HROB/191

IBS Center for Management Research

Attrition Analysis at Mesotime

This case was written by Rupali Chaudhuri, under the direction of Debapratim Purkayastha, IBS Hyderabad. It was prepared
from generalized experience, and is intended to be used as a basis for class discussion rather than to illustrate either effective or
ineffective handling of a management situation.

© 2018, IBS Center for Management Research. All rights reserved.

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 HROB/191

Attrition Analysis at Mesotime

“Why are people leaving us – I don’t understand at all! Voluntary Attrition1 is reported at 12.6 %,”
said a worried V V Ram (Ram), Senior Vice President Bio-Analytical R&D of Mesotime, to
Shyam C. (Shyam), Unit HR Head at Mesotime. It was a warm morning on April 12, 2017, and
both the senior officials at Mesotime realized that it was high time they put a stop to the exodus.
There had been multiple reasons why talented employees were leaving the organization – some
regrettable. Rather than relying on his own instincts and gut feel, Shyam wanted to analyze why
people were leaving from the raw data the HR Team had provided him.
Mesotime was founded in 1974 by Dr. V V Ram, scientist and entrepreneur. It was one of the few
companies in India that had reached Phase III of the clinical trials2 for its in-house drug,
MESOPHARMET, involving a few hundred people. The company’s research division was based
in Charlapalli, India, and had 547 employees. Over a period of 40 years, Mesotime had been able
to execute 4 drug discoveries in collaboration with medium sized biopharmaceutical companies.
The company had earned a good reputation in the Biosimilars3 market in India because of its
quality research and on-track record.
However, in FY 2016-17. Mesotime found itself dogged by misfortune. Two major accidents
occurred at its facility. In April 2016, four scientists lost their lives in a fire that broke out in its
plant. The following month, another lost his life in an accident in its production department while
working on the ammonia compressor. These incidents attracted a lot of negative press coverage for
Mesotime. The local Factories Department filed a lawsuit in Court over the alleged appalling
safety standards at the company’s plant.
In FY 2016-17, of the 12 women employees who had gone on maternity leave, four did not return
to work after their leave ended. In April 2016, the company had announced the closure of its onsite
children’s crèche saying there were very few children using the facility. With the 4 women – 2 of
them star performers – deciding not to rejoin the company, Shyam was left wondering whether the
decision to close down the crèche to reduce costs had been the right one. (Refer to Exhibit I)
Shyam wondered whether Mesotime should have given an extension to three senior managers who
had recently retired. He thought that it would have been worthwhile exploring if they could
continue working as Consultants or even work reduced hours. He especially wished Anna, the
senior Director who had been heading Strategy before her retirement, would come back. She
would be an excellent choice to head the company’s Diversity Council, he felt.

1
Voluntary attrition is when an employee leaves the organization to pursue another opportunity or for
personal reasons, such as raising a family, studies, etc.
2
In a clinical trial the healthcare scientist determines the safety and efficacy of the medication that had
been intended for humans. Clinical trials that involve new drugs have four phases: Phase I, Phase II,
Phase III, Phase IV or a combination.
3
Biosimilar is a biological medical product that is an identical copy of the original product that had been
manufactured by another company.

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 Attrition Analysis at Mesotime

Background check failure4 had been another cause of worry for Shyam. Poor background checks
had resulted in 6 of the 100 employees having to be asked to leave. The background checks were
conducted to verify the employee applicant information, such as credit history, criminal offense,
fabricated employment experience and education certificates. Mesotime had outsourced the
background checks to a third party vendor. The vendor had been notoriously late for submission of
the background check reports and in one case, the vendor gave a red flagged report after one year
of the employee joining the organization.
Seven employees had left the organization to pursue their higher studies. Two employees left to
pursue a Ph.D and three employees to pursue a PharmD. Shyam wondered whether he could get
these people to sign a bond that would enable them to pursue PhD full time and come back later to
work with Mesotime.
On closer inspection of the attrition data, Shyam realized that 11 employees had been rated as “Z”
performers and had been asked to leave due to poor performance (Refer to Exhibit II). He was
pleased with this outcome as Mesotime did not want to have underperformers and these employees
had been given adequate time to prove themselves. Mesotime followed a Forced Distribution
System5; where every year the “Z” performers were put on the Performance Improvement program
and given adequate time to prove themselves. The program started in May and ended in December.
In fact, the company had been extra lenient and extended the program for four people till the end
of March 2017.
One of the bigger worries Shyam had was that Mesotime had been losing middle level employees
and, voluntary attrition in this segment stood at 53.6% (Refer to Exhibit III). He silently cursed
himself for not managing his time better and making the time to meet the middle level
management employees. He often got good information about people trends from these people.
Shyam had made a mental note to have a chat with the Talent Acquisition team, as there were 30
early leavers and 40% of these were trainees. He feared that if the trainees left the company,
Mesotime would have trouble filling up key positions in the next few years.
Shyam knew that paying higher salaries and more generous hikes were not an option as the budget
allocated for salaries had already been approved by the Board of Directors and there was little
chance of any changes being made.
When he looked more closely at the attrition data, Shyam found that 22 people had left due to a
strained relationship with their managers. Shyam often felt that senior leaders were obsessed with the
discovery milestones and avoided tough conversations. Where junior executives were concerned,
many of them did not know how to take critical feedback. He felt that the employees needed to be
trained on how to manage their emotions at the workplace. At the same time, he felt there was a lack
of trust and mutual respect between the junior executives and the senior leadership teams.
Thus, there were several challenges before Shyam going forward – How should predictive
analytics be used to forecast which ‘type’ of employees would leave? Was there any correlation
between excess leave6 taken and internal years of experience for voluntary attrition? What
initiatives should he introduce to retain the women employees who were not rejoining after their
maternity leave? How should managers be trained to retain employees?

4
Background check is the process of looking up and compiling criminal records, commercial records, and
financial records of an individual before he joins the organization. If the credentials (Work history,
education or criminal history) given by an employee were proved wrong, Mesotime used to ask them to
leave, such an exit has been termed as “Background Check Failure”
5
The Forced Distribution System is the method where supervisors need to assess their team members based
on certain predetermined parameters and bracket the team members in different categories – excellent,
average, and poor. It was pioneered at GE in [Link] is also called the Bell Curve Rating Method.
6
Excess Leave is defined as the additional days of leave taken by an employee over the monthly 2.5 days
of accrued leave given at Mesotime.

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 Attrition Analysis at Mesotime

Exhibit I
Forced Ranking System at Mesotime
Performance Appraisal Rating Name % of Employees*
Star Performers (A+) 20%
Average Performers (A) 70%
Poor Performers (Z) 10%
*All employees who had been active as on December 31st of that financial year would get a rating

Exhibit II
HR Attrition Data at Mesotime
(Refer to Excel sheet)

Exhibit III
Management Structure at Mesotime
Management Level Position Description
1-Junior Level Trainee
2-Junior Level Junior Executive
3-Junior Level Analyst
4-Middle Level Biostatistician; Data Scientist; Executive; Scientist; Legal Counsel
5-Middle Level Senior Biostatistician; Senior Scientist; Manager; Senior Legal Counsel
6-Senior Level Principal Biostatistician; Senior Manager
7-Senior Level Program Director
8-Senior Level Director