A Three-Dimensional Analysis of Turnover Intention among Employees of ITES/BPO Sector

This paper aims at testing a conceptual model connecting variables of the demographical characteristics of the employees, internal and external work environment to ITES/BPO employee turnover. Based on the gaps identified from the literature, the study seeks to examine the influence of intervening variables such as alternative job availability and organizational commitment on turnover intention. The findings suggest that organizations need to focus on how to foster organizational commitment, to enhance job satisfaction, reduce job stress and provide support to facilitate employee retention. The findings of this study would provide information that will be useful to management practitioners and academicians. INTRODUCTION Outsourcing is the buzzword of the modern management system wherein an external service provider is contracted by the management to perform functions of a non-core activity (like pay roll in Human Resource stream), which is critical in nature. The advancement in the field of information technology and telecommunication has been the fundamental reason for the evolution of such new techniques that in turn aid the successful running of business houses. Another reason for such a monumental change in the nature of functioning of today's management system can be attributed to globalization. Specifically companies need to compete on a global basis if they are to achieve economies of scale and keep up with the latest technologies and advancements (Porter, 1980). The offshore outsourcing markets were initially developed as software development services and later developed as Information Technology-Enabled Services (ITES) . ITES has developed into a major part of IT industry. On the same lines, the BPO sector also forms a major part of ITES industry. The ITES/BPO industry is a young and nascent sector in India and has been in existence for a little more than a decade. Despite its recent arrival on the Indian scene, the industry has grown phenomenally and has now become a very important part of the export-oriented IT software and services environment. It initially began as an activity confined to multinational companies, but today it has developed into a broad based business platform backed by leading Indian IT software and services organizations and other third party service providers. The ITES/BPO market expanded its base with the entry of Indian IT companies and the ITES market of the present day is characterized by the existence of the IT giants who are able to leverage their broad skill-sets and global clientele to offer a wide spectrum of services. ITES include services that can be outsourced using the powers of IT the extent to which this is possible depends on the industry, location, time, costs and managerial perception of the risks involved. The Internet has facilitated execution of several activities, previously done within geographical proximity to the firm, from remote lowlabor cost locations, drawing both transaction cost and production cost efficiencies. WHY STUDY TURNOVER IN ITES/BPO SECTOR? Voluntary turnover has become a problem for many organizations, regardless of the nature of job, in today's society. The costs of this turnover not only have an impact on organizations, but also affect the morale of the rest of the staff. Prior research has examined the costs of an employee's decision to voluntarily leave an organization. For example, a recentfigure explained that it costs a company $78,000 to replace an employee (Ramsey-Smith, 2004) * These costs include the cost of recruitment and training of employees (Alexander et al, 1994), loss of firm-level social capital (Dess and Shaw, 2001), decrease in temporary productivity (Osterman, 1987) and loss of important tacit knowledge (Droege and Hoobler, 2003). For this reason, there have been a plethora of research studies conducted over the past 40 years by both academicians and practitioners on the causes and consequences of voluntary turnover. …