Attrition to drop by 16-17% in Indian IT firms

MUMBAI, INDIA — The attrition rate in India’s IT companies is expected to drop from FY2023’s 20-22% to 16-17% over the next two quarters as the impact of retrenchments and hiring freezes takes effect. 

According to a Mint report, turnover rates in India’s tech sector increased during the pandemic as companies poached employees from each other. 

In the March quarter, attrition in tech giant Infosys fell from 24.3% to 20.9%. Similarly, HCL Technologies and Tata Consultancy Services (TCS) attrition rates dropped by 19.5% and 20.1%, respectively. 

The IT firms said they have slowed hiring due to the “sluggish market.” HCL Tech and TCS only added 3,674 and 821 employees during the past three months, while Infosys reduced its headcount by 3,611. 

However, while attrition is expected to decrease in the next months, Indian companies are still losing talent to foreign-owned global capability centers (GCCs). 

In the past year, about 45% of the employees hired by these centers came from the three tech cohorts of services, products, and startups.

“As international brands, GCCs rank higher than Indian IT Service players on the desirability curve of tech talent. With this brand attraction and comparatively higher compensation packages, GCCs will continue to woo talent from the IT Services cohort,” said Kamal Karanth, co-founder of IT and startup recruitment firm Xpheno.