Employee Retention– A Cat & Mouse Game!

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Hiring is one part of the battle for running a company. The other part of the battle or the biggest battle is retaining the employees. This is where it gets interesting. Companies in a rush to hire the talent before anyone, tend to be generous with the pay packages. This turned out to be a vicious circle which is haunting all the companies. The employees of the company get the same kind of offers from companies across the sector. Bit of a catch-22 situation!

employee retention

The years 2008 and 2009 belonged to the employers. There were jobs cuts, salary cuts, bonus cuts, variable pay cuts and coke cuts. Now the recession is over and organizations across the world are slowly ramping up their IT spend. Where does that money go? It has to come back to world’s back office. And the citizens of the world’s back office are all chipper about it. Increased IT spend spurred a demand which was last seen in 2005. Given the robust demand for software talent, the ball has quietly moved to the employee court.

How are employers coping with it? Very well if you ask me. To kick things off, companies have increased the notice period by a month. This is a warfare technique to squeeze out whatever is left from the employee. This is outright unhealthy for any corporation. Once an employee resigns, the news spreads like a wildfire. The spread is so rapid that you might question the role of Twitter in Jasmine revolution. Now the everybody knows that a employee is resigned, the next logical discussion is where is he going? how is the market like? How much hike did you get? If they are feeling lucky then… “What’s the CTC”.

After the discussion is complete and another news capsule spreads across, almost all the employees will rethink their ‘strategy’. Here’s what goes on in his or her mind : “I am way better than him. He never knew the difference between SQL and PL/SQL and yet he has landed a great offer. I bet if I put my resume, I will get a better offer”. Trust me this is the discussion which goes on in every employees mind. Even the most loyal ones. So extending the notice period ain’t gonna work.

What else do we got? The other tactic is “we will match the offer”. This is a very rare scenario reserved for the so-called stars, superstars and megastars of the software development world. More often than not, this works. Offering a promotion is another tactic which works quite well. A little bit about promotions. They are for the most part imaginary. If you are developer, then you will be promoted to a Sr. Developer reporting to a Manager with no one in between. When you are due for your next promotion a new layer appears mysteriously and you are on it. It could either be a Tech Lead or an Associate Manager. And the Sr. Associate Manager, Asst manager and then Manager. You might find a title like “Assistant associate deputy junior project manager” ludicrous. Ok. May be it is. But you get the point.

More recently, iGate-Patni combine has given a 6-month salary as a retention bonus to its employees. This might sound insane to the common man. But that is the cost of retaining an employee. If you gather all the efforts to hire new guy, may be a six-month bonus to existing employees isn’t that big a deal. Or May be if the employees weren’t treated so shabbily they would have stayed back. Or may be it really doesn’t matter.

A bit of a cat and mouse game. There is no way out of this. This game has to be played. No body wins and no body loses….

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  1. […] HRs trying to ensure employee retention. For any manager acquiring new talent is as important as retaining the existing talent pool which they have nurtured over the course of […]

  2. Amit says

    In my experience junior employees find other opportunities for better remuneration.
    However senior (5-7+ years) employees look for work when they are treated bad and unfair/unjust.
    Man management is something Indian managers will never learn as the problems are in the root, respecting others’ personal life, views and issues is something you never see in Indian society.

  3. Mihir Naik says

    nicely written this article….thanks again…

  4. Jay says

    What I find amusing that even though the recession is over, prices & expenses have gone up, the salary packages have in fact gone down instead of increasing.

    The job market surprising does not indicate a healthy level of salary packages for freshers & experienced people.

    Find it really odd!!

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