the factors impacting employee attrition in sri lankan bpo ... · based on this research, the...

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Colombo Journal of Advanced Research Vol. 1, No. 1; 2019

The Factors Impacting Employee Attrition in Sri Lankan BPO

industry

Shashi Jayatissa, University of West London, e-mail: [email protected]

Upul Lekamge, ANC Sri Lanka, Overseas Academic Partner – University of West London

Abstract

The current issue of a high attrition rate faced by organizations operating in the Business

Process Outsourcing (BPO) industry has an adverse impact on the productivity and

effectiveness to the macro environment. Employees are identified as a key element for this

industry as people skills are considered to be the most important asset they hold. Hence,

based on this research, the author had selected the title of this project as ‘The Factors

Impacting Employee Attrition in Sri Lankan BPO industry’. The sample size was selected

using G-power 3.1.9.2, from the company the research was based on 85 respondents from

a population base of 300 employees. Systematic random sampling techniques was used to

conduct the study. Quantitative research approach was suited from data analysis and

primary data collection using questionnaires was preferred by the author over secondary.

Data analysis was done using the SPSS software which included demographic factors and

questions with five-point Likert scale. Reliability analysis was conducted using Cronbach’s

alpha value, descriptive statistical analysis, correlation analysis, multiple regression

analysis and hypotheses testing. Variable constructs that were more focused during the

research are better salary perks, career advancement opportunities, favorable work

environment and good relationship with immediate manager that would assist ABC

organization to manage staff retention and bring down the attrition rate below industry

norm in order to be competitive and survive. This in turn would help the business to

improve revenue by catering to a profitable client tale.

Keywords: Attrition, BPO/BPM industry, turnover intention

1. Introduction

1.1 Introduce the Problem

The author had undertaken the concept of attrition in this study which had a considerable

impact on the industry that the research was based on. The term “attrition” also referred to

as turnover can be defined as a decline in labor force contributed by factors such as

retirement, letter of resignations, sickness or death. (Business Dictionary, n.d.).

Business Process Outsourcing is a system of contracting out numerous business activities

to a third party. (INVESTOPEDIA, 2015) Since the Year 2000, BPO industry has been

well established in Sri Lanka and had achieved its peak by contributing a significant portion

to the economic growth of the country. SLASSCOM is known to be the national chamber

to govern the BPO industry. (SLASSCOM, 2016).

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The author had selected a BPO company in Sri Lanka to conduct the research which will

be referred to as ABC Organization. ABC Limited was established in 1996 as a captive

unit, currently its operations are headquartered in Mumbai, India, and mainly involved in

Business Process Management (BPM).

1.2 Explore Importance of the Problem

The investigation on practical issues within ABC organization identified that the attrition

rate was increasing gradually. This increase was mostly contributed by the Associate level

employees and the common reasons identified after a discussion conducted with the senior

management team were;

- Dysfunctional relationships with peers and various tiers

- Unclear goals by Management

- Poor working environment

- Cost factor on recruitment and training

Despite addressing these issues, the company had still experienced the increasing attrition

rate; hence the author had determined the research question to be “what factors influence

employee attrition in BPO industry in Sri Lanka?”

1.3 Describe Relevant Scholarship

Firstly, the framework of staff turnover defines voluntary and involuntary turnover and

helps to identify which type of turnover should be considered and addressed to reduce

attrition within the industry. The author had researched on the model of turnover by March

& Simon, in 1958 to identify the transactional connection amongst the company and the

employee, where employee expects outcome for the effort exerted. Price 1977 model

depicts five turnover determinants and intervening variables for attrition. This model was

further developed by Hom & Griffeth, 1995, by including few other determinants that

influence attrition. Motivational theories boils down to Process based theories and Need

based theories. Some of the need based motivational theories were developed by Abraham

Maslow, Fredrick Herzberg, Clayton Alderfer and McClelland while process based

theories by John Stacey Adams, Victor Vroom and Edwin Locke. (Beck, 2000). Vroom’s

expectancy theory was identified by the author as the most appropriate theory to solve the

problem statement “what factors influence employee attrition in BPO industry in Sri

Lanka?”

The author had investigated several previous research findings conducted to identify the

conclusions made on the independent factors such as salary, career advancement, work

environment and immediate manager on the dependent variable attrition. Various cases

have derived vague relationships; hence the author had chosen to perform the research

based on the factors mentioned above.

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1.4 State Hypotheses and Their Correspondence to Research Design

Figure 1. Conceptual framework of the study

Ha1/ (H01) – There is a relationship between salary and attrition / (No correlation).

Ha2/ (H02) – There is a relationship between career development and attrition / (No

correlation).

Ha3/ (H03) – There is a relationship between work environment and attrition / (No

correlation).

Ha4/ (H04) – There is a relationship between supervisor and attrition / (No correlation).

What is the level of Turnover Intention?

For employees to leave an organization, Turnover Intention would be a major cause and

this intention level may vary from one individual to another. Hence the author had

produced this research question to analyse how the turnover intention evolves within

employees and the behavioral patterns that result from turnover intention. Identification of

turnover intention helps to analyse the root causes for this emerging issue, ‘Employee

attrition’ in BPO industry. It is also vital to consider the level of intention, as a very high

level tends employees to be absconded, which is a severe issue with a high impact on the

business activity.

What expectation do employees have on the level of salary?

Employee’s expectation to the salary level would depend on several factors such as

educational qualifications they possess, unique skill varieties, previous work experience,

attitude, successful deliverables etc. It was experienced by the author during the discussion

with the management, that employees in the same grade and position are recruited to

varying salary scale. This would be to match with the expectation to the appropriate

candidate during the recruitment process.

Salary

Career Advancement

Work Environment

Immediate Manager

Employee Attrition

Independent Variables Dependent Variable

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To what extent do employees expect career advancement opportunities for them?

Career advancement ensures that opportunities are provided to employees for the growth

of their job role. The rate of growth anticipated by employees may vary among each other.

Usually in the BPO sector the career growth rate is very high compared to other industries.

Therefore, employees joining this sector would expect their career advancement at this

rate. However, if they do not get a chance to experience this expectation this could lead

to demotivation; hence it was important to identify the expectation employees have on their

career advancement goals that may cause them work-stress, if unattained.

What level of relationship would be acceptable from their immediate managers?

Immediate managers remain as a main contact point to the subordinates; hence the

relationship between the subordinates and immediate managers need to be strong for the

employees to raise any concern they come through immediately. Since it is a formal work-

related relationship a friendly network extensively would not be suitable. Therefore, this

research question was formulated to determine the acceptable level of relationship to

accomplish the work targets effectively.

What is the type of work environment that is appropriate for employees?

Work environment would need to be suitable for the job role, organization policies and

procedures, employees’ requirements etc. Work environment with BPO companies differ

widely to any sector as it is set up to be appropriate for the younger generation. A relaxed

culture with various entertainment activities would be organized regularly to ensure that

the bond among the people are enhanced. There could be employees who prefer this

environment or leave the work place as they are unable to cope up with the culture

assuming lack of professionalism. Hence the author formulated a research question to

identify how the work place need to be organized most appropriately to the wider number

of employees, even though all the employees cannot be satisfied.

2. Method

The author had primarily used causal model of market research to recognise the link

amongst the constructs identified and also part of descriptive research since it is less

expensive and less time consuming to conduct the study in order to avoid the limitations

experienced. Descriptive method enabled collection of large amounts of data for the

research which was considered as the most preferable method in market researches. The

theoretical questionnaire was formulated to obtain the response from the target

respondents. The main purpose for the primary data collection methods was to provide a

clear picture on how the recognized independent variables have an impact on employee

attrition in BPO industry in Sri Lanka. In this research, the author had collected data of

various concepts to identify the impact to employee attrition from identified factors such

as salary, career advancement, work environment and immediate manager by building a

hypothesis upon it. For the purpose of testing the hypotheses a quantitative research using

survey method was conducted by the author under descriptive research.

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2.1 Identify Subsections

Internal consistency denotes to the similarity of the indicators that are being utilized to

measure the construct. It also ensures the consistency of the respondent in replying to the

survey questions conducted. In order to test the internal consistency reliability Cronbach’s

coefficient alpha was suggested as the most acceptable technique. The instrument becomes

better if the coefficient value increases and the lowest acceptable Cronbach’s Alpha value

is 0.7. (Sekaran & Bougie, 2010). The author had indicated the reliability test results for

the pilot study below in Table 1.

It is depicted from table 1 that the Cronbach’s coefficient alpha value had reached the

acceptable range of greater than 0.7 for both the pilot study and main study conducted by

the researcher and hence the research study is reliable based on internal consistency

measure.

Table 1. Internal consistency measures

Convergent Validity measures to what extent a scale links to another scale that measures a

similar variable/ construct. (Malhotra & Dash, 2011). An exploratory factor analysis could

assist on measuring the validity. Indicators for a dimension need to be loaded onto one

factor. The results will be generated through SPSS by Kaiser-Meyer-Olkin (KMO) to

measure the sampling adequacy. KMO value swings between 0 and 1, acceptable value

should be higher than 0.5. On the other hand, Bartlett's test of sphericity involves testing

the null hypothesis which checks whether all constructs are uncorrelated. Hence for the

factor analysis to be successful there needs to be relationships among the constructs, which

is tested from Bartlett’s significance value being less than 0.05. (Field, 2005).

Variable Item no: Cronbach’s Coefficient Alpha

Value – Pilot study

Cronbach’s Coefficient

Alpha Value – Main study

Salary 4 0.891 0.895

Career Advancement 2 0.830 0.822

Work environment 4 0.847 0.895

Immediate manager 4 0.908 0.870

Attrition 9 0.773 0.796

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Table 2. KMO Statistic and Bartlett’s test of Sphericity

Table 2 concludes that KMO values arrived at had met the acceptable threshold of 0.5 and

also the Bartlett’s test values depicts significance with a P-value less than <0.001. This

states that the measurement tools used had partially fulfilled to attain convergent validity.

2.2 Participant (Subject) Characteristics

Population comprises of all potential respondents sharing common characteristics pertinent

to the study. (Malhotra & Dash, 2011) The population that was used for this research were

the Associate level permanent employees at ABC Organization in Sri Lanka within any

age limit or gender.

2.3 Sampling Procedures

In this study the population and the sample frame is clearly designed; hence the author

would be using probability sampling and further elaborating systematic sampling had

suited to be the best from probability sampling techniques. The employees in ABC

organization will be listed out in employees registered with appropriate employee ID

numbers. As per systematic sampling every “nth” respondent in the list would be selected

to the sample. ‘N’ would be decided by (Total population / Sample size) i.e. every 5th

employee from the employee register is selected starting off with an employee randomly.

Other sampling techniques in probability sampling did not meet eligibility because simple

random sampling; required assigning numbers to all the units in population and using a

number generator choosing the employees, which required accessing employee register

which was not allowed to the author. Stratified random sampling; to split the population to

mutually exclusive groups and then use simple random sampling, also caused the author to

face the same disadvantages of simple random sampling. Cluster random sampling and

Multi-stage random sampling is essential for a large group of population where obtaining

a list is impossible and this was not the case in this study (Stephanie, 2015).

2.3.1 Sample Size, Power, and Precision

The estimated population was three hundred employees (300), selected sample size

amounts to 28.3 percent of the population that is eighty-five employees (85) diverse from

six different teams within the organization to generalize on the research finding.

Bartlett’s test of Sphericity

Variable KMO Statistic Chi Square Value P-Value Significance

Salary 0.831 211.037 <0.001 Significant

Career Advancement 0.500 55.289 <0.001 Significant

Work environment 0.803 217.743 <0.001 Significant

Immediate manager 0.725 213.325 <0.001 Significant

Attrition 0.702 316.077 <0.001 Significant

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(SLASSCOM, 2017). To determine on the sample size the author had utilized G-power

version 3.1.9.2.

2.3.2 Measures and Covariates

The uses of a questionnaire had helped the author to gather appropriate data, ensure the

collected data is comparable and agreeable to conduct the analysis and allow questions to

be diverse and engaging by decreasing the level of bias in questions. The format of the

questionnaire was published in English by considering the respondents in the sample.

Firstly, the demographic variables were captured to figure out the nature of behavior of the

respondents. All questions were derived under five-point Likert scale for the ease of

respondents since open-ended questions provide subjective results. The questionnaire

contained six parts with a total of 36 questions. Six parts consisted of demographic factors

(D1-D13), salary opinion (S1-S4) which assist to identify the expectation employees have

on the level of salary, opinion on growth opportunities (CA1-CA2) to describe the level of

career advancement opportunities available and expected by the employees, work

environment opinion (WE1-WE4) helps to determine the type of work environment that is

appropriate for employees, opinion on immediate manager (IM1-IM4) to attain the

research objective of the level of relationship between the immediate manager and the

employees and finally the potential reasons if at all the employee would want to leave are

listed to select one or more, along with the level of agreement.

2.3.3 Research Design

The pilot study was conducted using 20 respondents to test on the reliability of the variables

and the main study involved 85 respondents which were reliability and validity tested prior

to the analysis. The collected data was manually entered to the SPSS software for the

analysis to be initiated.

2.3.4 Experimental Manipulations or Interventions

The author had followed certain procedures to protect ethical practices in data collection.

They could be listed down to; not influencing any respondent to forcefully participate in

the survey and privacy of the respondents were maintained at a high level, also no

discrimination in terms of sexual, race or any other base when selecting the sample from

the population and data collection were allowed while ensuring equal treatment to all

respondents. A member from the HR department of the ABC organization distributed the

questionnaires and assisted the respondents as the researcher was not allowed in doing so

under the company policies and regulations. Mailing the questionnaires or conducting an

online survey was not allowed by the company, which would have benefited the author to

eliminate the time constraint.

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3. Results

3.1 Statistics and Data Analysis

Mean of attrition variable is 31.0235 along with a standard deviation of 5.69. This

replicates that average responses for attrition variable is unbiased in the selected sample. It

is evidenced that the maximum and minimum values are 45 and 16 respectively, while the

median being 31. Standard error of distribution had amounted to 0.61743 which indicates

the difference from actual population mean to sample mean. The interquartile range of the

distribution is 8.

Mean of salary variable is 9.5294, along with a standard deviation of 3.92. This replicates

that average responses for salary variable is neutral in the selected sample. It is evidenced

that the maximum and minimum values are 19 and 4 respectively, while the median being

9. Standard error of distribution had amounted to 0. 42492 which indicate the difference

from actual population mean to sample mean. The interquartile range of the distribution is

5.5.

Mean of career advancement variable is 5.7765 along with a standard deviation of 1.86047.

This replicates that average responses for career advancement variable is agreeable in the

selected sample. It is evidenced that the maximum and minimum values are 10 and 2

respectively, while the median being 6. Standard error of distribution had amounted to

0.20180 which indicates the difference from actual population mean to sample mean. The

interquartile range of the distribution is 3.

Mean of work environment variable is 13.6706 along with a standard deviation of 3.55028.

This replicates that average responses for work environment variable is acceptable in the

selected sample. It is evidenced that the maximum and minimum values are 20 and 6

respectively while the median being 15. Standard error of distribution had amounted to

0.38508, which indicates the difference from actual population mean to sample mean. The

interquartile range of the distribution is 4.

Mean of immediate manager variable is 14.0235 along with a standard deviation of

3.44679. This replicates that average responses for immediate manager variable is

agreeable in the selected sample. It is evidenced that the maximum and minimum values

are 20 and 7 respectively while the median being 15. Standard error of distribution had

amounted to 0.37386 which indicates the difference from actual population mean to sample

mean. The interquartile range of the distribution is 4.5.

3.2 Ancillary Analyses

The author had conducted a check for assumptions of multivariate data analysis, before

testing regression. This test mainly includes Outliers, Normality, Linearity and

Multicollinearity which is vital to be met to guarantee least square measures are fair. (Hair

JR., et al., 2010).

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Outliers can be referred to values that fall in to unacceptable outer ranges in the distribution.

It is important to identify these outliers by using various available methods and in this study

the researcher had utilized PASW Statistics 18 Stem and Leaf diagrams. (Hair JR., et al.,

2010) (Refer Appendix A)

Normality implies the outline of the data distribution for a single metric variable and how

it is correspondent with normal distribution. Skewness and Kurtosis information generated

in descriptive statistic above will be observed by the author to estimate normality.

Additionally, box plots, histograms, and normal Q-Q plots are tools that are commonly

used by researchers for the same analysis. Skewness evaluates the distribution symmetry

while kurtosis offers information on the peak of the distribution. Common norm accepted

for the skewness is ±1 and for kurtosis is ±3 to meet the acceptance in multiple regression

analysis. (Hair JR., et al., 2010). These thresholds are being achieved in this study.

It is assumed to have a linear relationship among dependent and independent variables.

Mutually accepted way of testing linearity by researchers are through examining scatter

plots of the constructs. (Hair JR., et al., 2010). It can be evidenced from Figure 2 that no

abnormality is visible from linearity assumption and variables possess upward and

downward moving slopes.

This assumption refers to an extreme correlation of independent variables in a multiple

regression model. To further test on the collinearity Condition Index (CI) of the variables

need to be less than 30, Tolerance level > 0.1 and Variable Inflation Factor (VIF) < 10.

(Hair JR., et al., 2010). In this study all, independent variables had not breached these

values as per the below table 3, hence it can be concluded that there is no multicollinearity

between independent variables.

Figure 2. Scatter plot

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Table 3. Multicollinearity Statistics

3.3 Participant Flow

The selected sample characteristics represent the population based on the analysis

conducted in this study. A normality test was accompanied to prove that the data is

approximately normally distributed and parametric test was used by the author to recognize

relationships among variables. Lastly the initiated correlation analysis to test the hypothesis

had evident that the formulated hypothesis is acceptable at significance level of 1 percent.

3.4 Intervention or Manipulation Fidelity

Correlation enables researchers to measure the strength of the connection among two

constructs. (Malhotra & Dash, 2011). Descriptive statistics in this study ensures that the

variables are almost normally distributed hence the author could conduct a Pearson

correlation analysis for the completion of this analysis. The author had conducted the

parametric test below to measure the relationship as the constructs are normally distributed.

The author had presented the relationship between variables graphically in Annexure B.

Ha1 – There is a relationship between salary and attrition.

The table B1 in Annexure B provides evidence that attrition and salary variables are

negatively correlated (-0.520). The hypothesis initially formulated based on the

relationship between attrition and salary are mentioned below. A significant correlation

exists at 0.01 level, Ha1 is acceptable. Henceforth, the conclusion that can be arrived is

that a negative relationship exists among attrition and salary at a significance level of 1

percent, which means more salary perks provided to employees would retain them from

leaving the company.

Ha2 – There is a relationship between career development and attrition.

Results from table B2 indicates that a negative correlation exist between attrition and career

advancement and the correlation coefficient is (-0.458). The hypothesis initially formulated

based on the link amongst attrition and career advancement are mentioned below. Ha2 is

acceptable as the correlation is significant at 0.01 level. The conclusion is that there is a

negative correlation that exists between attrition and career advancement at a 1 percent

significance level, which indicates more career development opportunities provided to the

employees would cause the attrition level to decline.

Collinearity Statistics Condition Index

Tolerance VIF

Salary 0.476 2.102 7.625

Career advancement 0.325 3.075 11.206

Work environment 0.637 1.569 12.333

Immediate manager 0.514 1.944 17.488

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Ha3 – There is a relationship between work environment and attrition.

It is depicted in table B3 that a negative correlation exists among attrition and work

environment variables with a correlation coefficient of (-0.475). The hypothesis initially

formulated based on the relationship between attrition and work environment are

mentioned below. A significant correlation exists at 0.01 level, Ha3 is acceptable.

Therefore, at a significant level of 1 percent the conclusion that can be is a favorable work

environment ensures that employees are engaged and comfortable with less turnover.

Ha4 – There is a relationship between supervisor and attrition.

It can be read from table B4 that a negative correlation at a 1 percent significance level is

evident among attrition and immediate manager with a correlation coefficient of (-0.357),

which indicates a good relationship between subordinates and managers prevents

employees from leaving the organization. Hence, Ha4 is acceptable.

3.5 Baseline Data

It is depicted that a majority 62% of the workers are within the age group of 25-29, followed

by 25% in 20-24 age group and only 13% above 30 years. The author had formulated the

questionnaire with less than 20 years; however, none of the respondents had fallen to this

group. Therefore, it can be concluded that the majority of the population in Associate level

falls to 25-29 age group in ABC organization. From the 85 respondents 54% were males

and 46% females. This represent gender equality in ABC organization, while the male

group is only a slight increase. Gender ratio is vital for this analysis on Attrition to identify

whether the causes for turnover are due to gender that cannot cope with work environment

of the BPO industry. Residential status of the employees who had responded explains 64%

living in their own house but 36% living on rent. Majority of singles are living with their

parents and high cost of living is incurred by 36% of the sample respondents who represent

the population. It can be noticed that 72% of the associate level employees are single while

only 28% being married. This could probably mean that married people tend to leave the

industry due to work life balance and odd work shifts they experience. It is indicated that

main stream of the employees (84%) travel more than 6 kms daily to work. A severe issue

they face is the work shift, due to this fact they are unable to find a staff transport to travel

to office. However, since one-way transport is provided by the company (except for Sri

Lankan shift) the employees might not treat the distance to be a critical fact. It is explained

that 95% represent a qualified employee base and the highest percentage being graduates

holding the associate level employment in ABC organization.

Hence this industry would have an upper hand due to an asset pool of qualified employees

contributing to the economy. Majority of the employees hold the position of senior

associate and lead associate accounting to 97% of the sample. When this fact is combined

with other demographic data collected, accelerated career progression through promotions

can be visible within the company and could be expected in the industry which is the most

vital factor that employees consider from the demographic factors. Salary will be the main

motivator for any employee in job selection. It can be read that the designations considered

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do not match with the salary scales and company policy had not considered standardized

packages when determining employee perks. This could be a serious issue if not addressed

leading to unfair distribution. 75% of the employees depend on the salary provided by the

company with no other source of income; hence, as identified by the author salary is a

crucial element for employees in ABC organization pertaining to the BPO industry. Most

of the participants in this survey work for the UK shift which is 12.30 pm to 9.30 pm in Sri

Lankan time. This could be a problematic situation for newly married employees or

mothers with kids at younger age that cause them to leave the industry. The overall

experience level of employees among the respondents is expected to be a best practice to

match the designation with the experience level; however, a fair distribution is seen from

experience which is incompatible with the distribution in designation. For instance, 51%

of employees as lead associates (highest level); however, only 28% possess an experience

of more than 5 years. Hence the question arises on the rest 23% (51%-28%) being less

experienced to achieve this designation and what criteria were considered by the managers

to offer such promotions. BPO companies is dynamic due to technological advancements;

hence, training requirements are highly important for employees to deliver accurately and

efficiently even though an insignificant portion (11%) aren’t being trained, this should be

focused with priority.

3.5.1 Statistics and Data Analysis

Formulated equation based on regression analysis data results from table 4 as indicated

below;

Attrition = 43.386 – 0.506 (Salary) – 0.035 (CarAdv) – 0.456 (WorEnv) – 0.079

(ImmMan)

Figure 3. Model summary

Figure 3 indicates a p-value less than 0.001 which proves a good fit and is evident that at

least one independent variable explicates the outcome.

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Figure 4. ANOVA

Table 4. Regression Analysis

Table 4 depicts that the 4 independent variables possess an adjusted r square value of 0.305

i.e. 30.5% variance to attrition can be explained by the identified variables salary, career

advancement, work environment and immediate manager.

3.5.2 Adverse Events

Independent variables are normally distributed, based on the correlation analysis

conducted; furthermore, author had compiled the summary of the hypothesis acceptance.

Table 5. Summary of correlation analysis

Coefficientsa

Model Unstandardized

Coefficients

Standardized

Coefficients

T Sig.

B Std. Error Beta

1 (Constant) 43.386 2.606 16.647 .000

Salary -.506 .192 -.348 -2.640 .010

CarAdv -.035 .488 -.011 -.071 .944

WorEnv -.456 .183 -.284 -2.497 .015

ImmMan -.079 .209 -.048 -.377 .707

a. Dependent Variable: Attrition

Dependent variable Independent variable Standardized β Hypothesis

Attrition Salary -0.348 Ha1 accepted

Career advancement -0.011 Ha2 accepted

Work environment -0.284 Ha3 accepted

Immediate manager -0.048 Ha4 accepted

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4. Discussion

The analysis conducted proved a negative correlation of (-0.520) between attrition and

salary causing acceptance to Ha1 hypothesis formulated. Therefore, a conclusion could be

derived that better salary packages provided to employees result in attrition rate declining

and vice versa. The Pearson correlation coefficient explains a moderate positive

relationship between the two variables which also means salary variable has no significant

impact on attrition. The research on literature review provided evidence that low salary

scales had aroused the attrition rate steadily. (Talapatra, et al., 2016). Even though a

negative relationship is evident among the two constructs this is only moderately true as

the model replicates other variables having a considerable impact on attrition over salary

variable. Research findings indicate a negative relationship between salary and attrition,

employees with lower salaries resulting in possessing higher turnover intention. However,

it was noticed in the study that the negative relationship between the constructs were

moderate and regression model showed salary had less significant impact on attrition.

Employees would deviate from this norm only if other factors are valued more by them

over salary. However, this research finding may differ for employees working in different

economies or industries. Senior management teams could focus on designing attractive

salary packages based on the job and performance by the Associate level employee to retain

the employees founded by the negative correlation identified in the study. This research

can further recommend to the management to match the salary with the current market

rates and ensure that the employees are happy with justifiable reasons on their salary scale.

The results obtained by the analysis states that Ha2 was acceptable as a relationship existed

between the two variables, attrition and career advancement by indicating a correlation

coefficient of -0.458, this means a moderate negative relationship could be visible in these

two variables. In the literature review the findings indicate that there was negative

relationship evident in these constructs. (UKEssays, 2015) In this model a moderate

correlation coefficient was visible which means career advancement would not have a

major impact on attrition. However, there could be circumstances where employees

prioritize on their career advancement job opportunity over any important factors for future

developments. Example: Audit workers and Senior management of the company is

required to develop career growth policies for each employee. Immediate manager needs

to identify the profile of the subordinate of any lacking areas to provide ample training on

job enlargement and job rotation if required to move up the hierarchy. Monthly or quarterly

discussions with employees would help managers to evidence the progress of the

employees from their current levels.

Analysis replicates that a relationship exist between work environment and attrition

accepting the hypothesis formed Ha3. The two variables give a correlation coefficient of (-

0.475). Hence it can be read that a favorable work environment in a company result in

employees having less turnover intention rate. As the Pearson correlation coefficient is less

than 0.5, work environment variable holds a less impact on attrition. However, this doesn’t

mean that this variable need to be avoided as based on the hypothesis developed a

relationship exist to attrition; hence a certain level of focus is required. It is the duty of the

senior management to make sure employees are satisfied with the work environment. This

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can be done by improving the culture, respect at work. A suggestion box easily accessible

to subordinates could be effective as it brings their real ideas and views to the

management’s notice. Furthermore, online surveys can be conducted anonymously for

recommendations on improving the work environment in an ideal manner.

A negative link was evident among immediate manager and attrition constructs from the

analysis conducted. Therefore, the fourth hypothesis Ha4 can be accepted. The correlation

coefficient of these two variables are (-0.357) a weak negative correlation visible from the

study. Previous researchers provided evidence that a high impact is expected from

immediate manager to the level of attrition (Buckingham & Coffman, 1999); however, this

research had proved a low impact in Sri Lankan context. It is vital for the management to

have appropriate communication with their subordinates to openly take up issues that

employees have with their immediate managers. These managers should have given ample

training on how these discussions are taken through. Daily close interaction with Associate

level employees enables the supervisors to improve their relationship and help each other

during difficulties.

Attrition is a vital concept to any business that needs to be considered in priority by the

senior management. Absence on consideration cause serious damage to the company which

was visible in ABC organization reducing growth prospects. Findings of the author to

identify independent variables (salary / career advancement / work environment and

immediate supervisor) impacting attrition provided evidence of a relationship existence

among these variables through techniques of correlation and regression. This study had

proved that mostly salary, career advancement and work environment were factors that had

contributed to the attrition of the organization while immediate manager had a weak

relationship.

4.1 Areas for Future Research

The study conducted was of quantitative approach that required respondents to provide the

agreement level on a five-point Likert scale to the statements mentioned by the researcher.

A qualitative research enables to conduct interviews personally to identify more feasible

factors that impact attrition and help to expand the model in this study.

The sample selection was limited to one company in the BPO industry; hence this opens a

gap for potential researchers to consider respondents from a wide group of employees

among various companies for better insights. Also, as the adjusted r square value indicated

was 30.5% for the identified factors salary, career advancement, work environment and

immediate manager, 69.5% is explained by other factors which open up an avenue for other

researchers to identify them. Conceptual framework formulated by the author was tested

in Sri Lankan context; consequently, the research results are limited only to this economy.

Therefore, the future researchers could extend this study globally in order develop models

and test them that suits best for global context. Regression analysis performed showed that

immediate manager had no significant impact on attrition. This research can be extended

to various other industries which are labor intensive that face attrition issue. Henceforth it

is recommended to conduct a research considering these gaps to recognize further details.

51


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52


Appendix A

Stem-and-Leaf Plot

53


Appendix B

Correlation Analysis

Table B1. Relationship between Attrition and Salary

Table B2. Relationship between Attrition and Career advancement

Correlations

Attrition CarAdv

Attrition Pearson

Correlation

1 -.458**

Sig. (2-tailed) .000

N 85 85

CarAdv Pearson

Correlation

-.458** 1


N 85 85

**. Correlation is significant at the 0.01 level (2-tailed).

Correlations

Attrition Salary

Attritio

n

Pearson

Correlation

1 -.520**


N 85 85

Salary Pearson

Correlation

-.520** 1


N 85 85

**. Correlation is significant at the 0.01 level (2-

tailed).

54


Table B3. Relationship between Attrition and Work environment

Table B4. Relationship between Attrition and Immediate manager

Correlations

Attrition WorEnv

Attrition Pearson

Correlation

1 -.475**


N 85 85

WorEnv Pearson

Correlation

-.475** 1


N 85 85


Correlations

Attrition ImmMan

Attrition Pearson Correlation 1 -.357**


N 85 85

ImmMan Pearson Correlation -.357** 1


N 85 85


the factors impacting employee attrition in sri lankan bpo ... · based on this research, the...

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