Employee Attrition

Reasons for high attrition

High attrition is one of the major problems in both local and international business process outsourcing (BPO) sector. It affects continuity of staffing that would soon affect company performance in terms of productivity and profitability.

Attrition is the loss of employees either voluntarily or forced. Either way, it is a challenging aspect to deal with especially for service-oriented companies like those in the BPO sector. With this, BPO companies start to strategise in order to keep employees happy and better manage attrition.

As per Naila Iqbal, a researcher for India, there is approximately 30-35 percent average attrition in the BPO sector in developing countries. In the United States, however, it reaches up to 70 percent.

Iqbal’s study entitled, “Analyzing Causes of Attrition Rate and Giving the Solution Through Maslow’s Hierarchy of Need(s) in (the) BPO Industry”, explores on the reasons behind the high attrition rate in the BPO industry. The study also offers quite a reasonable solutions looking at it psychologically through Maslow’s theory.

Illustrated through a 5-staged pyramid, Maslow’s Heirarchy of Needs attempts to understand human behavior. Specifically looking at it using the study mentioned above, it is used to understand what motivates employees to leave their jobs that collectively produce high turnover for BPO companies. Through understanding this, BPO executives can have a clearer perspective on how to manage employees and lessen turnover.

First, Maslow believes that the most basic need of a human being is physiological needs. This can includes food, shelter, and water. In a BPO set-up, these needs are satisfied by salary. Mind you, salary in a BPO company is higher than non-BPO companies. So the challenge for BPO companies is to keep their salaries competitive in order to keep their employees happy as well.

More than just salary, the second stage in Maslow’s pyramid describes the need of every human to feel safe and secure. BPO companies are aware of this. They provide proper security in their offices and raise awareness to their employees some necessary safety precautions. More to the literal understanding of safety and security is the security in terms of career. Many BPO employees dream of building a promising career. With this, each company should always make their employees feel as if there is a future for them and their ambitions within the company. It is important that each company sees the value of their employees.

Third in the pyramid is the need for a sense of belongingness, love and affection. This is often the most unmet need for every BPO employee because of the nightshifts. Nightshifts mean separation from family, friends and loved ones. That is why it is important for the management to see to it that each employee gets ample time to spend with whoever they want to spend it with away from the work and stress. Day-offs and paid leaves are very important in order to maintain a work-life balance.

Next is another psychological need that is the need for esteem, prestige and accomplishment. Companies should recognize that it is always for the benefit of everyone that they give-out gifts, prizes and certificates to top performers and best managers. The BPO industry should stop being the low value industry.

Lastly, there is the need for self-actualization. Maslow describes self-actualization as a person’s need to be and do what the person was “born to do”. In the same way, BPO firms should provide an option for career growth or other opportunities to help employees do what they want to do. Not to mention, these options can be long-term investments that can also serve as motivations for each employees.


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