The Hindu Business Line : Attrition now higher than in dotcom boom

The Nasscom President is of the view that one cannot regulate the flow of employees and it is for the industry to find ways to address with better compensation packages and incentives.

Hyderabad , Jan. 28

THE buoyancy in the technology sector and hectic pace of recruitment is good news for job seekers. This development is certainly not so pleasant for technology companies — which are currently faced with higher rates of attrition than in the dizzy dotcom boom time, as some recent trends indicate.

The best part, however, is that the sector players are not serious about this as they perceive this as a way of life. With the third quarter results of technology companies out, it is clear that the higher rates of attrition is a common thread even in big companies such as Wipro and Satyam.

Large companies are not too worried but surely the small and medium ones are. In a growing market, talent is a priced commodity. "Techies with a little over three to four years experience in the industry seeking to move, are sitting with three to four offer letters and are in a position to express concerns before landing the right job. In fact, some of them ask questions about their future prospects, the company's long-term plans and so on," says Mr Rama Rao Sriramineni, Vice-President of HelloSoft, a wireless applications solutions provider.

Responding to Business Line query on attrition, Mr R. Chandrasekaran, Managing Director, Cognizant Technology, said that Cognizant's annualised employee turnover was approximately 12 per cent during calendar 2003. Half of it was voluntary and the other half involuntary. The employee turnover was heavily weighted (almost 60 per cent) towards the "most junior member of our staff in India"— that is, those who have spent less than 18 months in Cognizant.

The attrition rate annualised both for Wipro and Satyam is now estimated at about 17 per cent. This is in spite of salary revisions and other incentives handed over to their associates.

"There is no problem in terms of getting good people at the entry level because the number of engineering colleges has gone up significantly over the last few years," Mr Thiagarajan, Vice-President, Satyam, said . "There are some technology skills that are in great demand. It is such skills that create problems for small and medium companies. For instance, a small company with a handful of experts could actually collapse. A lot is invested in such people in both training and exposure. When a company loses such highly specialised skilled people, it becomes a matter of concern, which cannot be handled overnight. One way to address this is to take the referral route to recruit people," Mr Sriramaneni said.

While the attrition levels in the IT services are within manageable levels, they are more pronounced in the IT-enabled services space. So much so that ITES companies have evolved a code of conduct in Hyderabad that seeks to curb poaching.

Giving a different perspective during his recent visit to Hyderabad, the Nasscom President, Mr Kiran Karnik, was of the view that one could not regulate the flow of employees and it was for the industry to find ways to address with better compensation packages and incentives.