PwC HCE Survey Report

Indian organisations trail global counterparts in retaining people, says PwC Saratoga India survey Banking and ITeS organisations witness highest voluntary employee turnover

Indian organisations trailed behind their global counterparts in retaining people, with 35% of the workforce having tenures of less than two years while for the APAC region it was 30% followed by 15% for the Western region. This is among the key findings of the PwC Saratoga India Survey, 2011-12 on HC effectiveness.Banking and ITeS organisations witnessed the highest voluntary employee turnover with the employee resignation rate in banks being 2.9 times more than that for the engineering and manufacturing organisations.

The survey conducted amongst 58 Indian companies across different industries provides detailed performance metrics and benchmark data to help companies understand their employees’ contributions to business performance. It also allows companies to compare themselves with peers by industry, revenue size and employee size.

To arrest the attrition levels within the industry in India, organisations stepped up their Learning and Development efforts as well as ensured new hires became productive early. On an average, they invested 17 man hours per person on learning initiatives – up from 13.5 man hours last year. Also, organisations became more aware of the need to source talent from within to aid in retention. For example there was an 11% increase this year in terms of key positions covered under succession planning, with almost 75% of key positions having identified successors. Such measures resulted in a gain of about 10% in the per rupee returns from human capital investments, up from 79 paisa per employee to 88 paisa per employee this year.

Commenting on the survey, Sankar Ramamurthy, Executive Director & Head, People & Change practice, PwC India said:

“One of the key finding of the survey this year was that organisations which were better able to manage talent turnover gained more benefits from investments made in employee development. With India being a developing economy, organisations that succeed in maximising their HC contribution to business performance will stand to gain exponentially. This report provides deep insights on how companies can better manage and leverage their HC for strategic advantage.”

Organisations also looked at improving the efficiencies of their HR functions. They focused on core HR activities and outsourced high volume, low skill work to effectively service Business. On an average, the HR functions' outsourcing bills went up to 15.4% of its total costs as against 6% last year.

Other key findings are:

Return on HC investment

• Amongst industry sectors, banking organisations witnessed the highest returns in spite of high people and HR department costs. Technology organisations on the other hand, witnessed the lowest returns.
• Resourcing
• This year, organisations hired 27-28% of their total workforce.
• Banks, having hired about 33% of their workforce topped the list of industry sectors followed by ITeS organisations at 30%.
• IT organisations filled the highest proportion of their new planned positions (27.43%) through external hires.
• Learning and development
• Amongst industry sectors, IT organisations clocked 64 man hours per person whereas engineering and manufacturing organisations clocked 12.6 hours only.
• Diversity and inclusion
• The percentage of workforce comprising women increased from 9% to 15% this year.
• However, these ratios were lower at higher levels of management.
• Human resource service delivery
• Banking organisations had the most efficient human resource (HR) service delivery models amongst all industry sectors covered by the survey.
• Banks had the maximum number of employees (109) being serviced by 1 HR person. At the same time their HR department costs made up only 0.38% of their total cost base.

Notes to the editor About PwC Saratoga

PwC Saratoga is the recognised leader in the measurement and benchmarking of HC performance, HR and Finance function transformation. It holds the world’s largest, most robust databases of people and HR performance metrics in existence with information from over 1,600 clients globally. It also holds impact metrics data for over 16000 organisations. Using a proven methodology developed over some 25 years across the world, Saratoga benchmarking and measurement services produce an executive appraisal of the strengths and limitations of an organisation’s resource, enabling organisations to focus upon those issues that will have a major impact on improving performance and increasing competitive advantage. By combining metrics with the PwC client experience of best practice, Saratoga benchmarks and measures are used to provide a valuable insight into the key drivers of HR functional effectiveness and HC performance.

Saratoga offers measurement and benchmarking in three areas namely HC (which measures the impact of the workforce in both the current & future categories), support function effectiveness (which measures impact of support functions) and advanced measurement.

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