TCS, Infosys, Wipro and HCLtech among others are suffering from high attrition rates.
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Attrition trend
The IT sector’s average attrition rate (last twelve months) is currently as high as 25 per cent.
The last few quarters haven’t been easier either with higher attrition rates, and slowed hiring.
Experts believe this trend is due to the fact that growth opportunities are now relatively lesser in the IT sector as compared to other sectors.
Infosys
This company reported voluntary attrition of 27.1 per cent for the September 2022 quarter (Q2FY23).
This was lower than the previous quarter’s 28.4 per cent but higher on a yearly basis as compared with the 20.1 per cent recorded in Q2FY22.
HCL Tech
Attrition here remained at 23.8 per cent in Q2FY23.
TCS
It was 21.5 per cent during the September 2022 quarter.
This is higher than 19.7 per cent in the previous quarter and 17.4 per cent in the March quarter.
Wipro
The situation here is that voluntary attrition, measured in the trailing 12 months for the quarter was at 23 per cent.
This is a moderation of 30 bps from the previous quarter.
President and co-founder of TeamLease Edtech Neeti Sharma said high attrition has been a problem in the IT sector for a long time now.
The past few quarters have seen “higher attrition and with the conversations around the ‘Great Resignation’ and ‘Great Movement’, the problem has been highlighted to a larger extent.”
Along with the growth opportunities in the sector and start-ups, there has been a 3x growth in requirements for tech skills in non-tech organisations.
This increase has resulted in employers identifying creative ways to attract talent, the attrition across the sector has been extremely high, said Sharma.
Employee retention
Founder and CEO of women career platform JobsForHer Neha Bagaria said, “The corporate universe has been facing challenges in hiring and retaining the right people at work.
If the issue is not addressed on priority, it can turn into a talent crisis and can have a negative impact on businesses worldwide.”
Meanwhile Sharma said that millennials and Gen Z have options apart from traditional career paths with the emergence of the gig economy.
They prioritize flexibility and work-life balance so this could be another possible reason for the 25 per cent (average) attrition rate in the sector.
Hiring freeze
IT companies globally, including India are also slowing on fresh hirings and resorting to layoffs.
Intel is planning to lay off thousands of employees in order to cut costs.
Previously Microsoft, Google and Tesla already announced mass layoffs.
In India, Infosys, Wipro and Tech Mahindra, have revoked offer letters from students after the companies are delaying the onboarding process for months.
While there might not be a one-size-fits-all solution to this problem, there are many things that can be taken to reduce attrition.
There is plenty of talent in India’s Tier-2 and Tier-3 cities and hiring from this talent pool.
Other recommendations
Firms must also consider becoming more employee-centric and offering cross-skilling or multi-skilling programmes that help employees stay engaged.
Employee recognition also plays an important role in retaining them.
This includes 360-degree feedback programmes on a quarterly basis that will also enable IT firms to understand employee grievances and needs.
Two-way communication is a must for the current generation and this will also provide valuable insights into their thought process.
From an HR perspective a generational shift in terms of the hiring mindset can reap rewards.
Other measures include collaborative hiring, reducing inflated salary packages, and diversifying the hiring pool.
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