Employee Retention Strategies in the BPO Industry

Mar 15, 2019

If you are business savvy, then you know that your employees are the lifeline of your company. You understand that it’s never a good that idea to take for granted how vital top talents are when climbing the ladder of success.

However, acquiring top talent is not your only priority. Another important factor that is often neglected is retaining these top talent.

It is going to be detrimental to the growth of your company if your employees are quickly coming and leaving, especially in the competitive world of BPO. It is hard to build a momentum when facing this kind of problematic situation.

Hiring managers and HR leaders are going to have to spend their time and efforts in finding and training new employees and making sure that the current employees are working efficiently instead of working on core functions.

It is reported to cost approximately 20% of that employee’s salary to find a replacement for that same position. The team’s morale can also be affected whenever a turnover happens, but if your company has developed good employee retention strategies, then they can acquire and hone the needed skills as they continue to work for the company. Also, employees who stay for a long time develop loyalty to the company and management.

Bottom line, employees gets more and more efficient the longer they stay with you which, in turn, can make for higher ROI.  

In the BPO sector where competition is fierce, the need for retaining top talent is even greater. However, it’s very unfortunate to know that the high turnover rate is one of the biggest problems BPO industries are facing.

There has been a significant increase in employee turnover in many countries. 20% of annual turnover is now the new norm. In India, employee turn attrition can reach up to 48% in call centers, and 26-28% for non-call centers BPO. And in the Philippines, employee attrition rate reached up to 33% in 2011.

Hence in the article, to avoid major losses for BPO sectors, we are going to discuss the strategies you can adapt to improve your company’s retention strategies. But before getting into that, let us first give employee retention a concise definition.


What is employee retention?

Employee retention generally refers to the companies’ abilities, strategies, practices, and techniques, to keep their employees. It is a function of the HR section to lower the number of employees who leave the company by ensuring that they can provide the right set up and the environment in order to a create a happier and loyal employee who can keep working alongside with the growth of the company.

Now that we have that out of the way, we can further dissect the problem of high turnover rate in BPO industries by identifying the factors causing this phenomenon, what can HR professionals do to address these issues, and how to incorporate it in BPO industries’ employee retention strategies.


Factors that affect high turnover rate in BPO industries

Factors involving high turnover rates for BPO sectors are found to be multifactorial including both socio-economic and business factors. Geography and differences in culture can also be factors to be considered.


  • Societal Factors

Employees began to seek more privileges such as more break time, more relaxed environment, and more benefits


  • Geography

Employees can now travel by train or buses but they prefer not to work longer hours and on erratic shifts to have time for their families.


  • Maturity turnover

Once the employee has been trained by the company, the employee realizes his increase in marketability and can offer his services to a competitor and demand for a higher wage.


It can also be that the employee does not see a career growth in the current company that he is working for. According to Glassdoor’s study, even after controlling the pay, job title, industry, and other factors, they found that employees who remained in the same job without a change in rank were more likely to leave for another company as a next career path.


  • Stress from work and no work-life balance

Stress from work can disrupt an employee’s work-life balance which can cause the employee to resign.

These are the common reasons as to why BPO industries have a high turnover rate and these are the issues that have to be addressed and adapted by HR leaders if they want to improve their employee retention capabilities.


How to increase employee retention in BPO

BPO industries must develop pro-active strategies when it comes to employee retention. Creating work policies that are beneficial to the employees and can raise employee retention is not just a matter of being “fair”, but is also a strategic move on the part of the HR executive.

Companies who are able to understand their employees’ demands and needs in the workplace can plan proactive strategic decisions that can eventually lead to the companies’ success in the markets they are in. At the end of the day, when an efficient employee chooses to stay with the company, the company gains dramatic cost-savings.


  • Create a flexible working environment

Providing your employees with flexible and convenient working environment can help keep them engaged and efficient. It also helps them achieve a more ideal work-life balance. For example, you can give mothers extended maternal leaves. This way, your employees can see that you care about them and may help build a sense of trust and loyalty. The employee may want to give back by working twice as hard for the company.

Or you can also try creating flexible hours for your employees. If possible, you can even allow them to work from home. If the commute is time-consuming, the employee can use the travel time to work instead of losing hours in traffic. Employees with children can also find working from home a more suitable arrangement for them since they can better take care of their household and family if they work in their one homes.


Employees are more likely to stay if they see that there’s an opportunity for them to grow. BPO sectors have to constantly provide career opportunities so employees are motivated to work hard and move up the ladder. Fortunately, BPO’s who are proving formalized career paths are now increasing in number.

One way they can encourage career growth and professional skills development is by constantly conducting seminars and training. Individualized career guidance and creation of individual roadmaps to career development can also be effective. BPOs can open in-house work counseling teams that can provide valuable work advice tailored according to the employee’s skills, strengths and career aspirations for interested employees.


  • Competitive salary and address concerns of health, security, transportation, and food

It is no longer enough to provide career opportunities for employees. Over time, employees want to make sure that the basic benefits and salary they are entitled to are progressive and competitive.

In fact, according to a survey, healthcare benefits was listed among the most important reasons to stay. Employees value their health, vision, and dental insurance above all other benefits, and 10% higher base pay is linked to 1.5 percentage point increase in the chances of an employee staying in their current company the next time they change to a new position.

It was also recognized that companies who are providing employee benefits such as Health insurance, security insurance, transportation allowance, and free food, have observed positive results. There was increased productivity, boost in morale and better engagement.

The main point here is that in the long term, employees are not satisfied with new job positions alone. They want to see a brighter future for themselves and are going to demand raised compensations as they rise in ranks.


  • Stock options with accompanying vesting periods

Offering stock options for employees who have stayed with the company for an extended period of time does not only make the employee more likely to want to stay with the company but it also deters the employee from leaving. Once the employee has developed a financial interest in the company, the chances of the employee leaving decreases.


  • Offer recreational activities, and basic facilities

The millennials, especially, are more receptive to working for companies that have recreational activities and facilities. The general approach by the company is to provide and invest in fun-filled activities such as events, parties, gyms, cafeteria, pool tables, coffee bars, and trendy interiors.

These activities have to produce an environment where the young and hip employees are going to enjoy their time and are not going to be burned out fast from the amount of work they have to do for the company, and ultimately, they are going to more likely stay in the company if they find the job and the company culture to be fun and inviting.


  • Offer performance incentives

Creating an incentive-based bonus for the employees is going to make them more motivated to do their best. Companies can do this by giving bonuses and incentives after every quarter and by devising a performance rating wherein the employees are evaluated and determined whether they get extra rewards for exceeding targets assigned to them. Some rewards can be in a form of family and travel opportunities for the employee.


Final Thoughts

Employee retention is one of the most pressing concerns the BPO industry is facing. The good news is that the factors for this phenomenon such as societal factors, no career growth opportunities, and stress from work due to lack of work-life balance, have already been identified.  BPO industries can now address these issues and incorporate them into their retention strategy plans.

Always remember that your employees are your competitive advantage. They can make or break your company. Hence, BPO industries must practice a more proactive approach to their employee retention capabilities. Treat your employees right and provide them with justifiable work-life balance and they are going to want to stay with you.



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By: Curran Daly + Associates


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