The first quarter of FY18 saw an overhaul in the US visa norms after Donald Trump's administration went stricter with immigration rules
The impact of US Donald Trump protectionist measures on Indian IT sector jobs is uneven across companies.
Going by the attrition numbers, Indian mid-tier IT firms lost fewer jobs since Trump came to power in comparison to the top players.
Since the October-December 2016 quarter – Trump won US Presidential elections on November 8, 2016 – India's top IT majors have shown a spike in employee attrition.
Attrition, or churn rate, is a calculation of the number of individuals that vacate or move out of a larger, collective group over a specified time frame.
From 18.4% in Q3, or October-December 2016 quarter, attrition at Infosys has risen sharply to 21% in the April-June 2017 quarter. It was 17.1% in the fourth quarter of fiscal 2017.
Wipro saw its churn rate increase to 16.1% in April-June quarter from 14.8% in preceding fourth quarter while TCS posted jump to 12.4% in Q1 of FY18 from Q4 11.5%.
While Tech Mahindra's attrition rate stood at 17% in both the quarters, HCL Technologies showed a decline to 16.2% from 16.5% last quarter.
The first quarter of FY18 saw an overhaul in the US visa norms after Donald Trump's administration went stricter with immigration rules.
This, however, hasn't impacted the mid-tier firms the similar way.
Attrition at MindTree dropped to 14% in Q1 of FY18 from 16.1% in the third quarter of fiscal 2017. It was 15.1% in the fourth quarter of the last fiscal.
At NIIT Technologies, attrition fell from 12.58% in Q3 of fiscal 2017 to 12.12% in Q1 of FY18. It had dropped to 12.72% in Q4 of the last fiscal.
Attributing tepid US outsourcing in earlier quarters for the drop, Alok Shende, co-founder and lead analyst at Ascentius Consulting, said, "The percentage growth of local recruitment has increased in the US while decreased in India. This is driven by new US regulatory norms and Visa woes."
Indian companies, which bag the largest number of H1-B visas, are expected to be hurt the most as "there has been a pricing pressure, deliverables have been down and the project volumes have fallen too," Shende said.
Cognizant, which has a majority of its workforce in India, in a media interview, said it was stepping up hiring in the US while reporting a net reduction of 4,400 people during the June quarter, resulting from "performance evaluations" and "voluntary separation programme".
Was increase in the attrition driven by the wave of automation?
Not really, Shende said, as "lower hanging fruits have already been plucked. Automation has already influenced attrition rate in the past."
However, Diptarup Chakraborti, VP and global head of marketing at Zycus, an IT firm, does not see the US hiring patterns driving the change in attrition. Increase in the churn rate, which includes forced (layoffs) as well as voluntary separation, may be because many MNCs are opening global IT centres in India and that is where the pool of talent could be going.
In May this year, Cognizant had extended a "voluntary separation incentive" to some of its top-level executives, offering them up to nine months of salary.
"There is a scope of voluntary separation as there are start-ups, boutique companies and multinational companies continuing to hire the best among the lot," he said, adding that Indian pool of talent cannot be matched on the quality as well as quantity front.
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Wipro saw its churn rate increase to 16.1% in April-June quarter from 14.8% in preceding fourth quarter while TCS posted jump to 12.4% in Q1 of FY18 from Q4 11.5%.
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