Increasing attrition rates, a big worry

The rates at which employees are leaving India's top IT companies, could be attributed to the rapid expansions in the industry. Record-high attrition rates are adding to the woes of the Indian IT industry as companies face cost overloads and margin pressures. The attrition rates at Indian IT companies are on the higher side compared to other industries.

There is increasing fear of global recession and spate of layoffs in the start-up space are expected to have a sobering effect on high attrition levels in the Indian IT industry over the next 2-3 quarters, and the majority of large tech companies talked of easing supply side pressures in the September quarter.

Infosys has reported an attrition rate of 27.1% for the July to September quarter, the highest among top IT companies in India. While attrition at HCL Tech remained at 23.8%, TCS reported a higher rate of 21.5% and Wipro posted a marginal fall to 23% compared to previous quarter. Attrition rate measures how many employees are voluntarily leaving a company.

A survey says, Indian techies change jobs often. Reason being, the growth opportunities are very less if they stay in the same company for more than 1-2 years now. The growth trajectory at any of the top Indian IT companies is not the same as it used to be before, where they witness a cutthroat competition in the industry.

The technology job market which had overheated in the last few quarters has begun to cool off, and compensation expectations of new hires are also becoming more realistic. A subject matter expert said, there is an excess of people working in the Indian IT industry.

There is a surplus of people in the system. All of them want to join the big companies and build a career and get good training. Today, the high attrition rate we are seeing could be because of better pay by other multinational corporations in the same sector.

S Mohini Ratna, Editor, VARINDIA