Exploring the Factors Affecting Employee Retention in the

Information Technology Sector: Demographic Perspective

N. Bargavi

, Abhishek Shrivastava

, Rupsa Mahapatra

, Rashmi Gupta

, Deepti

and Skanda M. G

SRM Institute of Science and Technology, Vadapalani Campus, Chennai, India

Department of Delivery & Pre-Sales, Kumori Technology, Bengaluru, India

School of Management, Centurion University, Bhubaneswar Campus, India

Dr.Ambedkar Institute of Management Studies, Deekshabhoomi, Nagpur, India

Abdul Kalam University, Hyderbad, Telangana, India

SJCE, JSS Science and Technology University, Mysore, Karnataka, India

deeptisthakur24@gmail.com, skanda.rao@sjce.ac.in

Keywords: Job Security, Training and Development, Employee Compensation, Retention.

Abstract: Employee Retention (ER) is an indispensable agenda for organizations operating in the extremely competitive

Information Technology (IT) sector. This study investigates the multifaceted challenges associated with ER

within the IT industry, emphasizing the need for customized strategies to motivate employees and cultivate

their enduring commitment to organizations. The capability to retain highly skilled employees is critical for

managing talent pipeline through, nurturing innovation, and retaining them. This research examines the

determinants influencing ER in the IT sector, with a specific focus on four independent variable as (job

security (JS), work environment (WE), training and development (T&D), and employee compensation (EC)).

Data were collected from a sample of 145 IT sector employees to examine these factors comprehensively.

Moreover, this study explores the impact of demographic factors, such as age, gender, years of experience,

and job designation, on ER within the IT sector. Through rigorous data analysis, we reveal correlations

between demographic variables and the key determinants, shedding light on their relative importance in

influencing ER. The insights gained from this research significantly contribute to the prevailing knowledge

of ER strategies in the IT industry and organizational decision-makers. These findings have the potential to

inform the development of targeted retention initiatives, specifically tailored to address the influence of

demographic factors. Ultimately, this research seeks to empower software companies to cultivate a more

engaged and committed workforce, thereby enhancing their competitiveness in the IT sector.

1 INTRODUCTION

Organizations universally prioritize the recruitment

and retention of top talent, recognizing that the

contributions of their employees have a direct bearing

on the company's achievements. These contributions,

in turn, exert a tangible influence on the company's

bottom line. Employees who choose to remain with

an organization for extended periods not only

contribute effectively but also become integral to the

company's fabric and its enduring success, as

evidenced by the study conducted by (N. Rajput.,

et.al., 2021). Employee Retention (ER) represents the

aspiration for a committed workforce to remain with

their current employer, a concept underscored by

(Huang et.al., 2006) ER, in essence, involves the

cultivation of engagements that inspire employees to

remain loyal to the organization over the long term.

Organizations must strategically and systematically

address the diverse needs of their employees to ensure

their continued commitment to the company, as

emphasized by (Calinao et.al., 2020). The

ramifications of employee attrition are far-reaching,

as the departure of employees entails the loss of

valuable skills, knowledge, and experience that they

had once brought to the organization. The extent and

nature of these losses constitute critical management

concerns with implications for efficiency,

effectiveness, as well as the quality of products and

services, as highlighted by (Shrivastava 2020). This

study is particularly relevant to the Indian IT sector,

which plays a pivotal role in India's economic

988

Bargavi, N., Shrivastava, A., Mahapatra, R., Gupta, R., Deepti, . and M. G, S.

Exploring the Factors Affecting Employee Retention in the Information Technology Sector: Demographic Perspective.

DOI: 10.5220/0012534000003792

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 1st Pamir Transboundary Conference for Sustainable Societies (PAMIR 2023), pages 988-991

ISBN: 978-989-758-687-3

progress, annually contributing a substantial 7.4% to

the GDP and offering employment opportunities to

nearly 5 million individuals in the sector, according

to a report by (ibef.org in 2023).

2 LITERATURE REVIEW

ER stands as a cornerstone of organizational success.

It serves as a litmus test for employee commitment to

the company's core values and ideals. Among the

pivotal determinants of employees' loyalty to their

organization, job security stands out prominently. JS

embodies the confidence that one's position is

safeguarded from potential elimination, providing a

sense of predictability and assurance even in the face

of economic uncertainties or downsizing, as

elucidated by (Ryan Joseph Calinao, et.al.,2020). In a

similar vein, the work environment assumes a pivotal

role in influencing ER. This environment

encompasses various facets, including interpersonal

dynamics, physical surroundings, and the overall

atmosphere of the workplace. When these elements

are thoughtfully cultivated, they can have a profound

impact on employee well-being, fostering healthy

relationships, teamwork, and overall productivity. As

posited by (Syed Harris, et.al., 2021), the work

environment and the rewards it offers strongly

influence ER. T&D initiatives within an organization

play a transformative role in enhancing employees'

knowledge and skillsets, motivating greater

commitment to improved job performance. T&D

programs are a compelling driver for ER, as

underscored by (Kumar & Kavitha., 2019).

Table 1: α.

Construct α

SE 0.764

WE 0.833

T&D 0.898

WE 0.756

ER 0.810

These initiatives hold immense significance for

both the organization and its workforce in retaining

employees within the IT sector. EC, encompassing

financial remuneration for an employee's knowledge,

skills, and services, is another crucial factor in the ER

equation. The association between EC and ER has

been the subject of extensive research. (BK Kumari et

al., 2023) determined that compensation significantly

contributes to ER, while other studies have uncovered

mixed

effects, suggesting that employee satisfaction

Table 2: t-test.

Dependent

Variable

Gender

ER Male Female

Mean SD Mean SD

21.35 4.34 22.89 3.69

T value P Value

1.219 0.189

Table 3: One-way Anova.

Factor Age Group(years)

ER < 25 26-30 31-35 >36

4.32

(0.69)

3.98

(0.48)

3.21

(0.76)

4.33

(0.72)

T value P Value

2.164 0.543

Table 4: One-Way Anova.

Factor Qualification

ER PG G Diploma Certification

3.27

(0.54)

3.23

(0.65)

4.12

(0.69)

4.76

(0.68)

F value P Value

4.368 0.010

with their salary plays a pivotal role in whether they

choose to remain with the company. Therefore,

compensation emerges as a vital component in

retaining staff members, with many employees

ranking their compensation package as a top priority,

as emphasized by (Tammana Mohapatra &

Debasmita Nayak, 2021). In conclusion, these key

factor like JS, WE, T&D and compensation to form

the bedrock of strategies aimed at retaining valued

employees within organizations, particularly within

the dynamic IT sector. Understanding and optimizing

these elements can pave the way for enhanced

employee loyalty and long-term organizational

success.

Exploring the Factors Affecting Employee Retention in the Information Technology Sector: Demographic Perspective

989

Table 5: One-Way Anova Analysis.

Factor Occupation

ER Software

Eng

S.Soft.

Eng

Network

Eng

Project

Lead

4.23

(0.84)

4.24

(0.78)

4.78

(0.63)

4.54

(0.67)

F value P Value

0.798 0.544

2.1 Objectives

• To ascertain the influence of demographic

variables on Employee Retention (ER) within

the IT sector

• H1There is a significant differences among

Demographic Profile with regard to ER.

• H2There is a correlation among the various

factors of ER

2.2 Data Analysis

This study employed empirical research and utilized

structured questionnaires to gather data from a

random sample of 145 employees within the Indian

IT sector. The research was dedicated to uncovering

how demographic factors affect employee retention

in the IT industry

Reliability and Validity Test

Hypothesis 1:

Based on the findings in Table No. 2, where the

p-value exceeds 0.05, thus there is no statistical

difference between them with relation to ER. Table

No. 3, p-value falls exceeds 0.05, stating no

difference of ER with related to age groups. Analysis

of Table No. 4 reveals a p-value of 0.022. At a 5%

significance level, we reject the null hypothesis and

state qualification has an impact on ER

Upon examination of Table No. 5, it is evident

that the p-value is 0.537. At a 5% significance level,

we accept the null hypothesis concerning occupation.

Hypothesis 2:

The above Table 6 states correlation coefficient

between the independent variables and the dependent

variable ER is 0.688. This coefficient suggests a

positive relationship of 0.46 or 46% between the

independent variables (JS, WE, T&D, EC) and the

dependent variable ER.

Table No. 6: Correlation Coefficient

Independent

Factor

Dependent Factor

(Retention)

1.00 0.688

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