Employees leave because of managers, says CEO Kurien

Even though Wipro has lagged behind Infosys, which posted 2 per cent revenue growth, the company has done a better job in retaining its employees.

Voluntary quarterly annualised attrition rates increased from 15.7 per cent last quarter to 17 per cent in the first quarter ended June 30 compared with the 19.5 per cent that Infosys recorded in Q1. TCS saw the least attrition in the quarter, at 12 per cent.

Saurabh Govil, Senior Vice-President of Human Resources, Wipro, said the company has tried to retain employees by giving wage hikes of 8 per cent for offshore and 2 per cent for onsite staff, effective June 1. Restricted stock options have also been given to key performers. Even salary hikes have been differentiated to reward performers.

Pointing out that the attrition rate of the company’s top performers, who constitute 25 per cent of the workforce, is less than half of the company’s overall attrition rate in the quarter, Govil said: “We are very happy that our key performers are happy with the company. We are witnessing a spike in attrition only among employees in the 2-5 years of experience range.”

While Wipro’s headcount remained negative to flat over the last four quarters with a net addition of just 241 employees during fiscal year 2014, Q1 saw the company adding a net 1,399 employees thanks to a healthy pipeline of deals and a large customer win.

Govil said campus and lateral hiring for niche skills will continue in FY 2015, while existing employees will be re-skilled to match new customer expectations.

Commenting on the growing attrition, TK Kurien, CEO of Wipro, said: “Employees do not leave a company; they leave because of their managers. If the manager does not mentor and keep them engaged and help in improving their career growth, employees will continue to quit.”

The company’s total headcount at the end of the first quarter rose to 147,452 from 146,053 last quarter.

“Wipro’s 17 per cent attrition does not pose a problem, because they are continuing to post revenue growth and increase employee utilisation from 73.3 per cent a year ago to 77.9 per cent this quarter. As long as employee productivity increases along with revenue growth, seasonal spikes in attrition should be ignored” said Sundararaman Viswanathan, Management Consultant, Zinnov.

How did the company continue to post revenue growth with negative to flat hiring for well over four quarters except for Q1?

“Technology service companies are being challenged by the emergence of cloud and newer technologies that have broken the linearity of their revenue and hiring because they have lower employment elasticity,” said Alka Dhingra, General Manager, TeamLease. “Companies like Wipro are up-skilling their employees to develop niche skills that customers want,” she said.

Wipro has added newer practices such as digital transformation and advanced technologies and solutions, since April, where deal sizes are small, ranging from $3-5 million. Once solutions are developed for customers, they can be productised and sold to multiple customers, without the need to hire more people, said an industry analyst.

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