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Why Is Attrition So High In India?

Global Business Culture has worked on dozens of offshoring to India projects over the past fifteen or more years with multiple clients from a wide variety of sectors across numerous countries.  These projects have ranged from large-scale transitions through to more modest start-up type activities.  However, regardless of sector, size of project or country of origin of the client, there seems to be one constant headache which keeps reappearing and that is the challenge associated with high levels of attrition.

Of course, all companies in all countries experience a certain level of attrition and indeed, most people would agree that zero attrition is probably bad for any organisation.  Having said that, the level of attrition some of our clients experience in India is simply mind-blowing.  One current client is seeing attrition rates of around 37% as an average across the business – with even higher rates amongst younger new joiners.  While these numbers are excessive, rates in the high twenty-percent bracket are not uncommon.

The recurring costs of recruitment, onboarding and knowledge transfer is enough to eat away at any perceived cost saving which are anticipated from an offshoring project.  The additional costs just mentioned are obvious and easy to calculate – it is the intangible costs, however, which are the real killer.  Nobody calculates the management time and bandwidth this sucks in from the home team or the demotivation which can be felt back in the US or the UK when new people are constantly having to be upskilled only to find they leave after six months.

So far, a less than appealing picture has been painted but I do want to say that for every client who has problems around their attrition numbers, another client can be pointed to who are looking at a stable employee engagement level and attrition rate.

A few fundamental questions need to be asked and answered:

I’ll address some of these issues and a number of related topics in this blog and return to it in a series of articles planned for the future.

The causes of attrition in India

Firstly, people leave jobs in India for all sorts of ‘normal’ reasons:

However, there are a few India-specific reasons which fuel attrition, and which need to be baked into the pie of understanding and these India-specifics fall broadly into two buckets; culture and environment.

Why are attrition rates so high in India?  –  Cultural reasons:

The problem is that many of the countries who engage in offshoring projects in India are from cultures where flatter organisations are currently in vogue and they try to import their flatter, matrix systems into India.  These flat structures tend to have few levels of seniority which means that promotions and improved job titles are few and far between – and this is often where the problems start.

Why are attrition rates so high in India? – Environmental reasons:

I’ve written some ideas here on one of the questions I posed earlier in the blog (‘why are attrition rates so high in India’ but still haven’t addressed the questions:

I will come back to these questions in a later blog because I know that when properly addressed, the challenges of attrition in India can be greatly reduced.  However, in the meantime please feel free to contact me and I’d be happy to discuss these issues with you.

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