The overall average attrition rate is projected at 19 per cent compared to the 2021 attrition rate of 12.1 per cent, show data from 100-plus companies across 18 sectors in the latest salary increment and workplace trends survey.
More employees will leave their jobs this year than last year when India Inc faced the wave of great resignation in some sectors. The wave is likely to intensify in 2022 as the job market opens across more sectors.
The overall average attrition rate is projected at 19%, an increase of over 57% compared to the 2021 attrition rate of 12.1%, show data from 100-plus companies across 18 sectors in the latest salary increment and workplace trends survey by human resources consulting firm Omam Consultants.
The data, shared exclusively with ET, show banking and financial services, ecommerce, IT, ITeS, pharma and healthcare will see attrition rates of around 30%.
A lot of this attrition will be due to restlessness of fence-sitters and job hoppers who have not had the opportunity to make a move last year because of pandemic-driven uncertainty, say compensation experts. Plus, sectors like IT, ITeS and startups have been luring talent with huge compensation, leading to high increment/incentive expectations among the workforce, which if not met, may lead to talent flight.
“The reasons for the spike in attrition are manifold — the unprecedented high demand for hot skills in technology, risk, assurance and areas such as ESG (environmental, social and governance) due to the economic recovery post the second wave, heightened war for talent and in many cases people making more discerning choices about the type of culture in an organization and the opportunities they have to do meaningful and fulfilling work,” said Sunit Sinha, partner and head – people, performance and culture at KPMG in India.
As per the survey, the projected salary increment on average is likely to be about 9.2%, which is at pre-Covid levels.
A host of other salary increment surveys have also projected an average salary increment of 9-10% this year. However, this may not be sufficient in retaining critical talent.
“The past trend in attrition, salary increase and job growth has been that all the three go down during a crisis, followed by over-compensation over a couple of years, and eventually normalizing into a steady state,” said Anil Koul, director – HR consulting at Omam Consultants.
With talent taking flight and attrition expected to intensify, companies are gearing up.
EdTech unicorn Eruditus has accelerated giving stock options to tenured employees as well as high-potential new joiners. “To provide liquidity to employees, we did a buyback of around Rs 200 crore in February for employees who are 75-100% vested,” said CEO Ashwin Damera.
Eruditus’ voluntary attrition stands at 10-12%, said Damera, who attributed the lower-than-industry rate to the unique retention approach. “We are offering global rotations for really high-potential employees; they have the opportunity to go work in our offices in Mexico City, Shanghai and the US. Right now, it’s virtual but they have the opportunity to move there once the situation is under control. For people in India, that’s a big draw.”
Shiprocket has this year handed out a 14.5% increment for top critical talent. Plus, a significant number of promotions, role enlargements and expansions ensured bigger responsibilities and business exposure to this set of talent pool.
“We have used equity compensation plans strategically to incentivize and retain top talent/senior leaders. A stratified approach to joining and retention bonuses and performance-linked variable pay exists across the board. We continually review and expand the ESOP pool to motivate and energize talent that is delivering value,” said founder Saahil Goel.
Simplilearn announced its first ESOP programme for employees last year. “At Simplilearn, along with salary and perks, we also offer employees career-planning sessions and proper growth charts to enable new growth avenues,” said Krishna Kumar, its founder and CEO.
In February, Cognizant Technology Solutions CEO Brian Humphries said the company was putting in a lot of effort around ‘hearts and minds’ to mitigate attrition levels which were at 31% for the September-December 2021 quarter and 28% for the 12-month period, higher than the attrition reported by its Indian peers like Infosys (25.5%) and Tech Mahindra (24%).
“There’s a lot of effort around compensation measures which of course is pretty critical … and just continue to support employees by celebrating success and giving them career path potential, which of course, growth does,” said Humphries in an ET report.
(Source: economictimes.indiatimes.com)