BackFirms draw up buffer plans to beat attrition
Firms draw up buffer plans to beat attrition
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PTI
New Delhi: With the attrition rate reaching alarming levels in India’s booming sectors like infotech and telecom, human resource personnel have devised innovative ways such as over-staffing and thinking beyond higher pay packet to retain talent.
“Attrition is a crisis in India, especially in sectors such as IT, ITeS, telecom and retail, that are growing at the fastest pace. Simultaneously these are the very sectors which get plagued by attrition the most," Global HR consultancy firm Hay Group’s Practice Leader Mark Thompson told PTI.
Hence, HR managers are resorting to innovative ways to harness and retain talent as the market is seeing demand-supply constraints, Thompson added.
BPO firm Genpact resorts to rotation of talent as a phenomenon or culture. “GE overstaffs around 15-20% to tackle attrition," Genpact executive vice-president (HR) Vivek Jain said.
High attrition rate experienced by 60% of BPO units are due to higher salary expectations. Over 80% of respondents from BPO firms surveyed by industry body, Assocham recently, felt attrition rates in future would rise over 40%, while the remaining 20% were optimistic that it will drop and would stabilize at 20-25%.
There should be a balance between attrition and retention of employees to ensure maximum growth of an organization. Now-a-days a hike in salary is not the only incentive that attracts talent, Thompson said.
“Companies now offer an ideal relational reward that balances work and family life. This is because salary alone cannot ensure retention and loyalty as others can match this," he added.
According to a report by Hay Group, IT and ITeS companies are facing high attrition rates of 30-40% mainly at junior and middle management levels and are looking at tools beyond compensation to arrest this trend.
In contrast, attrition in old-economy sectors like pharma and engineering was negligible.
Top four Indian IT firms — TCS, Infosys, Wipro and Satyam — saw an exodus of about 10,000 people for the quarter ended July.
TCS, the biggest IT firm in terms of revenue as well as headcount, saw an exodus of about 2,500 employees, while just over 2,000 people quit the country’s second largest software exporter, Infosys.
Attrition is estimated to be much higher at about 3,500 at Wipro, the country’s third-biggest IT firm, while Satyam, the smallest of the four, saw 1,600 people leave.
TCS posted an attrition of 11.5%, Infosys 13.7%, Satyam 14.9% and Wipro 20%.
The talent pressures in these new-economy companies get compounded with the entry of multinationals, which try to attract talent from established companies based on a high compensation differential.
“MNCs are more than willing to pay a 30-40% more in compensation and may be double the current package in case of employees with key qualifications and potential," a Hay Group report said, highlighting that salary growth in India during the last two years has been a striking 12.5%.
Besides, the demographic constituent of the country is one of the reasons behind this high rate of attrition as young people aggregates to over 50% of the total population.
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