BANGALORE: Sunita Krishnan is soft-spoken and genteel, not quite the type who would keep HR managers on their toes. The 29-year-old is a software programmer in Bangalore, one among the many in India’s tech capital who were driven to the edge last year as their employers cut back aggressively to cope with the global financial recession.
Today, Ms Krishnan and her ilk give nightmares to their employers as the economy rebounds and companies dust up their expansion plans. Kept on a tight leash with hardly anyone recruiting, India’s notoriously attrition-prone code-jocks are now sizing up their options and moving in for the kill, threatening to kick back the attrition rates to the 25% levels of the boom years.
Ms Krishnan, who got married last year, chucked her employer in March to join the multinational Cognizant for a 15% salary hike. “My friends in Infosys got hikes even during the slowdown, but we kept thinking of saving our jobs,” says Ms Krishnan, who requested not to mention the name of her past employer.
In the $50-billion software industry, even 15% attrition was considered an achievement until 2008 while some companies struggled to keep it below 20-30%.
The scene nose-dived after the collapse of Lehman Brothers in September 2008 and the onset of the financial slowdown, with attrition rates at India’s top tech firms dropping to single digits.
The status quo remained until a few months ago.
Today, with large customers such as JP Morgan, Citibank and GE sending more projects to the country, and multinationals like IBM and Accenture under pressure to hire more in India, the war for retaining and hiring talent is being waged once more.
“It’s coming back to haunt us. I just got back from a business trip, we have signed some new businesses and are now spending more time worrying about how to retain staff and hire new folks with relevant skills,” says the CEO of one of the top Indian tech firms, seeking anonymity.
According to Nasscom, the Indian IT industry will hire around 90,000 staff this year, taking the total IT workforce to around 2.3 million. Last year, the industry added only around 20,000 professionals as companies stalled their hiring plans.
Companies are now hoping that they will be able to retain employees with a 2-8% wage hike.
“Wage inflation is definitely back, but should be in single digit in the future,” says Phaneesh Murthy, chief executive of iGate, which counts General Electric among its top customers.
However, tech professionals who had to live with no salary increments last year are in no mood to remain loyal to the employers.
“I was planning to buy a car and go for loan last year, but did not have enough cash for making a down payment. Now, one of the companies interviewed me and offered some joining bonus too,” says Avishkar Sinha, a 28-year-old project analyst working with a Mumbai-headquartered tech firm.
TV Mohandas Pai, HR head of Infosys Technologies, says India’s second biggest software exporter has seen an increase in voluntary attrition from 7.5% to 8.3% in January.
“There has been a small uptick, and I think as time goes by, attrition will increase because there are many more opportunities. Not everybody gets promoted and people want to shift for various personal reasons,” he says.
Mr Pai says that companies should make sure they pay people better, offer more career opportunities and training opportunities. “We have to live with it,” he says.
The new uptick that he talks about was triggered by the increased hiring by MNC rivals IBM and Accenture in India. While IBM is letting staff go in countries such as Australia and the US for increasing the proportion of Indian workforce, Accenture is under pressure to improve its profitability by doing more work from cheaper offshore locations such as India. Both the companies are expected to hire over 50,000 people in next few years.
Experts such as Praveen Bhadada, engagement manager at Bangalore-based Zinnov Management Consulting, says companies will seek to address high attrition rates by offering retention and one-time bonuses apart from on-site overseas travel opportunities to their staff.
Growth is coming in from two engines: expanding domestic market revenues and backfilling for servicing newer geographies, he says.
Attrition is no more an HR challenge. For business leaders and CEOs at top tech firms, it's one of the top priorities to ensure that there are enough professionals available to serve the customers.
Are MBA graduates overpaid in India?
Given a choice, will you go for a decent job, or for a lucrative job?
Today, Ms Krishnan and her ilk give nightmares to their employers as the economy rebounds and companies dust up their expansion plans. Kept on a tight leash with hardly anyone recruiting, India’s notoriously attrition-prone code-jocks are now sizing up their options and moving in for the kill, threatening to kick back the attrition rates to the 25% levels of the boom years.
Ms Krishnan, who got married last year, chucked her employer in March to join the multinational Cognizant for a 15% salary hike. “My friends in Infosys got hikes even during the slowdown, but we kept thinking of saving our jobs,” says Ms Krishnan, who requested not to mention the name of her past employer.
In the $50-billion software industry, even 15% attrition was considered an achievement until 2008 while some companies struggled to keep it below 20-30%.
The scene nose-dived after the collapse of Lehman Brothers in September 2008 and the onset of the financial slowdown, with attrition rates at India’s top tech firms dropping to single digits.
The status quo remained until a few months ago.
Today, with large customers such as JP Morgan, Citibank and GE sending more projects to the country, and multinationals like IBM and Accenture under pressure to hire more in India, the war for retaining and hiring talent is being waged once more.
“It’s coming back to haunt us. I just got back from a business trip, we have signed some new businesses and are now spending more time worrying about how to retain staff and hire new folks with relevant skills,” says the CEO of one of the top Indian tech firms, seeking anonymity.
According to Nasscom, the Indian IT industry will hire around 90,000 staff this year, taking the total IT workforce to around 2.3 million. Last year, the industry added only around 20,000 professionals as companies stalled their hiring plans.
Companies are now hoping that they will be able to retain employees with a 2-8% wage hike.
“Wage inflation is definitely back, but should be in single digit in the future,” says Phaneesh Murthy, chief executive of iGate, which counts General Electric among its top customers.
However, tech professionals who had to live with no salary increments last year are in no mood to remain loyal to the employers.
“I was planning to buy a car and go for loan last year, but did not have enough cash for making a down payment. Now, one of the companies interviewed me and offered some joining bonus too,” says Avishkar Sinha, a 28-year-old project analyst working with a Mumbai-headquartered tech firm.
TV Mohandas Pai, HR head of Infosys Technologies, says India’s second biggest software exporter has seen an increase in voluntary attrition from 7.5% to 8.3% in January.
“There has been a small uptick, and I think as time goes by, attrition will increase because there are many more opportunities. Not everybody gets promoted and people want to shift for various personal reasons,” he says.
Mr Pai says that companies should make sure they pay people better, offer more career opportunities and training opportunities. “We have to live with it,” he says.
The new uptick that he talks about was triggered by the increased hiring by MNC rivals IBM and Accenture in India. While IBM is letting staff go in countries such as Australia and the US for increasing the proportion of Indian workforce, Accenture is under pressure to improve its profitability by doing more work from cheaper offshore locations such as India. Both the companies are expected to hire over 50,000 people in next few years.
Experts such as Praveen Bhadada, engagement manager at Bangalore-based Zinnov Management Consulting, says companies will seek to address high attrition rates by offering retention and one-time bonuses apart from on-site overseas travel opportunities to their staff.
Growth is coming in from two engines: expanding domestic market revenues and backfilling for servicing newer geographies, he says.
Attrition is no more an HR challenge. For business leaders and CEOs at top tech firms, it's one of the top priorities to ensure that there are enough professionals available to serve the customers.
Are MBA graduates overpaid in India?
Given a choice, will you go for a decent job, or for a lucrative job?
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