IT Companies battle rising attrition amid demand uptick

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It is now common knowledge that most Organisations have reported higher attrition over the last few months.
Business Standard quoted the following figures:
  • India’s second largest IT services company, Infosys’s attrition rate in July-September 2013 was highest in more than six quarters. It saw an attrition rate of 17.3% in July-September 2013, as against 15.0% a year ago, and 16.9% in April-June 2013.
  • HCL Technologies saw a sharp rise in attrition rate during the quarter. The company’s attrition rate for the quarter ended September 30, 2013, was at 16.1%, as against 14.% a quarter ago.
  • The country’s third largest IT exporter, Wipro also saw a jump in attrition rate at 15.4% in July-September 2013, as against 13.0% in April-June 2013.
Read the whole article here:
Experts believe that the attrition rate is expected to rise in the coming months driven by a number of factors. This should not come as a surprise especially since Attrition generally tends to increase when demand picks up.
Most companies view attrition as a reflection of Employee engagement; Higher attrition meaning unhappy employees and the converse.
However, this is not entirely true; attrition could be low but doesn’t necessarily mean that the employees are engaged and happy. It’s just that they are waiting for an opportune moment to leave the company and when demand picks up employees leave in hordes.
Organisations will now go back and start believing that employees are leaving because they are getting a better salary!! In one of my earlier posts I spoke about how “Salary most often is an outcome of the exit and not a reason”. Employee engagement is a continuous activity and should not be impacted by market conditions. Organisations have a moral responsibility to take care of all their employees once they are hired irrespective of how Attrition is behaving.
Employee attrition always hurts any organization. It must be viewed independent of an organization’s ability to withstand or succumb to attrition pressures as a reflected in key health indicators of business and momentum of the industry.
Attrition will pick up when the demand increases but that doesn’t mean that companies who engage well with their employees go through the same challenges. At the end of it, it is about how the employee is taken care of.
It is equally important to identify the root causes of attrition and not believe that they are because of Salary & better prospects. Action based on data will always produce better results that actions based on Gut feel or Hearsay.