High attrition rates continue to be a problem for two of India’s three major information technology (IT) firms, TCS and Infosys, according to their Q4 financial results. However, experts predict that attrition levels are expected to cool down to pre-pandemic levels by Q3FY24. Despite this, most IT companies are likely to continue restructuring internally, keeping hiring numbers low.
Vijay Sivaram, CEO of Quess IT Staffing, predicts that attrition rates will reach between 16 to 18 percent in the next two quarters, but there will not be a lot of new intakes as most IT firms are focusing on utilizing their bench. They are deploying freshers on new projects as soon as possible, rather than hiring talent from outside.
Infosys company reported its revenue growth guidance of 4-7 percent for FY24, which means the company is expected to grow at the slowest pace in six years. HCLTech recorded better results, but its revenue growth was still at the lower end of its guidance range of 13.5-14.5 percent. At TCS and Infosys, attrition rates were still high at 21.3 percent and 20.9 percent, respectively. Meanwhile, HCLTech had a slightly better attrition rate of 19.5 percent.
Neeti Sharma, president, and co-founder at TeamLease Edtech, believes that last year, there was a shift in mindset among IT candidates who were looking for more stable opportunities and leaving startups, leading to large-scale attrition among startups. In the current economic climate, Sharma suggests that more candidates will be looking to sacrifice higher salaries for a stable work environment and move to established IT firms. The captive industry, especially for IT services, is emerging as an attractive industry for those leaving their jobs at startups.
Vikram Ahuja, CEO and co-founder of recruitment platform Talent500, believes that the Indian startup industry has seen a loss of trust in the last six to 12 months due to high layoffs. Consequently, more people are looking to shift to captive centers.
However, experts predict that attrition in FY24 is likely to remain high at around 18-20 percent, mainly due to the high attrition that is likely to continue in Q1 and Q2. According to Yeshab Giri, a chief commercial officer of Staffing and Randstad Technologies at Randstad India, hiring would be higher for candidates with skills in data analytics, data visualization, data science, full-stack development, cloud computing, and DevOps.
Sharma adds that specialist roles such as analytics managers, big data engineers, cloud system administrators, and augmented reality QA testers are likely to be the focus of hiring in FY24. Giri predicts that the Indian IT sector is likely to hire between 350,000 to 400,000 employees in FY24, including a mix of fresh graduates and lateral hires.
In conclusion, while the high attrition rates at TCS and Infosys are a concern, experts predict that the attrition levels are expected to cool down to pre-pandemic levels by Q3FY24. IT firms are likely to continue restructuring internally, keeping hiring numbers low. Candidates with skills in data analytics, data visualization, data science, full-stack development, cloud computing, and DevOps are likely to be in demand, and specialist roles such as analytics managers, big data engineers, cloud system administrators, and augmented reality QA testers are expected to be the focus of hiring in FY24.
