Staffing software projects with engineers from inexpensive locations has become commonplace. However, distributed development remains practically challenging because of recurring problems, e.g., decreased productivity, low quality, and high, unforeseen costs. Although it is often overlooked, one of the main underlying reasons for these challenges is high employee turnover. This might be especially noticeable in developing countries with strong economic growth such as India. This article examines turnover of Indian software engineers and introduces strategies to address it.

Background: Employee turnover in GSD is an extremely important issue, especially in Western companies offshoring to emerging nations. Aims: In this case study we investigated an offshore vendor company and in particular whether the employees' retention is related with their experience. Moreover, we studied whether we can identify a threshold associated with the employees' tendency to leave the particular company. Method: We used a case study, applied and presented descriptive statistics, contingency tables, results from Chi-Square test of association and post hoc tests. Results: The emerging results showed that employee retention and company experience are associated. In particular, almost 90% of the employees are leaving the company within the first year, where the percentage within the second year is 50-50%. Thus, there is an indication that the 2 years' time is the retention threshold for the investigated offshore vendor company. Conclusions: The results are preliminary and lead us to the need for building a prediction model which should include more inherent characteristics of the projects to aid the companies avoiding massive turnover waves.