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A Study on

Attrition Rate in
Indian Pharmaceutical Sector

A project report submitted as partial fulfillment of the requirement for the


degree of
Bachelor of Business Administration

Guide: Submitted By:

Ms. Poonam Purohit Karishma Hotchandani

Bachelor of Business Administration

Faculty of Commerce

The Maharaja Sayajirao University

Vadodara

2009 -10
ACKNOWLEDGEMENT
I owe thanks to many people who helped and supported me during the writing of this

research report. My deepest thanks to Ms.Poonam Purohit,the Guide of the project for

guiding and correcting various documents with attention and care. She has taken pain to

go through the project and make necessary correction as and when required.

I express my thanks to the Dean of Commerce Faculty, Programme Director and

Assistant Programme Director of Bachelor of Business Administration programme, of

The Maharaja Sayajirao University of Baroda for extending their support. My deep sense

of gratitude to Mr Praharsh Mehta, Vice President HR, Alembic Chemical Works Co.

Ltd., for his support and guidance.

Thanks and appreciation to the helpful people of various pharmaceutical companies who

spared time to fill the questionnaire and for their support. I would also thank my

Institution and my faculty members without whom this project would have been a distant

reality. I also extend my heartfelt thanks to my family and well wishers.


PREFACE
Talent or human resource is a major asset for any company. Company invest high amount

of money for their recruitment, selection & training and what happens to company if

these Talents or Employees leave the organization in short while seeking new

opportunities. Pharmaceuticals' is a business driven by research. Talented people are,

therefore, any pharma company's assets because they are the source of ideas which drives

research.They are trying to have their talent management strategies in place to manage

and retain their best people. Thus attrition in the Indian pharma sector is one of the

biggest challenges for an HR professional.

Most of the employers believe their employees leave them for money reasons. Many a

times we have heard people saying, “If only I could have paid her more, she would have

stayed.” Yes, we’ve lost people because of money, but this research finds that people

leave for one major reason and several subordinate ones.The answers is that most people

leave their jobs because of their supervisor or team leader! What is it about this

workplace relationship that makes it the number one reason so many people leave their

jobs. Basically, it’s a lack—of trust, of communication, of relevant and timely feedback,

of appreciation, of fair treatment and of information.

“Thus people join the organization but leave their bosses”


CERTIFICATE OF ORIGINALITY

This is to certify that Ms. Karishma Hotchandani, studying


in the 6th semester, Third Year under the specialization area
of Human Resource Management, has successfully
completed her reaserach project as a partial fulfillment of
BBA curriculam in the area of “Attrition in the Indian
Pharmaceutical Sector” by undertaking a study in various
pharmaceutical companies in and around Vadodara.

Ms. Poonam Purohit


(Research Guide)

Date: 10th May 2010


TABLE OF CONTENT

Chapter Topic Page No.


No.
Acknowledgement
Preface
Certificate of Originality

1. Introduction
Terminologies
Attrition Costs
Reasons for Attrition
Life Cycle Approach
Calculating Employee Attrition
Controlling Growing Attrition Rate
The True Picture
Causes & Analysis
The Brighter Side of Attrition
2. Pharmaceutical Sector
Global Pharmaceutical Sector
Pharmaceutical Sector in India
Pharmaceutical Sector in Gujarat
3. Methodology
4. Results
5. Discussion
6. Conclusion
7. Recommendation

References
Annexure
TABLE OF GRAPHS

Sr. No Topic Pg. No


1. Employee Attrition Risk Quadrant
2. Top 20 Biotechnology Co.’s in India
3. Size & Growth of Gujarat Pharma
Turnover vis-à-vis India
4. Size & Growth of Gujarat Pharma
export vis-à-vis India
5. Gujarat Capital Investment
6. Gujarat Pharma – a SWOT Analysis
7. Gujarat – Cluster & Characteristics
8. Gujarat – Building Blocks & Key
Imperatives
9. Globalization Model for Gujarat’s
Pharmaceutical Industry

Interpretations of questionnaire into graph are placed in


Chapter 4 of the report.
Chapter : 1 Introduction
“If employees are to be products,
their shelf-lives are getting shorter”

In the best of worlds, employees would love their jobs, like their coworkers, work hard

for their employers, get paid well for their work, have ample chances for advancement,

and flexible schedules so they could attend to personal or family needs when necessary.

And never leave.But then there's the real world. And in the real world, employees, do

leave, either because they want more money, hate the working conditions, hate their

coworkers, want a change, or because their spouse gets a dream job in another state. So,

what does that entire turnover cost? And what employees are likely to have the highest

turnover? Who is likely to stay the longest?

Defining Attrition:

♦ Unpredictable and uncontrollable, but normal, reduction of work force due to

resignations, retirement, sickness, or death.

♦ Loss of a material or resource due to obsolescence or spoilage.

Defining Attrition rate:


“the rate of shrinkage in size or number"

Attrition is beginning to significantly affect offshore ROI. Just as businesses faced a

scarcity of talented IT resources during the dotcom era, organizations in offshore

countries such as India are experiencing similar pains. Skilled employees are hopping
from job to job and taking with them the customer knowledge and technical expertise that

any company needs. Their salaries are increasing, along with their perks, benefits, and

bonuses.

The attrition rate has always been a sensitive issue for all organizations. Calculating

employee turnover rate is not that simple as it seems to be. No common formula can be

used by all the organization. A formula had to be devised keeping in view the nature of

the business and different jib functions. Moreover, calculating attrition rate is not only

about devising a mathematical formula. It also has to take into account the root of the

problem by going back to the hiring stage.

Attrition Costs:
One of the best methods for calculating the cost of turnover takes account expenses

involved to replace an employee leaving an organization. These expenses are:

( a ) Recruitment Cost

( b ) Training and Development Cost

( c ) Adminstrative Cost
( a ) Recruitment Cost:

The cost to the business when hiring new employees includes the following six factors

plus 10 percent for incidentals such as background screening:

• Time spent on sourcing replacement

• Time spent on recruitment and selection

• Travel expenses, if any

• Re-location costs, if any and training/ramp-up time

• Background/reference screening

( b ) Training and Development Cost:


To estimate the cost of training and development new employees, cost of new hires must

be taken into consideration. This will mean direct and indirect costs, and can be largely

classified under the following heads:

• Training Materials

• Technology

• Employee Benefits

• Trainers’ Time

( b )Administrative Costs:
They include
• Set up communication systems

• Add employees to the HR system

• Set up the new hire’s workspace


• Set up ID-cards, access cards, etc
Reasons for attrition
It is not easy to find out as to who contributes and who has the control on the attrition of

employees. Various studies/survey conducted indicates that every one is contributing to

the prevailing attrition. Attrition does not happen for one or two reasons. The way the

industry is projected and speed at which the companies are expanding has a major part in

attrition.

The specific reasons for attrition are varied in nature and it is interesting to know why the

people change jobs so quickly. Even today, the main reason for changing jobs is for

higher salary and better benefits. While attrition cannot be attributed to employees alone,

let us look at some of the possible reasons:

1.Organizational matters
The employees always assess the management values, work culture, work practices and

credibility of the organization. The Indian companies do have difficulties in getting the

businesses and retain it for a long time. There are always ups and downs in the business.

When there is no focus and in the absence of business plans, non-availability of the

campaigns makes people to quickly move out of the organization.

2.Working environment
Working environment is the most important cause of attrition. Today’s Gen Next

employees expect a professional approach and an international style working

environment. They expect a friendly and learning environment. Employees look for

freedom, good treatment from the superiors, good encouragement, friendly approach
from one and all, and good motivation.

3.Job matters
No doubt the jobs today bring lots of pressure and stress is high. The employees often

switch jobs if there is too much pressure on performance or any work related pressure. It

is quite common that employees are moved from one process to another. They take time

to get adjusted with the new processes while few employees find it difficult to adjust and

consequently leave. Monotony sets in very quickly and this is one of the main reasons for

attrition. Job hopping is very common among youngsters who look at jobs as being

temporary. Another commonly looked option is to move to such other process where

there is little or no pressure of sales and meeting service level agreements (SLA). The

employees move out if there are strained relations with the sup

periors or with the subordinates or any slightest discontent.

4.Salary and other benefits


Moving from one job to another for higher salary, better positions and better benefits are

the most important reasons for attrition. The salaries and benefits offered by MNCs are

generally higher than their Indian counterparts. The employees expect salary revision

once in 4-6 months and if not they move to other organizations.

Moving from one job to another for higher salary, better positions and better benefits are

the most important reasons for attrition. The salaries and benefits offered by MNCs are

generally higher than their Indian counterparts. The employees expect salary revision

once in 4-6 months and if not they move to other organizations.

5.Personal reasons
The personal reasons are many and only few are visible to us. They vary widely from
getting married to relocating for health/family reasons. The next important personal

reason is going for higher education. Health is another aspect, which contributes for

attrition.The personal reasons are many and only few are visible to us. They vary widely

from getting married to relocating for health/family reasons. The next important personal

reason is going for higher education. Health is another aspect, which contributes for

attrition.

6.Poaching
The demand for trained and competent manpower is very

high. Poaching has become very common. The rise in the number of placement agencies

has led to a boom in poaching. Most of the organizations have employee referral schemes

and this makes people to spread message and refer known candidates from the previous

companies and earn too.

7.Employee’s advocate
One of the main reasons why employees leave companies is because of problems with

their managers. An HR professional can be termed an employee

One of the main reasons why employees leave companies is because of problems with

their managers. An HR professional can be termed an employee’s advocate and a bridge

between top management and employees at all levels. There is often a huge gap between

HR professionals and employees in terms of understanding challenges and delivering

requirements. HR sometimes does not really understand the problems associated with

employees’ careers and jobs. The company’s overall plans and strategies also depend on

HR professionals as they voice employees’ problems and requirements. The HR

department should have genuine interest in the employees’ welfare; it is responsible for
making sure that their expectations are met. By doing this it is easier to me

eet the company’s business targets.

A Lifecycle Approach
The key to long term results against attrition is a comprehensive approach that attacks all

of the root causes of attrition across the agent lifecycle. Attrition occurs at all stages,

often for different reasons.

Understanding attrition risk across the agent lifecycle is achieved by looking at a

combination of performance and fit of current employees. The following chart lays out a

method for assessing attrition risk. In this model job performance is based on

performance against key matrices and fit is based on personality traits and cognitive

abilities. Personality traits and cognitive abilities are “hard-wired” and have the largest

impact on long-term success and attrition.

Employee Attrition Risk Quadrant


Poor Performance, Poor Fit
Employees in this quadrant represent the highest attrition risk. Poor performance

combined with poor job fit results in highly early attrition rates during new hire training,

nesting and the first 90 days on the floor. This quadrant is typically filled with new hires

when a hiring process is not optimized for attrition. A typical response to this risk is to

add assessments to the hiring process. Knowlagent’ survey illustrates this trend as centers

addressing attrition use assessments twice as often as those who have not yet dealt with

the issue. But pharmaceutical sector need to be diligent to avoid using assessments to

automate an ineffective, manual hiring process. To truly change the hiring process, they

must first determine the most critical areas impacting attrition and assess candidates

against them. In this way candidates with the least chance at success are eliminated from

the process. This is in contrast to using best overall fit as a gauge since it tends to mask

critical gaps in personality, cognitive ability and skills. Additionally, since unclear job
expectations was highly ranked as a causal factor by respondents, a standardized way of

setting realistic job expectations should be integrated into the hiring process. Other

actions that may be taken in this quadrant are:

• Moving high risk agents to more suitable roles, if movement within the

organization is possible.

• Where possible, building skills and mitigating fit gaps that may respond to

coaching and training among these existing agents.

After this highest risk category is addressed, a lifecycle approach to attrition would mean

turning attention to the quadrants with lower risks. The makeup of the agent population

will change overtime as natural attrition occurs, but specific actions may be needed based

on the concentration of agents in the other quadrants.

Poor Performance, Good Fit


Agents in the lower right quadrant are typically a medium attrition risk. This quadrant

may be home to many new hires before adequate training and coaching are provided if a

hiring process is effective. Specific action items for new hires are:

• Provide tailored new hire training plans based on agents’ existing skills

• Provide opportunities for safe practice before interacting with customers

• Provide tailored coaching and training plans for nesting and post-nesting

environments

Targeted training and coaching can also be used to improve existing agents’ skills in this

quadrant.

Good Performance, Poor Fit


Agents in the upper left quadrant are a medium attrition risk due to poor fit. The majority

of agents in this quadrant cannot be moved to the upper right quadrant without a position

change. It is not possible to change an agent’s underlying traits, but training and coaching

can be used to mitigate fit gaps in conjunction with other incentives to reduce attrition

risk. The best chance for retention is to look for opportunities in other call center

positions that are a better fit.

Good Performance, Good Fit


Agents in this quadrant are a low attrition risk. Continue to train and positively coach

these agents since a good-fit agent who is not provided with appropriate training and

coaching can slip down into the lower right quadrant if the job changes without adequate

training. An agent in this upper right quadrant can move to the upper left quadrant if job

responsibilities substantially change and he/she does not have the underlying traits to

perform the job. This situation is possible in many centers transitioning from a service

only to service and sales model.

Associated costs with high Attrition

Talent cost:

It includes the cost of lost knowledge, skills and contacts that the person who is leaving is

taking with them out of your door.


Recruitment cost
-The cost of advertisements; agency costs; employee referral costs; internet posting costs.

-Calculate the cost of the manager who has to understand what work remains, and how to

cover that work until a replacement is found.

-Cost of the various candidate pre-employment tests to help assess candidates' skills,

abilities, aptitude, attitude, values and behaviors.

Training cost
-It includes the cost of orientation in terms of the new person's salary and the cost of the

person who conducts the orientation.

-It also consists of the training.

-Calculate the cost of various training materials needed including company product

manuals, computer or other technology equipment used in the delivery of the training.

Motivational cost:
It refers to the cost arises because of motivating the other employees to retain them in the

organization in terms of increasing their salary and time.

Lost Productivity Costs:


As the new employee is learning the new job, the company policies and practices, etc.

they are not fully productive.


Calculating Employee Attrition
The high attrition rate in the industry has always been the greatest concern, and a subject

of much analysis and debate. Organizations use different methodologies for calculating

their turnover rate. It is a known fact that turnover calculation is a grey area which does

not always depict the true picture. While a few techniques are common, there are no

proven theories. Furthermore, the approach to this calculation might vary from

organization to organization. Disclosure of the figure not only has a direct impact on the

business, but also affects employee morale and productivity. Significantly, it might also

trigger off a chain reaction-a high attrition rate will lead to more people leaving the

organization, while a lower rate will act as a retention strategy. It is not surprising that

most industry observers are skeptical when organizations disclose their employee

turnover.

A high attrition reflects poorly on an organization’s ability to hold on to its people.

Unfortunately, attrition is viewed as a management flaw, when in fact; it could well be a

recruitment error. In some cases it can be simply seen as an organization’s competitor

appreciating its quality of hires and the output, post-training-almost a backhanded

compliment!

Ideally, attrition should be calculated on a monthly basis for companies that have over 50

employees for the first five years of its business. Subsequently, a quarterly index should

be applied till a company's 10th anniversary. Post this, annual attrition figures should be

measured and accounted for. This is optimal within the services industry as companies

tend to have different challenges at different stages of their business life-cycle, and also

maturity achieves stability around a company's 10th anniversary.


Different theories
The attrition rate remains a debatable area, as there is no standard formula to calculate it.

A few of them are listed below:

• The employee base changes each month. So if a company has 1,000 employees in

April 2004 and 2,000 in March 2005, then they may take their base as 2,000 or as

1,500 (average for the year). If the number of employees who left is 300, then the

attrition figure could be 15% or 20% depending on what base you take.

• Many firms may not include attrition of freshers due to higher studies or attrition

within three months of joining.

• In some cases attrition of poor performers may also not be treated as attrition.

• Essentially the attrition number is also a PR or stock/analyst statement and is

prone to 'dressing' up.

Varied theories are also applied as organizations like to brand themselves differently

as far as their HR and recruitment strategy is concerned. Each company positions

itself uniquely in a common market place on account of having exceptional HR

policies, procedures and management styles that directly impact retention or attrition

and hence the absence of a homogenous system. Also, in scenarios where a common

attrition measurement formula is applied, companies find a way to justify their results

to position their statistics differently from their peers on account of having differing

operating practices.
Formula for Attrition
While different organizations follow different formulae for calculating attrition

depending on their size and nature of services, some of the commonly used formulae

to calculate attrition are as follows:

1.) Attrition Rate = (No of employees resigned/Average manpower)*100

where, Average Manpower = (Opening Manpower + Closing manpower)/2

(opening/closing manpower could be either the calendar year beginning or financial

year beginning whichever followed)

2.) Attrition = employees left * 100 / (opening balance in a month + number of

employees joined in a month + number of employees left + no of employees at the

end of the month

3.) Attrition = (No. of employees who left in the year / Average employees in the

year) * 100.
Controlling Growing Attrition Rate

1. Offer fair and competitive salaries. Fair compensation alone does not
guarantee employee loyalty, but offering below-market wages makes it much

more likely that employees will look for work elsewhere. In fact, research shows

that if incomes lag behind comparable jobs at a company across town by more

than 10 percent, workers are likely to bolt. To retain workers, conduct regular

reviews of the salaries you offer for all job titles — entry-level, experienced staff

and supervisory-level. Compare your department's salaries with statistically

reliable averages. If there are significant discrepancies, you probably should

consider making adjustments to ensure that you are in line with the marketplace.

2. Remember that benefits are important too. Although benefits are not
a key reason why employees stick with a company, the benefits you offer can't be

markedly worse than those offered by your competitors

3. Train your front-line supervisors, managers and

administrators. It can't be said often enough: People stay or leave because of


their bosses, not their companies. A good employee/manager relationship is critical to

employee satisfaction and retention. Make sure your managers aren't driving

technologists away. Give them the training they need to develop good supervisory

and people-management skills.


4. Clearly define roles and responsibilities. Develop a formal job
description for each title or position in your department. Make sure your employees

know what is expected of them every day, what types of decisions they are allowed to

make on their own, and to whom they are supposed to report.

5. Provide adequate advancement opportunities. To foster employee


loyalty, implement a career ladder and make sure employees know what they must do

to earn a promotion. Conduct regular performance reviews to identify employees'

strengths and weaknesses, and help them improve in areas that will lead to job

advancement. A clear professional development plan gives employees an incentive to

stick around.

6. Offer retention bonuses instead of sign-on bonuses. Worker


longevity typically is rewarded with an annual raise and additional vacation time after

three, five or 10 years. But why not offer other seniority-based rewards such as a paid

membership in the employee's professional association after one year, a paid

membership to a local gym after two years, and full reimbursement for the cost of the

employee's uniforms after three years? Retention packages also could be designed to

raise the salaries of technologists who become credentialed in additional specialty

areas, obtain additional education or take on more responsibility. Sign-on bonuses

encourage technologists to skip from job to job, while retention packages offer

incentives for staying.


7. Make someone accountable for retention. Measure your turnover
rate and hold someone (maybe you!) responsible for reducing it. In too many

workplaces, no one is held accountable when employees leave, so nothing is done to

encourage retention.

8. Conduct employee satisfaction surveys. You won't know what's


wrong ... or what's right … unless you ask. To check the pulse of your workplace,

conduct anonymous employee satisfaction surveys on a regular basis. One idea: Ask

employees what they want more of and what they want less of.

9. Foster an environment of teamwork. It takes effort to build an


effective team, but the result is greater productivity, better use of resources, improved

customer service and increased morale. Here are a few ideas to foster a team

environment in your department:

• Make sure everyone understands the department's purpose, mission or goal.

• Encourage discussion, participation and the sharing of ideas.

• Rotate leadership responsibilities depending on your employees' abilities and the

needs of the team.

• Involve employees in decisions; ask them to help make decisions through consensus

and collaboration.

• Encourage team members to show appreciation to their colleagues for superior

performance or achievement.
10. Reduce the paperwork burden. If your technologists spend nearly as
much time filling out paperwork, it's time for a change. Paperwork pressures can add

to the stress and burnout that employees feel. Eliminate unnecessary paperwork;

convert more paperwork to an electronic format; and hire non-tech administrative

staff to take over as much of the paperwork burden as is allowed under legal or

regulatory restrictions.

11. Make room for fun. Celebrate successes and recognize when milestones
are reached. Potluck lunches, birthday parties, employee picnics and creative contests

will help remind people why your company is a great place to work.

12. Write a mission statement for your department. Everyone wants


to feel that they are working toward a meaningful, worthwhile goal. Work with your

staff to develop a departmental mission statement, and then publicly post it for

everyone to see. Make sure employees understand how their contribution is

important.

13. Provide a variety of assignments. Identify your employees' talents and


then encourage them to stretch their abilities into new areas. Do you have a great

"teacher" on staff? Encourage him/ her to lead an in-service or present a poster

session on an interesting case. Have someone who likes planning and coordinating

events? Ask him to organize a departmental open house. Know a good critical-
thinker? Ask him/ her to work with a vendor to customize applications training on a

new piece of equipment. A variety of challenging assignments helps keep the

workplace stimulating.

14. Communicate openly. Employees are more loyal to a company when


they believe managers keep them informed about key issues. Is a corporate merger in

the works? Is a major expansion on the horizon? Your employees would rather hear it

from you than from the evening newscast. It is nearly impossible for a manager to

"over-communicate."

15. Encourage learning. Create opportunities for your technologists to grow


and learn. Reimburse them for CE courses, seminars and professional meetings;

discuss recent journal articles with them; ask them to research a new scheduling

method for the department. Encourage every employee to learn at least one new thing

every week, and you'll create a work force that is excited, motivated and committed.

16. Be flexible. Today's employees have many commitments outside their job,
often including responsibility for children, aging parents, chronic health conditions

and other issues. They will be loyal to workplaces that make their lives more

convenient by offering on-site childcare centers, on-site hair styling and dry cleaning,

flexible work hours, part-time positions, job-sharing or similar practices. For


example, employees of school-age children might appreciate the option to work nine

months a year and have the summers off to be with their children.

17. Develop an effective orientation program. Implement a formal


orientation program that's at least three weeks long and includes a thorough overview

of every area of your department and an introduction to other departments. Assign a

senior staff member to act as a mentor to the new employee throughout the

orientation period. Develop a checklist of topics that need to be covered and check in

with the new employee at the end of the orientation period to ensure that all topics

were adequately addressed.

18. Give people the best equipment and supplies possible. No one
wants to work with equipment that's old or constantly breaking down. Ensure that

your equipment is properly maintained, and regularly upgrade machinery, computers

and software. In addition, provide employees with the highest quality supplies you

can afford. Cheap, leaky pens may seem like a small thing, but they can add to

employees' overall stress level.

19. Show your employees that you value them. Recognize outstanding
achievements promptly and publicly, but also take time to comment on the many

small contributions your staff makes every day to the organization's mission. Don't

forget — these are the people who make you look good!
Employee attrition continues to affect organizations large and small, local and multinational and

may impact the growth and prosperity of the company. Similarly, the exit of experienced fund

managers also affects the performance of the fund temporarily as the style differs from one fund

manager to another. Intimate knowledge about the corporate world is very vital for the fund

The employee attrition problem is a global issue and at times may be difficult to manage but can

be tackled by careful planning and well thought out proactive HRD policies.

The True Picture


The attrition rate that is generally disclosed by most organizations does not always show

the correct picture. This is because the figure has direct impact on stock markets,

employee morale and customer confidence. Attrition rate has always been a sensitive

issue for all organizations as it can have major fallout on the bottom-line. This is because

the attrition rate is an indicator to many things intrinsic to the organization, and revealing

it may affect it negatively. In fact at times, disclosing this data can be like a self-fulfilling

prophecy-if you tell the fact that the attrition is high, it may actually become higher. It is

also not uncommon to find companies proclaiming an attrition rate that is much less than

the others in the industry or their competitor's turnover rate.

Companies often project their attrition rate incorrectly as it tends to affect their brand

image both internally and externally. Internally, it sends a wrong signal to their

employees and the board of members and externally, it can affect in various ways such as

developing a bad image or dissuading talent. However companies do not realize that

hiding their attrition rate is never a solution in reducing the same.


Cause & analysis
Calculating employee turnover is not a matter of simple mathematical method. It is

necessary to take into account the root of the problem, by going back to the hiring stage.

Most organizations in practice do not evolve robust measurements for calculating cost of

a bad hire or labor turnover. The detail of information required and the measurement

metrics are not common formulae, but have to be designed dependent on the nature of

business and function. As a result most organizations do not intend to mislead by

disclosing statistics which may not be true, it is just that perhaps they believe those to be

true.

Organizations will however know what their real attrition figures are as this has a huge

impact on business. Like with most data, attrition too can be interpreted in different ways

and it is up to each organization how and what they wish to share. Organizations are

generally much concerned about regretted voluntary attrition. These are people who leave

at their own will and those whom the organization would have loved to retain. Similarly,

organizations measure managed attrition. These are people made redundant, laid off or

exited. Though managed attrition is non-regretted by the organization, the trend of

managed attrition if on the higher side may show the organization in poor light and does

have an impact on the organization’s health.

Attrition does not only reflect the hiring policies of an organization, but also induction

and retention strategies, training methodologies, work culture and many other factors. It
costs the company valuable time, money and often credibility (especially where

employees develop relationships with customers). Some companies just look at the

employee turnover in terms of the cost involved in the hiring and training of the

individuals. While others look at the opportunity lost and cost.

Organizations aim to reduce voluntary attrition of productive employees and encourage

unproductive staff to leave its fold. It makes way for career progression, new thinking

and innovation.

The Brighter Side of Attrition

Some employee turnover positively benefits organizations. This happens whenever a

poor performer is replaced by a more effective employee, and can happen when a senior

retirement allows the promotion or acquisition of welcome 'fresh blood'. Moderate levels

of staff turnover can also help to reduce staff costs in organizations where business levels

are unpredictable month on month. In such situations when business is slack it is

straightforward to hold off filling recently created vacancies for some weeks
Chapter : 2

Pharmaceutical Sector
Talent or human resource is a major asset for any company. Company invest high amount

of money for their recruitment, selection & training and what happens to company if

these Talents or Employees leave the organization in short while seeking new

opportunities. Pharmaceuticals' is a business driven by research. Talented people are,

therefore, any pharma company's assets because they are the source of ideas which drives

research.They are trying to have their talent management strategies in place to manage

and retain their best people. Thus attrition in the Indian pharma sector is one of the

biggest challenges for an HR professional.

For the purpose of research work and clearly understanding the pharmaceutical sector, I

have segmented the sector into 3 categories; they are:

( a ) Global Pharmaceutical Sector

( b ) Pharmaceutical Sector in India

( c ) Pharmaceutical Sector in Gujarat


Global Pharmaceutical Sector

Accounting for two percent of the world's pharmaceutical market, the Indian

pharmaceutical sector has an estimated market value of about US $8 billion. It's at 4th

rank in terms of total pharmaceutical production and 13th in terms of value. It is growing

at an average rate of 7.2 % and is expected to grow to US $ 12 billion by 2010.

Over the last two years the pharmaceutical market value has increased to about US $ 355

million because of the launch of new products. According to an estimate, 3900 new

generic products have been launched in the past two years. These have been by and large

launched by big brands in the pharma sector. And in the year 2005 Indian pharmaceutical

companies captured around 70% of the domestic market.

As in the present scenario, only a few people can afford costly drugs, which have

increased price sensitivity in the pharmaceutical market. Now the companies are trying to

capture the market by introducing high quality and low price medicines and drugs.

With the Product Patent Act, which came into action in January 2005, this industry is

able to attract big MNCs to India. Earlier these big firms had apprehensions in launching

new drugs in the Indian market.


At present, a large number of Indian pharmaceuticals companies are looking for tie-ups

with foreign firms for in-license drugs. GlaxoSmithKline is among the top choices for the

firms that wish to launch their product in India, but do not have any branch over here.

Contract research and pharmaceutical outsourcing are the new avenues in the

pharmaceutical market. Contract manufacturing is growing at a very fast pace and is

estimated to grow to US $30billion, whereas contract research is estimated to reach

US$6-10 billion.

Indian multinational companies like Dr.Reddy's Lab, Cipla, Ranbaxy, etc have created

awareness about the Indian market prospects in the international pharmaceutical market.

Approvals given by Foods and Drugs Administration (FDA) and ANDA (Abbreviated

New Drug Application)/DMF (Drug Master File) have played an important role in

making India a cost-effective and high quality product manufacturer. Furthermore, the

changes that took place in the patent law, change of process patent to product patent,

have helped in reducing the risk of loss for intellectual property.

SWOT Analysis of Pharma Sector

Strength:

• Cost effective technology

• Strong and well-developed manufacturing base

• Clinical research and trials

• Knowledge based, low- cost manpower in science & technology


• Proficiency in path-breaking research

• High-quality formulations and drugs

• High standards of purity

• Non-infringing processes of Active Pharmaceutical Ingredients (APIs)

• Future growth driver

• World-class process development labs

• Excellent clinical trial centers

• Chemical and process development competencies

Weaknesses:

• Low Indian share in world pharmaceutical market (about 2%)

• Lack of strategic planning

• Fragmented capacities

• Low R&D investments

• Absence of association between institutes and industry

• Low healthcare expenditure

• Production of duplicate drugs

Opportunities:

• Incredible export potential

• Increasing health consciousness

• New innovative therapeutic products

• Globalization
• Drug delivery system management

• Increased incomes

• Production of generic drugs

• Contract manufacturing

• Clinical trials & research

• Drug molecules

Threats:

• Small number of discoveries

• Competition from MNCs

• Transformation of process patent to product patent (TRIPS)

• Outdated Sales and marketing methods

• Non-tariff barriers imposed by developed countries


The Following is a list of twelve largest pharmaceutical
companies ranked by revenue as of March 2010 according
to their released 2009 reports.

Rank Company Country Total


Revenues
(USD
millions)
1. Johnson & Johnson United States 61,897
2. Pfizer United States 50,009
3. Roche Switzerland 45,304
4. GlaxoSmithKline United 44,421
Kingdom
5. Novartis Switzerland 44,267
6. Sanofi-Aventis France 40,870
7. AstraZeneca United 32,804
Kingdom
8. Abbott Laboratories United States 30,765
9. Merck & Co. United States 27,428
10. Bayer HealthCare Germany 22,297
11. Eli Lilly United States 21,836
12. Bristol-Myers United States 18,808
Squibb
Indian Pharmaceutical Sector
“The Indian pharmaceutical industry is a success story providing employment for
millions and ensuring that essential drugs at affordable prices are available to the
vast population of this sub-continent.”

- Richard Gerster

The Indian Pharmaceutical Industry today is in the front rank of India’s science-based

industries with wide ranging capabilities in the complex field of drug manufacture and

technology. A highly organized sector, the Indian Pharma Industry is estimated to be

worth $ 4.5 billion, growing at about 8 to 9 percent annually. It ranks very high in the

third world, in terms of technology, quality and range of medicines manufactured. From

simple headache pills to sophisticated antibiotics and complex cardiac compounds,

almost every type of medicine is now made indigenously.

Playing a key role in promoting and sustaining development in the vital field of

medicines, Indian Pharma Industry boasts of quality producers and many units approved

by regulatory authorities in USA and UK. International companies associated with this

sector have stimulated, assisted and spearheaded this dynamic development in the past 53

years and helped to put India on the pharmaceutical map of the world.

The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered

units. It has expanded drastically in the last two decades. The leading 250 pharmaceutical

companies control 70% of the market with market leader holding nearly 7% of the market

share. It is an extremely fragmented market with severe price competition and

government price control.


The pharmaceutical industry in India meets around 70% of the country's demand for bulk

drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules,

orals and injectibles. There are about 250 large units and about 8000 Small Scale Units,

which form the core of the pharmaceutical industry in India (including 5 Central Public

Sector Units). These units produce the complete range of pharmaceutical formulations,

i.e., medicines ready for consumption by patients and about 350 bulk drugs, i.e.,

chemicals having therapeutic value and used for production of pharmaceutical

formulations.

Following the de-licensing of the pharmaceutical industry, industrial licensing for most of

the drugs and pharmaceutical products has been done away with. Manufacturers are free

to produce any drug duly approved by the Drug Control Authority. Technologically

strong and totally self-reliant, the pharmaceutical industry in India has low costs of

production, low R&D costs, innovative scientific manpower, strength of national

laboratories and an increasing balance of trade. The Pharmaceutical Industry,

with its rich scientific talents and research capabilities, supported by Intellectual

Property Protection regime is well set to take on the international market.


SWOT Analysis of the Indian Pharmaceutical Sector

Strengths:

• Low cost of production.

• Large pool of installed capacities

• Efficient technologies for large number of Generics.

• Large pool of skilled technical manpower.

• Increasing liberalization of government policies.

Opportunities:

• Aging of the world population.

• Growing incomes.

• Growing attention for health.

• New diagnoses and new social diseases.

• Spreading prophylactic approaches.

• Saturation point of market is far away.

• New therapy approaches.

• New delivery systems.

• Spreading attitude for soft medication (OTC drugs).

• Spreading use of Generic Drugs.

• Globalization

• Easier international trading.


• New markets are opening.

Weakness:

• Fragmentation of installed capacities.

• Low technology level of Capital Goods of this section.

• Non-availability of major intermediaries for bulk drugs.

• Lack of experience to exploit efficiently the new patent regime.

• Very low key R&D.

• Low share of India in World Pharmaceutical Production (1.2% of world

production but having 16.1% of world''s population).

• Very low level of Biotechnology in India and also for New Drug Discovery

Systems.

• Lack of experience in International Trade.

• Low level of strategic planning for future and also for technology

forecasting.

Threats:

• Containment of rising health-care cost.

• High Cost of discovering new products and fewer discoveries.

• Stricter registration procedures.

• High entry cost in newer markets.

• High cost of sales and marketing.

• Competition, particularly from generic products.

• More potential new drugs and more efficient therapies.


• Switching over form process patent to product patent

Top 20 Biotechnology Companies in India

Rank Company Revenue (Rs. Revenue (USD


Crore) millions)
1. Biocon 646 148.6
2. Serum Institute of India 565 129.9
3. Panacea Biotec 217 50.0
4. Venkateshwara Hatcheries 188 43.2
5. Mahyco Monsanto 166 38.3
6. Novo Nordisk 135 31.0
7. Rasi Seeds 87 20.0
8. Aventis Pharma 84 19.4
9. Bharat Serums 81 18.6
10. Chiron Behring Vaccines 78 17.9
11. GlaxoSmithKline 78 17.9
12. Indian Immunologicals 72 16.6
13. Shantha Biotechnics 70 16.1
14. Novozymes 69 15.9
15. Eli Lilly and Company 68 15.7
16. Wockhardt 67 15.4
17. Bharat Immunological & 53 12.3
Biological Corp.
18. Bharat Biological 41 9.4
International
19. Advanced Biochemicals 40 9.1
20. Biological E 36 8.3
USD 1 = Rs. 43.5
Source: BioSpectrum Top 20: A threshold crossed
Gujarat Pharma Industry

Brief overview of the evolution of Gujarat’s Pharma Industry

Alembic Chemical Works Co. Ltd., one of the oldest pharmacompanies in India, was set

up in Vadodara in 1907, just six years afterIndia’s first domestic pharmaceutical unit –

Bengal Chemical and Pharmaceutical Works was set up in Calcutta. Srabhai Chemicals

was started soon thereafter.

The industry had received strong support from the academic fiels. In 1940, the Drugs

Laboratory in Vadodara was established, followed by LM College of Pharmacy. Further

in 1989, the B.V. Patel Education Trust, Ahmedabad and Gujarat Branch of Indian

Pharmaceutical Education and Research Development (PERD) Centre in Ahmedabad.

In the last few decades, the invested capital to labour ratio has risen significantly. The

employment almost doubled between 1978-80 and 1997-98. over the years, the industry

has developed strong linkages with related sectors and industries such as chemicals,

pharma machinery, information technology,etc.

There are currently approximately 3,500 drug manufacturing units in Gujarat. The state

houses several established companies such as Torrent Pharma, Zydus Cadila, Alembic,

Sun Pharma,Claris, Intas Pharmaceuticals and Dishman Pharmaceuticals, which have

operations in the world’s major pharma markets.


Over the last few years, Gujarat’s contribution in the growth of India’s pharmaceuticals

industry has been significant. The state commands 42 percebt share of India’s

pharmaceutical turnover and 22 percent share of exports. Approximately 52,000 people

are employed in Gujarat’s pharmaceutical sector,which has witnessed 54 percent CAGR

in capital investments over the last three years.

Gujarat’s pharma industry: Some key


statistics and comparison with the Indian
Pharma Industry
Size and Growth of Gujarat’s pharma turnover vis-à-vis India
Size and Growth of Gujarat’s export vis-à-vis India
Gujarat Pharma – a SWOT analysis
Clusters:
A cluster is defined as a geographically proximate group of companies and associated

institutions in a particular field, linked by commonalities and complementarities.

For any successful industry, one of the driving forces is the pressure of Small and

Medium scale Enterprises (SMEs). A peculiar characteristic of SMEs is that, generally

they exist and thrive in clusters.


Building Blocks and Key Imperatives
There are certain building blocks that help industries flourish. Gujarat’s pharma industry

is good examples of a well-developed ecosystem with strong building blocks that have

helped the industry grow at such a phenomenal pace.

Creation of a Global Pharmaceuticals Hub


Gujarat, an established manufacturing base for bulk drugs and formulations- with its

inherent competitive advantage- is poised to capture emerging global opportunities to

become a global pharmaceuticals hub. Emergence of SEZs is likely to create a pharma

behemoth- with scale and infrastructure on par with international standards, that will

enable it to compete in the global market place.


The availability of a well-developed chemicals industry, which has strong linkages with

pharma AP/intermediates, can be utilized to boost the high growth of CRAMS sector.

This could make Gujarat a strong sourcing base for global pharma companies.

Emerging Opportunities
Medical Tourism: With India rapidly emerging as an attractive medical tourism hub,

Gujarat is also making big strides in this segment. It is fast competing with other places

such as Delhi, Maharashtra and Andhra Pradesh in this segment. The state offers high

quality and specialized healthcare services and infrastructure at very low costs, thus

making it a preferred destination for medical tourism.

Gujarat has highly qualified specialists particularly in the ophthalmology, urology,

embryology, orthodontics, oncology and orthopedics therapeutic areas. It also offers

other advantage such as English-speaking healthcare personnel, no waiting periods for

treatment, and high standards of international transport.

Contract Research Organizations: Gujarat is home to approximately 40 percentage

of CROs in the country. Its well established healthcare sector,strong infrastructure

facilities and relatively real estates costs has lured many global and local CROs to set up

shop in the state. Globally, contract research is a high growth segment led by establishing

a strong ancillary services industry base-such as bio-informatics and clinical data

management centres-which can facilitate and boost R&D and other high-end activities.

Pharmacetical Machinery: There is a strong local and global opportunity for Gujarat

in the manufacturing of pharmaceutical machinery, given its strong and well established

engineering sector. According to industry estimates, approximately 35-40 percent of


India’s pharmaceutical machinery is produced in Gujarat. The strong growth prospects of

the pharmaceutical exports segment and growing demand from the domestic market,will

further fuel growth in the pharmaceutical machinery sector. However, Gujarat’s

engineering sector is highly fragmented especially the pharma machinery manufacturing

segment. Due to the highly fragmented nature, there is a dearth of pricing power and

critical scale. This in turn restricts the ability to produce the technology-driven products

required for operating in the global markrts. The pharma machinery manufacturing

industry in Gujarat needs to consolidate and synergise the skills to be able to create worls

class players with the scale and resources required,to tap the global as well as local

demand.

Many pharma companies in Gujarat have adopted the inorganic route to participate in the

global markets. However, operating in the world markets is not just about acquiring

global assets but also about having a global mindset. In order to benefit from the on-

going integration of the world pharma markets, the pharma industry and companies have

to change interbal mindsets to think and compete globally, and create an environment of

innovation. Companies would have to imbibe a culture that enhances its efficiency while

responding to the global challenges in different geographies. Having a world-class

management team,reflective of the diverse global markets in which they operate,would

be a start in this direction. The enterprise-wide use of global IT solutions is another areas

that needs to be addressed.

Globalisation model
for
Gujarat’s Pharmaceuticals Industry
Chapter : 3
Methodology
Objectives Of Study

• To study the reasons of high attrition rate in the Indian pharmaceutical sector and

the need, aspiration, interest, satisfaction level of the employees so as to know the

reason why do they leave their jobs?

• To find out the impact of high attrition in the Indian Pharmaceutical Sector.

Sample

50 employees were randomly selected from below listed pharmaceutical industries. The

industries were:

• Zydus Alidac Fortiza

• Claris Life Sciences Ltd.

• Pfizer Limited

• Cipla Limited

• Abbott Diabetes Care

• Ranbaxy

• GlaxoSmithKline Pharma

• Eli-Lily & Company


Characteristics Of Sample

• The employees at all the level were taken into consideration.

• The employees taken into consideration held different positions and played

different roles in their respective organization.

Variable

• Independent Variable:

• Dependent Variable:

• Control Variable:

Hypothesis

Hypothesis 1:

Salary, Organization’s Brand and Outer image of the organization has effect on attrition

rate in the pharmaceutical sector.

Hypothesis 2:

High attrition in the pharmaceutical sector is due to poor job satisfaction and weak

organizational culture
Tools

• A self made questionnaire consisting on about 35 questions was drafted to

understand the reasons as to why employees leave the pharmaceutical sector or

keep on frequently shifting their jobs.

• Interview were taken personally or through telephonic talks and tried to

understand the trends of employment in the pharmaceutical sector.

Research Procedure:

The procedure is to enumerate all the steps of the research process in a chronological

order. The emphasis has been placed on the steps taken to assert the nature and size of

sample. Specific details also have been included in this section regarding the study.

1. Data Collection

This study involved the collection of data. First step involved making a

questionnaire suitable for the the level of employees in the organization. Secondly

getting the permission from the organization’s head to conduct the research and

collect the appropriate data. The objective of the study was made clear to all so

that they could give free and frank replies to all the questions without any fear in

their mind. Questionnaires were given to employees of different organization

either by e-mails or personal visits on a given date for their responses. Whenever

necessary, time was spent with them to explain the instructions for the

questionnaire. On specified dates questionnaire was collected from respective


candidates. However data could not be collected of same employees as they were

busy or were reluctant to give their responses. The higher officials of the

organization gave their information by personal and telephonic interviews.

2. Data Analysis

Data analysis and Interpretation involves the following:

Frequency Distribution, Percentage Distribution, Mean and Median to calculate

the collected data in order to obtain the results.

To help in further analysis the data was also graphically represented by using Bar

Graph.
Chapter : 4 Results

“I experience a sense of community in my organization”

Strongly Agree 20 40 %
Agree 13 26 %
Neutral 6 12 %
Disagree 3 6%
Strongly Disagree 8 16 %

Total 50 100 %

Chart 1: Employees feel a sense of community in the


workplace

25
20
Number of Employees

20

15 13

10 8
6
5 3

0
Strongly Agree
Somewhat Neutral Somewhat Strongly
Agree Disagree Disagree
Thus we can analyze that sense of community among the co-workers in the organization
is a very important to retain them. Their motivation, job satisfaction all adds up to
become the resistant force against attrition in the Indian pharmaceutical sector.
“I feel I am valued in this organization.”

Strongly Agree 30 60 %
Agree 12 24 %
Neutral 5 10 %
Disagree 1 2%
Strongly Disagree 2 4%

Total 50 100 %

Chart 2: Employees feel valued in their workplace

35
30
30

25

Number of 20
Employees 15
12
10
5
5 2
1
0
Strongly Agree Somewhat Neutral Somewhat Strongly
Agree Disagree Disagree
Majority of the employees have agreed that they are in their respective organization,
happy and satisfied in their job because they are valued there for the person they are or
for their skills, talent or ability. Acknowledgement, Appreciation, Feedback or Respect is
what an employee seeks to gain not only from his superiors but also from his peer
members and subordinates.
“Promoting respect & fair treatment among all staff is higher priority of this
organization”

Strongly Agree 25 50
Agree 12 24
Neutral 8 16
Disagree 2 4
Strongly Disagree 3 6

Total 50 100 %

Chart 3: promoting respect & fair treatment among the co-


workers is a higher priority of the organization

30
25
25
Number of Employees

20

15 12

10 8

5 3
2

0
Strongly Agree Somewhat Neutral Somewhat Strongly
50% of the employees strongly believe that
Agree they are been properly treated in the
Disagree Disagree
organization. It also says a lot about the culture, values, attitude and belief of the
organization as well as the employees working in it.

For people who feel they are not been treated well, proper grievance procedure should be
held for them
“Communication among staff in this organization is effective.”

Strongly Agree 25 50 %
Agree 18 26 %
Neutral 4 5%
Disagree 2 4%
Strongly Disagree 1 2%

Total 50 100 %

Chart 4: Communication among the co-workers is effective

30
25
25
Number of Employees

20 18

15

10

4
5
2
1
0
Strongly Agree
Somewhat Neutral Somewhat Strongly
Agree Disagree Disagree
Communication is the back bone for any organization. If proper two way channel of
communication is not there then a lot of problems will occur and the organization cannot
run smoothly. From this analysis we come to know almost 75% employees belief that
they have a good communication system in their respective organization so high attrition
due to poor communication is ruled out.
“I have a clear sense of the future direction of this organization.”

Strongly Agree 24 48 %
Agree 17 34 %
Neutral 8 16 %
Disagree 1 2%
Strongly Disagree 0 0%

Total 50 100 %

Chart 5: Employees have a clear sense of future direction


of their organization

30
24
25
Number of Employees

20 17

15

10 8

5
1
0
0
Strongly Agree
Somewhat Neutral Somewhat Strongly
Agree Disagree Disagree
For making any organization successful it is necessary that the organizational, team and
individual goals are aligned. If interest of any one is different from the rest then
deviations may occur. All employees should have knowledge about the organizations
mission, objective and goals. On the other hand even the employer should have
knowledge of the employee’s objectives and future direction.
“This organization’s atmosphere is generally friendly.”

Strongly Agree 25 50 %
Agree 18 36 %
Neutral 5 10 %
Disagree 1 2%
Strongly Disagree 1 2%

Total 50 100 %

Chart 6: Workplace's atmosphere is friendly

30
25
25
Number of Employyes

20 18

15

10
5
5
1 1
0
Strongly Agree
Somewhat Neutral Somewhat Strongly
Agree Disagree Disagree
If the organization’s atmosphere is friendly then work becomes a play, this is what all
organization strives for. There is a cut to throat competition in the pharmaceutical sector
so all HR people try to lessen the burden the work and create an healthy organizational
environment.
“Morale in this organization is high”

Strongly Agree 25 50 %
Agree 17 34 %
Neutral 1 2%
Disagree 3 6%
Strongly Disagree 4 8%

Total 50 100 %

C hart 7: Morale of the organiz ation is high

30
25
25
Number of Employees

20
17

15

10

5 4
3
1
0
Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree
Almost 90% of the employees believe that morale in their organization is high.
“I feel there are leaders in this organization that I can trust.”

Strongly Agree 26 52 %
Agree 15 30 %
Neutral 5 10 %
Disagree 1 2%
Strongly Disagree 3 6%

Total 50 100 %

Chart 8: Employees feel there are leaders in the workplace they can
trust

30
26
25
Number of Employees

20
15
15

10
5
5 3
1
0
Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree
Trust is the most important thing if people are working in a group for achieving a
common objective. Without trust no organization can work in a stable manner.
Organizational leaders should always work for the better interest of their members and
employees as members should show their trust in them and should support them. Through
this graph it can be clearly stated that majority of the employees trust their leaders.
“There is a spirit of co-operation among staff in this organization”

Strongly Agree 30 60 %
Agree 18 36 %
Neutral 2 4%
Disagree 0 0%
Strongly Disagree 0 0%

Total 50 100 %

Chart 9: There is a sprit of co-operation among co-workers

35
30
30
Number of Employees

25

20 18

15

10

5 2
0 0
0
Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree

All the employees agreed that there is a spirit of co-operation among its co-workers. This
also indicates the congenial and healthy organizational atmosphere of all the organization
as well as of the pharmaceutical sector as a whole.

If there are too much to conflict among the staff members then maximum time, resources
and human efforts are wasted solving those problems.
“I know how my job fits in the larger picture of the pharmaceutical affairs”

Strongly Agree 25 50 %
Agree 15 30 %
Neutral 5 10 %
Disagree 5 10 %
Strongly Disagree 0 0%

Total 50 100 %

C hart 10: Employees know how their job fits in the larger picture of the
pharmaceutical affairs

30
25
25
Number of Employees

20
15
15

10
5 5
5
0
0
Strongly A gree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree
In this competitive world it becomes necessary that an employee has a good career graph.
For this graph, an employee individually has to prepare a career path. The organization
can also help him prepare his career map with the organization. This would him both the
organization and the person. If a person feels he has good opportunities of growth in this
organization then he will never hunt for a job anywhere else.
“This organization has policies that are supportive of its staff”

Strongly Agree 23 46 %
Agree 19 38 %
Neutral 5 10 %
Disagree 1 2%
Strongly Disagree 2 4%

Total 50 100 %

Chart 11: Policies are supportive of its staff

25 23

20 19
Number of Employees

15

10

5
5
2
1
0
Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree
Organizational policies, norms, rules and regulations are made so that there is a normal
code of conduct for all working in the organizations. It is necessary that these rules and
regulations are enforced properly and at the same time they are supportive of their staff,
because if they are too rigid people might feel uncomfortable and leave their job and if
norms are too loose then their importance will go away.
“Policies in this organization are clearly articulated to its staff.”

Strongly Agree 20 40 %
Agree 15 30 %
Neutral 11 22 %
Disagree 2 4%
Strongly Disagree 1 2%

Total 50 100 %

Chart 12: Policies are clearly articulated to all

25

20
20
Number of Employees

15
15
11
10

5
2
1
0
Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree
Making a policy doesn’t make things rolling; it’s the communication and articulation that
makes the difference. 40% of employees believe that whatever policies their organization
implements is also articulated. Controlling is very necessary so that deviation don’t crop
up.
“Disciplinary procedures in this organization are consistently enforced.”

Strongly Agree 21 42 %
Agree 20 40 %
Neutral 7 14 %
Disagree 2 4%
Strongly Disagree 0 0%

Total 50 100 %

Chart 13: Disciplinary procedure are consistently enforced

25
21
20
20
Number of Employees

15

10
7

5
2
0
0
Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree
All the organizations have to act by the laws and rules of the state, the particular industry
or by the disciplinary laws enacted by Industrial Dispute Act. If they don’t abide them
then heavy penalty or punishments have to be borne.

According to this survey major segment of the employees believe the organization is
ethically implementing all disciplinary procedures as and when required.
“Workload in this organization is equally distributed.”

Strongly Agree 19 38 %
Agree 16 32 %
Neutral 11 22 %
Disagree 3 6%
Strongly Disagree 1 2%

Total 50 100 %

Chart 14: Workload is equally distributed

20 19
18
16
16
Number of Employees

14
12 11
10
8
6
4 3
2 1
0
Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree

One person cannot do all the work. So division of labour is done. Work is equally
distributed among all the employees so that the work pressure and stress is reduced from
one employees head and distributed. Their efficiency increases as a result productivity
and profitability also increases. There are many employees who are neutral about this
statement.
“This organization has regular staff meetings to plan and co-ordinate the
work and makes announcements.”

Strongly Agree 30 60
Agree 13 26
Neutral 3 6
Disagree 1 2
Strongly Disagree 3 6

Total 50 100 %

Chart 15: Regular staff meetings to plan & co-ordinate work & make
announcement are done

35
30
30
Number of Employees

25

20

15 13

10

5 3 3
1
0
Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree

An employee gets a clear direction of what is to be done, feedback of his past and present
work as well as the scenario going in the organization from the meetings. Staff meeting
creates a friendly environment within the organization. 60% of employees strongly agree
that their organizations have these staff meetings on a regular base and they are helpful.
“I know exactly what is expected of me as an employee.”

Strongly Agree 35 70
Agree 8 16
Neutral 5 10
Disagree 2 4
Strongly Disagree 0 0

Total 50 100 %

Chart 16: Employees know exactly what is expected out of them

40
35
35
Number of Employees

30

25

20

15

10 8
5
5 2
0
0
Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree
86% of employees of the Indian pharmaceutical sector have a clear understanding of
what is expected out of them. There is no one who strongly disagrees to this statement,
with this we can say that the employees are well aware about where they are and what is
to be done to go to the next position. Clarity of mind is the most important thing.
“I have a clear understanding of how my job performance is measured.”

Strongly Agree 31 62
Agree 16 32
Neutral 3 6
Disagree 0 0
Strongly Disagree 0 0

Total 50 100 %

Chart 17: Employes have a clear understanding of how his job


performance is measured

35
31
30
Number of Employees

25

20
16
15

10

5 3
0 0
0
Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree
Performance Appraisal is important for all the organizations. By this method performance
of employees is measured. Almost everyone knows the methods and means of how the
performance is measured in the organization. The method should be a standard method
and communicated to all. If the employee is appraised according to his potential then he
won’t think of any other job so risk of attrition lowers down.
“I received orientation to this organization and my job when I started.”

Strongly Agree 23 46 %
Agree 17 34 %
Neutral 7 14 %
Disagree 3 6%
Strongly Disagree 0 0%

Total 50 100 %

Chart 22: Employees had a thorough orientation about organization


and the job when he started

25 23

20
Number of Employees

17

15

10
7

5 3
0
0
Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree

No proper orientation or induction process is considered as one of the important reasons


for high attrition. An employee is new to the organization, the induction programme will
breaks the ice and makes the employee comfortable in the new environment. If this
process is not successfully done it might happen the employee leaves the job soon and
this becomes a cost on the organization.
“I feel encouraged by my organization to pursue professional opportunities.”

Strongly Agree 18 36
Agree 19 38
Neutral 8 16
Disagree 5 10
Strongly Disagree 0 0

Total 50 100 %

chart 19: Employees feel supported by the organization to participate


professioanl development and external programming opportunities.

20 19
18
18
16
Number of Employees

14
12
10
8
8
6 5
4
2
0
0
Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree

An employee especially in the pharmaceutical sector has to always polish his skills and
abilities because everyday there is a change and scope of development and learning. An
employee gets motivated when his organization, his peers support them to develop his
professional skills and motivates him to participate in external programs.
“This organization reasonably accommodates personal needs.”

Strongly Agree 12 24 %
Agree 25 50 %
Neutral 10 20 %
Disagree 3 6%
Strongly Disagree 0 0%

Total 50 100 %

Chart 28: Reasonable accomodation of personal needs

30
25
25
Number of Employees

20

15
12
10
10

5 3
0
0
Strongly
A person works Agree hisSomewhat
to fulfilling Agree If these
personal needs. Neutral
needs are notSomewhat
fulfilledDisagree
he tries toStrongly Disagree
hunt new jobs where he can satisfy these needs. By this graph it is clearly indicated that
by working in these organizations an employee can somewhat accommodate with his
personal needs.
“I feel fairly compensated for the work I do in this office as compared to
other similar position across the sector.”

Strongly Agree 15 30 %
Agree 16 32 %
Neutral 11 22 %
Disagree 5 10 %
Strongly Disagree 3 6%

Total 50 100 %

Chart 31: I feel fairly compensated for the work I do in this office
compared to other similar positions across the sector.

18
16
16 15
14
Number of Employees

12 11

10
8
6 5

4 3
2
0
Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree
Sometimes an employee get job satisfaction from the monetary compensation received to
him in the particular organization as compared to other jobs in the organization or similar
jobs in other organization.

Compensation is the primary driving force for people to work or to increase their
productivity.
“I like my job and my co-workers. My organization is one of the best places
to work in the pharma sector.”

Strongly Agree 30 60 %
Agree 9 18 %
Neutral 2 4%
Disagree 9 18 %
Strongly Disagree 0 0%

Total 50 100 %

Chart 33: I like my job and co-workers. My organization is the best place
to work in the pharma sector.

35
30
30
Number of Employees

25

20

15
9 9
10

5 2
0
0
Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree

60% of the people are satisfied and happy with their current organization. Though there
are 18% of people who are not very satisfied, other 18% are not at all happy with their
organization and 4 % are neutral towards it.
“I think often about seeking employment elsewhere.”

NO – I don’t think 16 32 %
about seeking
employment elsewhere
YES – A higher rank 22 44 %
position in same
organization
YES – Elsewhere in the 6 12 %
same organization
YES – Outside this 6 12 %
organization

Total 50 100 %

Chart 35: I think often about seeking employment elsewhere

25
22
Number of Employees

20
16
15

10
6 6
5

0
no - I don't think about yes - a higher rank yes - elsewhere in the yes - outside the org
seeking employment position in same org same org
About 44% of theelsewhere
employees are
seeking a higher rank in the same position. 12% want to
move out of the from their existing department. Other 12% want to move out of the
organization. While the rest 32% are not looking for any changes.
Chapter : 5 Discussion
The study was done to find out the reasons for high attrition rate in the Indian

pharmaceutical sector. Samples were selected from the various pharmaceutical

companies. There were 50 samples randomly selected for conducting the research work.

Employees of different management levels were surveyed.

In all the organizations there are different ways and methods of finding the attrition rate.

There are different formulas used. Moreover attrition rate varies from organization to

organization, also attrition rates changes in different organizational strata’s i.e top level

management, bottom level management and lower level management. On the average of

these rates the organizational attrition rate is calculated. The attrition of each organization

when combined forms the attrition rate of the entire sector.

Higher the attrition, higher is the cost to be borne by the organization so all organization

strives to lower their attrition rate. The employee leaving not only increases the cost but

also takes the company’s knowledge, customers, current projects details and business

secrets with him. This impacts the organizations in multiple ways.

A person works to fulfill his personal and social needs. If he is not compensated well

according to his skills and abilities then his morale goes down and he is no more

motivated to work hard. The survey also shows that employees in the Indian

pharmaceutical sector give importance to monetary benefits and about 30% to 35% of

employees believe that they are not compensated as per their skills and abilities.
Employees of big and branded companies do not show an inclination to leave their

organization as they know that they are working with one of the best organization. Only

12% of the employees want to quit their organization, whereas 44% of the employees

want to stick to the same organization but may be at a higher position. This implies that

the first hypothesis is proved correct.

Monetary compensation may be the prime criteria as to why an employee joins the

organization but the ultimate reason to remain in the organization is his job satisfaction.

Job satisfaction cannot be attained from a single thing but many factors are behind it like

communication, good rapport with co-workers, organizational culture etc.

An employee spends 1/3rd of the day in the organization so he should be provided with a

comfortable environment where he feels at valued so that he can give his 100%

performance. His grievances should be heard to with positive results. A healthy relation

among the organization should be maintained.26% of the employees feel that they are

properly heard in the organization. 58% of employees believe they are being supported

by other staff members and management. Thus from we can conclude our second

hypothesis is also true.


Chapter : 6 Conclusion
Most of the employers believe their employees leave us for money reasons. Many a times

we have heard people saying, “If only I could have paid her more, she would have

stayed.”

Yes, we’ve lost people because of money, but this research finds that people leave for

one major reason and several subordinate ones.

The answer is that most people leave their jobs because of their supervisor or team

leader! What is it about this workplace relationship that makes it the number one reason

so many people leave their jobs? Basically, it’s a lack—of trust, of communication, of

relevant and timely feedback, of appreciation, of fair treatment and of information.

In many organizations the size of the company becomes the reason for the “lack ofs.”

research indicates that once a business entity grows to more than 150—200 people the

“lack ofs” grow into “issues” because managers, supervisors and/or team leaders get too

far away from their people.When you go higher in the organization, you begin to “see” a

lack of familiarity. A lack of familiarity appears to breed discontent, which results in a

high rate of turnover.


Thus, with this we prove our two hypotheses stating that:

• Salary, Organization’s Brand and Outer image of the organization has effect on

attrition rate in the pharmaceutical sector.

• High attrition in the pharmaceutical sector is due to poor job satisfaction and

weak organizational culture.

Thus from the above discussion we can conclude that both our hypothesis have been

proved correct.

Major Limitation of Study

1. Sample Size

Since the sample size was small, numbering only 50 subjects, the exposure to the

subject was also small. Bigger sample size would have given more responses

leading to a better and broader idea of the outcomes. The study was limited to

only employees of few pharmaceutical in and around Vadodara.

2. Time Constraint

There was limited time to complete and compile the study.


3. The higher officials of the pharmaceutical companies were reluctant to make their

employees fill the questionnaire or give any information about the attrition stating

it to be a sensitive issue.

4. There are chances that the study undertaken is not 100% correct. So the allowable

error in the analysis is +/-4%.


Chapter : 7 Recommendations
Even though the attrition rate in the pharmaceutical sector seems to be quite favorable,

the organization will benefit if it looks into a few issues:

• The organization must try to empower the employees so that they can make their

own decision and have autonomy. This would not only increase their job

satisfaction, it would reduce the dependency on the management and hence the

management time to look into more pressing issues.

• Communication amongst all levels must be transparent and speedy so that it leads

to a climate of trust and positive working culture.

• The organization must avoid being bias to few influential people, and hearing out

only the stronger employees. A fair chance must be given to all employees and an

unbiased attitude must be adopted.

• The organizational culture should be made enabling i.e it should create a sense of

belongingness within it.

• Continuous updating of the employees skills and knowledge through training and

workshops would boost their job satisfaction and also create a positive

organizational culture.

• The employees are not always comfortable to express their opinions freely. To

check this, the organization needs to undertake a study of their communication

systems and remove employees do not always feel free and comfortable.
Reference
• Wilipedia, the free encyclopedia

• Express Pharma, fortnightly insight for pharma professionals.

• www.livemint.com

• Attrition Rate Study By Gustave G Wenzel, Hansen, M. Duane, Gustave

• Business Standard Magazine, Nov 2008 issue

• www.citehr.com

• www.managementguys.com

• Gujarat Pharma Industry by KPMG India