Return on Retention (RoR): A Grounded Theory Study of Knowledge Workers in Indian IT Services Industry

Knowledge workers in the Indian information technology (IT) services industry are the main contributors to the growth of the industry and the economy. However, human resource (HR) processes to manage knowledge workers are still evolving. There are gaps in understanding how HR interventions which lead to the retention of key employees can strengthen organizational outcomes. This study proposes a framework that builds linkages between different elements of retention of knowledge workers and outcomes that exhibit the competitiveness of IT companies. Knowledge of these outcomes can be an important incentive for firms to continue pursuing strategies for retaining talent.

The purpose of this study is to explore the outcomes of talent retention strategies adopted in the IT services industry through the grounded theory approach. The study reflects the lived experiences of line managers (16), employees (17), HR managers (10) and top-level executives (2) in the sector. Purposeful sampling was used to identify the research participants. The in-depth interviews conducted with the participants were transcribed verbatim and analyzed using open, axial and selective coding.

The study uncovers seven propositions as returns on retention (RoR) strategies: (i) successful talent retention contributes to cost-effective HR practices, (ii) managing individuals’ performance and retaining achievers foster corporate performance management, (iii) retaining young and senior workforce results in retaining knowledge assets and strengthening human capital development, (iv) retaining women talent promotes gender inclusivity across levels, (v) successful retention strategies result in workforce motivation and morale, (vi) talent retention positively impacts job involvement and organizational commitment and (vii) employee recognition and retention practices promote reverse brain drain.