It’s a bad time to switch jobs. This seems to be the thinking of employees with top software companies. As a result, the June quarter saw a significant drop in attrition rates for all the top five companies compared with the year- ago period.
“Things are bad everywhere [referring to the economic gloom]. Why take a risk by moving to another company?” said an employee of a large software company who did not want to be identified.
Fragile economy
The rate of attrition at all levels of IT and BPO organisations has dipped by 45-50 per cent between January and June, mostly due to a fragile global economy, according to a recent industry-specific survey by the Associated Chambers of Commerce and Industry of India (Assocham).
“An uncertain global economic environment together with cross-currency fluctuation has compelled the employees to adopt a wait-and-watch policy leading to a sharp decline in the attrition levels in the IT-BPO sector that has been grappling with talent crunch due to shortage of competent managers at middle and senior levels for quite some time,” said D. S. Rawat, Assocham Secretary-General, releasing the findings of the study recently.
S. D. Shibulal, CEO, Infosys, commenting on attrition, told analysts that usually a large number of people go for education in the first quarter. The company is doing lateral recruitment on a selective basis in India and abroad. Those are required to fill the attrition [of employees] or bring in special skills, he said, while discussing the company’s first quarter financial results.
Azim Premji, Chairman, Wipro, told analysts: “We continue to be significantly focused on employee engagement. We have seen employees settle down for a new structure, as reflected by a sharp drop in attrition rates and positive employee perception score. We continue to drive our strategy by maintaining the highest level of corporate governance.”
Shankar Srinivasan, Chief People Officer, Cognizant, said the company has consistently had lower attrition rates compared to its peers. “Our industry-leading growth results in faster career progression of our employees. We have evolved and continue to fine-tune a career growth mechanism that accommodates the varying goals, expectations, and desires of different profiles, generations, and genders of employees.”
According to E. Balaji, CEO of HR company Randstad India, usually the June quarter witnesses increased attrition at most IT majors as they complete employee appraisals in February and March and promotions and salary hikes are usually given to employees in April and May.
Higher churn seen
Most companies have announced around 8-10 per cent hikes, so a higher churn is seen in the entry-level and young employee segment. They switch jobs as they can get around 20-25 per cent increase in salary.
Last year’s trend shows that hiring in top Indian IT companies picks up in the July-September quarter compared to the previous quarter, he said.