Major IT services companies are seeing high attrition levels given the supply-side constraints for talent. Attrition has increased at IT services majors on account of the high demand for digital talent. Take a look.
Tata Consultancy Services Ltd., Infosys Ltd. and Wipro Ltd. reported an increase in attrition in the quarter ended December, the highest in the last three years. The three software exporters also made a net addition of nearly 51,000 people to their combined headcount.
Infosys saw attrition shoot up to 25.5%, the highest in recent quarters, as the company continues to be a poaching ground for rivals who are seeing growth from clients globally. Wipro reported attrition of 22.7% for the fiscal third quarter ended Dec. 31. For TCS, the attrition rate was relatively lower at 15.3%.
TCS, which hired 43,000 freshers in the first half of fiscal 2022, said in the third quarter itself it hired the 34,000 freshers planned for the entire second half and will likely hire more in the fourth quarter. At the end of December, its headcount was 556,986. TCS added 28,000 employees on a net basis in the past quarter.
Wipro reported a net addition of 10,306 employees during the quarter, taking its total headcount to 231,671. This is a net increase of 41,363 over a year earlier. Infosys added 15,125 people in the quarter, taking its total strength to 292,067 employees.
Collectively, the top three have made a net addition of over 134,000 employees in the ongoing fiscal, nearly four times more compared with last year. For the third quarter, the net increase was 19% higher.
The record high attrition rates clubbed with strong collective net headcount additions is indicative of a high demand for digital talent market at play. The supply-side constraints of experienced IT talent have created the attrition to increase once again. With no tested method to arrest near-term attrition in a buoyant market, this double-digit 15-25% attrition could well continue for at least 2-3 quarters to come.
Over the past year, IT services companies have been dealing with an increase in attrition as demand for digital talent outstripped supply.
Wipro CEO Thierry Delaporte said the company continued to focus on hiring, adding over 34,000 people in the last nine months. “We have added in three quarters what took 11 quarters in the past,” he said. The company is expected to hire a total of 17,000 freshers in FY2022 and is targeting 25,000-30,000 next year. “We remain focused on building world class talent and on ensuring that growth isn’t constrained,” he said. Attrition is expected to stabilize, although it would take a few more quarters for it to slow down, he added.
“We continue to prioritize investments in talent acquisition and development and have further increased our global graduate hiring program to over 55,000 for FY22 to support our growth ambitions,” Infosys’ Chief Financial Officer Nilanjan Roy said.
Wipro rolled out a second round of salary hikes for 80% of its employees during the previous quarter and is taking steps to ensure that supply would not be a constraint to the demand requirement. TCS said a record 110,000 promotions have been handed out so far this year, with another 40,000 planned in the fourth quarter.
All Wipro offices globally would be closed for the next four weeks as a proactive measure given the spread of the Omicron variant of Covid-19. Further, plans to return to office in a hybrid model would be calibrated in the context of the evolving situation, keeping employee and client preferences in mind. As of now, 90% of all employees globally have received the first dose of Covid vaccine and 65% are fully vaccinated.
(Source: economictimes.indiatimes.com)