The high level of attrition in the technology sector is directly linked to the higher rate of salaries and aspirations of employees, and is an industry-wide issue. However, this is expected to normalise in the next two quarters, according to L&T Technology Services (LTTS) CEO and managing director Amit Chadha.

For instance, in India, a programmer with three years of experience is seeking salaries of Rs 20 lakh per annum. Likewise, in the US, developers with five years of experience in artificial intelligence (AI) and machine learning (ML) already earn $50,000.

“From an industry point, these high salary structures are not tenable. I also tell people their wealth creation is not an instance, it’s a journey. A reason for rise in attrition is that the rank and file want immediate gratification in ‘cash and carry’,” Chadha said in an interaction with FE.

“No industry can survive a cash-and-carry generation based on immediate gratification. A certain amount of calming effect was required for the sector, which is happening. In my view, it should be back to normal in the next two quarters or so,” he added.

LTTS has launched initiatives such as the Leaders League Programme, an individual career development plan overseen by top leadership, to stem attrition.

For the first quarter ended June 30, LTTS’ attrition was at 23.2% on a last-12-month (LTM) trailing basis. LTTS’ percentage of employees leaving the company was 20.4% in March, an increase from 17.5% in the December quarter. For group company Mindtree, attrition rose to 24.5% on LTM in June quarter (23.8% in March quarter) and that of L&T Infotech, another group company, was at 23.8% (24% in Q4)

On its part, LTTS –- a subsidiary of construction major Larsen & (L&T) — intends to hire 3,000 freshers this year, quite similar to last year. As of June 30, 2022, LTTS employed a total of 21,433 personnel.

LTTS, which won an over $50-million deal, four $15-million deals and two deals with a total contract value of $10 million, expects the “deal momentum” to continue.

Chadha said LTTS’ growth will continue to outpace the larger industry and confirmed that LTTS is also on track to achieve $1 billion in revenue run rate by the second or third quarter of the current financial year. Further, it will touch an annual revenue run rate of $1.5 billion by FY25.

“We have already crossed $960 million in revenue run rate. I do believe the growth will come from the six areas that we’ve identified for ourselves, like electric autonomous & connected vehicle (EACV), 5G, med-tech, digital products & AI, digital manufacturing and sustainability.”

In LTTS’ AGM last week, chairman AM Naik said the company is poised to capitalise on opportunities, including an expected 9% annual growth rate for the global ER&D (engineering, research and development) industry, which would be worth $2.1 trillion by 2024.

“This quarter we filed 25 patents for ourselves and 20 for our customers. My commitment is to continue this with similar numbers,” Chadha added.