The high attrition rate in the information technology (IT) sector continues to be an issue and the companies, like India’s largest IT services company Tata Consultancy Services (TCS), Wipro and HCL Tech, are taking steps such as raising salaries giving the option of remote working to retain the talent. Wipro has announced to offer promotions to its employees every quarter starting July this year.
Attrition Rates Of IT Firms
TCS’ attrition rate stood at 19.7 per cent on a last twelve-month basis during the June 2022 quarter. It was its highest attrition rate in the last six quarters. The rate came during the quarter ended March 2022 at 17.4 per cent. The attrition rate of Wipro was as high as 23.3 per cent in the June 2022 quarter, which was lower on a quarter-on-quarter basis. Wipro had posted a 23.8 per cent attrition rate in Q4FY22.
HCL Tech also posted a high attrition rate of 23.8 per cent, compared to the quarter ended March 2022, where the same was 21.9 per cent. On a year on year basis, HCL Tech attrition level has risen by 12 per cent from 11.8 per cent in Q1FY22 to 23.8 per cent in Q1FY23.
Salary Hikes and Promotions
The companies are offering salary hikes, frequent promotions and flexible workplace options to retain talent. To keep the talent, Wipro CEO and MD Thierry Delaporte has said, “We announced moving to a quarterly promotion cycle which is very new, from when we were on the yearly cycle. The quarterly promotions have been effective this month (July 2022) and also salary increases for those eligible in September 2022."
Wipro has announced to offer promotions to its employees every quarter starting July this year and also salary hikes from next month.
This apart, IT companies are also offering retention bonus, out-of-cycle wage revisions and salary hikes, which has also been impacting their margins.
Work From Home Status
IT companies are largely working remotely. However, some of the firms are calling their employees once or twice a week. But, in the long term, most companies have informed that they will follow the hybrid model of working. TCS has also set up hot desks and occasional operating zones (OOZs). Infosys has also said it plans to follow the hybrid model of working in the long term.
During June 2022 quarter, TCS’ consolidated net profit stood at Rs 9,478 crore, a jump of 5.2 per cent on a year-on-year basis. The company’s revenue during April-June 2022 rose 16.2 per cent to Rs 52,758 crore, compared with Rs 45,411 crore in the year-ago period.
Wipro reported its June 2022 quarter profit at Rs 2,563 crore, a dip of 20.9 per cent year-on-year. HCL Technologies reported a jump of 2.4 per cent year-on-year in its net profit to Rs 3,283 crore in the June 2022 quarter, against Rs 3,218 crore in the corresponding quarter last year.