Infosys has introduced a quarterly promotion cycle for employees to arrest attrition, said CEO SD Shibulal.
Speaking to analysts on a conference call to discuss the company’s quarterly result, he said Infosys’ competitors could take a similar path to retain talent.
According to Shibulal, while attrition continued to be a concern, the company has improved predictability for employees by giving them timely compensation increases this year.
The quarterly promotion cycle and increases in variable payout have been implemented for the last few quarters. The company has also introduced a fast-track career path for high performers. “We hope to see a reduction in attrition as a result of these initiatives,” he said.
In the short-term, there is no impact due to attrition. However, in the long-term, there is a need to arrest attrition to reduce dependence on external hiring. It is important to retain some of the best people, he added.
Tan Moorthy, Head-HR, Infosys, said while interventions to curb attrition have started, it will begin to see results over the next two or three quarters.
Skills in demandA recent report by recruitment company TeamLease said the IT industry pays a premium for new skills and talent as markets such as the US are slowly getting back on track. The IT industry seems set on a talent acquisition/retention drive.
The announcement will certainly help Infosys curb attrition in the long run, said Bozhidar Hristov, Analyst, Professional Services Practice, Technology Business Research, US.
In the war for talent, companies implement alternative channels such as quarterly promotions to attain, train and retain the workforce with in-demand skills. There should be different retaining tools/programs for employees with different skills and responsibilities. For example, a quarterly promotion might be a ‘great’ motivator for a sales person, but an expanding R&D budget might be a better fit for a data scientist, he said.
As the economic climate in mature markets improves and India-centric vendors, including Infosys, look to expand onshore, vendors may be experiencing increasing attrition rates as more employees will be job hopping, compelling vendors to evaluate the type of personnel they are losing and developing best fit programs to avoid that, said Hristov. According to Moorthy K Uppaluri, CEO, Randstad India, an HR company, the IT industry has been facing the problem of attrition for over a decade due to a continued rise in demand for talent. While a major factor for talent attraction has been competitive salaries, most IT companies have also invested in various employee engagement initiatives to retain their top talent.
Recognising employee performance through promotions, coupled with salary hikes, is an effective retention strategy in the current job environment. However, beyond competitive salaries, employee retention strategies need to promote a merit-based culture, provide interesting job content, better career progression opportunities and convey the vision of the company and its leadership team, he said.