IT companies biggies gear up to stem rising attrition

Despite the big four IT firms reporting fourth quarter earnings that were ahead of market expectations, one area of concern in particular across the companies was the high attrition rate in the quarter – be it for TCS, Infosys, HCL Technologies or Wipro.

While the company management themselves attribute fourth quarter attrition to seasonality, the fact remains that the churn could well spill over to the next two quarters.
Infosys, which has seen its attrition level escalate to 18.7% from 18.1% since the last quarter, holds the industry highest attrition rate with eleven top management exits till date as well as a number of small and mid-level employees, which increased significantly after the return of executive chairman, NR Narayana Murthy last June. In the last four quarters, Infy's attrition has steadily risen to a two-year high of 17.3% in Q2 from 16.9% in Q1.

TCS, too, which posted industry lowest attrition rate last quarter at 10.1%, saw Q4 attrition rate rise to 11.1%. According to Ajoy Mukherjee, global HRD head, TCS, this rate is likely to rise further in the next two quarters, on account of seasonality. TCS' attrition rate stood at 10.9% in Q2, and 10.5% in Q1.

HCL Technologies, which claims its attrition is on a downward trend, still has one of the highest attrition rates in the industry. In Q4, its last twelve months' attrition stood at 16.9%, which has increased from 16.6% in Q2 and 16.1% in Q1. Wipro, too, reported a high attrition rate of 15.1% in Q4, as compared to 14.3% in Q3, 13.5% in Q2 and 13.2% in Q1.

While wage hikes can be one way of retaining staff – Infosys' which gave two wage hikes in the last year, is proof that this alone doesn't help. In fact, Infosys' CEO, SD Shibulal mentioned last month that the company was facing 'skill-set mismatch' of the employee base.

However, these IT majors have now taken recourse to various unique initiatives to fight the steady stream of exits from their organisations.
Speaking to dna about these techniques to curb attrition, Shibulal said, "We are doing numerous things, we have given two consecutive wage hikes, promotions at all levels in April and we have restructured the available compensation structure. Besides this, we have created a fast-track programme where high performers can go up the ladder faster and a variable compensation. In this way, we are investing in training and retooling our people – so there are a wide range of investments we are making." Infosys is also on track to hire 15,000-16,000 freshers for FY15 and 200 sales people onsite.

Prithvi Shergill, HR head for HCL Technologies, says the company has become more strategic in its training and skilling of employees to ensure greater retention. "For us, attrition is not something that is managed in a single quarter and after looking at our people practices in the last few quarters we now are trying to ensure that employees do get the experience they desire. We also recognised a few quarters ago that attrition is a natural lever of flow in terms of capability – both capacity and ability, people who are more comfortable with reskilling themselves will continue to be more successful, people who continue to focus on one skill which is not seeing so much demand will continue to look for options where that skill can be more used," said Shergill.
High performers, according to him, are recognised with talent identification programme that helps them to move into bigger roles in the middle of the year. "We have career programme called career connect where employees can reach out to experts to fashion their career plan, we have incentive plans that are linked to contribution directly made to the organisation – like CEO club recognised with vehicle, longer incentive plans linked to company's long term goals. While we have very structured talent management process where we look at almost 5000 people to decide deployment options for them in leadership positions, we are very clear we need to bring in new capacity from outside. In the last few quarters we added 26 such people to strengthen some of the new value propositions that we are offering our clients," he said.

TCS, which has crossed its 300,000 employee mark, and is on track to hire 55,000 more people this year (which is the same target as last year), including 25,000 freshers, has managed to maintain the lowest industry attrition rate with a slew of measures that include higher wage hikes for high performers (up to 14% in Q4, compared to 6-10% for the rest of its offshore staff), specialised training programmes and other incentives.