Home/ Companies / News/  High dropout rates put firms in a spot of bother

MUMBAI : Despite fewer job offers, 25-35% of candidates are dropping out just before joining, across most sectors, according to industry observers. While India Inc.’s hiring frenzy has ebbed and there is a slight dip in dropout rates from the 35-45% seen during peak hiring, the rates remain high as candidates have more than one offer, they added.

As a result, most companies are keeping a back-up candidate ready to fill up vacancies. “Dropout rates continue to be high at 35% and there has been no change in the last couple of months. During peak hiring, a couple of quarters ago, the dropout rate was at 45%," said Yuvaraj Srivastava, chief human resources officer at online travel company MakeMyTrip, which has around 3,000 employees.

The concerns of most HR teams and recruiters is that while overall hiring is subdued, candidates are having at least two job offers, and a counter offer, compared to the earlier 3-4 offers. Dropout rates of the tech sector, for instance, have fallen from 60-70% to 40-50%, but remain high, said recruiters.

This has forced firms to continue scouting for candidates even after making a job offer to ensure a vacancy is filled up on time even if a selected candidate backs out. “Companies in renewables are seeing a lot of hirings, and startups want candidates with specific skillsets. We have asked HR teams to have a plan A, B and C, so that even if the best candidate is offered a post, they also have other options," said Praveen Purohit, deputy chief HR officer at Vedanta Group.

The three-pronged plan hasn’t changed since last year, because the dropout rates for fresher levels (0-2 years of experience) continue to be at a 20%, he added.

For chartered accountants, the rate is even higher at 30% because of increasing demand from across sectors as companies expand bases and business portfolios.

Even for firms that are seeing low dropout rates, the battle remains pitched for certain job profiles. “Offer dropouts have fallen from last year across most functions by 50% but it is marginally lower in functions like actuary, technology and data science, where we are now making 2-3 offers instead of 3-4 earlier", said Judhajit Das, chief HR officer, ICICI Prudential Life Insurance.

The technology sector, which until two quarters ago, had seen companies woo candidates with a 60-70% hike, besides joining bonuses, promotions and counter offers, is more restrained. However, those well-versed in Python programming language, cloud computing, artificial intelligence and machine learning, remain at the top of salary negotiations.

“In the tech sector, dropout rates peaked at 60-70% during the post-pandemic bubble and great resignation times owing to candidates holding multiple offers compared to the pre-pandemic levels where the dropout rates were 10-15%," said A.R. Ramesh, director of digital business solutions, professional staffing and international engagement, Adecco.

However, considering the dip in new offers, and fears of a looming recession, job seekers may lose advantage in the next couple of quarters. “This is now starting to stabilize further and dropout rates have come down by 20% and are likely to dip in the next two quarters with larger geopolitical concerns and recession fears," Ramesh added.

Devina Sengupta
Devina Sengupta reports on the shifts in India Inc’s workplaces, HR policies and writes about the developments at India’s biggest conglomerates. Her stories over the last decade have been picked up and followed by Indian and international news outlets. She joined Mint in 2022 and previously worked with The Economic Times and DNA-Money.
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Updated: 13 Sep 2022, 06:12 AM IST
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