Recruitment and Retention issues in software companies in Bangalore by Sanjay Gupta

Certificate

This is to certify that Mr. XYZ , all belonging to group E10 of Batch FW/2007-08, of the Indian Institute of Planning and Management, Bangalore has successfully completed their project on “ Recruitment and Retention issues in software

companies in Bangalore” under my guidance and supervision as fulfillment of her course curriculum.

The assistance and help received during the research has been fully acknowledged.

Date:………… Place: Bangalore

Dr. XYZ (Research Guide) XYZ College

Acknowledgement

A research cannot be said to be work of an individual. A research is a combination of views and ideas, suggestions and contributions of many people. We take this opportunity to thank all the people whose cooperation and encouragement made the completion of this research project a possibility. First of all we wish to express my sincere gratitude and for all the support throughout the project study to my research guide Dr. XYZ under whose guidance the Research was undertaken. Without her supervision at each stage of research, the task would not have been accomplished. Last but not the least I wish to thank all the respondents who gave me some of their valuable time to fill up the questionnaires, without which the Research wouldn’t have been a success.

Date: ……………… Place: Bangalore

XYZ

EXECUTIVE SUMMARY

A firm should evaluate its recruitment and retention process along with all its other human resource management activities. Collecting appropriate evaluation measures on recruitment and retention efforts can help an organization to predict the time and budget needed to fill future openings. Identify the recruiting and retention methods that yield the greatest number and/or the greatest quality of candidates, and evaluate the performance of each individual.

The granddaddy of all recruiting evalvuation measures is cost per hire, though speed of filling vacancies is also an important measure. Nationwide insurance , a large insurance , financial services firm and also the fast growing software industries in Bangalore , recently benchmarked its recruiting methods and subsequently made a number of improvements to the process. Improvements in the recruitment process were needed to modify and improve the recruitment process. Many studies have been done to study the recruitment process of the software companies.

Having identified employees or job categories where turnover would be especially dysfunctional, organizations should be proactive in working to retain these people. An increasing percentage of employers claimed to have strategies for promoting retention and less percentage were developing strategies.

Most of the software industries retention policies are formal in nature. Positions such as â&#x20AC;&#x153;Manager of recruiting and retentionâ&#x20AC;? have been created to emphasize the importance of getting and then keeping high-quality staff.

A comprehensive retention management program must be built on accurate information about why people are leaving a particular organization. In the absence of such information, wrong conclusions may be drawn about the causes of departure and ineffective means to combat it adopted. Employees say that the least important factor in motivating them to quit is the availability of jobs that pay more. In fact the reason why employees leave the job is because their job is underappreciated and not recognized. The software industry should improve in this area, regardless of the external labor market. Opportunities to move up and develop skills are also important to employees , and with proper career planning, innovative career ladders, mentoring, and employer provided training or tuition reimbursement programs, much can be done in this areas as well.

TABLE OF CONTENTS

CHAPTER NO.

TITLE

PAGE NO.

INTRODUCTION ……HUMAN RESOURCE ……RECRUITMENT AND RETENTION ISSUES IN S/W INDUSTRIES

5 26

OBJECTIVES OF THE STUDY

LIMITATION OF THE STUDY

INTRODUCTION OF THE INDUSTRY

ANALYSIS OF THE INTERPRETATION

FINDINGS

CONCLUSIONS

SUGGESTIONS

BIBLIOGRAPHY

10.

ANEXURE

INTRODUCTION TO HUMAN RESOURCE

Human resources is a term with which many organizations describe the combination of traditionally administrative personnel functions with performance , Employee Relations and resource planning. The field draws upon concepts developed in Industrial/Organizational Psychology. Human resources has at least two related interpretations depending on context. The original usage derives from political economy and economics, where it was traditionally called labor, one of four factors of production. The more common usage within corporations and businesses refers to the individuals within the firm, and to the portion of the firm's organization that deals with hiring, firing, training, and other personnel issues. This article addresses both definitions. The objective of Human Resources is to maximize the return on investment from the organization's human capital and minimize financial risk. It is the responsibility of human resource managers to conduct these activities in an effective, legal, fair, and consistent manner. Human resource management serves these key functions: 1. Selection 2. Training and Development 3. Performance Evaluation and Management 4. Promotions 5. Redundancy 6. Industrial and Employee Relations 7. Record keeping of all personal data. 8. Compensation, pensions, bonuses etc in liaison with Payroll 9. Confidential advice to internal 'customers' in relation to problems at work. 10.Career development 5

Human resources Modern analysis emphasizes that human beings are not "commodities" or "resources", but are creative and social beings that make class contributions beyond 'labor' to a society and to civilization. The broad term human capital has evolved to contain some of this complexity, and in micro-economics the term "firm-specific human capital" has come to represent a meaning of the term "human resources." An extreme version of this view is that historical inequities such as African slavery must be compensated by current developed nations, which benefited from stolen "human resources" as they were developing. This is an extremely controversial view, but it echoes the general theme of converting human capital to "human resources" and thus greatly diminishing its value to the host society, i.e. "Africa", as it is put to narrow imitative use as "labor" in the using society. In terms of recruitment and selection it is important to consider carrying out a thorough job analysis to determine the level of skills/technical abilities, competencies, flexibility of the employee required etc. At this point it is important to consider both the internal and external factors that can have an effect on the recruitment of employees. The external factors are those out-with the powers of the organization and include issues such as current and future trends of the labor market e.g. skills, education level, government investment into industries etc. On the other hand internal influences are easier to control, predict and monitor, for example management styles or even the organizational culture.

scales (i.e. organized and related groups of items) and not simply focus on individual elements in isolation. To understand how high levels of employee engagement affect organizational performance/productivity it is important to have an a priori model that demonstrates how the scales interact. There is also overlap between this concept and those relating to well-being at work and the psychological contract. As employee productivity is clearly connected with employee engagement, creating an environment that encourages employee engagement is considered to be essential in the effective management of human capital.

Advocating the central role of "human resources" or human capital in enterprises and societies has been a traditional role of Human Resource socialist parties, who claim that value is primarily created by their activity, and accordingly justify a larger claim of profits or relief from these enterprises or societies. Critics say this is just a bargaining tactic which grew out of various practices of medieval European guilds into the modern trade union and collective bargaining unit. A contrary view, common to capitalist parties, is that it is the infrastructural capital and (what they call) intellectual capital owned and fused by "management" that provides most value in financial capital terms. This likewise justifies a bargaining position and a general view that "human resources" are interchangeable. A sign of consensus on this latter point was the ISO 9000 series of standards which in its 1994 revision could be understood to require procedures or a "job description" of every participant in a productive enterprise. The 2000 revision of ISO 9001 in contrast requires to identify the processes, their sequence and interaction, and to define and communicate responsibilities and authorities. In general, heavily unionized nations such as France and Germany have adopted and encouraged such job descriptions especially within trade unions. One view of this trend is that a strong social consensus on political economy and a good social welfare system facilitates labor mobility and tends to make the entire economy more productive, as labor can move from one enterprise to another with little controversy or difficulty in adapting. An important controversy regarding labor mobility illustrates the broader philosophical issue with usage of the phrase "human resources": governments of developing nations often regard developed nations that encourage immigration or "guest workers" as appropriating human capital that is rightfully part of the developing nation and required to further its growth as a civilization. They argue that this appropriation is similar to colonial commodity fiat wherein a colonizing European power would define an arbitrary price for natural resources, extracting which diminished national natural capital. 7

The debate regarding "human resources" versus human capital thus in many ways echoes the debate regarding natural resources versus natural capital. Over time the United Nations have come to more generally support the developing nations' point of view, and have requested significant offsetting "foreign aid" contributions so that a developing nation losing human capital does not lose the capacity to continue to train new people in trades, professions, and the arts. An extreme version of this view is that historical inequities such as African slavery must be compensated by current developed nations, which benefited from stolen "human resources" as they were developing. This is an extremely controversial view, but it echoes the general theme of converting human capital to "human resources" and thus greatly diminishing its value to the host society, i.e. "Africa", as it is put to narrow imitative use as "labor" in the using society. In terms of recruitment and selection it is important to consider carrying out a thorough job analysis to determine the level of skills/technical abilities, competencies, flexibility of the employee required etc. At this point it is important to consider both the internal and external factors that can have an effect on the recruitment of employees. The external factors are those out-with the powers of the organization and include issues such as current and future trends of the labor market e.g. skills, education level, government investment into industries etc. On the other hand internal influences are easier to control, predict and monitor, for example management styles or even the organizational culture.

In a series of reports of the UN Secretary-General to the General Assembly over the last decade [e.g. A/56/162 (2001)], a broad inter sectoral approach to developing human resourcefulness has been outlined as a priority for socio-economic development and particularly anti-poverty strategies. This calls for strategic and integrated public policies, for example in education, health, and employment sectors that promote occupational skills, knowledge and performance enhancement. In the very narrow context of corporate "human resources", there is a contrasting pull to reflect and require workplace diversity that echoes the diversity of a global customer base. Foreign language and culture skills, ingenuity, humor, and careful listening, are examples of traits that such programs typically require. It would appear that these evidence a general shift to the human capital point of view, and an acknowledgment that human beings do contribute much more to a productive enterprise than "work": they bring their character, their ethics, their creativity, their social connections, and in some cases even their pets and children, and alter the

character of a workplace. The term corporate culture is used to characterize such processes. A sign of consensus on this latter point was the ISO 9000 series of standards which in its 1994 revision could be understood to require procedures or a "job description" of every participant in a productive enterprise. The 2000 revision of ISO 9001 in contrast requires to identify the processes, their sequence and interaction, and to define and communicate responsibilities and authorities. In general, heavily unionized nations such as France and Germany have adopted and encouraged such job descriptions especially within trade unions. One view of this trend is that a strong social consensus on political economy and a good social welfare system facilitates labor mobility and tends to make the entire economy more productive, as labor can move from one enterprise to another with little controversy or difficulty in adapting. An important controversy regarding labor mobility illustrates the broader philosophical issue with usage of the phrase "human resources": governments of developing nations often regard developed nations that encourage immigration or "guest workers" as appropriating human capital that is rightfully part of the developing nation and required to further its growth as a civilization. They argue that this appropriation is similar to colonial commodity fiat wherein a colonizing European power would define an arbitrary price for natural resources, extracting which diminished national natural capital.

The traditional but extremely narrow context of hiring, firing, and job description is considered a 20th century anachronism. Most corporate organizations that compete in the modern global economy have adopted a view of human capital that mirrors the modern consensus as above. Some of these, in turn, deprecate the term "human resources" as useless. In general the abstractions of macro-economics treat it this way - as it characterizes no mechanisms to represent choice or ingenuity. So one interpretation is that "firmspecific human capital" as defined in macro-economics is the modern and correct definition of "human resources" - and that this is inadequate to represent the contributions of "human resources" in any modern theory of political economy. Human resource development In terms of recruitment and selection it is important to consider carrying out a thorough job analysis to determine the level of skills/technical abilities, competencies, flexibility of the employee required etc. At this point it is important to consider both the internal and external factors that can have an effect on the 9

recruitment of employees. The external factors are those out-with the powers of the organization and include issues such as current and future trends of the labor market e.g. skills, education level, government investment into industries etc. On the other hand internal influences are easier to control, predict and monitor, for example management styles or even the organizational culture. In order to know the business environment in which any organization operates, three major trends should be considered: 

Demographics – the characteristics of a population/workforce, for example, age, gender or social class. This type of trend may have an effect in relation to pension offerings, insurance packages etc.



Diversity – the variation within the population/workplace. Changes in society now mean that a larger proportion of organizations are made up of "babyboomers" or older employees in comparison to thirty years ago. Also, over recent years organizations have had to become more diverse in their employment practices to cope with the lower work ethic of the newer generations. The service industry for example, has embraced those "baby-boomers" desiring to reenter the workforce. Traditional advocates of "workplace diversity" simply advocate an employee base that is a mirror reflection of the make-up of society insofar as race, gender, sexual orientation, etc. These advocates focus on the social engineering theory without understanding the more important points: diversity of ideas to prevent stagnation of products and business development; expanding the customer base through "outreach"; and profit. Alarmists and advocates of social engineering theory cite a "rise in discrimination, unfair dismissal and sexual/racial harassment cases" as an indicator of the need for more diversity legislation. While such measures have a significant effect on the organization, they effect little or no real change in advancing diversity of ideas in the workplace. Anti-discrimination laws and regulations do require businesses to undertake a cost-benefit analysis. The result of this analysis is often to adopt an approach that generally recognizes gender, racial, and sexual orientation diversity as a cheaper alternative to fighting endless litigation. In summary, diversity, based on social engineering “is about creating a working culture that seeks, respects and values difference” without regard to how diversity increases productive and unity of effort.

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Skills and qualifications – as industries move from manual to a more managerial professions so does the need for more highly skilled graduates. If the market is "tight" (i.e. not enough staff for the jobs), employers will have to compete for employees by offering financial rewards, community investment, etc. 10

In regard to how individuals respond to the changes in a labour market the following should be understood: 

Geographical spread – how far is the job from the individual? The distance to travel to work should be in line with the pay offered by the organization and the transportation and infrastructure of the area will also be an influencing factor in deciding who will apply for a post.



Occupational structure – the norms and values of the different careers within an organization. Mahoney 1989 developed 3 different types of occupational structure namely craft (loyalty to the profession), organization career (promotion through the firm) and unstructured (lower/unskilled workers who work when needed).



Generational difference –different age categories of employees have certain characteristics, for example their behavior and their expectations of the organization.

While recruitment methods are wide and varied, it is important that the job is described correctly and that any personal specifications are stated. Job recruitment methods can be through job centres, employment agencies/consultants, headhunting, and local/national newspapers. It is important that the correct media is chosen to ensure an appropriate response to the advertised post. Modern concept of human resources Though human resources have been part of business and organizations since the first days of agriculture, the modern concept of human resources began in reaction to the efficiency focus of Taylorism in the early 1900s. By 1920, psychologists and employment experts in the United States started the human relations movement, which viewed workers in terms of their psychology and fit with companies, rather than as interchangeable parts. This movement grew throughout the middle of the 20th century, placing emphasis on how leadership, cohesion, and loyalty played important roles in organizational success. Although this view was increasingly challenged by more quantitatively rigorous and less "soft" management techniques in the 1960s and beyond, human resources had gained a permanent role within an organization.

Human resource management (HRM) is the strategic and coherent approach to the management of an organization's most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the 11

business. The terms "human resource management" and "human resources" (HR) have largely replaced the term "personnel management" as a description of the processes involved in managing people in organizations. Human Resource management is evolving rapidly. Human resource management is both an academic theory and a business practice that addresses the theoretical and practical techniques of managing a workforce.

Features Its features include: 

Personnel administration

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Personnel management

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Manpower management

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Industrial management

But these traditional expressions are becoming less common for the theoretical discipline. Sometimes even industrial relations and employee relations are confusingly listed as synonyms although these normally refer to the relationship between management and workers and the behavior of workers in companies. The theoretical discipline is based primarily on the assumption that employees are individuals with varying goals and needs, and as such should not be thought of as basic business resources, such as trucks and filing cabinets. The field takes a positive view of workers, assuming that virtually all wish to contribute to the enterprise productively, and that the main obstacles to their endeavors are lack of knowledge, insufficient training, and failures of process. HRM is seen by practitioners in the field as a more innovative view of workplace management than the traditional approach. Its techniques force the managers of an enterprise to express their goals with specificity so that they can be understood and undertaken by the workforce, and to provide the resources needed for them to successfully accomplish their assignments. As such, HRM techniques, when properly practiced, are expressive of the goals and operating practices of the enterprise overall. HRM is also seen by many to have a key role in risk reduction within organisations. Synonyms such as personnel management are often used in a more restricted sense to describe activities that are necessary in the recruiting of a workforce, providing its members with payroll and benefits, and administrating their work-life needs. So if we 12

move to actual definitions, Torrington and Hall (1987) define personnel management as being: “a series of activities which: first enable working people and their employing organisations to agree about the objectives and nature of their working relationship and, secondly, ensures that the agreement is fulfilled" (p. 49). While Miller (1987) suggests that HRM relates to: ".......those decisions and actions which concern the management of employees at all levels in the business and which are related to the implementation of strategies directed towards creating and sustaining competitive advantage" (p. 352). Academic theory The goal of human resource management is to help an organization to meet strategic goals by attracting, and maintaining employees and also to manage them effectively. The key word here perhaps is "fit", i.e. a HRM approach seeks to ensure a fit between the management of an organization's employees, and the overall strategic direction of the company (Miller, 1989). The basic premise of the academic theory of HRM is that humans are not machines, therefore we need to have an interdisciplinary examination of people in the workplace. Fields such as psychology, industrial engineering, industrial and organizational psychology, industrial relations, sociology, and critical theories: postmodernism, post-structuralism play a major role. Many colleges and universities offer bachelor and master degrees in Human Resources Management. One widely used scheme to describe the role of HRM, developed by Dave Ulrich, defines 4 fields for the HRM function: 

Strategic business partner

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Change agent

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Employee champion

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Administration

However, many HR functions these days struggle to get beyond the roles of administration and employee champion, and are seen rather as reactive than strategically proactive partners for the top management. In addition, HR organizations also have the difficulty in proving how their activities and processes add value to the company. Only in the recent years HR scholars and HR professionals are focusing to develop models that can measure if HR adds value. [7] 13

Critical Academic Theory Postmodernism plays an important part in Academic Theory and particularly in Critical Theory. Indeed Karen Legge in 'Human Resource Management: Rhetorics and Realities' possess the debate of whether HRM is a modernist project or a postmodern discourse (Legge 2004). In many ways, critically or not, many writers contend that HRM itself is an attempt to move away from the modernist traditions of personnel (man as machine) towards a postmodernist view of HRM (man as individuals). Critiques include the notion that because 'Human' is the subject we should recognize that people are complex and that it is only through various discourses that we understand the world. Man is not Machine, no matter what attempts are made to change it i.e. Fordism / Taylorism, McDonaldisation (Modernism). Critical Theory also questions whether HRM is the pursuit of "attitudinal shaping" (Wilkinson 1998), particularly when considering empowerment, or perhaps more precisely pseudo-empowerment - as the critical perspective notes. Many critics note the move away from Man as Machine is often in many ways, more a Linguistic (discursive) move away than a real attempt to recognise the Human in Human Resource Management. Critical Theory, in particular postmodernism (poststructualism), recognises that because the subject is people in the workplace, the subject is a complex one, and therefore simplistic notions of 'the best way' or a unitary perspectives on the subject are too simplistic. It also considers the complex subject of power, power games, and office politics. Power in the workplace is a vast and complex subject that cannot be easily defined. This leaves many critics to suggest that Management 'Gurus', consultants, 'best practice' and HR models are often overly simplistic, but in order to sell an idea, they are simplified, and often lead Management as a whole to fall into the trap of oversimplifying the relationship. Business practice Human resources management comprises several processes. Together they are supposed to achieve the above mentioned goal. These processes can be performed in an HR department, but some tasks can also be outsourced or performed by linemanagers or other departments. ď&#x201A;§

Workforce planning

ď&#x201A;§

Recruitment (sometimes separated into attraction and selection)

ď&#x201A;§

Induction and Orientation 14

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Skills management

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Training and development

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Personnel administration

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Compensation in wage or salary

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Time management

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Travel management (sometimes assigned to accounting rather than HRM)

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Payroll (sometimes assigned to accounting rather than HRM)

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Employee benefits administration

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Personnel cost planning

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Performance appraisal

Careers The sort of careers available in HRM are varied. There are generalist HRM jobs such as human resource assistant. There are careers involved with employment, recruitment and placement and these are usually conducted by interviewers, EOE (Equal Opportunity Employment) specialists or college recruiters. Training and development specialism is often conducted by trainers and orientation specialists. Compensation and benefits tasks are handled by compensation analysts, salary administrators, and benefits administrators. Professional organizations Professional organizations in HRM include the Society for Human Resource Management, the Australian Human Resources Insitute (AHRI), the Chartered Institute of Personnel and Development (CIPD), the International Public Management Association for HR (IPMA-HR), Management Association of Nepal MAN and the International Personnel Management Association of Canada (IPMA-Canada).

Human resource policies are systems of codified decisions, established by an organization, to support administrative personnel functions, performance management, employee relations and resource planning. Each company has a different set of circumstances, and so develops an individual set of human resource policies. 15

Purposes HR policies allow an organisation to be clear with employees on: 

The nature of the organisation

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What they should expect from the company

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What the company expects of them

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How policies and procedures work at your company

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What is acceptable and unacceptable behaviour

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The consequences of unacceptable behaviour

The establishment of policies can help an organization demonstrate that it meets requirements for diversity, ethics and training. In order to fire a person it may be necessary to show cause compliant with employment contracts and collective bargaining agreements; the establishment of HR Policies to document steps in procedures, including displinary procedures, is now standard. Developing the HR Policies HR policies provide an organisation with a mechanism to manage risk by staying up to date with current trends in employment standards and legislation. Human resource consulting is a $18.4 billion industry that has emerged from management consulting, as clients' needs have become more complex and specialized, widening the gap between HR needs and work force capabilities, and thus accentuating the ability of HR management consulting firms to fill this gap. While the multi-faceted nature of business sometimes causes overlap in consulting industries (i.e., with regards to human resources, general management, and information technology), the following are core fields around which most HR consultancies are based: 

Human Capital, including remuneration (also called total rewards), employee rewards and incentive programs, and talent acquisition and management

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Health & Benefits; i.e., orchestrating optimal employee health plans with the carriers themselves

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Mergers & Acquisitions, examining fit across culture, job-type, transaction costs, etc.

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Communication, including surveying employee attitudes, satisfaction, engagement, and other employee behaviors

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Retirement

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Outsourcing

Services may also include legal counseling, global initiatives, investments consulting, and the implementation of HR technologies to facilitate human capital management. The HR consulting industry also employs more actuaries than any other in order to assist in their services. Companies in the field HR consultancies vary in their ranges of services and sizes, with many consultants and academicians breaking off to form their own practices. A 2007 Workforce Management study identifies the top five revenue producing HR consultancies as Mercer ($2.4 billion), Deloitte ($1.6 billion), Watson Wyatt ($1.4 billion), Aon ($1.3 billion), and PricewaterhouseCoopers ($1.1 billion). Other major players include Towers Perrin, Hewitt Associates, and Hay Group.

Qualifications and certifications Many human resource consultants have specialized qualifications or certifications, such as: 

Accountancy: ACCA, CA, CPA, CCA

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Actuarial: EA, ASA, FSA, MAAA

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Educational: MSc in Management/HR, MBA, Ph.D. in Management, DBA, J.D.

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Finance: CFA

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General consulting: CMC

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Health and benefits: CEBS, CCP, CBP

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Human resources: Various SHRM certifications (e.g. PHR, SPHR, GPHR); MCIPD

Employee engagement is a concept that is generally viewed as managing discretionary effort, that is, when employees have choices, they will act in a way that

furthers their organization's interests. An engaged employee is a person who is fully involved in, and enthusiastic about, his or her work. In his book, Getting Engaged: The New Workplace Loyalty, author Tim Rutledge explains that truly engaged employees are attracted to, and inspired by, their work ("I want to do this"), committed ("I am dedicated to the success of what I am doing"), and fascinated ("I love what I am doing"). Studies Engaged employees care about the future of the company and are willing to invest the discretionary effort. Engaged employees feel a strong emotional bond to the organization that employs them. (Robinson) Emotional attachment Only 29% of employees are actively engaged in their jobs. [2] These employees work with passion and feel a profound connection to their company. People that are actively engaged help move the organization forward. 84% of highly engaged employees believe they can positively impact the quality of their organization's products, compared with only 31% of the disengaged. [citation needed] 72% of highly engaged employees believe they can positively effect customer service, versus 27% of the disengaged.[citation needed] 68% of highly engaged employees believe they can positively impact costs in their job or unit, compared with just 19% of the disengaged[1]. Engaged employees feel a strong emotional bond to the organization that employs them.[3] This is associated with people demonstrating a willingness to recommend the organization to others and commit time and effort to help the organization succeed.[4] It suggests that people are motivated by intrinsic factors (e.g. personal growth, working to a common purpose, being part of a larger process) rather than simply focusing on extrinsic factors (e.g., pay/reward).[5] Involvement Eileen Appelbaum and her colleagues (2000) studied 15 steel mills, 17 apparel manufacturers, and 10 electronic instrument and imaging equipment producers. Their purpose was to compare traditional production systems with flexible highperformance production systems involving teams, training, and incentive pay systems. In all three industries, the plants utilizing high-involvement practices showed superior performance. In addition, workers in the high-involvement plants showed more positive attitudes, including trust, organizational commitment and intrinsic enjoyment of the work[3]. The concept has gained popularity as various studies have demonstrated links with productivity. It is often linked to the notion of employee voice and empowerment.[6] 18

Commitment It has been routinely found that employee engagement scores account for as much as half of the variance in customer satisfaction scores. This translates into millions of dollars for companies if they can improve their scores. Studies have statistically demonstrated that engaged employees are more productive, more profitable, more customer-focused, safer, and less likely to leave their employer. Employees with the highest level of commitment perform 20% better and are 87% less likely to leave the organization, which indicates that engagement is linked to organizational performance.[7] For example, at the beverage company of MolsonCoors, it was found that engaged employees were five times less likely than non-engaged employees to have a safety incident and seven times less likely to have a lost-time safety incident. In fact, the average cost of a safety incident for an engaged employee was $63, compared with an average of $392 for a non-engaged employee. Consequently, through strengthening employee engagement, the company saved $1,721,760 in safety costs in 2002. In addition, savings were found in sales performance teams through engagement. In 2005, for example, lowengagement teams were seen falling behind engaged teams, with a difference in performance-related costs of low- versus high-engagement teams totaling $2,104,823.3 (Lockwood).

Life insurance industry Two studies of employees in the life insurance industry examined the impact of employee perceptions that they had the power to make decisions, sufficient knowledge and information to do the job effectively, and rewards for high performance. Both studies included large samples of employees (3,570 employees in 49 organizations and 4,828 employees in 92 organizations). In both studies, highinvolvement management practices were positively associated with employee morale, employee retention, and firm financial performance [3]. Watson Wyatt found that high-commitment organizations (one with loyal and dedicated employees) outperformed those with low commitment by 47% in the 2000 study and by 200% in the 2002 study.[8] Productivity In a study of professional service firms, the Hay Group found that offices with engaged employees were up to 43% more productive. [9]

The most striking finding[citation needed] is the almost 52% gaps in operating incomes between companies with highly engaged employees and companies whose employees have low-engagement scores. High-engagement companies improved 19.2% while low-engagement companies declined 32.7% in operating income during the study period[citation needed]. For example, New Century Financial Corporation, a U.S. specialty mortgage banking company, found that account executives in the wholesale division who were actively disengaged produced 28% less revenue than their colleagues who were engaged. Furthermore, those not engaged generated 23% less revenue than their engaged counterparts. Engaged employees also outperformed the not engaged and actively disengaged employees in other divisions[1]. It comes as no surprise, then, that engaged employees have been statistically linked with innovation events and better problem solving. [10] Generating engagement Recent research has focused on developing a better understanding of how variables such as quality of work relationships and values of the organization interact and their link to important work outcomes.[11] 84% of highly engaged employees believe they can positively impact the quality of their organization's products, compared with only 31 percent of the disengaged[1]. From the perspective of the employee, "outcomes" range from strong commitment to the isolation of oneself from the organization. [12] The study done by the Gallup Management Journal has shown that only 29% of employees are actively engaged in their jobs. Those "engaged" employees work with passion and feel a strong connection to their company. About â&#x2026;&#x201D; of the business units scoring above the median on employee engagement also scored above the median on performance. Moreover, 54% of employees are not engaged meaning that they go through each workday putting time but no passion into their work. Only about â&#x2026;&#x201C; of companies below the median on employee engagement scored above the median on performance. Employees with the highest level of commitment perform 20% better and are 87% less likely to leave the organization, which indicates that engagement is linked to organizational performance.[7] For example, at the beverage company of MolsonCoors, it was found that engaged employees were five times less likely than non-engaged employees to have a safety incident and seven times less likely to have a lost-time safety incident. In fact, the average cost of a safety incident for an engaged employee was $63, compared with an average of $392 for a non-engaged employee. Consequently, through strengthening employee engagement, the company saved $1,721,760 in safety costs in 2002. In addition, savings were found in sales performance teams through engagement. In 2005, for example, lowengagement teams were seen falling behind engaged teams, with a difference in 20

performance-related costs of low- versus high-engagement teams totaling $2,104,823.3 (Lockwood).

Access to a reliable model enables organizations to conduct validation studies to establish the relationship of employee engagement to productivity/performance and other measures linked to effectiveness. It is an important principle of industrial and organizational psychology (i.e. the application of psychological theories, research methods, and intervention strategies involving workplace issues) that validation studies should be anchored in reliable scales (i.e. organized and related groups of items) and not simply focus on individual elements in isolation. To understand how high levels of employee engagement affect organizational performance/productivity it is important to have an a priori model that demonstrates how the scales interact. There is also overlap between this concept and those relating to well-being at work and the psychological contract. As employee productivity is clearly connected with employee engagement, creating an environment that encourages employee engagement is considered to be essential in the effective management of human capital. Influences ď&#x201A;§

Employee perceptions of job importance. According to a 2006 study by Gerard Seijts and Dan Crim, "...an employees attitude toward the job['s importance] and the company had the greatest impact on loyalty and customer service then all other employee factors combined." 21

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Employee clarity of job expectations. "If expectations are not clear and basic materials and equipment not provided, negative emotions such as boredom or resentment may result, and the employee may then become focused on surviving more than thinking about how he can help the organization succeed."



Career advancement/improvement opportunities. "Plant supervisors and managers indicated that many plant improvements were being made outside the suggestion system, where employees initiated changes in order to reap the bonuses generated by the subsequent cost savings."



Regular feedback and dialogue with superiors. "Feedback is the key to giving employees a sense of where they’re going, but many organizations are remarkably bad at giving it."[4] "'What I really wanted to hear was 'Thanks. You did a good job.' But all my boss did was hand me a check.'"



Quality of working relationships with peers, superiors, and subordinates. "...if employees' relationship with their managers is fractured, then no amount of perks will persuade the employees to perform at top levels. Employee engagement is a direct reflection of how employees feel about their relationship with the boss."



Perceptions of the ethos and values of the organization. "'Inspiration and values' is the most important of the six drivers in our Engaged Performance model. Inspirational leadership is the ultimate perk. In its absence, [it] is unlikely to engage employees."



Effective Internal Employee Communications - which convey a clear description of "what's going on". "'If you accept that employees want to be involved in what they are doing then this trend is clear (from small businesses to large global organisations). The effect of poor internal communications is seen as its most destructive in global organisations which suffer from employee annexation - where the head office in one country is buoyant (since they are closest to the action, know what is going on, and are heavily engaged) but its annexes (who are furthest away from the action and know little about what is happening) are dis-engaged. In the worst case, employee annexation can be very destructive when the head office attributes the annex's low engagement to its poor performance... when its poor performance is really due to its poor communications.



Potential red flags ď&#x201A;§

Inappropriate use of Benchmark Data - some of the more well established Employee Engagement survey companies will state that the most important part of post survey follow up is related to comparison of internal survey data to numerous external benchmarks. This seems to have rubbed off onto internal sponsors who demand very specific benchmarks, being unaware that they are diluting the accuracy of their analysis. Steve Bicknell, research analyst in over 100 Employee Engagement global projects concluded that the standard comparisons by industry sector are flawed. Is it right to compare a Bentley employee to one from Vauxhall (GM) because they are in the same automotive sector? He concluded that more information can be obtained by looking at the kind of organisation that employees were a part of (and its employee proposition), its stage in development, internal communication, its brand, motivation and culture.

Human Resource Management Systems (HRMS, EHRMS), Human Resource Information Systems (HRIS), HR Technology or also called HR modules, shape an intersection in between human resource management (HRM) and information technology. It merges HRM as a discipline and in particular its basic HR activities and processes with the information technology field, whereas the programming of data processing systems evolved into standardised routines and packages of enterprise resource planning (ERP) software. On the whole, these ERP systems have their origin on software that integrates information from different applications into one universal database. The linkage of its financial and human resource modules through one database is the most important distinction to the individually and proprietary developed predecessors, which makes this software application both rigid and flexible. Purpose The function of Human Resources departments is generally administrative and common to all organizations. Organizations may have formalized selection, evaluation, and payroll processes. Efficient and effective management of "Human Capital" has progressed to an increasingly imperative and complex process. The HR function consists of tracking existing employee data which traditionally includes personal histories, skills, capabilities, accomplishments and salary. To reduce the manual workload of these administrative activities, organizations began to electronically automate many of these processes by introducing specialized Human Resource Management Systems. Due HR executives rely on internal or external IT 23

professionals to develop and maintain an integrated HRMS. Before the "client-server" architecture evolved in the late 1980s, many HR automation processes were relegated to mainframe computers that could handle large amounts of data transactions. In consequence of the high capital investment necessary to purchase or program proprietary software, these internally-developed HRMS were limited to organizations that possessed a large amount of capital. The advent of client-server, Application Service Provider, and Software as a Service or SaaS Human Resource Management Systems enabled take increasingly higher administrative control of such systems. Currently Human Resource Management Systems encompass: 1. Payrolls 2. Work Time 3. Benefits Administration 4. HR management Information system 5. Recruiting 6. Training/ Learning Management System LMS The Payroll module automates the pay process by gathering data on employee time and attendance, calculating various deductions and taxes, and generating periodic pay cheques and employee tax reports. Data is generally fed from the human resources and time keeping modules to calculate automatic deposit and manual cheque writing capabilities. This module can encompass all employee-related transactions as well as integrate with existing financial management systems. The Work Time gathers standardized time and work related efforts. The most advanced modules provide broad flexibility in data collection methods, labour distribution capabilities and data analysis features. Cost analysis and efficency metrics are the primary functions. The Benefits Administration module provides a system for organizations to administer and track employee participation in benefits programs. These typically encompass, insurance, compensation, profit sharing and retirement. The HR management module is a component covering many other HR aspects from application to retirement. The system records basic demographic and address data, selection, training and development, capabilities and skills management, compensation planning records and other related activities. Leading edge systems provide the ability to "read" applications and enter relevant data to applicable database fields, notify employers and provide position management and position 24

control. Human resource management function involves the recruitment, placement, evaluation, compensation and development of the employees of an organisation. Initially, businesses used computer based information system to: 

produce pay checks and payroll reports;



maintain personnel records;



pursue Talent Management.

Online Recruiting has become one of the primary methods employed by HR departments to garner potential candidates for available positions within an organization. Talent Management systems typically encompass: 

analyzing personnel usage within an organization;



identifying potential applicants;



recruiting through company-facing listings;



recruiting through online recruiting sites or publications that market to both recruiters and applicants.

The significant cost incurred in maintaining an organized recruitment effort, crossposting within and across general or industry-specific job boards and maintaining a competitive exposure of availabilities has given rise to the development of a dedicated Applicant Tracking System, or 'ATS', module. The 'Training Module' provides a system for organizations to administer and track employee training and development efforts. The system, normally called a Learning Management System if a stand alone proeduct, allows HR to track education, qualifications and skills of the employees, as well as outlining what training courses, books, CDs, web based learning or materials are available to develop which skills. Courses can then be offered in date specific sessions, with delegates and training resources being mapped and managed within the same system. Sophisticated LMS allow managers to approve training, budgets and calendars alongside performance management and appraisal metrics. Many organizations have gone beyond the traditional functions and developed human resource management information systems, which support recruitment, selection, hiring, job placement, performance appraisals, employee benefit analysis, health, safety and security, while others integrate an outsourced Applicant Tracking System that encompasses a subset of the above.

Human Resource Law Human Resource Law concerns the inequality of bargaining power between employers and workers. Labour law (also known as employment or labor law) is the body of laws, administrative rulings, and precedents which address the legal rights of, and restrictions on, working people and their organizations. As such, it mediates many aspects of the relationship between trade unions, employers and employees. In Canada, employment laws related to unionised workplaces are differentiated from those relating to particular individuals. In most countries however, no such distinction is made. However, there are two broad categories of labour law. First, collective labour law relates to the tripartite relationship between employee, employer and union. Second, individual labour law concerns employees' rights at work and through the contract for work. The labour movement has been instrumental in the enacting of laws protecting labour rights in the 19th and 20th centuries. Labour rights have been integral to the social and economic development since the industrial revolution.

INTRODUCTION TO RECRUITMENT AND RETENTION POLICIES OF THE SOFTWARE INDUSTRIES

According to Edwin B. Flippo, “Recruitment is the process of searching the candidates for employment and stimulating them to apply for jobs in the organisation”. Recruitment is the activity that links the employers and the job seekers. A few definitions of recruitment are:  A process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends when their applications are submitted. The result is a pool of applications from which new employees are selected.  It is the process to discover sources of manpower to meet the requirement of staffing schedule and to employ effective measures for attracting that manpower in adequate numbers to facilitate effective selection of an efficient working force. Recruitment of candidates is the function preceding the selection, which helps create a pool of prospective employees for the organisation so that the management can select the right candidate for the right job from this pool. The main objective of the recruitment process is to expedite the selection process. Recruitment is a continuous process whereby the firm attempts to develop a pool of qualified applicants for the future human resources needs even though specific vacancies do not exist. Usually, the recruitment process starts when a manger initiates an employee requisition for a specific vacancy or an anticipated vacancy. RECRUITMENT NEEDS ARE OF THREE TYPES PLANNED policy.

i.e. the needs arising from changes in organization and retirement

ANTICIPATED Anticipated needs are those movements in personnel, which an organization can predict by studying trends in internal and external environment.  UNEXPECTED Resignation, deaths, accidents, illness give rise to unexpected needs.

Purpose & Importance Of Recruitment  Attract and encourage more and more candidates to apply in the organisation.  Create a talent pool of candidates to enable the selection of best candidates for the organisation.  Determine present and future requirements of the organization in conjunction with its personnel planning and job analysis activities.  Recruitment is the process which links the employers with the employees.  Increase the pool of job candidates at minimum cost.  Help increase the success rate of selection process by decreasing number of visibly under qualified or overqualified job applicants.  Help reduce the probability that job applicants once recruited and selected will leave the organization only after a short period of time.  Meet the organizations legal and social obligations regarding the composition of its workforce.  Begin identifying and preparing potential job applicants who will be appropriate candidates.  Increase organization and individual effectiveness of various recruiting techniques and sources for all types of job applicants

Retention Employee Retention involves taking measures to encourage employees to remain in the organization for the maximum period of time. Corporate is facing a lot of problems in employee retention these days. Hiring knowledgeable people for the job is essential for an employer. But retention is even more important than hiring. There is no dearth of opportunities for a talented person. There are many organizations which are looking for such employees. If a person is not satisfied by the job heâ&#x20AC;&#x2122;s doing, he may switch over to some other more suitable job. In todayâ&#x20AC;&#x2122;s environment it becomes very important for organizations to retain their employees. The top organizations are on the top because they value their employees and they know how to keep them glued to the organization. Employees stay and leave organizations for some reasons. The reason may be personal or professional. These reasons should be understood by the employer and should be taken care of. The organizations are becoming aware of these reasons and adopting many strategies for employee retention. Importance Of Employee Retention Now that so much is being done by organizations to retain its employees, why is retention so important? Is it just to reduce the turnover costs? Well, the answer is a definite no. Itâ&#x20AC;&#x2122;s not only the cost incurred by a company that emphasizes the need of retaining employees but also the need to retain talented employees from getting poached. The process of employee retention will benefit an organization in the following ways: 1. The Cost of Turnover: The cost of employee turnover adds hundreds of thousands of money to a company's expenses. While it is difficult to fully calculate the cost of turnover (including hiring costs, training costs and productivity loss), industry experts often quote 25% of the average employee salary as a conservative estimate. 2. Loss of Company Knowledge: When an employee leaves, he takes with him valuable knowledge about the company, customers, current projects and past history (sometimes to competitors). Often much time and money has been spent on the employee in expectation of a future return. When the employee leaves, the investment is not realized. 3. Interruption of Customer Service: Customers and clients do business with a company in part because of the people. Relationships are developed that encourage continued sponsorship of the business. When an employee leaves, the relationships that employee built for the company are severed, which could lead to potential customer loss. 4. Turnover leads to more turnovers: When an employee terminates, the effect is felt throughout the organization. Co-workers are often required to pick up the slack. The unspoken negativity often intensifies for the remaining staff.

5. Goodwill of the company: The goodwill of a company is maintained when the attrition rates are low. Higher retention rates motivate potential employees to join the organization. 6. Regaining efficiency: If an employee resigns, then good amount of time is lost in hiring a new employee and then training him/her and this goes to the loss of the company directly which many a times goes unnoticed. And even after this you cannot assure us of the same efficiency from the new employee

What Makes Employee Leave? Employees do not leave an organization without any significant reason. There are certain circumstances that lead to their leaving the organization. The most common reasons can be: •

Job is not what the employee expected to be: Sometimes the job responsibilities don’t come out to be same as expected by the candidates. Unexpected job responsibilities lead to job dissatisfaction.

•

Job and person mismatch: A candidate may be fit to do a certain type of job which matches his personality. If he is given a job which mismatches his personality, then he won’t be able to perform it well and will try to find out reasons to leave the job. No growth opportunities: No or less learning and growth opportunities in the current job will make candidate’s job and career stagnant.

• •

Lack of appreciation: If the work is not appreciated by the supervisor, the employee feels de-motivated and loses interest in job.

•

Lack of trust and support in coworkers, seniors and management: Trust is the most important factor that is required for an individual to stay in the job. Non-supportive coworkers, seniors and management can make office environment unfriendly and difficult to work in.

•

Stress from overwork and work life imbalance: Job stress can lead to work life imbalance which ultimately many times lead to employee leaving the organization.

•

Compensation: Better compensation packages being offered by other companies may attract employees towards themselves.

•

New job offer: An attractive job offer which an employee thinks is good for him with respect to job responsibility, compensation, growth and learning etc. can lead an employee to leave the organization.

Employee Retention Strategies The basic practices which should be kept in mind in the employee retention strategies are: 1. Hire the right people in the first place. 2. Empower the employees: Give the employees the authority to get things done. 3. Make employees realize that they are the most valuable asset of the organization. 4. Have faith in them, trust them and respect them. 5. Provide them information and knowledge. 6. Keep providing them feedback on their performance. 7. Recognize and appreciate their achievements. 8. Keep their morale high. 9. Create an environment where the employees want to work and have fun. These practices can be categorized in 3 levels: Low, medium and high level.

Recruitment and Retention Issues in companies Recruitment & retention problems on the rise Recruitment pressures have increased by more than 20 per cent during the past twelve months, despite the economic slowdown and wave of redundancies. According to the Chartered Institute of Personnel and Development (CIPD), the problem exists across all sectors and regions with more than nine out of ten of the 557 organisations surveyed experiencing difficulties. The CIPD’s survey confirms the trend of the ‘3Rs effect’, where mass redundancy coexists alongside recruitment and retention difficulties. The three main causes of the problem include a lack of specialist skills, poor quality applicants and pay inflexibility, all of which are particularly acute in the public sector. The cost of living is also cited as a major reason - in London and the South East in particular. Meanwhile, the number of organisations reporting retention difficulties has jumped even more markedly in the past year from half in 2002 to more than seven out of ten this year. 32

The problem is even more acute in the public sector, where more than eight out of ten report problems. Retaining administrative staff is also proving difficult. And more organisations in London report retention difficulties than in any other UK region. Angela Baron, CIPD Adviser on Employee Resourcing and the survey's co-ordinator comments, "Recruiting and retaining staff remains HR's biggest challenge in spite of the economic downturn. While some may see this as surprising, a combination of low unemployment and a massive expansion in public sector recruitment has meant that staff at all levels, in all sectors and in all regions are difficult to recruit and retain. "The problems are particularly acute in the public sector where the demand for trained specialist staff currently exceeds supply. However, this should even itself out over time as more trained staff come on stream." One result of these recruitment and retention problems is that employers are now more prepared to train new recruits and lower the level of experience required. Seven out of ten organisations now say that they will appoint people with potential who do not currently meet the job requirements, while the use of coaching and mentoring has also increased sharply. Although more than a third of organisations have improved their starting salaries to recruit staff, the number that have increased pay to retain staff has dropped, a reflection of difficult economic conditions. But this pay inflexibility has led to almost a half of organisations losing candidates, with the public sector the biggest loser. More than six out of ten public sector organisations see pay as a major issue. On the flip side, however, a greater emphasis on work-life balance has become the public sectorâ&#x20AC;&#x2122;s key retention weapon. Half of public sector organisations offer flexible working hours compared with just a quarter of manufacturing and production organisations. Half of not-for-profit and public service organisations also offer both family-friendly and work-life balance provisions beyond the legal minimum. When staff do decide to leave, three-quarters of organisations monitor the findings from exit interviews and six out of ten use staff attitude surveys. But less than a third monitor the financial cost of replacing leavers.

R2 = EOC (Recruitment and Retention = Employer of Choice) Problems with staffing and retention may not be due to bad hires or a low unemployment rate. In fact, they may be related to poor management insight by not recognizing your employees as a core competency in your business strategy. Although employees may not fit the strictest definition of a core competency, it is a fact that your employees are the ones responsible for creating many of your core competencies. It is an undisputable fact that failure to recognize the importance of employee contributions will lead to failure regardless of your business strategy. 33

Recruitment and Retention Creating a strategic plan and definitive initiatives is the easy part of the formula for success. The difficult part is finding, recruiting and retaining the appropriate talent combination in today's market to carry out that plan. Recruitment and retention are major issues in most industries today. These issues are especially critical to the wholesale distribution industry for two reasons: First, wholesale distribution is one of our aged-basic industries that doesn't necessarily project the excitement of the high-tech industries and the dot coms of the new millennium (even though many have crashed and burned). Second, the number of employees between the ages of 25 and 44, traditionally the bulk of the workforce, will continue to decline in the United States for at least the next five years. The baby-boomers are aging quickly toward retirement. Under these circumstances, how in the world does a company not only recruit new talent, but protect the talent they have? Questions about compensation, training, incentives, benefits and work environment always come to the forefront. The answer is committing to becoming an employer of choice (EOC) with as much tenacity as you commit to being a supplier of choice, always wanting the first call and last look.

Many company executives pay far too little attention to this part of their businesses. Often the mindset is that this is the "touchy-feely" stuff that's a non-revenue producing necessary evil. Maybe that thought process didn't hurt the company in the 80's or early 90's when unemployment in some areas reached 10%, but that's not the case today where the labor unemployment rate in many markets is less than 4%. When unemployment is that low, most people who are unemployed just don't want to work. As a result, there is a lot of corporate raiding going on. Even with the recent massive layoff announcements by the automotive industry and some high-tech industries, unemployment remains at a level that just is not conducive to recruitment and retention. Going on midnight raids? Offering BMWs as signing bonuses? Paying way above market wages? NO, the answer is building a human resource strategy into your business plan. Get over the old paradigm that human resource departments are too costly and of little value. In fact, those companies that adopt that philosophy actually spend more money by having highly compensated managers, particularly sales managers, running ads, receiving resumes and doing preliminary interviews when they should be selling. The costs associated with that process as well as the revenue lost due to extended position vacancies inevitably far exceeds the annual costs of 34

dedicated human resource professionals. Secondly, a huge percentage of new hires will jump ship within 18 months if they sense the company is not committed to its employees. They will jump if the company does not accept them into the fold properly by offering initial orientation, subsequent training and a culture that treats the employee as the company's most precious assets. The question is not, "Can you afford to invest in this soft touchy-feely stuff?" The question becomes, "Can you afford to not invest in your most important asset, your employees?" The old paradigm creates a bias against paying attention to the human element of the workforce. Many company executives that do strategic business plans initiate from the top down instead of the bottom up often ignoring the real value of a strategic plan. The real value is the involvement and education of your employees in completing the plan, not in the document itself. Are you at the mercy of your workforce? This bias that exists in many companies is almost as though admitting that employees are the most precious of corporate assets will lead to an anarchy on which owners and managers will fall at the mercy of the workforce. Well, shake your head in disbelief if you want to, but the reality of the situation is that you are at the mercy of your workforce. The rules have to continue to change. If you aren't willing to admit that and get your head in the game then you won't survive in the new millennium. "People are not profits but without people there are no profits." Some companies recognized their dilemma years ago. Many of the top performers in your industry are at the top because they strive to be employers of choice. These are forward thinking companies that have found solutions to their recruitment and retention challenges. Following in their footsteps requires an initial "gut check." Honestly ask yourself how your employees would answer questions like: Do you receive counseling on a career plan? Is there a current wage and salary plan in place? Do performance incentives exist? Do you receive regular training and instruction? Do you receive performance updates and recognition beyond a once a year chat with your boss? Does customer feedback play a role in performance evaluations? 35

Are suggestions reviewed and awarded? Is there both a formal and informal communication channel? These questions relate to the basic core competencies of human resources: staffing, training, rewarding, recognizing and organizing. The business strategic plan cannot succeed without paying attention to this part of the business. You must facilitate your employees' involvement and feedback into this process. This basic premise in implementation across steel service centers varies according to size. The same plan for a $20 million privately held company would not work for a $500 million private or public company.. EOC To solve your recruitment and retention problems you must strive to become an Employer of Choice. To accomplish that objective you must have a Human Resources strategy that is integrated into your corporate strategic plan that acknowledges and recognizes the employees as the company's most precious asset. R2 = EOC

Recruitment Policy Of a Company In todayâ&#x20AC;&#x2122;s rapidly changing business environment, a well defined recruitment policy is necessary for organizations to respond to its human resource requirements in time. Therefore, it is important to have a clear and concise recruitment policy in place, which can be executed effectively to recruit the best talent pool for the selection of the right candidate at the right place quickly. Creating a suitable recruitment policy is the first step in the efficient hiring process. A clear and concise recruitment policy helps ensure a sound recruitment process. It specifies the objectives of recruitment and provides a framework for implementation of recruitment programme. It may involve organizational system to be developed for implementing recruitment programmes and procedures by filling up vacancies with best qualified people. The sort of careers available in HRM are varied. There are generalist HRM jobs such as human resource assistant. There are careers involved with employment, recruitment and placement and these are usually conducted by interviewers, EOE (Equal Opportunity Employment) specialists or college recruiters. Training and 36

development specialism is often conducted by trainers and orientation specialists. Compensation and benefits tasks are handled by compensation analysts, salary administrators, and benefits administrators.

COMPONENTS OF THE RECRUITMENT POLICY •

The general recruitment policies and terms of the organisation

•

Recruitment services of consultants

•

Recruitment of temporary employees

•

Unique recruitment situations

•

The selection process

•

The job descriptions

•

The terms and conditions of the employment

A recruitment policy of an organisation should be such that: •

It should focus on recruiting the best potential people.

•

To ensure that every applicant and employee is treated equally with dignity and respect. 37

•

Unbiased policy.

•

To aid and encourage employees in realizing their full potential.

•

Transparent, task oriented and merit based selection.

•

Weightage during selection given to factors that suit organization needs.

•

Optimization of manpower at the time of selection process.

•

Defining the competent authority to approve each selection.

•

Abides by relevant public policy and legislation on hiring and employment relationship.

•

Integrates employee needs with the organisational needs.

FACTORS AFFECTING RECRUITMENT POLICY •

Organizational objectives

•

Personnel policies of the organization and its competitors.

•

Government policies on reservations.

•

Preferred sources of recruitment.

•

Need of the organization.

•

Recruitment costs and financial implications.

OBJECTIVES OF THE STUDY

The objective of the study is to find out the recruitment and retention issues in the software industry and the policies that the software industry has adopted for recruiting and retaining their employees.

The study was also conducted to know how the employees working in the software organization felt about their companyâ&#x20AC;&#x2122;s recruitment and retention policies. A firm should evaluate its recruitment and retention process along with all its other human resource management activities. Collecting appropriate evaluation measures on recruitment and retention efforts so that the data collected can help an organization to predict the time and budget needed to fill future openings. From this we can identify the recruiting and retention methods that yield the greatest number and/or the greatest quality of candidates, and evaluate the performance of each individual working in a software industry.

The software industry should improve in all the above areas, regardless of the external labor market. Opportunities to move up and develop skills are also important to employees , and with proper career planning, innovative career ladders, mentoring, and employer provided training or tuition reimbursement programs, much can be done in this areas as well if proper analysis is made on the recruitment and retention policies followed by the software industries.

LIMITATIONS OF THE STUDY

Some of the limitations of the study include: •

The sample size. We restricted ourselves to 40 samples. And due to this errors while would have arisen in analyzing the data since important data’s were not recorded.

•

There was also a time constraint. There was little time given to complete the project since we were doing our internship as well at the same time.

•

Most of the people whom we surveyed did not give out sufficient information which could have been useful to our project.

•

We restricted our research to Bangalore city only. We had taken 40 surveys of employees of software industries only in Bangalore.

INTRODUCTION OF THE SOFTWARE INDUSTRY IEEE defines software as "Computer programs, procedures, and possibly associated data pertaining to the operation of a computer system." According to Pressman software is;   

instructions (computer programs) that when executed provide desired function and performance, data structures that enable the programs to adequately manipulate information, and documents that describe the operation and use of the programs.

Software can also be seen as an interface between the problem domain and the computer.

Software engineering is the conduct of software process that is, applying means to produce and maintain a solution to a real-world problem in the software domain. Contemporary View

Software Engineering was defined by Bauer in the late 60s as "The establishment and use of sound engineering principles in order to obtain software that is reliable and works efficiently on real machines." Despite being old, this definition gives the spirit behind the discipline. Component technology is currently a growing approach for developing information systems. Unlike the traditional approach, the component approach assembles existing components to form a software solution. There are currently two competing component standards, Sun's JavaBeans and Microsoft's DCOM. Software Components are reusable building blocks for constructing software systems. Components encapsulate semantically meaningful application or technical services. Component-Based technology is a powerful approach for engineering enterprise information systems, since this approach reduces the conflict of combating the high complexity of such information systems and the search for high quality and productivity.

The pivotal importance of the use of measurements is characteristic to all engineering disciplines. Metrics in an engineering framework refers to standards of measurements used to quantify specific aspects of an engineering process, product or project. A measure is a mapping from the empirical world to a more formal, mathematical world . Developments in software engineering began in programming technique and then grew to other phases of the software life cycle. Structured programming was followed by structured methods of analysis and design. In addition, object oriented and component technologies began. Programming was the golden task in early times of software engineering, but now requirement engineering and design are more popular. In the 1990s project management gained interest and became an important component in software engineering. Software standards and process maturity have characterized the software industry as a mature discipline in the last decade. At a technical level, information system engineering begins with a series of modeling tasks that lead to a complete specification of requirements and a comprehensive design representation for the software to be built. Many methods have been developed for the modeling of information systems. However, object oriented methods are becoming the de facto standard. For some critical information systems, formal methods have been developed to facilitate producing systems with the highest integrity. Formal methods rely on mathematical techniques that express and model the requirements of any product in the software life cycle. The use of formal methods is recommended wherever feasible in the lifecycle. Object Oriented software Development emerged in the 80s as a natural development of the structured methods. UML (Unified Modeling Language) has emerged as a unification of diverse object oriented modeling methods and is becoming an ISO standard. Developments in software engineering began in programming technique and then grew to other phases of the software life cycle. Structured programming was followed by structured methods of analysis and design. In addition, object oriented and component technologies began. Programming was the golden task in early times of software engineering, but now requirement engineering and design are more popular. In the 1990s project management gained interest and became an important component in software engineering. Software standards and process maturity have characterized the software industry as a mature discipline in the last decade.

Component technology is currently a growing approach for developing information systems. Unlike the traditional approach, the component approach assembles existing components to form a software solution. There are currently two competing component standards, Sun's JavaBeans and Microsoft's DCOM. Software Components are reusable building blocks for constructing software systems. Components encapsulate semantically meaningful application or technical services. ComponentBased technology is a powerful approach for engineering enterprise information systems, since this approach reduces the conflict of combating the high complexity of such information systems and the search for high quality and productivity. Object Oriented software Development emerged in the 80s as a natural development of the structured methods. UML (Unified Modeling Language) has emerged as a unification of diverse object oriented modeling methods and is becoming an ISO standard. Developments in software engineering began in programming technique and then grew to other phases of the software life cycle. Structured programming was followed by structured methods of analysis and design. In addition, object oriented and component technologies began. Programming was the golden task in early times of software engineering, but now requirement engineering and design are more popular. In the 1990s project management gained interest and became an important component in software engineering. Software standards and process maturity have characterized the software industry as a mature discipline in the last decade.

SOFTWARE PRODUCTS Generic Products: Stand-alone systems which are produced by a development organization and sold on the open market to any customer. Bespoke (customized) Products: Systems which are commissioned by a specific customer and developed specially by some contractor. Most software expenditure is on generic products but most development effort is on bespoke systems.

Software Product Attributes: •

•

Maintainability It should be possible for the software to evolve to meet changing requirements. Dependability The software should not cause physical or economic damage in the event of failure.

•

Efficiency The software should not make wasteful use of system resources.

•

Usability Software should have an appropriate user interface and documentation.

•

Correctness A program is functionally correct if it behaves according to the specification of the functions it should provide.

•

Reliability Informally, software is reliable if the user can depend on it. The specialized literature on software reliability in term of statistical behavior-the probability that the software will operate as expected over a specified time interval.

•

Robustness A program is robust if it behaves "reasonably," even in circumstances that were not anticipated in the requirements specification.

•

Performance Any engineering product is expected to meet a certain level of performance. Unlike other disciplines, in software engineering we often equate performance with efficiency. A software system is efficient if it uses computing resources economically.

•

User Friendliness A software system is user friendly if its human users find it easy to use. This definition reflects the subjective nature of user friendliness. An application that is used by novice programmers qualifies as user friendly by virtue of different properties than an application that is used by expert programmers.

•

Verifiable A software system is verifiable if its properties can be verified easily. For example, the correctness or the performance of a software system are properties we would be interested in verifying. Verification can be performed either by formal analysis methods or through testing.

•

Repairability A software system is repairable if it allows the correction of its defects with a limited amount of work.

•

Evolvability Software products are modified over time to provide new functions or to change existing functions. Indeed, the fact that the software is so malleable makes modifications extremely easy to apply to an implementation.

•

Reusability Reusability is akin to evolvability. In product evolution, we modify a product to build a new version of that same product; in product reuse, we use itperhaps with minor changes-to build another product. Reusability appears to be more applicable to software components than to whole products but it certainly seems possible to build products that are reusable.

•

Portability Software is portable if it can run in different environments. The term "environment" can refer to a hardware platform or a software environment such as a particular operating system.

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Understandability Some software systems are easier to understand than others. Of course, some tasks are inherently more complex than others. Given tasks of inherently similar difficulty, we can follow certain guidelines to produce more understandable programs. Understandability is an internal product quality, and it helps in achieving many of the other qualities such as evolvability and verifiability.

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Interoperability Interoperability refers to the ability of a system to coexist and cooperate with other systems-for example, a word-processor's ability to incorporate a chart produced by a graphing package, or the graphics package's ability to graph the data produced by a spreadsheet.

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Productivity Productivity is a quality of the software production process; it measures the efficiency of the process and is the performance quality applied to the process. An efficient process results in faster delivery of the product.

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Timeliness Timeliness is a process-related quality that refers to the ability to deliver a product on time.

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Visibility A software development process is visible if all of its steps and current status are documented clearly.

Importance of Product Characteristics

Efficiency Costs 45

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The relative importance of these characteristics depends on the product and the environment in which it is to be used. In some cases, some attributes may dominate. In safety-critical real-time systems, key attributes may be dependability and efficiency Costs tend to rise exponentially if very high levels of any one attribute are required.

THE DEMAND FOR SOFTWARE PRODUCTS Both the demand for larger systems and the demand in diverse domains grows exponentially. TV sets contain 500 kilobytes of software, electric razors contain 2 kilobytes of software, and power trains of GM cars contain 30.000 LOC. Software became a significant component of many devices. F-22 Program Director states that: “The only thing you can do with an F-22 without its software is to take its picture.” (1992)

At the same time, the demand for larger systems grows exponentially. NASA Space vehicles (Figure 1.6) and U.S. Military aircraft software sizes in succeeding models are two examples:

Demand for Larger Software Products

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F4 had no digital computer and software (Early 70’s) F16A had 50 digital processors and 135 KLOC (Late 70’s)

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F16D had 300 digital processors and 236 KLOC (Late 80’s)

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The B-2 has over 200 digital processors and 5000 KLOC

Software Industry: Wealth of people •

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22 people whose net worth > 300,000,000 USD in 1996 Forbes richest 400. 6 out of 40 richest people are form Microsoft, Oracle and SAP alone. Larry Ellison alone made 6,500,000 USD per day between april 1997 and april 1998.

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Microsoft alone created 5,000 to 10,000 millionaires.

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Average growth of millionaires. 44% in San Jose. 7.5% in U.S.

Wealth of companies •

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Among the top 50 initial public offerings in 1997: Software and software service – 11 Telecommunications – 7 Semiconductors - 6 Oracle’s market value $188,000,000 in 1986 $25,000,000,000 in 1997 Mature software players: software 500 40% increased their software revenues %50

Job creation •

1996 - 2,000,000 software people in US. Between 1997 and 1994 annual job growth in the software business 47

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9.6%. US general - %1.6. Between 1998 and 2006 it will be the leading sector to create jobs in US. US job market 346,000 IT-related jobs are vacant.

Global market • •

Europe - 1996 – 1,000,000 software people Indian software market $ 10,000,000 in 1987 $ 2,200,000,000 in 1997 55,000 IT profesionals per year

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Israel – 1996 – 40,000 software people

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Turkey – 1996 – 10,000 IT professionals

The Other Side • •

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In 1996, 70% of IT revenues were from products that did not exist 2 years ago. The story of Word Perfect: In 1990 - %46 share in word processing market. Adapted the windows graphical user interface 16 months later than Microsoft. In 1996 sold off to Corel. In 1997 - 17% share in word processing market. The majority (%60) go bankrupt.

ANALYSIS OF THE INTERPRETATION

Research Procedure

The survey consisted of 10 questions aiming to find out some issues concerning the recruitment an retention problems in the software industries. The very first thing we noticed was that in the small companies the top management were highly involved in the recruitment and retention process. But in a large scale company where the numbers of employees are more than 400 the top management played a small role in recruitment and retention process. Apart from this we also found out that few of the employees who have less than 2 years of experience have no idea about the recruitment and retention process in their very own company.

The respondents were approached randomly and verbal consent was sought before administering the survey. Once agreed, they were offered a structured questionnaire (Annexure) and requested to answer it. A total of 40 responses were obtained. The average duration of the survey was 15 minutes.

Target Segment: The software company employees•

Within the age group of 24-50. -all people working in software companies.

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Geographical location: Bangalore.

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Research Instrument: Questionnaire.

These are the major target audience for the analysis of recruitment and retention issues in software industries.

ANALYSIS OF THE INTERPRETATION

 The survey that we have taken from included these many software companies across Bangalore as shown below in the vertical axis.  The horizontal axis indicates the number of surveys for each different company.

ANALYSIS OF THE INTERPRETATION

 The companies like Sanaba s/w tech , Gryphon IT , BEA systems and DELL were the few software companies where the top management were much participative in recruitment and retention process.  Also Sanaba s/w tech , Gryphon IT , BEA systems consisted of employees ranging from 0-300. These companies where the number of employees were less , the top management took much participation in the recruitment and retention process.  Surprisingly , even though DELL has employees of more than 600, said their top management were very much involve in recruitment and retention process. But , we had only taken a survey from 2 of the employees from DELL and their might be a sampling error in this.

ANALYSIS OF THE INTERPRETATION

The first question in the survey was to find out how many people were aware of the recruitment policy of the organization. And this is the result as shown below.

 As shown in the pie graph above(in percentage) most of the people who said yes make up 97% of the total people shown in.  While 3% of the total people said they have no idea of the recruitment policy of their organization.  Most of the employees are aware of the recruitment policy of their organization i.e. in software companies.

ANALYSIS OF THE INTERPRETATION

There are different ways by which organizations recruit their employees in the software companies. And an analysis was made according to this after taking the surveys.

 The x-axis shows different ways, the software companies use to recruit their employees.  The y-axis shows numbers (not in percentage) of how employees get recruited in software industries.  29 respondents said their immediate boss recruits them , 22 respondents said it was the recruitment agency, 21 respondents said it was a consultancy firm and 12 said it was the panel of directors who recruits them.  Only 1 respondent specified others i.e. he was the person responsible for recruiting employees being the Chief executive officer of Sanaba s/w tech. 53

ANALYSIS OF THE INTERPRETATION

 The next question deals with the accuracy of the recruitment and retention policy in the software industry.

This was split up into three different sectors--- 45%-50% 75%>

---- 55%-75% -----

 An accuracy of 75% was registered by 43% of the respondents which came in top.  An accuracy of between 55%-75% was registered by 20% of the respondents.  An accuracy of between 45%-50% was registered by 37% of the respondents.  This shows that the software industries accuracy in their recruitment and retention process is more than 75% by majority (43%).

ANALYSIS OF THE INTERPRETATION

 The next question deals with how much awareness the employees working in a software company have about the retention policies of their organization.

 It seems that the respondents who were not aware of the retention policy made up 55% of the total respondents.  Respondents who were aware of the retention policy were less than those who were aware of it. They made up 45% of the total respondents.

ANALYSIS OF THE INTERPRETATION

The next question deals with the different methods by which employees are retained in the software industries.

 The bar graph shows that most of the software companies go for increasing the salary annually.  The next popular one refers to the company perks.  The third one is the frequent job rotations.  The fouth one is bonuses.  The fifth one is giving training to employees.  The least popular among the 40 respondents working in different software companies were methods like incentives and appraisals used in order to retain their employees. 56

ANALYSIS OF THE INTERPRETATION  The next question was asked to find out whether the employees working in the software industries think that the recruitment and retention policy are interrelated.

 As indicated by the pie chart 77% of the total respondents said “yes, the recruitment and retention policy were indeed interrelated”.

 But 23% of the total respondents said “recruitment and retention policy were not interrelated”.

ANALYSIS OF THE INTERPRETATION

 Next the respondents was asked to rate their organizations retention policy as compared to the industry.

 40% agreed that it was about 60%

 52% agreed that it was about 50%

 And 8% agreed that it was rated above 70%

ANALYSIS OF THE INTERPRETATION

 Next the respondents were asked how successful the retention policy is in their organization(i.e. in software industry).

 Most of the respondents said that their retention policy were satisfactory as opposed to it being good and very good.  52% of the people said it(i.e. the retention policy) was satisfactory.  43% of the people said it(i.e. the retention policy) was good.  5% of the people said it(i.e. the retention policy) was very good.

ANALYSIS OF THE INTERPRETATION  Next we asked respondents whether their recruitment system was centralized or was it local.

 55% of the total respondents said the recruitment system is local.

 45% of the total respondents said the recruitment system is centralized.

FINDINGS

The survey that we have taken from included these many software companies across Bangalore .

Apart from this we also found out that few of the employees who have less than 2 years of experience have no idea about the recruitment and retention process in their very own company.

Target Segment: The software company employees•

Within the age group of 24-50. -all people working in software companies.

•

Geographical location: Bangalore.

•

Research Instrument: Questionnaire.

These are the major target audience for the analysis of recruitment and retention issues in software industries.

FINDINGS

The companies like Sanaba s/w tech , Gryphon IT , BEA systems and DELL were the few software companies where the top management were much participative in recruitment and retention process. Also Sanaba s/w tech , Gryphon IT , BEA systems consisted of employees ranging from 0-300. These companies where the number of employees were less , the top management took much participation in the recruitment and retention process. Surprisingly , even though DELL has employees of more than 600, said their top management were very much involve in recruitment and retention process. But , we had only taken a survey from 2 of the employees from DELL and their might be a sampling error in this. Most of the employees are aware of the recruitment policy of their organization i.e. in software companies. While 3% of the total people said they have no idea of the recruitment policy of their organization. 29 respondents said their immediate boss recruits them , 22 respondents said it was the recruitment agency, 21 respondents said it was a consultancy firm and 12 said it was the panel of directors who recruits them. Only 1 respondent specified others i.e. he was the person responsible for recruiting employees being the Chief executive officer of Sanaba s/w tech. An accuracy of 75% was registered by 43% of the respondents which came in top. An accuracy of between 55%-75% was registered by 20% of the respondents. An accuracy of between 45%-50% was registered by 37% of the respondents. This shows that the software industries accuracy in their recruitment and retention process is more than 75% by majority (43%). 62

It seems that the respondents who were not aware of the retention policy made up 55% of the total respondents. Respondents who were aware of the retention policy were less than those who were aware of it. They made up 45% of the total respondents.

FINDINGS

Most of the software companies in order to retain their employees go for increasing the employees salary annually.The next popular one refers to the company perks.The third one is the frequent job rotations.The fouth one is bonuses.The fifth one is giving training to employees.The least popular among the 40 respondents working in different software companies were methods like incentives and appraisals used in order to retain their employees. 77% of the total respondents said “yes, the recruitment and retention policy were indeed interrelated”. But 23% of the total respondents said “recruitment and retention policy were not interrelated”. Most of the respondents said that their retention policy were satisfactory as opposed to it being good and very good.52% of the people said it(i.e. the retention policy) was satisfactory.43% of the people said it(i.e. the retention policy) was good.5% of the people said it(i.e. the retention policy) was very good. 55% of the total respondents said the recruitment system is local.45% of the total respondents said the recruitment system is centralized. Finally when the respondents were asked to rate their retention policy when compared to the industry this is what we found out: 40% rated that it was about 60% 52% rated that it was about 50% And 8% agreed that it was rated above 70%

CONCLUSION Most of the employees are aware of the recruitment policy of their organization i.e. in software companies. While 3% of the total people said they have no idea of the recruitment policy of their organization. 29 respondents said their immediate boss recruits them , 22 respondents said it was the recruitment agency, 21 respondents said it was a consultancy firm and 12 said it was the panel of directors who recruits them. Only 1 respondent specified others i.e. he was the person responsible for recruiting employees being the Chief executive officer of Sanaba s/w tech. An accuracy of 75% was registered by 43% of the respondents which came in top. An accuracy of between 55%-75% was registered by 20% of the respondents. An accuracy of between 45%-50% was registered by 37% of the respondents. This shows that the software industries accuracy in their recruitment and retention process is more than 75% by majority (43%). It seems that the respondents who were not aware of the retention policy made up 55% of the total respondents. Respondents who were aware of the retention policy were less than those who were aware of it. They made up 45% of the total respondents. Most of the software companies in order to retain their employees go for increasing the employees salary annually.The next popular one refers to the company perks.The third one is the frequent job rotations.The fouth one is bonuses.The fifth one is giving training to employees.The least popular among the 40 respondents working in different software companies were methods like incentives and appraisals used in order to retain their employees. 77% of the total respondents said “yes, the recruitment and retention policy were indeed interrelated”. But 23% of the total respondents said “recruitment and retention policy were not interrelated”.

Most of the respondents said that their retention policy were satisfactory as opposed to it being good and very good.52% of the people said it(i.e. the retention policy) was satisfactory.43% of the people said it(i.e. the retention policy) was good.5% of the people said it(i.e. the retention policy) was very good. 55% of the total respondents said the recruitment system is local.45% of the total respondents said the recruitment system is centralized. Finally when the respondents were asked to rate their retention policy when compared to the industry this is what we found out: 40% rated that it was about 60%.52% rated that it was about 50%.And 8% agreed that it was rated above 70%

SUGGESTIONS

Recruitment is a continuous process whereby the firm attempts to develop a pool of qualified applicants for the future human resources needs even though specific vacancies do not exist. Usually, the recruitment process starts when a manger initiates an employee requisition for a specific vacancy or an anticipated vacancy. RECRUITMENT NEEDS SHOULD CONSIST OF THREE TYPES  PLANNED i.e. the needs arising from changes in organization and retirement policy.  ANTICIPATED Anticipated needs are those movements in personnel, which an organization can predict by studying trends in internal and external environment.  UNEXPECTED Resignation, deaths, accidents, illness give rise to unexpected needs.

Recruitment should be used for the following purpose  Attract and encourage more and more candidates to apply in the organisation.  Create a talent pool of candidates to enable the selection of best candidates for the organisation.  Determine present and future requirements of the organization in conjunction with its personnel planning and job analysis activities. 65

 Recruitment is the process which links the employers with the employees.  Increase the pool of job candidates at minimum cost.  Help increase the success rate of selection process by decreasing number of visibly under qualified or overqualified job applicants.  Help reduce the probability that job applicants once recruited and selected will leave the organization only after a short period of time.  Meet the organizations legal and social obligations regarding the composition of its workforce.  Begin identifying and preparing potential job applicants who will be appropriate candidates.  Increase organization and individual effectiveness of various recruiting techniques and sources for all types of job applicants Retention Employee Retention involves taking measures to encourage employees to remain in the organization for the maximum period of time. Corporate is facing a lot of problems in employee retention these days. Hiring knowledgeable people for the job is essential for an employer. But retention is even more important than hiring. There is no dearth of opportunities for a talented person. There are many organizations which are looking for such employees. If a person is not satisfied by the job he’s doing, he may switch over to some other more suitable job. In today’s environment it becomes very important for organizations to retain their employees. The top organizations are on the top because they value their employees and they know how to keep them glued to the organization. Employees stay and leave organizations for some reasons. The reason may be personal or professional. These reasons should be understood by the employer and should be taken care of. The organizations are becoming aware of these reasons and adopting many strategies for employee retention.

The process of employee retention should be used to benefit an organization in the following ways: 1. The Cost of Turnover: The cost of employee turnover adds hundreds of thousands of money to a company's expenses. While it is difficult to fully calculate the cost of turnover (including hiring costs, training costs and productivity loss), industry experts often quote 25% of the average employee salary as a conservative estimate.

2. Loss of Company Knowledge: When an employee leaves, he takes with him valuable knowledge about the company, customers, current projects and past history (sometimes to competitors). Often much time and money has been spent on the employee in expectation of a future return. When the employee leaves, the investment is not realized. 3. Interruption of Customer Service: Customers and clients do business with a company in part because of the people. Relationships are developed that encourage continued sponsorship of the business. When an employee leaves, the relationships that employee built for the company are severed, which could lead to potential customer loss. 4. Turnover leads to more turnovers: When an employee terminates, the effect is felt throughout the organization. Co-workers are often required to pick up the slack. The unspoken negativity often intensifies for the remaining staff. 5. Goodwill of the company: The goodwill of a company is maintained when the attrition rates are low. Higher retention rates motivate potential employees to join the organization. 6. Regaining efficiency: If an employee resigns, then good amount of time is lost in hiring a new employee and then training him/her and this goes to the loss of the company directly which many a times goes unnoticed. And even after this you cannot assure us of the same efficiency from the new employee

9. Create an environment where the employees want to work and have fun.

BIBLIOGRAPHY

REFERENCES: •

HUMAN RESOURCE MANAGEMENT by Cynthia D. Fischer, Lyle F. Schoenfeldt, James B. Shaw.

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http://recruitment.naukrihub.com/recruitment-process.html

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http://retention.naukrihub.com/retention.html

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http://en.wikipedia.org/wiki/Human_resources

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http://en.wikipedia.org/wiki/Human_Resource_Law

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http://www.management-issues.com/2006/8/24/research/recruitmentretention-problems-on-the-rise.asp

ANNEXURE Questionnaire (Recruitment and retention issues) Name:_______________________ Company:____________________ Department:__________________ No. of years:__________________ Designation:___________________

1] Are you aware of the recruitment policy of the organization? Yes / No

2] Who recruits in your organization?

(a) Recruitment agency 69

(b) Consultancy (c) Immediate boss (d) Panel of directors (e) Others_________________

3] What is the percentage of accuracy of the recruitment policy and recruitment process of your organization? (a) 45% - 50%

(b) 55% - 75%

4] Are you aware of the retention policy of your company? Yes / No

5] What are the different methods by which employees are retained? State any 3: _____________________________ _____________________________ _____________________________

6] Do you think the recruitment and retention policy are interrelated? Yes / No

7] How do you rate your organization with respect to its retention policy as compared to the industry? (a) 50%

(b) 60%

8] How successful have the retention policy been in your organization? (a) Satisfactory 70

(b) Good (c) Very good

9] Is the recruitment system (a) Centralized

(b) Local

10] How many employees are their in your organization? (a) 0-300

(b) 301-600

11] How much of participation does the top management take in recruitment & retention process? Please comment: _____________________________________________________________________ _____________________________________________________________________ _______________________________________________________________

12] Suggestions if any: _____________________________________________________________________ _________________________________________________________________