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Attrition Rate in It Industry Essay

According to human resource experts, the average attrition rate is projected to grow at 31 per cent in Indian firms in the April-June quarter, a rise of 9-10 per cent from the preceding quarter (January-March).

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In the April-June quarter of 2011-12, the average attrition rate was 27 per cent.

Generally, employees would have received their annual appraisals during the April-June period and those not happy with their performance review or salary hikes seek better opportunities. Consequently, attrition rates are seen going up in these three months, experts opined.

“In the current quarter, we are expecting an average attrition rate of 30 per cent. In Q4 employees were not keen to switch jobs due to appraisal season. Now in April they reached on higher salary compared to previous one and have a chance to negotiate for better salary with new employer along with new appraised designation,” MyHiringClub.com CEO Rajesh Kumar said.

“Salary and designation are the major factors for higher attrition outlook in Q1, FY13. One more concern is having in employees mind if they’ll change their job in this quarter they are entitled to enter into appraisal cycle with their new employer also. So they are not going to loose anything with job change,” he added.

Another HR consultant Ripples Consultancy Services CEO and MD Rishi Raman said. “We would see a high attrition rate of 30-31 per cent in the first quarter of the current fiscal.

The reason behind such attrition is many employees are not satisfied with their appraisals.

“A good performer did not expect 10-15 per cent of hike, their expectation is not less then 20 per cent,” he added.

Experts said that attrition would be in double digits in all the sectors. It would be highest in the IT/ITeS sector at 31 per cent, followed by telecom (26 per cent), banking and financial services (23 per cent), aviation and hospitality (22 per cent ), real estate (15 per cent), FMCG (21 per cent), automobile and manufacturing (19 per cent).

HR consultants are of the view that employers needs to take various steps in order to retain talent like providing career opportunities and suitable work environment as high attrition impact the company’s resource negatively.

“One of the most effective way to ensure good working conditions for your employees is to provide them with advancement opportunities,” Raman said.

HeadHunter Solution Director Priyanka Pawar said,” the high attrition costs increases the costs to the organisation considerably.

“The more the people leave an organisation, the more it is a drain on the company’s resources like recruitment expenses, training and orientation resources and the time. The high attrition rate also affects the productivity of the organisation,” she added. High attrition rate hits IT companies’ bottomlines

TNN | Aug 26, 2010, 12.44AM IST

CHENNAI: Bad things happen in good times too. Indian IT companies are finding it hard to recruit and retain employees as the recovery takes a definite shape. And their bottomlines are getting hit due to rising wages and high attrition. Earnings before interest, tax, depreciation and amortisation (EBITDA) margins or operating margins have been dipping for most of the IT biggies in the recent quarters largely because of the spurt in wage inflation.

Operating margins of Infosys Technologies declined by 2.36% in June quarter compared with the March quarter. Tata Consultancy Services (TCS) and HCL Technologies saw their operating margins falling by 0.7% and 1.1%,┬árespectively. This slide is not an aberration. The companies’ EBITDA has been on a decline for the past four quarters.

On the attrition front, a report by Motilal Oswal, a financial services firm, said that Wipro leads the pack with 23% attrition, followed by Infosys (15.8%), HCL Tech (15.7%), and TCS (13.1%) in the June quarter. The figures have been increasing for all these companies for the past few quarters.


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