IT firms' average attrition rate hits 17%

High attrition rates among the top six IT service companies that reported their Q2FY22 earnings have sent the firms on a hiring drive. These companies reported a cumulative average of over 17% voluntary exits compared to 13% in the previous quarter of this fiscal and 11% in Q2 of the previous fiscal.

Both Infosys and Wipro’s attrition rate is as high as 20% quarter-on-quarter, according to exchange filings. While TCS managed to restrict the rate to 11.9%, its volume is huge as it has a significantly larger pool of workforce compared to its rivals.

On the other hand, the Q2 FY21 attrition number for TCS and Infosys was in single digits at 8.9% and 7.8%, respectively; whereas, Wipro had reported a 11% talent loss.

To make up for lost talent, all the major IT exporters have raised their respective hiring targets for the year. While TCS has doubled its target to 1.6 lakh freshers, Infosys too has decided to raise the count to 45,000 for the current year. Wipro, on the other hand, will hire over 12,000 freshers in the current financial year, up 33% from last year.

Outgoing Infosys COO U B Pravin Rao had said at the quarterly results press conference, “Attrition is normally high between 3 and 6 years, (because) that is where people are still not emotionally connected with the organisation.”

However, former Infosys CFO T V Mohandas Pai told DH, “IT companies have to shell out more if they want the attrition rate to come down, the scenario will get worse in the next two years as this is driven by unprecedented spending by global corporations to digitise their work.”

Pai further explained that fresher salaries have remained stagnant since 2009 even though living expenses have gone up. The CEOs and top layer executives’ pay has risen 8-10 times in the last 12-13 years whereas fresher handout in the sector over these many years has gone up by merely 10-15%, he added.