MS Research Survey

[High Turnover in IT Industry]

Submitted To:

Research Supervisor: Mr. Ubaid Aftab

Submitted On:

15th June, 2008

Submitted By:

Mudassir Shahabuddin – (MS – SPM) 06-808

___________________ ____________________
Ubaid Aftab Mudassir Shahabuddin
Supervisor Student
 HIGH TURNOVER IN IT INDUSTRY

Mudassir Shahabuddin
m06.808
Masters of Science in Software Project Management
National University of Computer and Emerging Sciences

The field of Information Technology has faced a revolution in past decades and has opened new areas
of success and opportunities for entrepreneur globally. However, this has also become a distressed
situation when it comes to retain skilled employees. High turnover has become a trend in IT and is
increasing exponentially. This study will provide in depth analysis of research so far done on High
Turnover in IT and provide possible strategic solution to it.

1. Introduction

Turnover has always proven itself disruptive and dysfunctional for all sizes of IT organizations. Organizations made
effort to retain their employees by increasing salaries, offering fringe benefits, better work environment and job
security. Turnover of highly skilled staff can jeopardize organizational sustenance and even can lose customers also.
Cases have been found where employee pulled potential customers and information along with him while exiting.
Moreover, high training cost incurs to prepare incoming employees and delays in customer deliverables have been
noticed.

Here we wish to highlight some important factors and reasons that provide fuel to high turnover and will than
provide strategic road map to cater high turnover in IT.

2. Internet Revolution

The world has seen devastating revolution in the field of IT with past few decades. The IT revolution, both at its
peak and decline, has changed the expectations and norms of this population of workers considerably. During the
mid 90s, demand for IT workers increased exponentially, for many reasons, out of which Y2K compliance is
prominent. However this demand decreased after 2000. Specifically, years 1996-1999, the period of Internet
Revolution, faced a severe shortage of IT workers having specific skills in new technologies that resulted in supply
demand asymmetry. This was the point where ―careerist‖ mindset among IT workers was experienced [1]. IT
workers start focusing on financial gains that eventually inspired them to switch employers frequently. But the
situation gets more agitated when century turn and economic slowdown, shut the doors of opportunities resulting an
oversupply of high tech professionals. The US department of labor posted that oversupply of IT workers would be
temporary. Nonetheless, since than the situation improved and now it enjoys quite healthy breath.

3. Individual and Situational Factors

Researchers have found that individual as well as situational factors play an important role in describing turnover
intentions. Not only individuals but organizations also have their own individual and situational factor that empower
or dampens their role in participating turnover intentions.
From organization point of view, individual factor might be the implicit risk present in the business model or
environment when entrepreneurs take initiatives to start a new business. Here, situational factors also play an
important role. In today‘s competitive and tight market , to what extent an employer provide variety among its IT
jobs that he offers and to what extent does his position differentiates him from others.

Research done by agarwal posted that effect of situational risk on turnover intentions is moderated by individual
preference for risk. Returns associated with a particular employment situation are likely to be evaluated in the
context of the risks that the employer embodies. The DOT COM revolution has changed the way organizations think
before and young entrepreneurial ventures emerged in the latter half of 1990s. Thus IT enabled business innovation
offers an opportunity for reward; these rewards are not without risk.

Situational Risk is positively related to turnover intentions. Two identical individuals, in terms of salary, work
criteria and incentives, the one in the situation of higher risk is likely to have the higher turnover intentions. When
individuals see their preferences aligned with situation, their attachment and commitment increases with the
organization. Whereas facing unsatisfactory outcome from job, one might develop intentions to leave organization.

Evaluation of employment opportunities doesn‘t ends here. A second dimension, that IT professionals also consider
is the range of technologies and experiences that are potentially available with a given employer. High quality of
work, variety among work, interesting work are few norms that individuals usually foresee and that eventually
moderate intentions to stay. Surveys of ―Best places of work‖ highlight the nature of the work (e.g., leading edge
technologies, interesting tasks/projects) as an important driver of IT professionals ‗ attitudes and work behaviors.
Thus agarwal posted that Effect of variety offered by the employer (or the situation) is moderated by individual
preferences for variety. Organizations that provide such incentives, face low turnover rates as compared to
organizations that have some rigidity in this regard.

4. Decision Paths

Researchers have extensively studied the decision paths that IT professionals take under different circumstances.
However, diversification in results has made this issue controversial. What are the factors that an individual
considers while planning to switch employee. Factors such as job satisfaction, organizational commitment, attitude
etc were pull into concentration while analyzing decision path that affect turnover and considerable outcomes were
viewed.

Job satisfaction and organizational commitment each contribute independently to the prediction of intention of
turnover. ―In short, over 17 years of research on the traditional turnover models suggest that many employees may
leave organizations in ways not specified by traditional models…Lee & Mitchell (1994). It clearly reflects that there
are some factors that are prominent to the IT Industry and IT professionals consider something else while being in a
job as well as while searching a new job.

The ever glimpse and charm of IT that has attracted intellectuals towards itself, not only enjoys their worthy services
but also facing their controversial attitudes, diversified demands and off course their mystified decisions. While
discussing the same issue of Decision Path mystery Lee et al (1999) proposed a alternative view that adds new
attitudinal measures such as a shock, a jarring event such as an unsolicited job offer or significant change in family
circumstances, and availability of alternatives to extend the set of variables considered as potential turnover
influences. In a series of studies, they have tested and refined their theory examining varied groups of respondents
including nurses and accountants (Lee et al., 1999). They have further tested differences in characteristics of those
following the various paths.

Researchers have found that job satisfaction, higher salaries, managerial problems are not always the reason of
leaving job. In this analysis turnover is influenced by a variety of variables like shock (an unexpected job offer,
major life events etc), the following of scripts, image violation etc. however, it doesn‘t neglect the factor of job
satisfaction but rather sees it as small part of overall picture.

A shock is a jarring event such as an unexpected job offer, a drastic change in family life, or any such event has an
aggressive effect on mind [2]. Such events might have or might not have engaged scripts. Engaged scripts are pre
existing plan of actions that one has brought in his mind with the passage of time like how to react, what to do if any
particular event occurred. This can also develop from previous experiences, social learning, behavior of people
around like colleagues, friends etc. Image violation occurs when one‘s goals, objectives are not synchronizing with
the current job or what he is doing. An employee not getting intellectual, financial or moral benefits from his
employee can feel his image being violated. This is intern pressurize personnel to look for alternatives that might
also be intention of job switch.

There can be several decision paths when an individual decides to leave an organization. Lee and Mitchell (1994)
described it as follows. Consider path 1 where individual‘s intention towards turnover starts with a shock. Employee
leaves without considering his attachment to the current organization or without considering job alternatives; job
satisfaction is not relevant. This is termed as ―script-driven‖ decision. There was some pre engaged script created in
his mind that insists him to immediately leave the job without considering alternatives. Here job satisfaction is not
relevant because his attachment to the organization wasn‘t that deep and his attitude has become so much agitated
with time that insists him to switch without considering anything.

Path 2 also starts with a shock but employee reconsiders his attachment with the organization because image
violation has occurred, and the employee leaves without searching for alternatives. This is termed as ―push‖
decision. In path 3, that also starts with a shock, an employee experiences image violations that in turn prompt the
evaluation of both the current job and alternatives. This is termed as a ― pull ― decision .

It is not necessary that there should always be a shock that impact individuals to see alternatives but there may be
some other reasons as well. Suppose we have path 4a and 4b. In such path where turnover intentions start without a
shock is called ―gradual withdrawal‖. Usually this has been noticed because of lower job satisfaction among
individuals. In path 4a lower job satisfaction becomes so prominent that an individual leaves organization without
considering alternatives where as in 4b employees search and evaluate different alternatives.

4.1 Decision Path Speed

While studying the nature of this study and the speed through which individual‘s leave organization depends upon
three factors. One is off course shock; other two are amount of mental forethought and the availability of
information. Since path 1 and 2 faces fewer mental deliberations, therefore take less time to decide as compared to
path 3, where individual need to consider alternatives. However, mental forethoughts are more in path 4a and 4b as
compared to other paths, decision making here take more time. Secondly, availability of information also affects
decision speed. In path 3 and 4b, information about the alternatives, options and jobs predict that it will take more
time than path 1, 2 and 4a.

5. Turnover: As Culture

Culture is defined as the values commonly held among a group of people. Organizational culture is the set of values,
norms, and beliefs shared by members of an organization. Being a part of same culture, co-workers get inspired
from each other that also moderate intention when we talk about turnover.

Turnover in IT has come to be so accepted that an IT Manager recently confided that his subordinates ―look at my
career and think I‘m a loser because I‘ve pretty much stayed in one place‖ [3]. Said more clearly, a high turnover
culture reflects the acceptance of turnover as part of work group norms. That is an employee under this environment
likely believes that turnover is necessary and perhaps even expected.

While understanding turnover culture, much can be understood by literature and research done on Organizational
Culture. Different groups, siblings, casts and friends exist in an organization. Some are highly attached and some are
loosely coupled according to their work norms and ethical attitudes. In both the cases every individual take
inspiration from others constantly.
Researchers have identified two key dimensions of organizational culture construct: direction and intensity [4].
Direction refers to the kind of culture being developed in the organization. It could be the implicit thoughts among
individuals or norms developed organization wide. Intensity is the strength of these norms or thoughts.
Organizations can lead to a significant outcome for their future plans by controlling the ratio of these two factors.
Equalizing these switches and creating a good balance is a pretty good art than science.

As we have mentioned earlier, turnover culture has deep resemblance with organizational culture as gossips,
customs, information flows, hierarchy and structure are few prominent features that relate both. Therefore, these
artifacts ultimately moderate assumptions and beliefs that in turn effect turnover intentions. If colleagues make
positive comments about their work, environment and management, then there is a higher degree of chance that
favorable aspects of the job and commitment to work and organization increases. On the other hand if co-workers
have some negative views about work, then there is a higher chance that these effect individual negatively i.e.; his
own perceptions and views become negative. Researchers have noted that more similar colleagues or siblings that
have almost same position or work assignments will come to a similar decision more quickly. Their attitude towards
staying or leaving will be more or less similar.

It is not necessary that turnover all happen among individuals. It can exist at industry, organizational, and
workgroup levels [5]. At industry level, it depicts that turnover, low or high, is present in a particular industry. That
industry faces shortage of specified skill set people and is common across companies belonging to that industry.
These companies however can create a firm strategy to cope with this problem. Turnover at organizational level at
organizational level refers to the beliefs and custom developed within an organization with a passage of time. Co-
workers share their views and perceptions that in turn reflect in their actions. That is why turnover most of the times
differ from organization to organization. Companies make similar strategies to retain employees and perform
different operations accordingly. Turnover at workgroup level refers to a department or unit within an organization
that more or less contain similar beliefs. Since the nature of work and functional operations are similar with a
workgroup, therefore their demands and problems are similar. We argue that turnover culture can also exist at
occupational level. IT occupation for example refers to a particular industry that can be shared among many
individuals working in different organizations. Such kind of occupational group where communication ways are
easily available and accessible (internet, news, seminars, academic groups, e social circles, alumni etc ) creates a
strong network where information flows rapidly and accurately. Therefore any labor market containing an
occupational group can contribute to high turnover. IT occupational group could be the best fit. For example there is
a strong demand of IT professionals in the market their shortage as well can inspire them to work for more pennies
and therefore job switch will become a trend.

As we move further we need to insight an important question. Are all IT professionals similar according to demand
and turnover ratio? The marketability of particular job skills highly contributes to turnover culture within an
occupational group. For example, J2EE developers are in a greater demand in local industry. Professional DBA‘s
having a good knowledge of Oracle is in high demand and fortunately or unfortunately there is a shortage of
professionals having expertise in the said area. In one way or other, management practices also contribute to
turnover. Since organizations face shortage of skilled employees, they offer handsome packages and incentives in
order to attract professionals towards them. Paying top dollars to require personnel provide message to others that
there are higher wages available in the market and that they are working for small pennies. Such actions create hype
in the market that fuels higher turnover. IT professionals judge themselves by looking for head hunter calls. If
professionals at all level are not getting head hunter calls than they conclude that there is some problem with their
skills and abilities.

There are several strategies followed by organizations to cope with this situation. Most of the time, mid career
professionals are at a highest demand or we can say mid career IT professionals hold a larger part of job percentage.
Organization usually move aside mid career IT workers and bring fresh graduates to work. Fresh graduates tend to
work on lower salaries as compared to experienced workers. Their intention to learn and enthusiasm can lead
organization to a significant outcome and success. Fresh graduates are usually single and can even work happily
under sufficient work load. They had no issues in late sittings as their primary focus is to learn. Family
responsibilities are near to none. Such an IT Human Resource strategy was acknowledged recently by hiring a
manager in Silicon Valley firm: ―You work the young ones for five years and then replace them‖ [6].

Along the same line, persistently overloading IT professionals with work (at any stage of their careers) is likely to
contribute to a high turnover culture in IT workgroups. Research shows that IT professionals experiencing work
exhaustion report significantly stronger intentions to leave their jobs [10]. Exhausted professionals have described
work environments in which ―management places unrealistic and arbitrary goals on us, then refuses to hire anyone
to help‖ [7]. If work overload and exhaustion are common within the workgroup, IT professionals are likely to have
observed others experiencing the problem and successfully resolving it by leaving their jobs. Work overload and
exhaustion can therefore contribute to a high turnover culture in IT workgroups.

As we have discussed that culture plays an important role and that people attract people in a sense that they get
inspired from each other easily. Over glorification of this act or as termed by Moore, Romance of turnover can
become a usual thing at occupational level. Departing employees are treated as heroes, because they have found a
way out of the organization. Most of the time only positive aspects of the new job are discussed among co workers
and those aspects negative of the current employer. Actual consequences and fair judgment is very keep in to
consideration thus assuming that turnover is the only solution to their problems.

Implications of the above mentioned problems are always depicted as a serious issue and none could a single
positive aspect out of it. Consider a scenario where an individual have multiple job options and he can easily ―exit‖
without ―voice‖. Over 30 years ago, political and social economist Albert O. Hirschman, in his classic treatise on
―exit‖ and ―voice,‖ noted that when exit is an easy alternative, the use of voice to right problems in an organization
tends to atrophy [8]. By executing such a path, organization loses valuable comments and suggestion, departing
employee has in his mind. How often we have seen or heard that exit interviews are conducted while an employee
leaves. This is because why one should use voice and might become part of any controversy, instead exit safely.

6. Turnover and Internal Market Strategies

Much of the research has been conducted to study the individual level evaluation of turnover. Till now research
focus was on individual perceptions, what an individual thinks about his career, his future plans, his problems and
his turnover intentions. However, lesser work is done to analyze this issue from a labor market perspective. Doing so
we can better analyze the problem as a whole, and internal labor market strategies could be evolved that will surely
help analyzing turnover problem as a whole and designing a firm strategy. A labor market perspective
conceptualized a problem as a whole and induce attention towards major and most occurring problems rather than
prominent but few occurrences of a problem. This can help organizations to develop strategies market wide and let
them fuse at a single consensus, thus building a more flexible and robust strategy. By having a clearer picture of the
overall market, they can easily control the most disputing factors and can easily float their ideas and plans that
would eventually become requirement of the market.

Researchers have classified Internal Labor Market strategies (ILM) in to two categories [9].

Industrial ILM strategies

Craft ILM strategies

Industrial ILM refers to the organizations where an individual has limited options to enter an organization. Jobs are
not frequently available in these organizational positions and even entry points are limited and promotion is usually
happens gradually. Employees do progress and climb organizational stairs but rather at a firm and slow pace.
However, these organizations offer job security because their rules and regulations are well defined and clearly
stated. These create a sense of satisfaction to employees how are really conscious about job security and long term
plans. These sort of companies paid a reasonable attention towards Human Resource management because they
consider human skills as their primary source of success. Skills and knowledge are prominent to the firm. Since,
employees are old retainers; they have firm specific knowledge that drives their value. Domain understanding is
clear as crystal to these employees and not much problem is faced when it comes to domain understanding. One
more positive aspect of Industrial ILM is that organization focuses on training and in house courses that favor
employees to get themselves abreast of latest technologies and trends and further motivate them to sustain. Since,
making an entry to organization is limited, it helps retaining more employees, thus moderating low turnover ratio.
On the other hand, Craft ILM refers to the situation where greater loyalty is found towards specific skills or
education rather than organization. Organizations faces high turnover as far as craft ILM strategy is concerned
because skills are not according to organization‘s domain or business specifics. Therefore, individuals having their
own mobilized skills and had a strong market hold and eventually they mould market cost easily. Organizations do
need these kind of personnel, but both the parties are not as much dependant on each other, or we can say , they
don‘t need to stay together for a very long period of time. Individual focuses on enhancing their technical abilities
rather than grasping any particular domain knowledge. Such a situation automatically creates higher demand of such
individuals and that in turn increases mobility of inter firm movement.

6.1 IT and ILM Strategies

Many researchers have come to a consensus that IT employee‘s career orientations are of two types, Managerial and
Technical [11]. It could be easily judged that Managerial positions such as Chief Technology Officer, Project
Manager, Chief Information Officer etc are positions that require firm specific knowledge, domain expertise,
organization‘s history and future plans. Thus, employees that have spend a considerable time in an organization can
have a better understanding of these mentioned areas rather than a newly hired executive. Therefore, organizations
always try to promote employees within the organization to come up and take these responsibilities and encourage
people to come a head from the older pool of employees. Now on the other hand if we see technical positions to be
filled from within an organization or to hire employees from outside, we can easily judge the difference. For
technical perspective organizations required people who have strong technical skills and command on required or
latest technologies, despite they have firm specific knowledge or not. Their skills are required for a limited period of
time might be for longer, but their mobility does not affect as such the progress of running project or task.

Therefore, we conclude this part of our discussion by stating that since in Managerial ILM entry from outside the
company is low, there is less inter firm mobility and lower turnover is expected from the employees. However,
reverse is the case with craft ILM. Technical personnel focus more on learning and keeping themselves abreast with
the latest trends and technologies. Thus focusing more on skill development rather than organization commitment,
they intend to switch employer more frequently.

Implicitly, we have come to a conclusion that occupational attributes are the driving force behind the classification
of an ILM strategy for an IT occupation. Now since we know that Technical IT occupation will always generate
higher turnover as compared to Managerial IT occupation. We need to cope with this situation and one way or the
other should make any strategy that may dampen the rate of turnover. Organizations can shuffle between their
strategies in order to mould down technical IT occupation from craft ILM strategy towards industrial ILM strategy.
An example is the creation of ―technical career paths‖ [9] in organizations that enable programmers to achieve high
promotion, pay and status while remaining in a technical, non-managerial role.

According to Osterman [20], predictability, flexibility and cost minimization drive ILM strategies, and these differ
across organizations. For non profit or public organizations predictability is more important than cost minimization
and its more better if flexibility lies in that predictability. Therefore such organizations focus more on stability that
in turn enjoys lower turnover because they industrialize their Technical IT occupation and focus more on
predictability. In private sector, we can see more or less, the same behavior. It producers may also focus on
predictability as their core objective, even if the final gal is cost minimization. This is because the core competencies
and backbone reside with the technical abilities of IT workers present in that organization. This concludes that such
organizations tends to focus on retaining skilled employees because revenue generation is deeply associated with
them. Therefore, such organizations industrialize their technical IT occupation.

7. Behavioral and Organizational Factors

Today organizations are facing critical situation as far as turnover is concerned and keeping IT workers satisfied, is
one of the most challenging tasks for them. Even slowing down the pace of high turnover is getting difficult. Not
only retention is a problem, the availability of highly skilled employees is very short and organizations need to face
this challenging situation with increase in intensity day by day. At the same time IT workers enjoys a high demand
market where they can put high demands in front of organizations and also ask them to create a good working
environment for them. The managerial problem is to know what are the critical organizational and job features that
affect the desire to stay in or leave a company.

One of the most critical issues facing managers of high tech companies is keeping their technical employees
satisfied and trying to prevent a rapid staff turnover. The shortage of good quality technical people in high tech
companies creates a high demand for their skills. This makes it easy for them to change employers and more
important for companies to provide working conditions which are attractive enough to keep their technical staff.

While relating individual behavior with organizational factors two main areas are covered; the first is the reasons
why technical employees would leave their present company; the second looks at factors influencing the length of
time they expect to stay in their present company.

A research done by Anna-Maria Garden from London Business School, a study done on motivation of high tech
software professionals [10]. Preliminary questionnaire results of 302 people from 7 high tech software companies, 3
small companies with less than 50 employees, 3 medium size companies with between 150-200 employees and 1
large company with over 2,000 employees in total. As a result professionals listed the following factors according to
higher priority to lower priority.

TABLE I
Rankings of Potential Reasons to
Leave Present Company
Org behavior paper.

(Table copied from [10])

Ranking Factor

1st Higher salary

2nd More experience

3rd More interesting work

4th Need for a change

5th More challenge

6th Greater chance of promotion

7th Better location

8th Present Company getting too large

9th More control over own work

10th Keep up'with technical knowledge

11th Run own company

12th More flexible working arrangements

13th Greater structure in work

14th Go to more successful company

15th Difficulties with immediate boss

16th Friendlier company

17th Opportunity for equity stake

18th Go to less commercial company

19th Go to more commercial company

As we can see, above rankings are distributed in to three groups for better understandability. These groups are set
according to the intensity and demand highlighted by professionals at the most. At number one, we can see higher
salary, the most required and irresistible demand by professionals. IT workers might compromise at anything except
salary because they tend to believe that the expertise and knowledge they hold, is hard to difficult and execute.
Therefore, demanding a higher salary comes first beside everything else. Since the charm and life line of IT
profession is keeping yourself updated technology wise, IT professionals demand more experience and more
interesting work after high salaries. They always try to gain more and more experience in order to gain more
expertise and require more challenging and interesting work. IT profession is all about creativity and imagination.
Professionals, who take it as a career, always look forward for more creative and interesting stuff. This generates an
implicit demand to having good quality and challenging work.

As we can see the factors mentioned above tends to move from more personal to environmental or less personal
demands. Professionals always look forward for more and more improvement to their life style and environment that
surrounds. Better location lies in the middle of all and the first point of the second group. The final eight factors
were given such relatively low rankings they could be considered to be merely idiosyncratic. The priority given to
salary is unusually high for individuals with a technical or professional orientation; it is more common where
individuals take a more detached approach to
their job (e.g., process workers). The next 5 highest-ranked factors indicate the importance of
interesting and challenging work. The predicament with IT organizations is that their employees expect an
interesting and quality work job and also demand higher salaries explicitly. Maintaining such an environment and
fulfilling employee‘s demand is a big challenge for employers."More flexible working arrangements," and "more
control over own work," for example, tends to be less important but do not appear as reasons for leaving job rather it
has a small implication on leaving intentions.

7.1 Small and Large Companies

According to this study, a issue has been discussed is that it is getting more difficult day by day to satisfy and retain
independent type of people as structure, rules and regulations as the company grows in size. Researchers are trying
to answer the question whether every small and large size of companies have different employees and does size of
the company matters on identifying the nature of employees. As a study done to compare small size companies with
medium and large companies several conclusions were drawn.
 1. A major difference found between small companies and middle or large companies is that employees in
smaller companies have a higher intention to leave because they rather want to start their own company or
tends to join a more successful company.

2. In smaller companies, technical staff tends to focus on start new business, as compared to looking for a
larger company. Both factors are there but differ in intensity.

3. Employees in medium and large companies differ from those in smaller companies in way that they focus
more on ―promotion‖ as compared to employees in smaller organizations. this is because of two reasons.
Employees in larger companies tend to ladder faster and rate in promotion is higher. Secondly, employees
in smaller companies assume that there career growth and advancement is dependent upon the growth of
company, but in larger companies it happens alternatively. Employee there doesn‘t advance themselves
accordingly as companies grows but still enjoys different incentives as company advances

8. Relationship between Nature of Work Selection and Organizational Commitment of

IT Professionals
Tim Klaus from University of South Florida [20] did a research on Select Nature of Work Characteristics and
Organizational Commitment of IT Professionals. The study explores the nature of work context within the IT
context and asserts that nature of work as contextually specified contributes to an IT professional‘s commitment to
the organization. Nature of work in the IT context is expressed as core job characteristics, the level of group
cohesion, and the level of role stress. IT managers and organizations can use this information to guide project
assignment job decisions and improve job and work design to increase organizational commitment and ultimately to
increase retention.

IT research has shown that job performance is related to the IT professional‘s commitment to the organization
with higher levels of commitment related to better retention of IT professionals [11]. Management literature has
indicated that nature of work is an antecedent to employee work-related attitudes. The connection between
nature of work and organizational commitment is particularly promising as corrective action may be within
the capabilities of the IT manager or organization. In situations where the nature of work negatively
influences organizational commitment, management may have the ability to enact job redesign remedies (e.g.
job enrichment, job rotation). Through better job assignment or work design, employees may have higher
commitment, leading to a higher job performance. Such remedies may be particularly viable in an IT context where
project work is prevalent.

Study done by Tim Klaus introduces a model of the relationship between the nature of work and organizational
commitment in the IT context. The proposed model recognizes past job characteristics literature and the nuances of
the IT context by explicating nature of work to include role stress, group cohesion and job characteristics.

8.1 Core Job Characteristics

One job enrichment model that has garnered much interest and support is the Job Characteristics Model
[12]. This model postulates there are five core dimensions that affect the psychological state of employees,
leading to certain personal and work outcomes [13]. The Job Characteristics Model has been studied using
organizations of all sizes and cultures. However, few if any studies have used this model to study the
relationship between IT workers and organizational commitment. This context is inviting since historically the
IT industry is one plagued with high turnover. The Job Characteristics Model operationalizes the motivating
potential of a job as a summative measure based upon the weighting of various core job characteristics.
Although this model originally was developed to explain three psychological states, it has widely been used to
determine work outcomes.
8.2 Group Cohesion

Group cohesion addresses how well the participant has bonded with a work group or others in the epartment.
Given the proliferation of projects requiring teamwork in IS, the workers perception of group cohesion was
selected as a likely variable that may influence the commitment of workers to the organization. It is implicit in the
work group cohesion literature to note that employees that have close friends at work rated higher on work
group cohesion and were more inclined to stay at the company than leave [14]. This study also noted that
employees with close friends at work will more likely stay with the organization. Granovetter further explains
this concept, nothing that within companies there are social networks [6]. One conclusion was that employees
that have strong ties with other employees are less likely to leave the organization.

8.3 Role Stress

Role stress is selected as a Nature of Work factor as IT employees generally move from one project to another,
engaging in many types of activities, project assignments, and requirements. Therefore, role ambiguity and
role conflict are more likely to occur for these IT workers, affecting commitment to the organization.
Some research views role stress from a transactional perspective [15]. This perspective asserts that role stress
is an individualized process that increases or decreases due to stimuli and then affects responses (e.g. commitment).
Role stress is a complex construct when viewed from the individual transaction level rather than a more
objective environmental approach. Research indicates the dimensions of this complex construct include role
ambiguity and role conflict [16]. This study acknowledges both role stress dimensions.

8.4 Organizational Commitment

Organizational commitment is a common construct used in management, marketing, psychology, and other
disciplines as an antecedent of job involvement, job satisfaction, turnover, and absenteeism [17]. Like role
stress, commitment is a multi dimensional construct. Prevalent dimensions of this construct explored in
research include continuance commitment, normative commitment, and general feelings of organizational
loyalty and pride. The continuance commitment perspective views commitment from the position of loss;
employees remain with an organization because they will lose existing benefits if they leave [18]. Normative
commitment refers to the commitment to an organization based upon a feeling of obligation [19]. This
study will look at both continuance and normative commitment to the organization as well as the loyalty
and pride participants have towards their employers.

9. Is Turnover Always Disruptive

So far we have discussed that turnover has always been found disruptive for organizations. Employers tend to
introduce new ideas, strategies, offers and facilities to employees in order to keep them attracted. However, there are
people who consider turnover as a strategic facilitator and suggests that turnover is helpful and functional.
Here we will discuss a research done Havard Meland from Agder University College, Norway [21]. The paper
discusses different perspective and argues that turnover is a possible strategic facilitator for organizational
development.

“All those who pass through this door bring joy to this office,
some by coming in and some by going out”

Sign on the office door of famous US college basketball coach Bob Knight]

The author has proposed a model which is called Strategic Turnover Management Process (STMP) using theory of
planned behavior, theory of Psychological contracts and conclusion drawn from prior research on turnover.
STMP has three stages consisting of:

i. Continually assessing the staying or leaving intentions of the employees

ii. Deciding whether to retain him, and
iii. Re-recruiting in case the decision is to retain.

Human resource literature has always stressed to design a HR system persistently that fit with the goals, strategies
and future road maps of the organizations and also offers a goof person organization fit. Therefore there should exist
a balanced system that understands organization needs and at the same time also provide a balanced equity of the
employees of that organization. For example, if an organization has some vacant positions available than internal
candidates should be placed in those places. This would help organizations gain benefit from employees with cross-
competency skills and knowledge. Employees being there for a longer period of time can also be risky for
organizations. many important knowledge and news that should be known to management timely, are acknowledged
when an employee leaves out. There might be in justice happening to sub ordinates by their senior, but since he has
been there for a long time no one is about to know. This might create bad feelings among sub ordinates and instead
of being capable enough to do their job, they leave the organization. Turnover in the company can also open paths
for career development, which is necessary when people seek to fulfill their career goals or accommodate career
anchors [22]. It may also open the way for previous employees to come back with experience from other companies
as part of their career paths [23].

If a company faces low turnover, this might be good for an external views about that organizations in terms of HR
policies, but might be disruptive for continuous growth and stability. Organizations need bright and creative ideas
every time. In fact this happens that organizations needs some employees to leave organizations for strategic
reasons. They might fire, transfer or laid off employees but it‘s better suggested that a firm strategy should be
developed

STMP Step 1: Assessing employees’ staying intentions

“The theoretical premise for assessing an employee’s intention to stay or leave is the theory of planned behavior or
TPB [22]. According to TPB, human behavior is guided by three kinds of considerations: Beliefs about the likely
outcomes of the behavior, beliefs about the normative expectations of others, and beliefs about the presence of
factors that may facilitate or impede the behavior. A combination of these leads to the formation of a behavioral
intention, which is assumed to be the immediate antecedent of behavior [22]. TPB has previously been used in
career choice investigations [23] and employment status choice intentions investigations [24] and has found strong
support. TPB has also been used to predict women's intentions to pursue a career versus intentions to become a
homemaker [25] and the career intentions of army officers [26]. Adapting to the context of turnover, the behavior in
question is
either staying or leaving. One can argue whether they are the two ends of the same bipolar construct, or whether
staying and leaving constructs are distinct and may be present in the same individual. To empirically derive the
intentions, we sought the advice of Ajzen [27] response was “Ask about both staying and leaving intentions and
when deriving the higher order construct, recode and combine those into one construct”. This implied a bipolar
construct.” [21]

STMP Step 2: The Intervention decision

While dealing with turnover organizations feels themselves very confused sometimes. The decision whether
turnover is obstructing organization goals and its overall strength or it‘s a good time to entertain turnover at its
notion is a crucial decision to take. STMP offers a simple solution of recognizing each individual separately. The
identification of company needs and comparison with individual skills and strength can easily notify whether the
individual is replaceable or not.
Acceptable turnover would be a case where organization can easily replace the employee and acquiring a new
person with same capabilities or skills. However this might not always be the case. The competencies of the
departing employee may have been outdated i.e.; no more required by the company. As an effect of this market
decline, the company may have changed their corporate business strategies, focusing on other areas of competencies
and service offerings. Even though the employee‘s role may not need to be filled, a replace-ability analysis should
be conducted in order to uncover aspects of the employee, the corporate business strategies or the market place not
initially anticipated. The replace-ability of an employee then depends on the fit or match between three dimensions:
company dimension, employee dimension and market dimension.

The company dimensions are the requirements which the company should fulfill to run its business successfully.
Particulars like domain expertise, technology adaption, infrastructure setup etc could be the prime focus. Company
culture, trends, values and norms are few particulars that plays an important role in structuring and maintaining
required environment. Demands could be also its business strategies, such as areas of growth and service/knowledge
focus of the consulting company as well as the culture of the company, and the ethics and standard the company
wants to be identified with. Such values and norms may be honesty, courage, freedom, team spirit, and confidence
among others.

The employee dimension refers to the abilities, skills, knowledge and to what extent the person organization fit tends
to make him more worthy. His competencies and requirement of his skills within the job market is a complex
comparison. Competencies tend to be described as substantive content because they could be one‘s own competency
or the one required by the market.

The market dimension refers to the availability of skills and competencies in the market. Organizations effort and
willingness always affect the efficacy of market dimension. Usually business requirements of organizations create
market demands that in turn attract individuals to decide their career accordingly. Since, the shortage of skill and
competencies are always a challenge for organizations, the use of fringe benefits, trainings, incentives and other
offers by companies accelerate market demands. The market dimension may also affect the company dimension,
since company goals and strategy change with the market dynamics. The availability of projects will affect the
company dimension, the business strategies and needs for competency within the company. Evaluating the replace-
ability implies analysis of compatibility and fit between these dimensions.

STMP Step 3: Intervention by re-recruitment

The theoretical premise of this step is psychological contract which is defined as: ―Individual beliefs, shaped by the
organization, regarding terms of an exchange agreement between individuals and their organizations.‖ [21, p. 9].
The effects of changing psychological contracts in employment have been subject to several studies [8, 20, 21].
Psychological contract refers to the moral and mental agreement between the employee and the employer. In
organizational settings, contracts can be social [shared by the larger society, e.g., in this context employees in the
industry] and organizational [21]. Ideally, a psychological contract should consist of the detailed expectations of
employee and employer. But typical contracts are not complete due to bounded rationality [24], and the ever
changing environment of an organization making all conditions impossible to specify up front [22]. This results in
gaps in the contract, which is filled in by both employee and employer, and is done in somewhat unpredictable
ways. Therefore, contracts become self-organizing and change over time.

10. Survey

On the basis of argument done in this paper, we conducted a survey to substantiate the above discussion. People
related to technical and managerial positions were focused in different size and type of IT organizations. We
categorized companies as small, medium and large as size of 10-20, 21-50 and >50 respectively. Technical
personnel were asked questions as what are their highest demands from their employer, why did they left previous
organization, which IT segment they belong to, how many times they have switched job etc. similar questions with
respect to management were asked from people at managerial positions as to what are their expectations from
employees, what problems are they facing while running an IT business, what strategy do they follow.

10.1Technical Personnel Results

In Technical survey, we asked 100 technical personnel, out of which 30 (30%) respondent to the survey. Following
are the findings from these results.

1. 23% each belong to small and medium size organizations while 53% belong to large organizations.

2. 26% were married or have dependants while 76% were unmarried or have no dependants.

3. 43% have 1 to 3 years of experience and 57% have more than 3 yrs of experience.

4. 40% have switched one job at least, 30% switched two jobs, 23% switched 3 jobs and 6% switched 4 jobs
so far.

5. 80% told that their highest demand is greater salary, 66% said that they focus on career growth, 30% said
job security matters them more, 46% said piece of mind and 6% said they want flexible timings. Many of
them also selected multiple choices.

6. While asking why did they left their previous employee, 50% said they left because of career growth, 43%
said because of less salary,20% said they left because of bad management relationship, 26% said they left
because of peace of mind or late sittings , 6% said that there was no job security and 3% said they need a
change.

7. While asking a question that what you think is the reason of high turnover in IT Industry, 50% told that this
is because opportunities are greater. There is always a better option available in the market in terms of
salaries, work quality, incentives etc. The environment is very flexible and moderated towards the
demands and expectations of technical personnel. However, 20% of the respondents told that this has
become a trend in the market. People get inspired by others and feel turnover as their strategic need as to
keep themselves laddering up. Only 6% said that people want themselves to be updated with latest
technologies and trends in the market, therefore, they intent to switch the job. 2% each told that high
turnover happens because of bad management practices or immature industry standards. Lastly 3% said that
they don‘t know why there is high turnover in IT industry.

10.2 Managerial Personnel Results

We reached 50 managerial positions, out of which unfortunately only 8 (16%) people replied to the survey.
Following are the results obtained.

1. 12% belong to small organizations, 37% belong to medium size organizations and 50% belong to large
organizations.

2. 75% personnel had less than five years of managerial experience while 12% each have less than ten years
of experience and less than 20 years of experience.

3. 62% managers admitted that their organization faces high turnover problem and retention has become a
predicament for them while 37% told that their organization is not facing any turnover problem and
retention is not an issue for them.
 4. When asked from the executives that what are the expectations of your employees from your company,
100% told that their demands are higher salaries and career growth. They tend to focus on these two factors
more than others. However, 62% said that job security is also a major demand of employees.

5. When asked about the incentives and benefits, management provide to their employees to retain maximum,
87% told that they try to provide higher, better or competitive salaries to their employees. 75% told that
they insure career growth to the employees and try to convince them on providing better work according to
eminent trend and technologies. 50% told that they ensure job security while only 37% said that they
provide other financial benefits, bonuses and performance based rewards.

6. While asking that what are managers expectations from their employees, 87% told that they want their
employees to be committed towards the organizations and work with full dedication. 12% told they want
their employee to negotiate on complaints rather than taking rash actions, be a team player, be reasonable
when negotiate, honesty and transparency and productivity.

7. While asking the question as to what managers think are the reasons about high turnover in IT Industry,
87% managers told that increasing opportunities, rapid growth in IT industry and good offers are the major
reasons of high turnover.

8. When asked about the number of employees retained successfully after their resignation, 62% told that they
retained only a few number of employees, most of them joined other company. 12% also told that they
have successfully retained all the employees after their resignation and 12% told that they have no retention
policy.

11. Conclusion

As per our discussion, survey and analysis there is no doubt putting this paper in one statement that is Turnover is
inevitable. Organizations will continue to face such situation, at least for some time and has to find some workout
under the same situation. However, since we can‘t stop water flowing down the steam, we can control its frequency
and direction.

Organizations need to build an environment where they can maximize retention of employees by continuous
improvement and firm strategies. Employer should have something on plate to attract employees at every point in
time. Understanding their financial needs, their worth in the market, their lust to learn and keep themselves updated,
competitor‘s high offers, controlling their mind sets and even justifying and satisfying their unreasonable comments
are simultaneous challenges that need to be faced continuously. By providing effective training slowly and step wise
could be a better option to keep them attracted. However, there should always be a good backup plan if any
employee leaves. This could be achieved by keeping all the team members up to date so that there is always a
backup or alternative available when somebody leaves.

12. References

1. Agarwal, R., De, P., and Ferratt, T.W. (2001). ―An Experimental Investigation of Turnover Intentions
Among New Entrants in IT‖.
2. Fred Niederman and Marry Summer. ―Decision Paths Affecting Turnover among Information Technology
Professionals.
3. Hymowitz, C. On the job: Coping with youth—and impatience. St.
Louis Post-Dispatch (Dec. 19, 1999), E3.
4. Cooke, R. and Rousseau, D. Behavioral norms and expectations: A quantitative approach to the assessment
of organizational culture.
5. Moore and Burke. ―How to Turn Around ‗TURNOVER CULTURE‘ in IT‖.
6. Matloff, N. Debunking the myth of a desperate software labor shortage. Testimony presented to the U.S.
House Judiciary Committee on Immigration, Apr. 21, 1998.
7. Moore, J. One road to turnover: An examination of work exhaustion in technology professionals. MIS
Quart. 24, 1 (2000), 141–168.
8. Hirschman, A. Exit, Voice, and Loyalty. Harvard University Press, Cambridge, MA, 1970.
9. Sandra Slaughter and Soon Ang. ―Internal labor market strategies and turnover of Information Technology
Prefessionals‖.
10. Anna Maria Garden. ―BEHAVIOURAL AND ORGANISATIONAL FACTORS INVOLVED IN THE
TURNOVER OFHIGH TECH PROFESSIONALS‖.
11. Mowday, R., Steers, R., and Porter, L. .The Measurement Of Organizational Commitment.. Journal of
Vocational Behavior. V. 14, 1979, p. 224-247.
12. Fried, Y., and Ferris, G. .The Validity of the Job Characteristics Model: A Review and Meta-Analysis..
Personnel Psychology. V. 40, 1987: p. 287-322.
13. Hackman, J. R., and Oldham, G. R. "Motivation through the design of work: A test of a theory".
Organizational Behaviour and Human Performance, Vol. 16, No. 2, August, 1976, pp. 250-279.
14. Iveron, Roderick and Parimal Roy. .A Causal Model of Behavioral Commitment: Evidence from a Study
of Australian Blue-Collar Employees. Journal of Management. 20:1, Spring 1994: 15-42.
15. Cooper, C., Dewe, M., and O.Driscoll, M. .Organizational Stress: A Review and Critique of Theory,
Research, and Applications.. Sage Publications, 2001, Thousand Oaks, CA.
16. Moore, J.E. .One Road to Turnover: An Examination of Work Exhaustion in Technology Professionals..
MIS Quarterly. March 2000, v. 24 i.1: p. 141-168.
17. Eby, L., Freeman, D., Rush M., and Lance, C. .Motivational Bases of Affective Organizational
Commitment: A Partial Test of an Integrative Theoretical Model.. Journal of Occupational and
Organizational Psychology. (72:4) 1999, p. 463.
18. Meyer, J.P., and Allen, N.J. .A Three Component Conceptualization of Organizational Commitment..
Human Resource Management Review. v. 1, p. 61-89.
19. Hackett, R. Bycio, P., and Hausdorf, P. .Further Assessments of Meyer and Allen.s (1991) Three
Component Model of Organizational Commitment.. Journal of Applied Psychology, v.79, p. 15-23.
20. Tim Klaus. ―An Examination of the Relationships between Select Nature of Work Characteristics and
Organizational Commitment of IT Professionals ‖.
21. Harvard Meland. ―The Other Side of Turnover: Managing IT Personnel Strategically‖.
22. Schein, E. H.. Career anchors revised: implications for career development in the 21st century. Academy of
Management Executive, 10, 4, 1996, 80-88.
23. Giles, M. and Rea, A. Career self-efficacy: an application of the theory of planned behavior. Journal of
Occupational & Organizational Psychology, 72, 3, 1999, 393-399.
24. Kolvereid, L. Prediction of employment status choice intentions. Entrepreneurship Theory & Practice, 21,
1, 1996, 47-58.
25. Ajzen, I. and Fishbein, M. Understanding Attitudes and Predicting Social Behavior. Prentice-Hall,
Englewood Cliffs, NJ., 1980
26. Guthrie, T. A. [1992]. Career intentions and behavior of army officers: a model testing approach. [Online:
http://www.stormingmedia.us/19/1926/A192642.html] Accessed: [2005, February 4].
27. Ajzen, I. Personal communication, 2002.
Appendix “A” – Research Survey Proposal

MS Research Survey

[High Turnover in IT Industry]

Submitted To:

Research Supervisor: Mr. Ubaid Aftab

Submitted On:

23rd March, 2008

Submitted By:

Mudassir Shahabuddin – (MS – SPM) 06-808

Introduction
Turnover of highly skilled employees can be very expensive and disruptive for firms. Losing highly skilled staff
members may incur substantial cost associated with recruiting, re-skilling, and hidden costs associated with
difficulties completing projects and disruptions in team based work environments.

This paper provides a detailed survey on the research carried out by different researchers on High Turnover in IT
Industry. Identification of turnover factors, situational risks, and situation variety along with retention policies will
be covered. What factors are under consideration while an individual plans to change employer and what fringe
benefits can be given to retain employees?

So far following papers are been selected for this research. More papers may be included/excluded if found
necessary.

An Experimental Investigation of Turnover Intentions Among New Entrants in IT

Ritu Agarwal [University of Maryland]
Thomas W. Ferratt [University of Dayton]
Prabuddha De [Purdue University]

The Other Side of Turnover: Managing IT Personnel Strategically

Havard Meland [Agder University College]
Rolf Petter Waage [Agder University College]

Decision Paths Affecting Turnover Among Information Technology Professionals

Fred Niederman [Saint Louis University]

BEHAVIOURAL AND ORGANISATIONAL FACTORS INVOLVED IN THE TURNOVER OF

HIGH TECH PROFESSIONALS
Anna-Maria Garden [London Business School]

The Shadow Knows: Performance Expectations of New Hires in an IT Organization

Diane Bandow [Troy State University]

How to Turn Around „TURNOVER CULTURE‟ in IT

Jo Ellen Moore and Lisa A. Burke
Appendix “B” – Meeting Log

Date/Time Venue Agenda Outcome/ future work

19th March 2008 Fast-NU City Campus Discussion and Sign off Initial work need to be
sarted

26th March 2008 At Teachers Home Review selected papers Few papers were rejected.
need to select 2 more
papers

3rd April 2008 Fast-NU City Campus Papers finalized Reed all papers
thoroughly.

10th April 2008 Fast-Nu City Campus Detailed discussion on the Initial draft need to be
content of read papers. created and direction of
our research need to be
identified.

20th April 2008 At Teachers Home Understanding of few Extend the draft and start
papers and terminology writing report
cleared.

2nd May 2008 Fast Main Campus Questionnaire discussion Identify questions and
areas to be covered in the
questioners.

10th May 2008 At Teachers Home Analyzed questionnaire Create statistics of the
results Survey results

17th May 2008 At Teachers Home Initial report review Changes required.

30th May 2008 At Teachers Home Report review Finalized.

Appendix “C” – Managerial Questionnaire

High Turnover in IT Industry

Survey Questionnaire

Note: Kindly fill in the options you feel are appropriate. You can select more than one option also and can
also add additional remarks/suggestions/views.

1. Name (Optional):

2. Organization(Optional) :

3. Industry
a. Software
b. Telecommunication
c. Infrastructure
d. Implementation
e. Out sourcing
f. Other _____________________

4. Designation
a. CEO
b. CTO
c. CIO
d. Project Manager
e. Team Lead
f. Other ________________________

5. Managerial Experience:
a. < 5
b. < 10
c. <20
d. >20

6. Are you or your company facing High Turnover among your employees?
a. Yes
b. No

Remarks:

7. Do you feel retention of employees is a problem for you?

a. Yes
b. No
 Remarks:

8. What do you think your employees expect from you or your company:
a. Higher salaries
b. Good quality of work. (Work on cutting edge technologies, challenging work etc).
c. Job security.
d. Other __________________

Remarks:

9. What benefits do you usually give employees in order to retain higher number of employees
a. Higher salaries
b. Good quality of work. (Work on cutting edge technologies, challenging work etc).
c. Job security.
d. Other __________________

Remarks:

10. What do you think are the reasons of high turnover in IT Industry? Elaborate.
Answer:

11. What are the major complaints you have from your employees?
Answer:

12. What strategy do you follow in order to retain employees?

Answer:

13. What is your biggest demand from current employee or whom you are looking for
Answer:

14. Any additional thing you would like to tell

Answer:
Appendix “D” – Technical Personnel Questionnaire

High Turnover in IT Industry

Survey Questionnaire

Note: Kindly fill in the options you feel are appropriate. You can select more than one option also and can
also add additional remarks/suggestions/views. Your provided information will be kept confidential.

15. Name (Optional):

16. Organization(Optional) :

17. Are you married

a. Yes
b. No

18. Industry
a. Software
b. Telecommunication
c. Infrastructure
d. Implementation
e. Other _________________

19. Designation ___________________

20. Technical Experience:

a. 1-3 yrs
b. 3-6 yrs
c. More than 6 yrs

21. How many times do you have switch job till your current employment.
a. 1
b. 2
c. 3
d. 4
e. 5
f. More than 5

22. What is your highest demand/expectation from your current employment or whom you are looking for:
a. Higher Salary
b. Job Satisfaction (Quality work).
c. Job security
d. Peace of mind
e. Other ______________

Remarks:
23. Why did you left your last employment.
a. Felt saturated (learning was not up to your expectations)
b. Less salary
c. Bad Managerial relation
d. Other_______________

Remarks:

24. Was there any negotiation when you left your last job? If yes. Did you retained or left?
Answer:

25. Was there any Exit Interview when you left your last job? If yes. What was the outcome of that meeting?
Answer:

26. Do you have any complaints from your current employment? If yes. What are they?
Answer:

27. Do you think is there any specific reason of high turnover in IT Industry?
Answer: