Indian IT major Tata Consultancy Services (TCS) reported an 8.6% attrition in the past year, in its results for the first quarter of the 2021-22 financial year.
According to the report, it rose from 7.2% in the previous quarter—ending on March 31, 2021 – even the attrition rate is pegged to be the lowest in the county.
IT companies such as Accenture announced their attrition rate for the first quarter of 2021-22 fiscal at 17% against 11% in the year-ago quarter., while Infosys and Wipro’s attrition rates were reported to be 15.2% and 12.1% in the fourth quarter of 2020-21 financial year.
The trend in employee attrition is a concern the IT firms were plagued by. However, TCS reported that its employee headcount crossed the 500,000-mark in the quarter ending June 2021, when the company hit a total workforce of 509,058.
In July, TCS announced a 29% rise year-on-year in quarterly profit, powered by higher demand from businesses ramping up digital services during the coronavirus disease (Covid-19) pandemic crisis, Hindustan Times’ sister publication LiveMint reported. The IT giant’s net profit rose to ₹9,008 crore, between April and June, up from ₹7,008 crore a year earlier, while its revenue from operations jumped 18.5% to ₹45,411 crore.
Even as some of the big IT firms were expecting the attrition rate to inch up in the financial quarters to come, riding on the back of a talent war, outgoing employees make direct and indirect impacts on a company and its resources.
Industry experts often pointed out that attrition is an important human resources metric that indicates a lot about the direction of a company’s business, as well as the possible problems that need the attention of the HR managers.
One of the major causes behind the strong attrition at TCS is its remuneration, said a Kolkata-based tech analyst who recently left TCS for another major IT firm.
“Compared to the industry standards, the remuneration is less when compared with lateral recruits,” the techie told HT, adding, “The effort by TCS to retain an employee after they put in their papers do cut it. It often offers an onsite opportunity to an employee in a bid to retain them but such opportunities do not work, especially when an employee has made up their mind to leave over remuneration concerns, as people want to earn a standard salary staying home.”
An onsite is an opportunity where IT companies send their employees to foreign shores on a temporary employment visa to work from there.
The analyst said given the ongoing pandemic situation, and with most countries closing their border to contain the spread of the virus, onshore opportunities have declined drastically.
The analyst also claimed that the annual compensation increment is a significant concern that drives people to switch jobs. “Yearly hikes are at a maximum of 6% for top performers. Even there, a large of the increased compensation is allocated to the performance variable, which makes the effective in-hand hike look meagre.”
He said while the increments of the IT giants across the board are more or less similar, a 5-6% over the existing salary of employees who have stayed at TCS throughout their career does not cut it in today’s age where the cost of basic necessities is through the roof.
The former employee also claimed that promotions and resignations have been an area of concern which also prompts employees to leave TCS. “Junior level promotions such as for IT analysts are no longer guaranteed by the end of four years…and one needs to wait for 4.5 years to be eligible for it.”
TCS added over 40,000 employees in the first quarter of the 2021 fiscal year and 19,388 between January and March this year.
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