Major IT companies in India have had a productive quarter, with great performance reflected by revenue growth.
For example, TCS’s revenue for the quarter grew by 16.8%, Infosys by 20.4% and Wipro by as much as 30%.
But despite the glowing numbers, the companies have not been able to escape the shadows of attrition.
- 1 The Menace Of Attrition
- 2 Junior-Level Exits
- 3 Supply Crunch
- 4 Poaching By Startups
- 5 Hiring Gone Digital
- 6 Future Possibilities
The Menace Of Attrition
Cognizant leads the industry in attrition with a quarter rate of 31% along with Infosys and Wipro both of which have crossed 20%.
Even TCS wound up with 11.9% attrition rate, a company famed for keeping its rates in single digits.
Apart from the direct impact on the firms themselves, this trend also threatens to weaken demand which had seen a boost thanks to the pandemic.
The reasons behind IT workers quitting in droves can be divided into 4 aspects.
One, most of the people leaving are at the junior level.
Here, the industry has to hold itself responsible due to paltry entry-level salaries which have been stagnant for over a decade.
Many of those leaving have three to six years of experience.
This level of experience fetches them higher income when they switch jobs.
However, there is unlikely to be any change anytime soon since entry-level jobs also come with investment into training from the employer.
Two, a significant driver of IT companies’ growth has been talent in areas like cloud computing, big data, artificial intelligence, machine learning and cybersecurity.
People specialising in these skills, despite having high value, are small in number compared to the demand which is eight times larger than the pool size.
This gives them an advantage in salary negotiations and allows them to constantly look out for better opportunities.
Poaching By Startups
Three, established software firms are losing out to new-age startups which are in rapid scaling mode.
These startups are armed with funds which allows them to attract niche IT talent.
Some of the attractive perks they offer include above-market salaries, flexible work arrangements and generous employee stock options (ESOPs).
Hiring Gone Digital
Four, the acceptance of the work-from-home (WFH) model in the mainstream and its normalisation.
This empowers employees to conveniently explore other career prospects since recruitment has shifted almost entirely online.
In response to the situation, companies are ramping up hiring, re-skilling, and the use of sub-contractors.
But the companies and experts do expect the upward attrition trend to continue for sometime before cooling down.
There is a possibility that in the future, the supply side may go up from higher intake in computer science programmes.
An improvement in education quality may churn out more and more candidates who are career ready and will not have to undergo additional training.
This could go a long way toward rectifying the present situation.