IT majors witness lowest attrition numbers in Q3

With employees preferring to play it safe, India’s top IT companies reported lowest attrition numbers in the December quarter. Tata Consultancy Services registered its lowest-ever attrition, while HCL Technologies and Wipro reported a three-year low.

TCS’ attrition number dipped to 7.6 per cent in the December quarter as against 8.9 per cent in the previous quarter; HCL’s declined to 10.2 per cent (excluding involuntary attrition and digital process operations), as against 12.2 per cent reported in the previous quarter. Wipro’s attrition number was flat at 11 per cent (voluntary trailing 12 months; IT services excluding digital, operations and platform).

However, Infosys’ Q3 attrition at 10 per cent was slightly higher than the previous quarter. Pravin Rao, COO, Infosys, told analysts: “...voluntary attrition for IT services eased up to 10 per cent although lower than our comfort band of 14-15 per cent.”

Kamal Karanth, Co-Founder, Xpheno, a specialist staffing solutions company, said the shift in enterprise hiring combined with employees not voluntarily venturing out seeking greener pastures during Covid-19, has contributed to some of the lowest attrition percentages reported. One has to wait another quarter to see if the unusually low attrition rates are sustainable for enterprises that are back in business in full swing, he said.

Net headcount additions

The dip in attrition numbers should also be seen in the context of net headcount additions with all of them registering their highest quarterly net additions in Q3. “High net additions typically drive low attrition as a mathematical derivative,” he said. Fresh hiring, experts say, has targeted freshers and lateral hiring from smaller IT companies.

Yugal Joshi, Vice-President, Everest Group, a research firm, said employees do not want to leave their employer at this point of time given the uncertainty. Also, as demand picks up, they are getting deployed into projects, and therefore, either do not want or cannot leave their employer. But they are staying mostly because things are now looking up.

According to V Ramakrishnan, Chief Financial Officer, TCS, the attrition in the third quarter includes all departures, voluntary and involuntary. “It was an all-time low, even by our own standards. However, as growth returns across the industry, we expect to see attrition inch up from these very low levels,” he told analysts while discussing the third quarter results.

For Wipro, attrition has held up for the last two quarters and has been flat. “But given the momentum in the market, I see this could be a rising trend in the coming quarter,” Saurabh Govil, Chief HR Officer, Wipro, told analysts.