At Gislen Software we have very low employee attrition rate. Normally it is within 2-5%/year. However, the Indian IT industry has a very high attrition rate. Some studies indicate as high rates as 23%. At Gislen Software we have at the same time only had an employee attrition rate of 2-5% per year. However, the IT employee attrition rate is usually very high in India as well as worldwide. Some of India’s top IT companies have had employee attrition rates as high as or even above 20%.
Many of our staff have stayed for more than ten years. Some have even been with us almost from the beginning more than two decades back. Why have we managed to have such a low employee attrition rate at Gislen Software? We cannot, in any way claim to have found the silver bullet. However, we do believe we have done something right since our employee attrition is as low as it is.
The advantage of being smaller
Of course, being a smaller company is an advantage when you want to have a lower employee attrition rate. It is much easier to see every person when the crowd is small. Employees get a broader perspective. They can see the wholeness and not a small part. Seeing the big picture is often not possible when working with a larger company. Since the personal relationship is important, a lower employee attrition rate is more to be expected.
At the same time, a small company does not have the financial muscles and brand recognition in the employment market. Therefore it may be more challenging for a small business to recruit top talents. Some of the big companies have given up on retention. They are instead trying to recruit great people and getting the most out of them as fast as possible. We believe that this is a short-term solution. We believe clients will appreciate working with a supplier who has a low attrition rate. Among other advantages, a lesser attrition rate will over time reduce cost and time lost on knowledge transfer.
Many important factors are affecting employee attrition rate:
- Paying market-salaries
- Equal opportunities
Any company which is serious about retaining its employees must ensure that these factors are in place. If not, then management will not be seen as credible by the employees. No initiatives can make up for not doing a good groundwork. If these things are not in place employees will not stay. In other words – you can’t fake it. A low attrition rate doesn’t come without effort. It is mainly the result of leadership and culture.
We don’t use a formal appraisal system. Instead, our managers meet and regularly interact with every single person reporting to them. Since we use agile methodologies, our self-managed teams themselves ensures that every team member gets recognition and feedback. The informal communication of a non-hierarchical organisation creates natural support-networks where every person is seen and valued. We also try to add a fair amount of fun into the way we work and even outside work.
We recognise that people have different needs and we try to understand these. Young people may not mind working extra hours monitoring the client’s system during late evenings. Extra income or time off may motivate them more. Employees with children, may value regular work-hours, work from home option or bring children to the office. We believe that higher autonomy and flexibility are the primary reasons for our low employee attrition rate.
When new employees join our company directly from college, they do go through formal training initially. However, in general, we don’t believe that classroom training or formal training is the best way to learn. Rather learning is something which happens all the time and mostly on the job. To make sure that our staff continuously acquire new knowledge and competence, we organise tech-groups. These groups jointly study and research a topic and build some proof of concepts. After learning the area, they end up presenting their learnings for their colleagues. It is also important that staff have the opportunity to rotate and get exposure to new technologies over the years.
Making a difference
We decided early to be a different company. That does not mean that we can’t learn from others. But we are not in the business of copying what others do. We wanted to lead. Therefore we decided from the beginning to be an ethical company in as many ways as we could. Becoming an ethical company has been a journey, and we are by no means ready. We can always do more and do better.
A few initiatives that stand out over the years:
- Our CSR initiative where we give and support the less fortunate in our community mainly via Little Lambs School.
- Solar panels and inverters on our roof to manage power cuts, instead of a diesel generator
- We wanted to lead in moving towards a more sustainable and environmentally friendly business. As a result, we have volunteered to manage garden areas in our export zone. Waste segregation is another of our pet projects.
- We want to inspire our staff and others to live a healthier lifestyle. We have a gym at the office, and we participate in various marathon races in the city.
If the company takes social responsibility, it will make it a better workplace. A socially responsible company is attractive both for existing staff and attracts new employees. If the employer you work for is a responsible corporate citizen, it creates pride. It also strengthens our brand-recognition. It gives us a chance to stand out in a way larger companies can’t always do.
Recruiting the right people and growing the right way
Obviously just having low attrition would not be the only way of being a great company. We have to source the right people and train them in the way we work. If we fail to do this, it will not make any difference if we manage to keep them. We do believe that we should hire most of our future leaders from our own company. Sticking to such principles have put a limit on how fast we can grow. However, possibly that is a good one. We want to keep our unique culture and atmosphere and continue to stand out in all we do.
One of the most talked about contemporary motivation theories says that what motivates employees the most is autonomy, mastery and purpose. Money is just a hygiene reason. If you feel you are underpaid, you may leave because of the feeling that the employer is unfair. However, if you think you receive a fair salary, money stops being an important motivator.
Conclusions for why we have low employee attrition
To become a better company is not so much an endpoint as a journey. We want to engage with each employee and treat them as individuals continually. We always try to give each staff member the flexibility he or she needs. They should always be learning and growing both as professionals and people. It is also important that they are feeling part of an organisation who wants to make a difference. Each of our employees should feel that they are working together with great colleagues. We believe that we can become an even more outstanding company.
During 2014 we were rewarded for excellence in our sector by D&B, Federal Bank and Times Group. We feel it is our obligation to take it as a challenge to improve on where we are. We never stop aiming for higher levels of excellence. In the process, we hope we can continue to keep our great staff and stand out as a great company. We are working hard to continue to keep up our low attrition rate.