Employee Retention Issues in Indian IT Sector

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Employee Retention Issues in Indian IT Sector
MANAGING PEOPLE AT WORK –
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Employee Retention Issues in Indian IT Sector
Table of Contents
Introduction.....................................................................................................................................3
Human Resource Management Issue...........................................................................................3
Indian Information Technology Industry......................................................................................3
Challenges of Employee Retention in the Indian IT Sector................................................................4
Recommendations for Dealing with Employee Retention Issues......................................................7
Conclusion........................................................................................................................................9
Bibliography...................................................................................................................................10

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Employee Retention Issues in Indian IT Sector
Introduction
Human Resource Management Issue
Human resource management is a concept that deals with the workforce or the human
element of a business organizations. Human resource management aims at optimising the
performance levels of individuals by helping business organizations in improving the work
conditions for them and by establishing effective relations between employers and
employees (Noe, Hollenbeck, Gerhart, & Wright, 2017).
Since the spread of globalisation and liberalisation, the competition in the market has
become really tough. Business operations have started expanding their operations overseas,
which is forcing their rivals to think of strategies that could help them in coping up with the
changing trends. Business organisations have become vulnerable to a number of internal
and external environment factors, which can change and shape the future of an industry in
real time. One such factor that has been disturbing the operations of a number of industries
is the high labour turnover rates or the inability of the business organisations to retain their
talented employees (Johnson, 2018). Therefore, in this report, we will discuss the issue of
labour retention and turnover rates in the Information Technology sector in developing
countries.
Indian Information Technology Industry
India is one of the largest developing countries and has become an obvious choice for
business expansion for almost all multinational organizations. Information Technology
industry has been booming in India since the last few decades and is estimated to reach
around USD 350 Billion by 2025 in terms of revenue. India is favourable for IT growth and
expansion because it has abundant resources available at competitive costs (Singh, 2018).

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Employee Retention Issues in Indian IT Sector
The Indian IT sector is facing a number of issues at present but one of the major issues that
is having an impact on the India IT companies is the employee retention in the industry.
Employee retention is defined as the ability of a company to prevent its employees from
leaving the workplace to join another company . The Indian IT sector is facing high labour
turnover ratios because of a shortage of skilled employees, economic growth and employee
turnover. Due to a shortage of talented employees in the market, exclusive talent is being
poached by competitive business organizations, which is increasing the difficulties of
business organizations operating in the Indian IT sector (Kumar & Kavitha, 2018). Further,
the Indian IT sector employees are in a demand all over the globe because of their talent
and commitment to their work, which further adds up to the problem.
In this report, we will discuss the impact that the issue of employee retention will have on the
companies operating in the Indian IT sector and how can they deal with the issue. We will
also use data from secondary sources to gain knowledge about the best practices and
strategies that Indian IT sectors are implementing to ensure high employee retention rates.
Challenges of Employee Retention in the Indian IT Sector
When a business organisation recruits a new candidate, it invests a lot of resources in its
candidate for his development and to turn them into high performing employees and no
company would like to lose such an employee to a competitor. Further, an employee quitting
an organisation leaves a void , which has to be filled through external or internal recruitment
methods sooner or later. As a result, retaining employees is important for business
organizations, especially for the ones that are operating in a tough market like the Indian IT
sector. The challenges of retention issues on the Indian IT sector companies are:
Shortage of human resources:
Shortage of human resources is one of the biggest challenges that is faced by the IT sector
companies operating in India as a result of employee retention issues. IT companies that are