Manpower Retention and Cost Control Strategies in Indian Service Sector - A Human Resource Perspective

Anurika Vaish, Sarthak Sengupta


India had been witnessing an unprecedented growth since 1990 in its economy. Consequently, the job opportunity in India had also evidenced a positive growth. The year 2000-2005 had been quite promising in terms of high employment growth rate in India. While the service sector, particularly the IT/ITES sector had registered a massive employment growth rate since the year 1999 till 2008 and even today growth of job opportunities is tremendous. With soaring demand of online shopping, social media and cloud computing more than ever before, the demand for professionals in the IT/ITES domain are getting phenomenal day by day and becoming competitive. Moreover, the estimate projects the market size of Indian IT industry to grow at a rate of 12-14% for FY2016-17 in constant currency terms. The sector is also expected to triple its current annual revenue to reach US$ 350 billion by FY 2025 (IT and ITES Industry in India, 2017). Subsequently, with opportunity and growth in the sector few daunting challenges have also emerged which calls for immediate attention with special reference to high attrition rate in the job segment of IT/ITES companies. An average of more than 30% of employees in midlevel positions at tech startups and e-commerce firms quit their jobs every year, according to human resource (HR) consultants and industry executives (Sapam, 2015). Moreover, attrition rate is found to be higher in firms where business models are rapidly changing. Attrition rate in IT/ITES sector had been registered to be approximately 28% in March 2011 which is considered to be the highest among other employment sectors in India. Retaining the employees despite providing high pay and competitive environment is becoming a challenge and a high-cost affair for companies. Thus, the present research work aims at proposing strategies to retain employees in the company and indirectly control on costs which accrue due to attrition. Eventually, factors responsible for attrition would be identified, followed by finding cause and effect relationship to evolve the best-fit strategies for retention which indirectly control associated cost implications and challenges for companies in this sector.


Aus. J. Acc. Eco. Fin. Vol 3(2), October 2017, P 76-84

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