Attrition in toptier IT companies has seen a sharp decline over the past year, indicating a slowdown in hiring of mid to senior level IT professionals in the current tough business climate.
Wipro’s attrition rate has dropped sharply to 14.6% in the September quarter from the 21-22 % rates in the first half of the last financial year. TCSBSE 0.43 %, the country’s largest IT company, saw the rate dip to 11.4% in the most recent quarter, from 14.8% in the June quarter of last year. Mindtree’s has dropped in the same period from 25.6% to 16.5%.
Saurabh Govil, senior VP-HR in Wipro Technologies , said voluntary attrition (attrition that excludes firing ) in the company touched a 36-month low at 12% in the September quarter. “The tough environment is helping us to keep attrition levels low. Jobs aren’t available and companies are going slow on all fronts,” he said.
Ravi Shankar, chief people officer in Mindtree, said attrition had softened as companies were hiring more freshers than lateral hires. “We are looking at ways to improve utilization on the bench,” he said.
The IT sector has slowed down sharply because of economic weakness in the US and Europe. The industry’s apexBSE 0.00 % body Nasscom recently lowered the dollar revenue guidance for the $100-billion industry on account of underperformance by several of the big companies, notably InfosysBSE 0.93 % and Wipro. Nasscom in February had predicted an 11-14 % growth, but a fortnight ago it said it was likely to be at the lower end of this range. The unexpectedly sharp slowdown this year has also meant that companies have large reserves of unutilized employees, or what in industry parlance is called the bench. In many cases, 30% or more of employees are on the bench today . There are campus recruits from last year who are yet to work on a project.
HCL’s head of talent acquisition Naveen Narayanan said the company was deploying people on the bench for customer build programmes, involving high degree of engagement with the client. “This gives them confidence and we support them through a defined reskilling programme,” he said.
Some companies say attrition has dropped for them because of special efforts to retain people. MindtreeBSE 0.32 % said it had put in place a retention council headed by senior management within each business unit to address employee woes. “They address non-compensation related problems, issues like role change, upgradation of skills. We’ve seen a large percentage of attrition getting reversed through this process ,” Shankar said.
HCL’s Narayanan said programmes to identify top performers among entry level and supervisory roles and to put them through leadership training had helped rein in attrition.
Rajesh Kumar, CEO of recruitment service provider MyHiringClub.com, said attrition levels were expected to be in the 13-15 % range in the current quarter, and may be fall further in the final quarter.