High Attrition Rate in the Indian IT Sector Post-Covid, and it’s Impact
April 13th, 2022
by Khushi Choudhary, Market Research Intern at Nordic Academy
TCS had a 15.30% attrition rate in the quarter ending December 2021, while Infosys and Wipro had 25.50% and 22.70%, respectively. But why are engineers resigning now, when the demand is more than ever? Well, the answer to that question is scarcity. The demand for engineers is not meeting the supply which is why big tech companies are ready to pay more. And engineers are taking advantage of this situation and benefitting from it. Since tech companies are trying their best to salvage their best engineers, they are agreeing to almost a 30% hike.
Hence the businesses have increased their focus on acquiring new staff while also attempting to keep existing personnel. In FY22, Infosys, India’s second-largest IT company, expects to hire 55,000 freshers. Meanwhile, in CY2021, Cognizant added 33,000 new college graduates to its staff in India. Companies have announced various solutions for retaining existing staff. For example upskilling, promotions, salary increases, employee stock options, and long-term incentives to keep them from quitting.
While companies are trying their best to keep employees, engineers are enjoying this turning of the table. They’ve expressed how after years of under evaluation, they are finally getting paid for what they are worth. And this has simply created a hiring war among tech companies, where the highest bidder gets an employee. And this according to many industry experts is not sustainable.
Being sensitive to the demands of their employees, most companies have agreed to continue working in the hybrid model, consisting of experienced professionals and fresh graduates in the short run.
But to stay competitive in the market and for organic growth many companies have already started looking for alternative solutions.
With the outbreak of the pandemic, data generation exploded across all industries, with everything moving online. Companies are now aggressively investing in data science and complicated algorithms to mine the rapidly growing data and create business outcomes. The network effect has taken an impact, driving the industry ahead. Several of these downstream industries have popped up as well. Indian workers are also using the internet to improve their skills.
India will soon become a USD 313 billion online education market.
The pandemic played a major role in pushing many end users in the Indian market over the live and embrace online learning willy nilly.
Reports and surveys say that this attrition rate will further increase in the coming years. So for the companies, maybe it is time for them to rethink their resource management and planning strategy.