Finally, A Sigh of Relief for Attrition-battered Indian IT

At last, there’s a glimmer of hope for the Indian IT that has battled with attrition for many many months. Most IT companies like, Infosys, Wipro, Mindtree, and HCL Technologies, are witnessing a steady decline in the attrition rate, indicating a downward trend for the coming months. 

According to recent data, Infosys has recorded the highest attrition rate, while TCS has the lowest attrition rate when compared to other IT companies. However, for FY23 Q2, the company has witnessed its highest attrition rate ever, which stands at 21.5 per cent, up from 11.9 per cent last year. 

Attrition flattens, downward trend ahead

The companies have been doing everything in their capacity to curb attrition, including freshers hiring, salary hikes, employee engagement programmes, etc. However, despite these initiatives, the Indian IT attrition rate still stands at an average of 24%, as per AIM estimates. 

Wipro chief Thierry Delaporte said that the company would see a steady reduction in attrition in the coming quarters. Sharing the reasons for the decline in attrition, he said that they have successfully connected and engaged with its employees regularly. “We have had our ‘employees all gathering’ at the campus every day, and that has certainly been driving a certain stabilisation of the attrition,” said Delaporte. 

Meanwhile, Wipro’s Saurabh Govil said that onboarding freshers, engaging with them and showing them career paths for the next five years from both career and financial perspectives have also helped stabilise attrition. He said that the company had seen a moderation in attrition level. “What we see in Q3 will be further moderation and contraction of attrition,” he added. 

Wipro has onboarded over 14,000 freshers in the first six months of FY22. Delaporte said they have decided to invest in freshers for the next five years. In addition, the company rolled out salary hikes and promoted 10k employees during the quarter. From a headcount standpoint, in FY 23 Q2, the company added 605 employees, which is low compared to the previous quarter, where they added close to 15,445 employees. 

Read: Wipro Profit Plummets, Attrition Remains Steady 

In the past three quarters, Infosys also saw a decline in its attrition rate. In the latest quarter, it saw a decline of 2.5 per cent, indicating a decline in Q3. “We expect attrition to reduce further in the coming quarters,” said Nilanjan Roy, chief financial officer at Infosys.

Mindtree attrition rate for the quarter stood at 24.1 per cent. The company’s chief Debashis Chatterjee said that attrition shows early signs of stabilising. “We believe there is room for it to trend down further,” he added. 

Chief financial officer of Mindtree, Vinit Teredesai, also said that the attrition shows early signs of stabilisation. “It’s not worsening, and this is a good sign,” he added, saying that it won’t probably fall below 20 in a very quick run. 

HCL Technologies’ attrition rate for the quarter stood at 23.8 per cent. Commenting on the same, CPO R Sundararajan said that compared to the last quarter, the attrition rate has already stabilised. “We think that’s hit the peak, while in the previous four quarters, you would have seen an increasing trend that has stopped,” he added, saying that they are expecting to see a significant drop in the coming quarters. Further, he said that the company is in a good space now in terms of managing attrition. 

A downtick in freshers hiring 

As per the half-yearly reports, Infosys, Wipro, TCS and HCL Technologies have added over one lakh plus freshers, which is higher than last year’s number for the same period. These companies are expected to hire 1.57 lakh freshers by FY23. 

Last year, the IT majors added over 2.3 lakh freshers. However, this year, the numbers are set to drop over 30%. Experts believe that the drop is due to market uncertainties and stabilising attrition rate. Many companies are focusing on reducing dependency on lateral hiring and are keen to improve utilisation levels. Ergo, a strong stance on moonlighting. 

Read: Indian IT Moonlighting: The Rant Continues 

At the latest earnings call, TCS said that it had added about 35,000 freshers in the first half of FY23. The company has revised its freshers' guidance from 40K to 47K for FY23. Meanwhile, Infosys – leading the freshers’ hiring race – has already onboarded 40k freshers from various campuses and looks to hire 10k more in the coming months, with a target of 50K for the year. 

HCL Technologies expects to hire over 30k freshers in FY23. In the first half of the fiscal year, it added about 16k freshers. Wipro, on the other hand, has plans to hire about 30k freshers in FY23. Of these, the company has already onboarded close to 14k freshers. “We have hired in H1 as many freshers as – actually, 75 per cent of the total number of freshers we hired last year over 12 months,” said Wipro chief Thierry Delaporte at the earnings call.