Deficiency and Sufficiency of Critical Factors Greatly Affect Attrition and Leverage Retention in IT Companies) –Madurai District, Tamilnadu, India.

Abstract

The IT sector is the backbone of service sector in Indian economy and brings significant foreign revenues which boost our economy. Even during the economic turmoil over the globe, particularly in developed countries, Indian IT sector came out successfully managing the entire economic imbroglio. Tamil Nadu, particularly, Chennai is considered to be one of the biggest IT hubs in India having presence of very big IT companies. The availability of skilled employees with cheap labor cost in Tamil Nadu is an important reason. Given the rosy picture of IT sector, it is bound to have problems. High attrition in the IT industry has always been the greatest concern and a subject of considerable analysis and debate. Organizations use different methodologies for calculating the attrition rate. HR experts felt that it is a known factor that attrition calculation is grey area which does not depict the true picture, while a few techniques are common however there are no proven theories yet. Further, the approach to this calculation might vary from organization to organization. At the same time the rate of attrition is also felt in these companies. The study is conducted on Tier II cities like Madurai, and Coimbatore and employee retention is also felt in the IT companies. In this context, the researchers, attempted to decipher the reasons for attrition in IT companies situated in Madurai district. In order to study the situation, 55 IT companies in Madurai district were taken as global population and 300 samples were identified through Simple Random sampling method. Eleven critical factors with 92 predictors were selected. The results from the statistical analysis showed that all the eleven CFs were statistically significant and has close association with the employee attrition and retention process in IT companies in Madurai.