Attrition for large-cap IT firms has gone down to normalcy as pandemic induced opportunities for techies are dwindling in the software industry.
In the second quarter of 2024 fiscal, TCS, Infosys, HCL Tech and Wipro reported attrition levels of 14.9 per cent, 14.6 per cent, 14.2 per cent and 15.5 per cent, respectively; reporting levels below Q1FY22 – when the “great resignation” phase for IT firms began.
The Covid-19 pandemic opened a spate of new opportunities for techies, prompting them to leave their steady jobs in IT firms in droves. Thus, these large IT firms struggled to curb the exodus of techies who were striking out to try out more lucrative opportunities.
However, as the tech industry faces a downturn globally, it appears that techies are hunkering down to hold on to their jobs even as firms such as Infosys and TCS reduce hiring and layoff expendables in hopes to optimise their bench.
To put these attrition numbers in context, at the height of the pandemic induced tech boom, these large IT firms were reporting at least a quarter of their total headcount leaving in the last 12 months. In addition to this, firms complained of their employees exploiting work from home opportunities to “moonlight,” or take up side projects to develop new skills or open new streams of income.
The IT firms argued that these trends had an adverse impact on their efficiency and margins. For the last four to five quarters, attrition levels have trended down consistently. In fact, firms saw the largest dip in attrition levels in Q2FY24 – finally reaching normalizing.
These last few quarters have also been difficult for IT firms as macroeconomic headwinds have slowed down new projects for the firms, and these IT firms are not keen on taking on new hires anymore, preferring to utilise their existing bench for these projects. businessline reported last week that hiring for these large-cap IT firms hit a five-year low in Q2FY24 as well, as they pare down their benches, and optimise their workforce in light of the demand for their services slowing down.
As IT firms also hope to utilise artificial intelligence to improve the productivity of their employees, experts believe that the dearth of opportunities in the tech sector could also become permanent.
IT companies believe that attrition levels will go down further in the upcoming quarters. “We should not relate the headcount degrowth with business demand or the business situation,” Millin Lakkad, TCS CHRO said, as this is happening across quarters. “People coming in for the last 18 months are getting leveraged now in the past year.”