trend is expected to continue further. As a result, the companies are

expected to scale up their operations. The Indian IT companies are also vying for inorganic

growth, with a quest for newer geographical areas, service offerings, domain expertise,

customers and markets

REVIEW OF LITERATURE

Price & Muller (1981) observed that job dissatisfaction influenced actual turnover

indirectly through its direct effect on turnover intention. The variables that affect

job satisfaction are pay, promotion opportunities, immediate supervisor, fringe

benefits, contingent rewards, rules and procedures, relation with co-workers, type of

work done, and communication within the organization.

Williams and Hazer (1986) has differentiated between job satisfaction and

commitment by explaining the former as an emotional reaction to specific aspects of

job and the latter as an emotional reaction to the whole organization. Both the

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individual factors as well as the organizational factors influence organizational

commitment which eventually influences turnover intentions amongst employees.

Costly et al. (1987) points out that a high labour turnover may mean poor personnel

policies, poor recruitment policies, poor supervisory practices, poor grievance

procedures, or lack of motivation. All these factors contribute to high employee

turnover in the sense that there is no proper management practices and policies on

personnel matters hence employees are not recruited scientifically, promotions of

employees are not based on spelled out policies, no grievance procedures in place

and thus employees decides to quit.

Magner et al. (1996) argues that employees feel comfortable to stay longer, in

positions where they are involved in some level of the decision-making process. That

is employees should fully understand about issues that affect their working

atmosphere.

Labov, (1997) has highlighted that employees have a strong need to be informed.

Organisation with strong communication systems enjoyed lower turnover of staff.

Mobley (1977) first proposed a model explaining the relationship between job

satisfaction and thoughts of quitting which, ultimately led to actual turnover.

Trevor (2001) argues that local unemployment rates interact with job satisfaction to

predict turnover in the market. Role stressors also lead to employees’ turnover. Role

ambiguity refers to the difference between what people expect of us on the job and

what we feel we should do. This causes uncertainty about what our role should be. It

can be a result of misunderstanding what is expected, how to meet the expectations,

or the employee thinking the job should be different.

Manu et al. (2004) argue that employees quit from organization due economic

reasons. Using economic model they showed that people quit from organization due

to economic reasons and these can be used to predict the labour turnover in the

market.

Loi et al. (2006) has indicated contrary to be true, that is, there existed negative

relationship between turnover intention and both procedural and distributional

justice.

Elanain Abu, (2010) the study disclosed that the perception of organizational justice

had an influence on work outcomes. A low degree of turnover intention was

observed on employees who showed positive feelings towards procedural and

distributive justice.

OBJECTIVES OF THE STUDY

A study on employee turnover in IT industry with special reference to Chennai city.

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To analyze the safety measures provided by the industry.

To examine the working conditions prevailing in the industry.

To know the job satisfaction level of the employee working in the industry.

To provide some suggestion to reduce the employee turnover and retain the

employees

RESEARCH METHODOLOGY

In this research study, a Descriptive Research design was adopted. The source of data is

primary and secondary. The Primary data were collected from 250 respondents through

structured Questionnaires and it from Executive and Non-Executive Employees. The

secondary data were used from Journals and Newspapers. The simple random sampling

were used in this study and tools used are

Percentage Analysis

Chi – Square Test

Weighted average method

F-Test

T-Test

ANALYSIS AND INTERPRETATION

SOCIAL – DEMOGRAPHIC FACTORS OF THE EMPLOYEES

TABLE NO. 1

SOCIAL – DEMOGRAPHIC FACTORS OF THE EMPLOYEES

RESPONDENTS SOCIAL – DEMOGRAPHIC FACTORS

GENDER OF THE RESPONDENTS DESIGNATION

SEX

RESPONDENTS

% DESIGNATION RESPONDENTS

%

MALE 145 58 EXECUTIVE 152 61

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FEMALE 105 42 NON-

EXECUTIVE

98 39

TOTAL 250 100 TOTAL 250 100

AGE OF THE RESPONDENTS YEARS OF SERVICE

AGE RESPONDENTS

% YEARS OF

SERVICE

RESPONDENTS

%

LESS THAN

20 YEARS

63 25 LESS THAN

5YEARS

96 38

20-30 YEARS 87 35 5-10YEARS 75 30

30-40YEARS 67 27 10-15 YEARS 45 18

ABOVE 40

YEARS

33 13 ABOVE10YEARS 34 14

TOTAL 250 100 TOTAL 250 100

MONTHLY INCOME OF

EMPLOYEES QUALIFICATION

MONTHLY

INCOME(IN

Rs)

RESPONDENTS

% QUALIFICATION RESPONDENTS

%

BELOW

5000

76 30 H.Sc 32 13

5001-10000 82 33 DIPLOMA 64 26

10001-15000 45 18 U.G 86 34

15001-20000 37 15 P.G 45 18

ABOVE

20000

10 4 Above P.G 23 9

TOTAL 250 100 TOTAL 250 100

(Source: Primary data from survey)

INFERENCE

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The above table reveals the demographic factors in the study. The majority of

respondents are male i.e., 58%, the maximum respondents belong to the age group 20-30

years i.e., 35%, and the majority of respondents belongs to executive level i.e., 61% and the

majority of respondents experience is below 5 years and the monthly income earned by

majority of respondents belongs to above 10,000 i.e., 33% and the majority of the

respondents qualification belongs to undergraduate i.e., 34%.

CHI SQUARE ANALYSIS OF SALARY AND JOB SATISFACTION LEVEL

TABLE NO. 2

SALARY AND JOB SATISFACTION LEVEL

Job

satisfaction

Salary

Highly

satisfied

Satisfied Neutral Dissatisfied Highly

dissatisfied

Total

Highly

satisfied

65 42 33 15 0 155

Satisfied 0 0 0 50 0 50

Neutral 0 0 0 0 28 28

Dissatisfied 0 0 0 0 11 11

Highly

dissatisfied

0 0 0 0 6 6

Total

65 42 33 65 45 250


CALCULATION OF CHI-SQUARE ANALYSIS

40.3 26.0

4

20.4

6

40.3 27.9

13 8.4 6.6 13 9

7.3 4.7 3.7 7.3 5.0

2.9 1.8 1.5 2.9 1.9

1.5 1.0 0.7 1.5 1.0

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NULL HYPOTHESIS (H0)

There is no significant difference between salary and job satisfaction level.

ALTERNATIVE HYPOTHESIS (H1)

There is significant difference between salary and job satisfaction level.

Degree of freedom At the 5 percent level

(r - 1) (c - 1) Table value = 7.962

(5 - 1) (5 - 1) Calculated value = 210.7

4 * 4 = 16

CHI – SQUARE TEST TABLE

Factor Level of

significance

Degree of

freedom

Table

value

Calculated

value Result

Relationship between salary

and level of satisfaction with

training

0.05 16 7.962 210.7 Rejected

INFERENCE

The calculated value of chi-square (210.7) is greater than the table value (7.962), the

null hypothesis is rejected.

CHI SQUARE ANALYSIS OF WORKLOAD AND JOB SATISFACTION LEVEL

TABLE NO.3

WORKLOAD AND JOB SATISFACTION LEVEL

Job

satisfaction

Work Load

Highly

satisfied

Satisfied Neutral Dissatisfied Highly

dissatisfied

Total

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Highly

satisfied

73 31 26 0 0 130

Satisfied 0 0 16 32 0 48

Neutral 0 0 0 25 0 25

Dissatisfied 0 0 0 16 0 16

Highly

dissatisfied

0 0 0 10 21 31

Total

73 31 42 83 21 250


CALCULATION OF CHI-SQUARE ANALYSIS

NULL HYPOTHESIS (H0)

There is no significant difference between workload and job satisfaction level

ALTERNATIVE HYPOTHESIS (H1)

There is significant difference between workload and job satisfaction level.

Degree of freedom At the 5 percent level

(r - 1) (c - 1) Table value = 7.962

(5 - 1) (5 - 1) Calculated value = 241.9

4 * 4 = 16

CHI – SQUARE TEST TABLE

Factor Level of

significance

Degree of

freedom

Table

value

Calculated

value Result

37.9 16.1 21.8 43.1 10.9

14.0 5.9 8.0 15.9 4.0

7.3 3.1 4.2 8.3 2.1

4.6 1.9 2.6 5.3 1.3

9.0 3.8 5.2 10.2 2.6

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Relationship between

workload and level of

satisfaction with training

0.05 16 7.962 241.9 Rejected

INFERENCE

The calculated value of chi-square (241.9) is greater than the table value (7.962), the

null hypothesis is rejected.

REASONS FOR LEAVING THE ORGANIZATION USING WEIGHTED AVERAGE

METHOD

TABLE NO. 4

REASONS FOR LEAVING THE ORGANIZATION USING WEIGHTED AVERAGE

METHOD

S.NO FACTORS X W XW XW/∑W RANK

1 Nature of the job

93 5 465 31 1

2 Problems with

management

15 4 60 4 4

3 Maternity

75 3 225 15 2

4 Relocation to another

area

35 2 70 4.66 3

5 Others

32 1 32 2.13 5

TOTAL 250 15 852 56.8

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INFERENCE

The above table indicates the various reasons for leaving the organization.

According to the opinion given by the respondents, the Employee Turnover is due to nature

of job.

WORK LOAD AND WORKING CONDITION OF EMPLOYEES

TABLE NO: 5

T-TEST

COMPARISON BETWEEN WORK LOAD AND WORKING CONDITION OF

EMPLOYEES

WORKLOAD AND WORKING

CONDITION

FREQUENCY FREQUENCY

HIGHLY SATISFIED 73 33

SATISFIED 52 37

NEUTRAL 45 56

DISSATISFIED 39 72

HIGHLY DISSATISFIED 41 52

TOTAL 250 250

MEAN 50 50

STANDARD DEVIATION 13.78 15.67

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STANDARD ERROR 6.16 7.01

UNPAIRED T TEST RESULTS

P VALUE AND STATISTICAL SIGNIFICANCE

The two-tailed P value equals 1.0000

By conventional criteria; this difference is considered to be not statistically

significant.

CONFIDENCE INTERVAL

The mean of Group One minus Group Two equals 0.00

95% confidence interval of this difference: From -21.52 to 21.52

INTERMEDIATE VALUES USED IN CALCULATIONS

t = 0.0000

df = 8

standard error of difference = 9.333

INFERENCE

The comparison between the working condition of employees’ in the organization

and the work load of employees reveals that the result of the t test is not significant to each

other. Hence the work load and working condition does not coincide.

HEALTH & SAFETY MEASURES AND WORKING ENVIRONMENT

TABLE NO. 6

T-TEST

COMPARISON BETWEEN HEALTH & SAFETY MEASURES AND WORKING

ENVIRONMENT

HEALTH & SAFETY MEASURES AND

WORK ENVIRONMENT

FREQUENCY FREQUENCY

HIGHLY SATISFIED 47 33

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SATISFIED 43 37

NEUTRAL 52 56

DISSATISFIED 49 72

HIGHLY DISSATISFIED 59 52

TOTAL 250 250

MEAN 50 50

STANDARD DEVIATION 15.67 6

STANDARD ERROR 7.01 2.68

UNPAIRED T TEST RESULTS

P VALUE AND STATISTICAL SIGNIFICANCE

The two-tailed P value equals 1.0000

By conventional criteria; this difference is considered to be not statistically significant.

CONFIDENCE INTERVAL

The mean of Group One minus Group Two equals 0.00

95% confidence interval of this difference: From -17.30 to 17.30

INTERMEDIATE VALUES USED IN CALCULATIONS

t = 0.0000

df = 8

standard error of difference = 7.503

INFERENCE

The comparison between the working environment and the health & safety

measures provided to the employees reveals that the result of the t test is not significant to

each other. Hence the work environment has no significance over safety measures.

TRAINING PROGRAM AND EMPLOYEE TURNOVER REASONS

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TABLE NO. 7

F TEST

COMPARISON BETWEEN TRAINING PROGRAM AND EMPLOYEE TURNOVER

REASONS

TRAINING

PROGRAM

FREQUENCY REASON FREQUENCY

HIGHLY SATISFIED 82 NATURE OF THE

JOB

93

SATISFIED 75 PROBLEM WITH

MANAGEMENT

15

NEUTRAL 67 MATERNITY 75

DISSATISFIED 15 RELOCATION TO

ANOTHER AREA

35

HIGHLY

DISSATISFIED

11 OTHERS 32

TOTAL 250 TOTAL 250

RESULT

F statistics 1.1026

degrees of freedom 4 | 4

two-tailed p-value 0.9268

95% confidence intervals

upper 10.5903

lower 0.1148

INFERENCE

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The relationship between training program provided to employees and the reasons

for leaving the organization by employees analyzed using f test reveals that both has an

equal variation.

COWORKERS RELATIONSHIP AND TOP MANAGEMENT PERSONNEL

TABLE NO. 8

F-TEST

COMPARISON BETWEEN COWORKERS RELATIONSHIP AND TOP

MANAGEMENT PERSONNEL

RELATIONSHIP WITH

COWORKERS AND TOP MANAGEMENT

FREQUENCY FREQUENCY

GOOD 135 126

AVERAGE 95 86

POOR 20 38

TOTAL 250 250

RESULT

F statistic 1.7557

degrees of freedom 2 | 2

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two-tailed p-value 0.7258

95% confidence intervals

upper 68.471

lower 0.045

INFERENCE

The relationship between the co-workers relationship and top management

personnel was analyzed using f test reveals that both had an equal variation. This states

that both the samples are equal variant among themselves.

FINDINGS

The demographic factors in the study reveals that the major respondents are male 58%,

the maximum respondents belong to the age group 20-30 years i.e., 35%, and the

majority of respondents belongs to executive level i.e., 61% and the majority of

respondents experience is below 5 years and the monthly income earned by majority of

respondents belongs to above 10,000 i.e., 33% and the majority of the respondents

qualification belongs to undergraduate i.e., 34% .

Chi square reveals that there is a significant relationship between salary and level of

satisfaction with job.

The comparison between the working condition of employees’ in the organization and

the work load of employees reveals that the result of the t test is not significant to each

other. Hence the work load and working condition does not coincide.

The comparison between the working environment and the health & safety measures

provided to the employees reveals that the result of the t test is not significant to each

other. Hence the work environment has no significance over safety measures.

The relationship between training program provided to employees and the reasons for

leaving the organization by employees analyzed using f test reveals that both has an

equal variation.

The relationship between the co-workers relationship and top management personnel

was analyzed using f test reveals that both had an equal variation. This states that both

the samples are equal variant among themselves

SUGGESTIONS

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Create a rotational schedule for roles with sets of tasks that cycle 2 or 3 times a year.

Encourage employee pride by offering innovative programs that demonstrate that

they are important to the success of the company or organization.

Demonstrate respect for employees at all times.

At the same time, don't neglect to hire people with the innate talent, ability, and

smarts to work in almost any position even if you don't currently have the "best"

match available. Hire the smartest people you can find to reduce employee turnover.

CONCLUSION

The researcher has attempted to study some of the factors which may be the

possible reasons for an employee to leave the organization. This research will help the

organization to make the necessary measures to retain the employees. This will certainly

bring down the causes for employee turnover and helps the management to reduce the

employee turnover level.To reduce the employee turnover rate the company has to

concentrate more on working condition and Safety measures. So it leads the organization

to retain their employees.

BIBLIOGRAPHY

JOURNALS

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and commitment in turnover models: a re-analysis using latent variable structural

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Price, J. & Muller, C. (1981). A casual model of turnover of nurses. Academy of

Management Journal, 24(3), 543-565.

Mobley, W.H. (1977). Intermediate linkages in the relationship between job

satisfaction and employee turnover. Journal of Applied Psychology, 62, 237-240.

Elanain Abu, M.H. (2010). Testing the direct and indirect relationship between

organizational justice and work outcomes in a non-western context of the UAE.

Journal of Management Development, 29 (1), 05-27.

Simon Booth, Kristian Hamer (2007). “Labour turnover in the retail industry” the

Inte. J. Retail distribution manage. 35 (4): 289-307

Zuber A (2001). "A career in food service cons: high turnover", Nations Restaurant

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Morrell K, Loan-Clarke J, Wilkinson A (2001). "Unweaving leaving: the use of

models in the management of employee turnover", Int. J. Manage. Rev. 3 (3): 219-

144.

Catherine M Gustafson (2002). “staff turnover: Retention”. International j.

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Maertz CP, Griffeth RW (2004). Eight Motivational Forces and Voluntary

Turnover: A Theoretical Synthesis with Implications for Research. J. Manage.,

30(5): 667-683.

Zhang M (2004). The positive research on the employees’ dynamic turnover model

in IT industry of China. Unpublished Master paper, Xi'an Jiaotong University.

BOOKS

M. Ganagadhar Rao, V.S.P.Rao, Human Resource Management, P.S Narayana

organizational Ltd, 2nd

edition

Kitab Mahal, Research Methodology, 1st edition.

Fisher Schoenfelt Shaw (1997), Human Resource Management, Houghton Mifflin

Company, New Jersey, 3rd

edition.

Kothari C.R., Research Methodology, New Delhi, Vishwa Prakashan, 2006.

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