BackHow Indian IT companies are countering employee attrition
ICICI Securities believes that crest in terms of attrition has already passed and is expected to taper down in the coming quarters
PremiumAttrition has been a cause for concern for the some time now as it has been continuously rising. However, brokerage and research firm ICICI Securities believe that crest in terms of attrition has already passed and is expected to taper down in the coming quarters.
The Indian IT companies have already elevated their fresher hiring for FY22 and are planning to hire even more freshers in the next 12 months, which will ease pressure on attrition, it said in a note.
“The companies have also been opening delivery centres in tier II and tier III cities in India to increase their catchment areas as well as to facilitate hybrid working model, which will also help in employee stickiness in the long term and is expected to ease attrition pressure," the report added.
Further, companies have been communicating with their clients about the cost rise in terms of wage hikes amid high attrition. Clients have been receptive in terms of dialogue and recognised the elevated costs for the IT companies. IT companies have been in continuous discussions with clients for price increase and the response, so far, has been positive in terms of new deals, ICICI Securities highlighted.
Meanwhile, the demand environment continues to be strong for Indian IT companies, which reflects in the strong headcount additions for the companies i.e. headcount additions for 9MFY22 is even higher than their FY21 additions.
"The demand environment is aided by some of the bold transformation programmes being undertaken by their clients, spanning multiple parts of the enterprise and in accelerated time frames, as they recognise the need to transform every part of their enterprise with technology, data, AI and new ways of working. As per Accenture, only 30% of the workload globally has been moved to cloud, which means a long tail of opportunity of cloud transformation for Indian IT companies," the report stated.
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