Infosys and Wipro are losing 1 in 5 employees every year. That’s thousands of employees a year! Well, you can’t blame the IT professionals because retention rates in few companies are lower as they don’t want to increase their hiring costs. Therefore, a lot of IT employees are flocking to startups and other firms for a better salary package and growth. Because, why not! But then what would happen to the IT industry? Let’s check up on it.
What Are The Reasons Behind Exiting?
In a recent report by TeamLease (HR firm), the average attrition rate in the IT industry was 8.67% in the September quarter. Wipro, Infosys and TCS recorded an attrition rate of 20.5%, 20.1% and 11.5%, respectively, in the same quarter. Now that's quite a concern because employees are the biggest assets for IT firms. Logically, the big firms won’t get affected but the smaller ones will.
According to TeamLease, a shift in employee perspective and work dynamics are a few reasons behind the rise in attrition. With an increasing demand for technical skill sets, there is a talent crunch because the employees have multiple job offers. 91% of HR leaders are concerned about employee turnover in the coming months. With so many opportunities in the market, employees are not emotionally connected to a particular workspace, and that’s why it’s easy for them to quit and join another one with a higher package.
What’s The Solution?
Companies believe the attrition rate will be higher in the coming quarters. That’s why they have started to hire freshers and also retain current employees. For instance, Wipro plans to add over 25,000 freshers in the next financial year. Moreover, all three IT biggies - Infosys, Wipro and TCS - are together set to hire 1.53 lakh employees in FY22. This is not a permanent solution because every year hiring will be a major task for the managers in order to fill the fresher chairs. As long as they can fill the space, revenue keeps coming in.
Why Should It Bother You?
The current scenario of the IT industry shows a massive demand for techies. But if the attrition rate continues to remain a concern for the IT firms, then completing a project will take enormous time. This could lead to fewer clients in the future and low revenues for the company. To prevent this, IT firms are giving handsome compensation, free vacation, work-from-home job option, referral goodies, bonuses etc. However, attrition could slow down if IT firms continue to hire freshers and increase their workforce to achieve bigger deals.
