The attrition rates at top Indian IT services companies are moderating on a sequential basis although it is not expected to significantly come down in the near future as demand for tech talent continues to be robust.
The attrition rate at Infosys on a last-twelve-month basis came down to 27.1% for the quarter ended September, from 28.4% in the June quarter. “This implies considerable drop in quarterly attrition. Management mentioned that attrition-led cost pressures will gradually ease off as attrition tapers down,” analysts at ICICI Securities said.
Wipro’s attrition rate moderated to 23% in the September quarter from 23.3% in the preceding three months and the management expects it to come down further in the coming months. The attrition rate at HCLTech also remained stable at 23.8%.
“Compared to last quarter, it (attrition) has already stabilised. We think that’s hit the peak. While in the previous quarters, we had seen an increasing trend, that has stopped. So, the early indication from that trend is very clear as to where we are. Also, if you look at the current quarter number on an annualised basis, which is the indicator of what is the outlook going forward, there’s a significant drop that we see. So, we think in terms of managing attrition, we are in a good space now,” Ramachandran Sundarajan, chief people officer, HCLTech said in a post-earnings analyst call.
Tata Consultancy Services (TCS), India’s largest IT firm, was an exception whose attrition rate for the second quarter increased to 21.5% from 19.7% in the June quarter. “We believe our quarterly annualised attrition has peaked in Q2 and should see it taper down from this point, while compensation expectations of experienced professionals moderate,” said Milind Lakkad, chief human resources officer, TCS.
To be sure, the demand for tech talent continues to be strong on the back of digitalisation efforts by companies of all sizes and across sectors.
Also Read: Higher interest rates, prices fail to deter home buyers
“Although attrition has moderated, we don’t expect it to come down below 20-22% in the near future…Clients are fast-forwarding their technology investments and the demand for tech talent is going up. The surge in demand will still be higher than the supply,” said Rituparna Chakraborty, co-founder and executive vice president, TeamLease Services.
There are also numerous opportunities for digital talent in non-IT companies such as global capability centres (GCCs), research and development (R&D) units, and companies in other sectors that are moving online.
For instance, British retail giant Tesco plans to hire over 1,000 people, mostly in digital skills, in the next one year for its technology centres in Bengaluru. The hiring will be across various profiles like software engineers, system engineers, data scientists, product managers, architects, and digital transformation and robotic process automation (RPA) experts.
The roles of senior technology leaders like chief information officers (CIOs) and chief technology officers (CTOs) have also expanded in the modern enterprises. “The roles of CIOs and CTOs roles have evolved from just being technology facilitators to being advisors in crucial decision-making in the organization. They are expected to execute key responsibilities in human resource management, cyber security, and digital transformation-driven business strategies,” said a consultant at an HR firm.