Between Tata Consultancy Services (TCS), Wipro and Infosys, the three bigwigs of the Indian IT space, it seems that that employees are jumping the ship at a rate faster than ever.
The annual attrition rate at Infosys stood at 18.9%, Wipro average at around 15% and TCS shed nearly 48,000 employees last year, averaging at 14.9% in the last quarter of fiscal year 2015.
Subhash Khare, Vice President, Human Resources, Wipro Ltd told dna, "
We find that there is a higher percentage of attrition at the junior levels, as compared to middle or senior management. The reasons would range from higher studies to or relocation to another city or better opportunities which usually come with more compensation."
Attrition in Indian IT Sector
Who lost how many?
- Despite hefty bonus and iPhones, attrition at Infy stood at 18.9%
- Wipro's net hiring at the end of March 31, 2015 stood at 12,164
- TCS lost nearly 48,000 employees, 13,000 of which came in 4th quarter
Infosys spokesperson, too, seconded Khare of Wipro and said, "The industry does see seasonal increases in attrition usually due to employees opting for higher education or an increase in opportunities arising out of industry growth. Over a period of time, the numbers tend to average out."
TCS's Executive Vice President and Head of Global Human Resources, Ajoyendra Mukherjee, told dna on April 17 the reasons for high attrition rate is the buoyant job market. "Job opportunities in the market are good," he said.
The reasons for this high attrition rate in Indian IT are many. The sector believes that most of the hiring is taking place laterally, i.e. within services industry as the prospects in the sector are growing.
Khare said, "While there is a segment of talent in the IT industry, which is exploring opportunities at start-ups, it is a relatively small number. Most people who leave usually join another services organization."
Over the past year, companies like TCS and Infosys have relied on bonuses and special rewards to its employees but the effects of those in stemming attrition are yet to be seen.
TCS, which celebrated its 10th anniversary of its listing on the Indian stock markets gave out a hefty Rs 12,750 crore payout as dividends to its shareholders, decided to to give a one-time bonus of Rs 2628 crore to its employees as part of the same celebrations.
Although, the company claimed that the aim of this bonus isn't to check attrition but it expects a positive impact on voluntary separations.
In January this year, Infosys said that the company offered 100% bonus to its employees and doled out 3000 iPhones to best performers, in order to stem attrition.
Manik Taneja and Ruchi Burde of Emkay Research had written in their report, “Infosys’s recent steps in restoring regular wage hike cycle, better variable pay-outs as well as increased promotions should temper attrition over the next few quarters in our view.”
The three, however, are not bogged down by the numbers. Infosys spokesperson said, "We have not seen any significant impact on our business performance as we have a robust talent fulfillment model that operates real time to cover gaps caused by attrition."
Whatever the case may be, it is clear that the companies are uncomfortable with the high churn out rate of its employees and are trying various incentives including hefty bonuses. How long will these strategies work and whether the high attrition rate will have an impact on the business going forward is something only time will tell.
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