AIB (MBA) 2015 Report for the subject "Strategic Human Resource Management" by A.R.W.M.M.D.Rohana Kumara

1. STRATEGIC HUMAN RESOURCE MANAGEMENT
A.R.W.M.M.D.Rohana Kumara
B.Sc (Sri Lanka), MBCS (UK), MBA (Aus-Reading)
Australian Institute of Business
Master of Business Administration
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2. Executive Summary #
In IT sector, Software companies currently face biggest challenge to keep their skilful resources.
Due to the high turnover rate, every Software Company constantly hire skilful resources to keep
their staff to meet the deadlines and maintain the best quality of the products to reach the
client expectations. Today most of the businesses wanted automated systems with accessibility
through Smart Phones to gain competitive advantage. Therefore each software company has
ample of opportunities design and develop software solutions for those organizations. Achieve
that target software companies need more skilful resources who can design and deliver the
solution on time, creates competitive job market for them. Job offers constantly come from
different organizations with attractive packages. Based on the offer employees move from one
organization to another frequently. Therefore every IT company fighting to retain their skilled
workforce and also hire new skilful resources.
Kandy International Software Solutions (KISS) is the leading Software Development Company in
Sri Lanka specialized in smart phone application development. Smart phone application
development is emerging field in IT, company face huge issue with high volunteer turnover rate
of the software developers. Company wanted to retain the skilled employees who had gain lot
of tacit and explicit knowledge, which create the competitive advantage for the company and
made “KISS Mobile Apps” as a leading brand in the market. The objective of this assignment will
be to identify the causes for the high employee turnover rate faced by KISS and propose
recommended actions that can contribute to better retention of its Software Engineers.
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3. Contents
Contents.......................................................................................................................................3
1. Introduction.............................................................................................................................4
2. Structure of the Organization..................................................................................................5
3. Roles and responsibilities of project team...............................................................................7
4. Business impact of the high turnover......................................................................................9
5. Reasons for high turnover.....................................................................................................12
6. Recommendations for retain employees...............................................................................14
6.1 Training and development...................................................................................................14
6.2 Job satisfaction and job fulfilment......................................................................................14
6.3 Recruitment and selection...................................................................................................15
7. Conclusion.............................................................................................................................16
References.................................................................................................................................17
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4. 1. Introduction
Kandy International Software Solutions (KISS) is one of the leading Software Development
Company in Sri Lanka. KISS specialized in smart phone application development of Android, iOS,
Blackberry and Windows Phone platforms. “KISS Mobile Apps” is the leading brand for smart
phone application development market locally as well as globally in last five years.
‘KISS’ consistently strived to exceed the customer expectations by providing revolutionized
business solutions to through various smart phone applications. In order to maintain the brand
name and the customer satisfaction, company requires talented pool of qualified professionals
who can deliver the quality outputs. Software engineers of ‘KISS’ expected to be constantly
innovative set of employees who are highly energized, competent and motivated to perform
excellently in development of challenging business solutions.
In the last two years, company HR report indicates that company has experienced high
voluntary turnover of the smart phone application development engineers than other
employees. This rate was noted to be quite high than the previous years. As a result 60% of the
current smart phone development engineers comprises of the cadre with less than one year of
experience resulting negative impact to the quality of the software engineering division
deliverables.
In this assignment I will determine the reasons for the high voluntary turnover amongst smart
phone application development engineers and identify the possible solutions that Kandy
International Software Solutions can implement to retain their skilled resources to keep the
competitive advantage in the industry.
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5. 2. Structure of the Organization
The current organizational structure of Kandy International Software Solution is shown in the
below Figure 2.1 where there one vice president heading the entire development directly
reporting to the CEO of the company. Under vice president (engineering) there are three Heads
(HOD) for separate departments who engage with forming a development team for particular
project. Project Manager is the leader of the formed development team who is responsible for
the overall project. Project manager is directly reporting to HOD’s, Vice President Engineering,
CEO and also Client.
Under Project manager there are three other people working closely. Software Architect and
Tech lead responsible for the software design and development. Quality Assurance lead
responsible for assure the quality of the final product. Software engineers develop the smart
phone application based on the requirement given by the client and they need to innovate
many components and maintain coding standards too.
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6. Figure 2.1 Organization Structure
Project Team
Source – Authors Work
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Software Architect
Tech Lead
Software Engineer
QA Lead
QA Engineers
CEO
VP Marketing VP Engineering VP Finance
HOD DevelopmentHOD Quality Assurance HOD Project Management
Project Manager

7. 3. Roles and responsibilities of project team
Modern generation mostly use smartphones not only for communication, but also online
purchases, online banking, social media too. Therefore lots of new business opportunities
emerged with this new market through Smart Phone usage. Traditional businesses wanted to
shift from manual work to automated systems with accessibility through Smart Phones to save
time, money and gain competitive advantage.
Project Manager is the overall responsible of the final product, who is responsible to facilitate
everything to every stakeholder of the project. Therefore project manager always push his
team to gather customer requirement as it is and finalized before design the innovative
solutions. Then drives the developers to meet the coding best practices to lead zero defects.
But project manager’s duty is to get Quality Assurance engineers help to test the smart phone
application thoroughly to find any defect which need to fix before final release.
Software architects in the ‘KISS’ wanted to design solid software architecture to exceed the
customer expectations by providing revolutionized business solutions to uplift their businesses
through various smart phone applications. Those smart phone applications should be very
simple to operate, attract the end users to use it again and again for the betterment of them.
Tech Leads and Software engineers develop the software based on the software architecture
developed for the particular customer requirement. They need to find the simplest, speediest
but secure codes to develop the solution to meet the defined parameters to satisfy the end
user. Meet those end user satisfaction, developers need to spend more time to think about the
design of the attractive user interfaces and less hazard steps to complete the business
transaction or the business activity. Most importantly software developers should able to
develop solutions in any given platform with related technologies to that. Most of the
developers in the KISS gain those tacit and explicit knowledge during their projects and gives
competitive advantage over the other companies.
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8. Quality Assurance lead and Quality Assurance engineers are responsible for the overall quality
standards of the developed smart phone application. They need to go through each and every
step as end user and test the application to find the defects as well as any design issues related
to the software defined by the client requirement document. Each defects, design issue needs
to report back to development team and fix before the release final product to the client.
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9. 4. Business impact of the high turnover
Employee turnover will take place in any organization due to many reasons. It may be voluntary
or involuntary depending on the situation it happens. Employee turnover give opportunity to
new blood pumped in to the organization with new ideas. But when it is become high turnover
rate, it will give negatively impact to employee morale, work engagement and also the
customer loyalty with the organization. In such cases like Kandy International Software
Solution, your voluntary separation may end up with affecting many critical areas in the
business domain given below,
• Lose your skilled resources pool
• Drop your competitive advantage
• High cost for recruitment and selection of new employees
• Training and development of new employees to fit the job environment
High employee turnover can have huge financial costs as well as other costs to be considered
too. Most of the newly recruited employees would be able to become fully productive work
force within several months through considerable amount of difficult learning and training.
Based on the capacity of employee’s learning curve the time duration differ. Not only that each
newly hired employee must participate proper training and development sessions to gain
substantial amount of job related experience before fit in to the standard practices in
organization. The time, effort, resources and money invested in this transition period is really
high investment on the new employees who needs to keep with the organization to meet the
defined goals.
Employee turnover rates give indication of the employment growth in the organization. In
order to achieve the challenging financial targets given by the management may give
challenging software solutions to develop for the clients. To achieve that right number of right
employees need to be allocate in right time at right place to get the job done right.
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10. As a result of this recent increase of voluntary turnover rate of the Kandy International
Software Solution reflect that there are some factors which software engineers may not
preferred to deal with. Due to highly competitive market ‘KISS’ has heavy competition from
other small and medium size software companies. Therefore the opportunities are available for
software engineers to join a competitor is high. This has lead majority of the skilled and
experienced work force moved out of the organization create huge problems within the
organization to maintain the competitive advantage, timely delivery of the projects, high quality
out puts to the client was declined.
Furthermore this issue disturbs the team work and workflow within the software development
teams. This also leads to loss in morale and job satisfaction among the remaining team
members in the software development project. They may not be able to achieve the team
targets and milestones on time.
The following can be considered as the negative business impact for ‘KISS’ due to increasing
voluntary turnover:
• Increase of the inexperienced work force decreased the performance within the team
due to lack of knowledge and training.
• Quality of the smart phone applications decline due to bad practices
• Cost for the recruitment and training increases due to having to re-train staff hired as
replacements for the staff that leave
• Loss of customer satisfaction due to having deal with new staff, they may not be able to
build good rapport with the client like before
• Lower knowledge base due to inexperienced staff may create conflicts within the team
members
• Remaining staff’s average years of experience being relatively low gives a wrong
indications to the client about the reputation of organization.
• Resigned experienced staff may give a wrong impression to the job market about the
organization, which leads to more difficult to find skilled resources to recruit.
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11. All of the above negative impact of turnover can lead following things:
• Loss of company performance
• Loss of revenue targets
• Loss of competitive advantage
Therefore it would be really important to identify and understand the reasons behind for
increasing voluntary turnover rates in order to ‘KISS’ to take preventive and corrective actions
to increase the retention of software engineers in future.
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12. 5. Reasons for high turnover
A high employee turnover rate is not give an indication that company is not a good one to work
for. Good indicator of improving job market is that employees changing their jobs time to time.
Voluntary turn over happens generally following reasons:
• Retirement
• Career opportunities
• Dis-satisfaction of the working environment
In this situation voluntary turnover rate risen due some internal factors of the ‘KISS’ as
following:
• Inadequate compensation
As a market leader of the Smart Phone Application Development segment in Sri Lanka,
seekers expect that ‘KISS’ may pay high salary. But in real they have bargaining power
when it comes to negotiating employees about their compensation packages. Due to
the prestigious name of the company, new employees are willing to join at lower salary
than what is offered by the competitors in the same industry. Considering the work load
and the high standards expected from the new employees create more pressure and
employees feel that their package is insufficient. Therefore most of the new employees
join company and try to get the best training and exposure from the company and move
out to a another company demanding a better compensation package.
• Lack of coaching and mentoring
Most of the employees get proper training from the company about the technologies
and processes that they need to follow. But closely 60 % of software developers feel
that they don’t get proper coaching and mentoring from the company. They believe that
lack of the feedback and guidance for their development and approaches is the primary
reason for their poor performance drives to delays and high defect count in the
software development.
• Lack of career growth opportunities
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13. Employees believe that career growth is a key reward for their better performance. But
80 % of the project team members agreed that company won’t be able to do that due to
flat organization structure. Software engineers / QA engineers need to wait many years
to move to their next level if vacancy available or expansion of the company. Until then
they only receive annual salary increment based on their performance.
• Job stress
In every software development project team, all the members are admit that their job is
extremely stressful. In some occasions they need to work long hours to meet deadlines
may cause healthy balance between work and personal life. Software engineers always
in a huge stress to do innovations without proper coaching and mentoring.
• Uncomfortable office environment
For some employees the job or the work place was not as expected. The problem
usually start with the hiring process, interviewers not focusing to give realistic preview
of the job and the office environment mislead the new employees. Not only that lack of
support given to the project teams also create uncomfortable situations and heated
arguments happen at the end of each project if they overrun the budget.
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14. 6. Recommendations for retain employees
Design a good retention plan will produce the desired outcomes of the Kandy International
Software Solutions. Evidences suggest that monetary factors may not be the only method to
minimize the voluntary turnover of the employee force in the companies. Therefore company
need to identify the alternative ways to motivate their staff and retain them. Current well
trained software engineers are extremely important for the company not only they are
developing high quality software solutions, but also they are the key source for obtaining
intellectual knowledge make the competitive advantage over the other companies. Losing them
could be a catastrophic loss for the organization. Following recommendations must be
considered to improve the retention level of these software engineers.
6.1 Training and development
Effective training and career development programs help to uplift the quality and value of the
employees who make more value to the company. This will help to encourage employees to
retain with the company, because it gives confidence to employees in career progression within
the company. However when investing on training programs should take necessary measures
to ensure that their staff does not obtain this training and leave giving the benefits to the
competitors. Therefore company and introduce training bond agreement before commencing
the training to retain them for a particular time period.
6.2 Job satisfaction and job fulfilment
Job satisfaction enable employees to gain an indication of commitment to the company. It is a
measurement used for view the employee’s attitudes of overall acceptance, enjoyment and in
their work (Lee-Kelley, Blackman & Hurts, 2007). It focus on innovative ways to promote the job
satisfaction to increase the employee retention within the ‘KISS’. Therefore company focus on
strategies to improve the job satisfaction to gain the competitive advantage through retain the
employees.
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15. 6.3 Recruitment and selection
Recruiting right people to the right positions is really important to any organization. Therefore
‘KISS’ needs to have properly structured recruitment and selection process. Because continuous
recruitment costing a lot for the company. It ensures that candidate’s technical competency
along with the attitude to deliver quality software and also company can rely on their goodwill,
loyalty and commitment towards the organization goals. Referral based recruitment will give a
better chance of recruiting suitable candidates.
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16. 7. Conclusion
Most of the companies still rely on the traditional solutions to resolving issues by salary and
benefits many more. But more evidences prove that more intangible solutions will resolve more
issues than before. The retention of software engineers is an issue for the project teams which
is traditionally experienced high turnover due to competition. But sound retention strategy will
help to keep the employees and will help to increase their productivity and performance with
the help of both tangible and intangible benefits to the employee. Since software engineers are
the backbone of the software development, recruiting them is very challenging. Therefore it is
better to follow proper recruitment and selection mechanism with six sigma process to gain the
maximum ROI to the company. Proper training and development will help to uplift the skills and
keep good attitudes and behaviours of these employees are directly impact to the organizations
goals. Therefore Kandy International Software Solution must take the preventive actions
seriously and bring the proper retention strategies to keep their competitive advantage and
avoid negative impacts it can create on their business.
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17. References
Noe, RA, Hollenbeck, JR, Gerhart, B and Wright PM 2013, Human Resources Management –
Gaining a Competitive Advantage, 9th
edn, McGraw-Hill Irwin, New York
Tae, H.L., Gerhart, B., Weller, I., & Trevor, C.O. (2008). Understanding Voluntary turnover: Path-
specific job satisfaction effects and the importance of unsolicited job offers. Academy of
Management Journal, 51(4), 651-671.
Mahal, P 2012, ‘HR Practices as Determinants of Organizational Commitment and Employee
Retention’, IUP Journal of Management Research, vol.11, no. 4, pp 37-53.
Shafique, O 2012, ‘recruitment in 21 st Century’, Interdisciplinary Journal of Contemporary
Research In Business, vo. 4, no.2, pp. 887-901.
Lee-Kelly, D.A., Blackman, J., & Hurts, P. (2007). An exploration of the relationship between
learning organizations and the retention of knowledge workers. The Learning Organization 14
(3)
Brenner, BK 2010, ‘Using Employee Benefits Can Help Recruit, Attract, and Retain the
Workforce of the Future: The Mature Employee’, Journal of Financial Service Professionals, vol.
6, no. 3, pp. 24-28.
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