A higher attrition rate is a major concern across industries. Most recently, in the Report on Trend and Progress of Banking in India 2023-24 released by the RBI in December 2024, it was observed that employee attrition rates are high across select private sector banks and Small Finance Banks (SFBs). Attrition rate was about 25 per cent in select cases. It was observed that high attrition and employee turnover rate pose significant operational risks, including disruption in customer services, besides leading to loss of institutional knowledge and increased recruitment costs. Realizing this, technology companies have launched predictive tools to enable companies in different sectors to gain a better understanding of likely attritionsand undertake preventive measures for employee turnover.

F. Leigh Branham in his book, ‘Keeping the People Who Keep You in Business: 24 Ways to Hang On to Your Most Valuable Talent’ mentioned the cost of losing an employee anywhere between 25 per cent to 200 per cent of that employee’s salary. Employees’ turnover (voluntary or involuntary) has huge costs involved comprising Direct turnover costs such as cost of leaving, replacement costs, and transition costs, and Indirect turnover costs such as loss of production and reduced performance.

Business Responsibility & Sustainability Report (BRSR) of companies must give details on employee turnover rate. BRSR of top pharmaceutical companies in India reflects interesting trends. Among major Indian pharmaceutical companies, Employee Turnover Rate was the highest in case of Alkem Labs at 27.6% among permanent employees in FY 2023-24 and it was the lowest in case of Divi’s Labs at 9.05% among permanent employees in FY 2023-24. For FY 2023-24, employee turnover rate among permanent employees was also higher for Zydus Lifesciences (20.0%), Lupin (19.0%), followed by Dr. Reddy’s Labs (18.4%), Mankind (18.0%), Torrent Pharma (16.6%), Aurobindo Pharma (16.0%), and Sun Pharma (13.59%). Cipla Limited reported Total Permanent Employee and Worker Turnover Rate of 18.6% for FY 2023-24.

*Besides employees and workers, the company has another column – ‘Others’, and total column gives weightage to that too

Note: For FY 2022-23, turnover rate was given for the previous year, and for FY 2021-22, turnover rate in the year prior to previous Financial Year was reported by Torrent Pharma, Dr. Reddy’s Laboratories, and Zydus Lifesciences. 

Employee Turnover Rate regarding Permanent Employees has gone up for Sun Pharma, Alkem Labs and Torrent Pharma from 10.40% to 13.59%, 20.0% to 27.6%, and 12.0% to 16.6% respectively during three-year period from FY 2021-22 to FY 2023-24. Divi’s Labs has shown significant progress in a short span of time as Employee Turnover Rate went down to 9.05% in FY 2023-24 from a high of 18.52% in FY 2022-23.

Improvement has been observed in case of Lupin as Employee Turnover Rate for Permanent Employees of the company went down from 24.47% in FY 2022-23 to 19.00% in FY 2023-24 followed by Zydus Lifesciences (from 24.0% to 20.0%), Cipla (from 21.70% to 18.74%), Dr. Reddy’s Labs (from 20.6% to 18.4%), Mankind Pharma (from 19.49% to 18.00%) and Aurobindo Pharma (from 17.0% to 16.0%) during three-year period from FY 2021-22 to FY 2023-24. 

From FY 2021-22 to FY 2023-24, Employee Turnover rate of permanent employees was higher than employee turnover rate of permanent workers in top pharmaceutical companies in India. Higher employee turnover rate of 10.30% was found among male permanent workers in Sun Pharma for FY 2021-22 which has declined to 7.11% in FY 2023-24. In last three years, a higher employee turnover rate of 22.0% among male permanent workers as compared to 18.0% for permanent employees was found in case of Mankind Pharma for FY 2023-24. For Zydus Lifesciences, a higher employee turnover rate of 26.0% among male permanent workers was found as compared to 22.0% for permanent employees. For Dr. Reddy’s Laboratories, a higher employee turnover rate was observed among permanent workers (male as well as female) as compared to permanent employees in FY 2021-22 as well as in FY 2022-23. In FY 2023-24, employee turnover rate has gone down to just 8.0% among male permanent workers but remained high at 34.1% among female permanent workers in DRL.  

Among Permanent Employees (Female), employee turnover rate was the lowest for Cipla, i.e., 2.33% in FY 2023-24 as compared to 2.60% in FY 2022-23. Employee Turnover rate for Permanent Employees (Female) was the highest at 28.0% in Aurobindo Pharma for FY 2023-24 followed by 27.0% in Mankind Pharma, Torrent Pharma (26.0%) Alkem Labs (25.9%), Lupin (22.50%), Zydus Lifesciences (21.0%), DRL (19.0%), Divi’s Labs (14.64%) and Sun Pharma (11.29%).

Sun Pharma could curtail Permanent Employees (Female) employee turnover rate from 15.70% in FY 2021-22 to 11.29% in FY 2023-24. In contrast to this, there was visible deterioration on this count for Mankind Pharma as the employee turnover rate has gone up from 19.74% in FY 2021-22 to 27.0% in FY 2023-24.

Most of these pharmaceutical companies have reported that these companies are making efforts to contain employee turnover rate, e.g., Sun Pharma reported that multiple channels of communication with employees include employee focused web portal, e-mail, employee engagement surveys, and town-halls. Further, it has recognized that employee well-being and satisfaction is an integral part of the company’s growth strategy. Key areas of interest for employees comprise Learning and Development, Professional Growth, Well-being initiatives, Employee recognition, Fair remuneration, and Work-life balance. On employee engagement and frequency, Cipla reported that it is continuous (one-to-one manager interaction, grievance redressal mechanism), Periodic (trainings, skip level meetings, webinars), Quarterly (townhalls), and Annual (awards and appraisals, and employee engagement surveys). Intra-company and inter-company comparison of measures undertaken and effectiveness of those measures can offer valuable insights for remedial action. It was not without reason that Cognizant made headlines in November 2024 when the CEO declared that ‘the mojo of the company is back’ as 13,000 associates who had earlier worked with the company, wanted to come back.

Dr. Anil Kumar Angrish- Associate Professor, Department of Pharmaceutical Management, NIPER S.A,S, Nagar (Mohali), Punjab

Disclaimer: Views are personal and do not represent the views of the Institute.