Journal of Positive School Psychology http://journalppw.

com
2022, Vol. 6, No. 6, 3687-3697

An Empirical Study On Impact Of Employee Retention In IT

Companies On The Employer Branding With Reference To
Chennai City

Dr. N. Barathi Dasan

Assistant Professor, PG & Research Department of Commerce, Dr. Ambedkar Government Arts College Vyasarpadi
Chennai 600039, nbd2001@gmail.com

Abstract
The technology market is overwhelmed making the bid for talented employees is higher and shows no sign
of slowing down. The companies need to change their strategy in recruiting and in retaining the best staff.
Information Technology has created a level playing field among countries and has a positive impact on the
lives of millions. A country’s IT potential is very important for it to compete globally and attain a healthy
GDP. The IT industry has played a pivotal role in putting India on the global map. IT industry has been one
of the most significant growth contributors for the Indian economy and its cost competitiveness in providing
IT services continues to be its USP. It was instrumental in the transformation of the country from an
agricultural based economy to a knowledge based economy and has contributed significantly towards social
transformation in the country. This paper examined how important the concept of employer branding is
gaining importance in today’s corporate world in order to retain the key talent, therefore organizations are
focusing on building their corporate image in order to attract and retain the talented employees. The primary
objective of this research paper was to study the retention strategies followed in the IT companies and to
measure the impact of the strategies of retention of employees in the IT companies on the employer
branding. This is an empirical study carried out in Chennai city. Employer branding helps the companies
to improve and efficient management of the human resource in the IT sector. Recruitment and retention of
employees are strongly influenced by the employer branding. In this view, 200 employees have been
selected for this study based simple random technique. The primary data have been collected through the
Google forms.

Keywords:-Employer Branding, Employee Retention, employer image, employer culture and IT

companies

Introduction Businesses nowadays frequently discover that

they spend a significant amount of time, effort,
Employee retention refers to the policies and and money training an employee only to have
procedures in place at businesses to keep them develop into a valuable commodity and
important employees from leaving. One of the depart for brighter pastures. Employers should
most pressing issues confronting businesses in examine as many choices as possible when it
today's competitive environment is how to retain comes to keeping employees, while also gaining
valuable staff. Companies used to view the their trust and loyalty so they have less of a desire
"revolving door policy" as a necessary element of to leave in the future, in order to build a
conducting business, and they were fast to fill a successful firm. Staff must be kept because
vacancy with another enthusiastic candidate. running a firm requires good, loyal, well-trained,
Dr. N. Barathi Dasan 3688

and diligent employees1. They have a thorough projects, etc. Because of the increased staff
understanding of the product over time, and a turnover rate, the company's goodwill is harmed,
trained employee can better handle clients and and competitors begin poking their noses in to
solve difficulties for colleagues who are new to attract the finest personnel from them. Work
the firm. When an employee quits, he takes all efficiency has been severely impacted2.
corporate information with him, including current

Retaining talented employees is the priority of sustaining at a competitive advantage occupies

many organizations and it is the key differentiator the minds of many business leaders, with the most
of human capital management. Even major IT inevitable source of having competitive
companies today are facing the challenge of advantage are the employees. The prime focused
retaining their talent competes in the global question for the organizations is how they can
markets. As people, intellectual capital and talent gain an edge in this competitive environment.
are ever more critical to organizational strategic Today businesses practices are more dependent
success and existence of an organization, in the on their top performers for innovations and
current competitive business environment, providing services that differentiate a company
retention of highly talented employees is very from its fierce competitors3. Therefore,
important as they contribute positively in corporations are rely and believe that their
improving the organizational productivity. Thus, employees are the main assets so as to survive and
companies are in search of effective mechanisms win over the market. Comparing the two eras in
for increasing the retention rate in the which employees have created new currents in
organizational. It is of no surprise that in today’s the workplace and has introduced a system where
world we have the most aggressive of the retention of employees is given more attention
business environment, and the challenge of and value as compared to the past.
3689 Journal of Positive School Psychology

Employer Branding – As a New HR Arena market, they will get better response from the
talented employee if not; it’s very difficult to
The term employer branding has evolved around sustain in this competitive world. If the
years and even decades. The employer branding organization has a positive brand image in the
is still relevant in the corporate world and a market, it will help in acquiring right workforce
Strategic lever in finding the best talent in this at right time and at the same time it will have a
Digital Era. This is a result oriented Environment curb over the employee cost4.
in which if Corporate have a good brand value in
Dr. N. Barathi Dasan 3690

Employer Branding refers to the methods significant aspect of employer branding. To

an organization uses to engage, motivate and supporting the above remark another researches
retain their employees through their internal referenced that Great Company, work culture and
efforts that makes the organization the best place practices, Wealth and perks, development
to work. The desired result of these efforts is to potential, Psychologically Health life style and
deliver a sustained competitive advantage safety and security are very influencing
through their human capital and not in the typical component of employer branding Vinot and
manner of business practices and procedures. For Vasantha, (2015).7recognized that leadership
an employer brand to be successful, it is critical support, learning culture, open communication,
that its values are aligned with what its values and policies, freedom of work, work life
employees’ values.5 The increase in the attrition balance, reward system, work environment are
rate has ruined the normal work flow of a firm. some of the significant element of employer
The turnover can be of two types- one being branding. Kavitha, (2014)8 discovered that the
internal to the firm, where employees leave one applicant evaluate the firm reputation when
project or function in an organization and move applying for employment. She also believes that
to another one. This is mostly a positive change excellent corporate image and company
and a skilled professional stay within an reputation helps to recruit and retain the
organization. This generally happens under personnel. In the present competitive scenario the
organized HR process and under the company’s major challenge for the service based companies
policies. While the second case may be the is to discriminate themselves successfully in
external to the firm, where employees leave their order to attract and retain the talented employees
organization and join competitors or the like within the organization. With the changing
firms. This results in the losses like, decreased scenario of Liberalization, Privatization &
overall performance, difficulty in managing daily Globalization and subsequent economic reforms,
tasks, increased costs, losing and paying the all the companies are becoming internationally
previous employee, hiring a new one, training strategic to utilize the employer brand to attract
cost for the new employee, lack of and retain talent which leads to expand and
knowledgeable employees, hinders the employee growth of a business. The magnificent
development and even create a negative image, as competition in the IT sector is providing impetus
a consistent number of employees leave the to the concept of employer branding as
organization. This contributes to the negative companies are striving to attract the paramount
image or hampers the brand of the organization. talent and retain them for a longer duration. Job
There are a lot of retention strategies followed by description is considered as the most important
the firms, to retain the talents. Thus, it is factor as the majority of respondents gives first
inevitable for the organization to retain the rank to it which is followed by salary and
employees, which in current scenario, may be benefits. A greater number of respondents
considered as the human capital. revealed that they prefer fast growth with
changing employer instead of slow growth with
Antecedents of Employer Branding one employer. The majority of respondents
In line with the aforementioned notion, another articulated that they are enjoying their work in
research suggests that employer branding is a their present company but they might take a new
productive activity if done with passion, correct job if a good opportunity would come to them
knowledge, trust, belief and leadership support Studies Relating to Impact of Employer
Gupta, Patti and Marwah, (2014)6.Further, the Branding on Employee Retention
author noted that company’s reputation, working
environment, development prospects are
3691 Journal of Positive School Psychology

Employee retention refers to the hierarchical HR practitioners and practitioners in general.

arrangements and practices utilised as a part of This article covers the many measures undertaken
the organization to keep key workers from by Indian Corporate Hospitals that have resulted
leaving the association. Employee retention is the in the development of an employer brand.
exertion by a business to keep attractive
employees with a specific end goal to meet Vijayalakshmi and Uthayasuriyan.
business. Employee retention is keeping the (2015)10 , stated employer branding is the new
capable well-performing employees in the modern word for marketers as well as in human
organization for a longer period to achieve resource management. A planned, long-term
competitive advantage. Berry and Morris, approach to manage the knowledge and views of
retention is a continuation of the employment of current and prospective workers, as well as other
the workers, particularly high-caliber and stakeholders with relation to a specific company.
productive workers. Employee retention in an The technique may be tailored to support efforts
organization relies upon the way the organization in recruiting, retention, and productivity
maintains its HRM practices to discuss the issues management, among other objectives.
and requests of its employees. However, retention Organizations use a variety of strategies to recruit
is multidimensional factor of an organization’s and hire employees, but it is now time to leverage
human resource policies which begins with the business's brand to attract the skills.
recruiting the right people in the organization and Essentially, employer brand refers to "the
to stick them with the organization’s business perception of a business as being "a fantastic
portfolio. In addition, the retention strategies, place to work" amongst its own present workers
including bonuses, promotions, and personal and important stakeholders in the outside
communication from top managers. market." As with marketing, human resources has
used brand management tools in order to recruit,
Chaitra and Murthy (2016)9 explored that engage, and retain workers in much the same
rising competition in the global business manner as marketing implements similar tools to
environment compel the organizations to develop attract and keep consumers. This article will
competitive advantage over other organizations. define Employer Branding, the Employer
For this reason, Indian corporate hospitals are Branding Process and its Importance, the Steps in
increasingly promoting themselves as brands, not Building an Employer Brand to Attract, Engage,
just to sell their goods and services but also to and Retain Talent, suggestions to attract, keep,
acquire new talent and to retain the finest and motivate employees, and an Employee
individuals who already work for them. Retention Strategy. Employer Branding, the
Employer branding is the process through which Employer Branding Process and its Importance
an organization's identity is communicated to the
general public. To put it another way, it is the Muhammad Kashif and Imran Naseem
11
process of creating a picture of a fantastic place (2015) explored the effectiveness of company
to work in the minds of prospective and current branding in recruiting young graduates from
workers. Various studies have looked at the Pakistan from a variety of different industries.
advantages of being an employer of choice, and The information was gathered via the use of a
the findings have shown that employer branding survey questionnaire among 96 young graduates
may have a major impact on overall company from Pakistan. Correlation between the variables
performance and profitability. It is also believed of employer brands was used in the study, as well
to be the panacea for problems such as a as cross tabulation for the comparison of
challenging labour market and decreasing pools employer brands across different sectors, in terms
of qualified candidates. As a crucial technique for of the main attributes of employer brands, such as
building organizational sustainability, employer public relations, sponsorship activities, word-of-
branding has gained appeal in recent years among mouth endorsements, and advertising. The
information gathered from the young graduates
Dr. N. Barathi Dasan 3692

was utilised to conduct an analysis of the sectors efficiency). Employer branding strategies in India
of employer brands in terms of the primary that address issues such as recruitment, training,
characteristics of employer brands. The findings employee motivation, employee engagement, and
revealed that employer brands in various retention are the focus of this paper, with the goal
industries (with service sectors dominating the of reducing organization costs, increasing
list) place a strong emphasis on publicity, word- productivity, and improving business
of-mouth endorsements, and advertising, while performance being the overall goal.
placing less emphasis on sponsorship activities.
The young graduates should be evaluated for Need and Importance of the Study
employer brand traits around the globe, rather `The concept of employer branding has been
than only in Pakistan, in order to provide a more gaining momentum, given the crucial role it plays
comprehensive and clear image. However, only in the retention of employees. Effective employer
the young graduates from Pakistan were tested branding leads to competitive advantage, helps
for this study effort. These findings are based on internalize organizational values and assist in
an examination of the main attributes of employer employee retention. Despite the growing
brands among young graduates in Pakistan, in popularity of employer branding practice,
order to determine what their perceptions of academic research in this area is still at its
employer brands are in different sectors, and to infancy. Most of the existing studies on employer
identify the attributes of employer brands that branding are purely theoretical in nature, offering
require further investigation and consideration. frameworks and propositions with no field study.
Shivdasini Singh and ShilpaBhaskar Understanding the role of employer branding in
(2014)12 , examined the development of a theme retaining employees is considered a gap with
and the establishment of an image of the little research focus. In addition, the perception of
employment experience at an organization are current employees on employer branding is often
essential components of successful employment overlooked. Globally, studies on employer
branding, which attracts and keeps qualified branding have been focused on developing a
people for the business. Employer branding is the positive image of the organization as an employer
process of developing and communicating an among potential employees, examining the
organization's culture as a desirable employer in influence of the employment offering on
the marketplace. In addition to communicating applicants’ attitudes and communicating the
the "value proposition" - the sum of the brand externally, i.e., to potential employees but
organization's culture, systems, attitudes, and not to existing employees. The plethora of
employee relationship - it also encourages staff research studies on employer branding, both
members to embrace and share personal and national and international, concentrate only on
professional goals for success, productivity, and attraction of employees, focusing on potential
satisfaction on both a personal and professional employees. These studies discuss employer
level. Throughout the job experience, employer branding as perceived by students who are
branding serves as a focal point, giving touch potential employees on the verge of being
points that begin with initial employer brand recruited. The outcome of such studies cannot be
awareness and continue throughout the length of generalized as potential and current employees
employment, even until retirement. Employer perceive organization’s employer brand in
branding is a distinguishing and relevant different ways.
opportunity for a company to differentiate itself IT industry in India is considered to be
from the competition by establishing its branded the sunshine industry, it is riddled with an all-time
factors as its unique selling proposition (USP) for high attrition rate. Employee Retention is
employee satisfaction and happiness, which in difficult in IT industry due to reasons such as
turn results in employee retention, productivity, demography of population, intense competition
and efficiency (retention, productivity, and etc. Though there are ‘Best Employer’ surveys
3693 Journal of Positive School Psychology

being conducted by several institutions, they do scientifically important as the results will
not capture the perceptions of employees very contribute to the existing knowledge about
well and do not recognize the link between employer branding. This study has theoretical
employer branding and employee retention. implications on the literature in the staffing
Hence, this study aims to understand how domain of Human Resources Management where
employer branding practices leads to employee employer branding is emerging as an important
retention. The outcome of this study will provide construct. The current study exemplifies the
insights into which value propositions are variables under employer branding leading to
considered important for IT employees to stay building a robust instrument which will enable
with their organization researchers in this field to measure the strength of
the employer brand. As it concentrates on the
Scope of the Study current employees and not on students unlike in
Employer branding is more important in the earlier researches, it adds to the generalizability
Indian IT industry as it faces high attrition rates of the results. This work also has implications on
and organizations are finding difficult to retain emerging fields such as ‘great place to work’ and
their employees. The present study aims to throw ‘employer of choice’ as they are basically
light on the employer branding practices in IT outcomes of employer branding. Thus, this
companies in Chennai city and aims to research will be an eye opener to the body of
understand how companies retain their current knowledge and the findings will be a concrete
employees through employer branding. Hence, evidence to show the significant relationship
current employees are chosen for the study as between employer branding and employee
previous research proves that familiarity with the retention. HR practitioners would find this
organization is a relevant condition to assess the research of immense importance as it will help
perception about the employer brand. As the define the expectations of employees and would
study is based on current employee perceptions of help the industry to build their strategies to suit
employer branding, other stakeholders such as the ever changing needs of the employees. This
prospective employees and customers are not study would also provide important cues for
considered. The research on employer branding designing HR policies and interventions in
conducted in India is very limited and thus the making their organizations a ‘great place to
scope of research was set to include only IT work’. Thus, the outcome of this research will be
companies operating in India. This study on the a reference for future improvement.
impact of employer branding on employee Statement of the Problem
retention covers the prevailing scenario of
employer brand and is restricted to Chennai city The research on employer branding conducted in
as it is considered to be the ‘IT hub’ of India, to India is very limited and thus the scope of
Bangalore, with all major IT companies setting research was set to include only IT companies
up shop in Chennai. operating in India. This study on the impact of
employer branding on employee retention covers
Significance of the Study the prevailing scenario of employer brand and is
Employer branding programmes are becoming restricted to Chennai city as it is considered to be
the key factor in retention of employees in many the ‘IT hub’ of India, next only to Bangalore, with
organizations. Though organizations have an all major IT companies setting up shop in
employer brand, it is not a structured one. While Chennai. It is assumed that, knowingly or
there is evidence of strong research conducted unknowingly, each organization selected for the
overseas on the subject of employer branding, no study has an employer branding.
local research has been conducted on this subject, Objectives
as far as the researcher’s knowledge. This
research provides keystones which can be useful The study has the following objectives
for their knowledge about employer branding and
its impact on employee retention. This research is 1. To study the retention strategies followed
in the IT companies
Dr. N. Barathi Dasan 3694

2. To measure the impact of the strategies Findings, Results and Discussion

of retention of employees in the IT
companies on the employer branding 1. Socio-economic characteristics
The study is indented to analyze the employer
Research Methodology branding in the IT companies and the influence of
the retention strategies on the employer branding.
This is an empirical study carried out in Chennai The opinion of the employees towards the
city. Employer branding helps the companies to employer brand values is measured. Their
improve and efficient management of the human opinion of the employees may differ based on the
resource in the IT sector. Recruitment and nature like age, gender, educational status,
retention of employees are strongly influenced by experience and the income. In this context, the
the employer branding. In this view, 200 details of the respondents are summarized below.
employees have been selected for this study
based simple random technique. The primary
data have been collected through the Google
forms.
Table 1 Nature of the respondents
Socio-Economic characteristics N %
Less than 30 years 63 31.5
Age group 30 to 45 years 73 36.5
More than 45 years 64 32.0
Male 113 56.5
Gender
Female 87 43.5
Diploma 12 6.0
Educational qualification Under graduation 142 71.0
Post-graduation 46 23.0
Arts and science 78 39.0
Education stream
Engineering and technology 122 61.0
Up to 5 years 57 28.5
Experience 6 to 10 years 88 44.0
More than 10 years 55 27.5
Less than Rs. 1 Lakh 73 36.5
Income level Rs. 1 Lakh to Rs. 2 Lakhs 114 57.0
More than Rs. 2 Lakhs 13 6.5
Total 200 100.0

The Table 1 shows that most of the respondents colleges. Level of experience shows that 88
(73) belong to the age group between 30 years (44.0%) respondents have experience between 6
and 45 years, 64 (32.0%) respondents are aged to 10 years, 57 (28.5%) respondents experienced
more than 45 years 63 (31.5%) are aged less than less than 5 years and 55 (27.5%) respondents
30 years. 113 (56.5%) respondents are male and have more than 10 years of experience. Based on
87 (43.5%) are female. Majority (71.0%) of the the Income level, it is found that 114 (57.0%) are
respondents is under graduates and 23.0% of the earning between Rs. 1 Lakh and Rs. 2 Lakhs and
respondents are post graduates. 73 (36.5%) respondents’ income is less than Rs.
According to the educational stream 1 Lakh and 13 (6.5%) respondents; salary is more
studied, the respondents are distributed that 122 than Rs.2 lakhs.
(61.0%) respondents have completed their
education in the Engineering stream and 78 2. Retention strategies of the IT
(39.0%) respondents are from the arts and science companies
3695 Journal of Positive School Psychology

The IT companies’ employees are well educated, strategies of the IT companies. The following
skilled and talented employees. This is one of the retention strategies are analyzed from the opinion
strongest service sectors to provide large of the respondents. The training programs,
employment and foreign exchange. They have mentorship, employee compensation, perks and
proper and efficient human resource management wellness offered, communication, feedback
department which makes proper plan for system, working environment and work life
retention of their employees. The study is balance, recognition etc.
focusing on the employer branding and retention

Table 2 Descriptive Statistics

Retention strategies Std.
Mean Rank
Deviation
R1 Wellness offering 2.8850 1.36421 14
R2 On board or orientation 3.1350 1.18482 9
R3 Communication 3.1950 1.05477 8
R4 Employee compensation 3.2850 1.14469 6
R5 Feedback system 3.4800 1.31080 3
R6 Mentorship programs 3.4250 1.14934 4
R7 Perks 3.2950 1.08807 5
R8 Training and development 2.9150 1.14645 13
R9 Flexible work arrangements 2.9300 1.41957 12
R10 Work life balance 3.0400 1.15545 10
R11 An emphasis on teamwork 4.1106 1.21765 1
R12 Recognition and rewards 3.6550 0.86587 2
R13 Effective change management 3.2764 0.79709 7
R14 Acknowledgement of milestones 3.0350 1.11354 11

The respondents’ opinion about the different

retention strategies applied in the IT companies is 3. Impact of Retention strategies on the
measured with the help of 5 point Likert scale. employer branding
The result shows that the emphasis on the team The opinion of the employees of the value of
work is given importance in their companies employer branding is measured in a question
(4.1106). The strategy of recognition and rewards using 5 Likert scale. The paper is attempting to
are also properly followed in the companies measure the level of influence of the each
(3.6550). Thirdly, the feedback system is also retention strategies on the employer branding.
successful in the retention practices (3.4800). Success of the employer branding is based on the
Mentorship programs (3.4250), perks allowed best practices of the management. To measure the
(3.2950) and employee compensation paid impact of the retention practices on the employer
(3.2850) are ranked by the employees as best branding, the regression model is applied.
strategies in the retention practice.

Table 3 Model Summary

Adjusted R Std. Error of
Model R R Square
Square the Estimate
1 0.800 0.640 0.613 6.02522
a. Predictors: (Constant), R1, R2, R3, R4, R5, R6, R7,R8, R9, R10, R11,
R12, R13 and R14
Dr. N. Barathi Dasan 3696

The regression model summary shows that the R value is 0.800 and adjusted R square value is 0.640 (64%).
It explains that independent variables are having 64% of variance on the dependent variable. The model
shows that the role of all retention strategies on the employer branding of the IT companies. The result of
ANOVA test is given below.

Table 4 ANOVA
Model Sum of df Mean F Sig.
Squares Square
Regression 11889.495 14 849.250 23.393 0.000
1 Residual 6679.801 184 36.303
Total 18569.296 198
a. Dependent Variable: Employer branding
b. Predictors: (Constant), R1, R2, R3, R4, R5, R6, R7,R8, R9, R10, R11, R12, R13 and
R14

The ANOVA table shows the fitness of the model. The calculated F value (23.393) from the ANOVA test
shows fitness of the model (p-0.000). The effect of each strategy on the employer branding is explained in
the following table.

Table 5 Coefficients
Unstandardized Standardized
Model Coefficients Coefficients t Sig.
B Std. Error Beta
(Constant) 10.874 2.883 3.772 0.000*
Wellness offering 1.295 0.598 0.183 2.166 0.032*
On board or orientation 0.439 0.622 0.054 0.706 0.481
Communication 0.208 0.607 0.023 0.343 0.732
Employee compensation 2.804 0.595 0.332 4.709 0.000*
Feedback system 0.173 0.561 0.023 0.308 0.759
Mentorship programs 0.655 0.628 0.078 1.043 0.298
Perks 1.215 0.589 0.137 2.062 0.041*
Training and development 0.867 0.673 0.103 1.288 0.199
Flexible work arrangements -0.162 0.632 -0.024 -0.256 0.798
Work life balance 1.530 0.597 0.183 2.562 0.011*
An emphasis on teamwork -0.510 0.452 -0.064 -1.128 0.261
Recognition and rewards 1.689 0.673 0.148 2.509 0.013*
Effective change management -0.011 0.648 -0.001 -0.017 0.987
Acknowledgement of milestones -0.293 0.463 -0.033 -0.632 0.528
* Significant influence

The Table 5 exhibits that 5 strategies and the balance and recognition and rewards are
constant factor are influencing on the employer significantly influence on the employer branding.
branding. The t values of wellness offering
(2.166), employee compensation (4.709), perks Conclusions
offered (2.062), work life balance (2.562) and
recognition and reward (2.509) are more than Employee turnover is a major problem in the
1.96. Their significance values are less than 0.05. industry. The main causes of turnover are pay
Hence, it is concluded that the retention strategies satisfaction, other benefits obtained from the
of IT companies to offer wellness, employee company and alternative employment
compensation and perks offered, work life opportunities. The employees were also curious
3697 Journal of Positive School Psychology

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