Business Case Studies, HRM / Organizational behaviour Case Study, Employee Retention in Indian BPO Industry, New Initiatives

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HRM / Organizational behaviour Case Study

Case Title:

Employee Retention in Indian BPO Industry: The New Initiatives

Publication Year : 2004

Authors: Mercy Mathew, G Srikanth

Industry: Information Technology and IT Enabled Services


Case Code: HRM0002

Teaching Note: Available

Structured Assignment: Not Available

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The Indian BPO (business process outsourcing) industry faced an attrition rate of 30% to 40%, costing the industry Rs. 300 crore in recruitment and training. Added to these were the costs of failed service levels. The total loss due to attrition was estimated to be 25% of the annual revenue. A synergy between incentives, higher education programmes, career growth programmes, selection of right person for the right job and changes in the organisation environment helped organisations in bringing the attrition rate under their control to some extent. But all these efforts had cost implications. The high cost involved in employees’ retention was eroding the cost competitiveness of Indian BPO companies.

Pedagogical Objectives:

  • To discuss the efficiency of the measures undertaken to curtail employee attrition in the Indian BPO industry
  • To discuss the alternative measures to curtail the attrition without eroding the cost competitiveness.

Keywords : BPO (Business Process Outsourcing), Recruitment and training, Attrition rate, Compensation, bonus, incentives, Career plan and growth, Job rotation and enrichment, Promotion and motivation, HRM Case Study, Higher education, Employee turnover, Employee retention initiatives, Human resource management, Pay package, employee compensation, HCL Technologies, GTL, Tracmail, Vertex India, Wipro Spectramind, Progeon, Daksh, Psychometric tests


  • Introduction
  • High attrition rate – the problem
  • Initiatives to curb attrition
  • The challenge: cost of retention vs cost of attrition

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