MANILA - Despite budget restraints, companies in the business process outsourcing (BPO) sector can retain their valuable employees by focusing on "quality of life" incentives, according to a study by XMG Global ICT Research and Advisory.

XMG Global said its recent multi-client study covering three established offshoring countries—namely India, the Philippines and China—showed a common trend: High-performing supervisors, team leaders and mid-managers employed in BPOs and call centers can be retained without huge additional spending.

It's true that high compensation in the form of cash is still the "most essential" incentive for key talents, according to the research.

However, the interest in strictly cash compensation is starting to wane, specifically among high-level employees working in call centers and BPOs.

XMG said in a report that while the use of cash rewards is consistent with or slightly behind levels reported last year, some categories of non-monetary rewards, or what XMG Global calls "quality of life" incentives, increased by an astounding 18%. Examples of these incentives include flex hours, additional paid time off, telecommuting, stress management and family counselling.

"As health and family related issues are on the rise, most particularly due to work related stress and working the graveyard shifts, the respondents indicated they are willing to devote more to a company that recognizes and respects their personal needs and life circumstances. Supporting this trend, XMG Global’s cultural audits of its clients show that high performance and successful retention are more consistent in cultures that stress quality of life and provide challenging work environments, compared to just using cash rewards for doing good work," XMG said in its report.

While cash remains the strongest form of incentive to retain key performers and encourage higher performance in offshoring companies, providing a friendly and stress-free working environment could be a leading retention practice.