As Covid-19 clouds clear, the Indian IT industry in the recent past has been dealing with an all time high attrition rate that is averaging around 25 per cent as per a few market experts. Companies are dealing with this situation differently and are bringing in measures to retain staff and the high-potentials in particular.
They are investing in salary corrections, attractive salaries and benefits, stock options, various employee engagement activities and solid talent management practices. Market experts, however, feel this is a temporary phenomenon and may be contained over the next few quarters.
“The sharp rise in attrition rates has been fueled by the rising demand for automation and digitalisation across all industry sectors and the world at large. As a result, all IT services players have strong order books looking for talent to work on those projects. Secondly, due to the superfast adoption of cloud technologies, IT products and tools for cyber security, automation, storage, networking, analytics, ecommerce, communication and the like have been on the rise. These product companies have been in a hurry to go to market and acquire a significant market share. Thirdly, Indian startup ecosystem has been on a growth path developing into one of the largest in the world. The investors have been bringing in the investments at a pace we have not ever seen in the past. As a result, the 60000 startups in India have been one a race to acquire talent. Though some of them have laid off employees, the spirit has not weakened,” pointed out Aditya Narayan Mishra, director and CEO of CIEL HR Services.
Market experts point out that the key to reducing the attrition rate in the Indian IT sector is to implement steps that are motivated to benefit the employees at a deep-rooted level that aims at contributing to their growth immediately and in the long run.
“The Indian IT sector has adopted several new measures. There is an increased focus on re-skilling or skill development programs through different modes and a more holistic approach towards on job training. Companies are actively trying to grow with their employees and not just in terms of revenue. An employee's satisfaction with a company ultimately comes down to a good work culture which companies are determined to provide,” said Sunil Bist, CEO, NetConnect Global.
Studies have revealed that the average tenure of an employee in an IT company is between three to four years. In the wake of the pandemic, the IT sector witnessed increased demand and a boom in job markets. “Employers are now willing to pay more than market standards to meet their active requirements. This has led to rising competition in terms of salary hike percentages, perks and benefits, as companies bid to attract the best talent. Overall, we can see an increase of up to 3-4 times in average CTC, as compared to pre-pandemic times. This has encouraged high attrition. Organisational processes and HR practices are now evolving to solve emerging challenges in creative ways. In the past, efforts to combat attrition would begin post resignation. However, today, the retention strategy must begin even before on boarding. This process must begin as soon as a potential candidate is identified, and continue throughout the employee life cycle,” said Rekha KK, Manager HR at Utthunga.
Experts do agree that besides a competitive salary, today's employees prioritise flexibility, opportunities for coaching and mentorship, learning, upskilling and work life balance as necessary ingredients of a healthy work life. Therefore, companies are trying to create a flexible environment with space for learning, growth, exploration, and innovation.
For instance, Tredence, an AI and Data Science Solutions company, has ensured an agile, free flowing, innovation driven, and employee friendly environment. The company views growth as a combination of opportunities for learning and development, problem solving, and practicing the first principle of thinking. This allows their employees to challenge fundamentals, expand their knowledge, sharpen their skills and carve a niche for themselves.
“Upskilling opportunities are a key part of employee retention, and companies must have well-defined learning pathways in place. Tredence covers reimbursement up to Rs 50,000 for upskilling courses through our ULVP (U Learn V Pay) Policy. Other programs, such as the Everest programme (a mini MBA in which we coach and mentor employees to face future challenges), ASHTA (in which we hire candidates with adjacent skills and train them for the specific job role), and the Data science learning programme (in which we train people in data science), have helped us increase employee satisfaction and reduce attrition,” said Saurabh Upadhyay, Chief People Officer, Tredence.
Market analysts are of the opinion that as the US has come out the Covid haze, the strong demand emanating from the north American markets has caught the Indian supply side market unawares. “This demand from the north American market has created a scarcity of resources leading to increasing attrition across the board. However, the slowing down of the US economy might taper the attrition statistics in the coming quarters,” said Alok Shende of Mumbai-based Ascentius Consulting.