The high attrition rate in the information technology (IT) industry continues to be a problem, so businesses like Wipro, HCL Tech, and Tata Consultancy Services (TCS), which is the largest IT services provider in India, are taking action to retain talent by raising salaries and offering remote work options. Wipro has stated that beginning in July of this year, it will award promotions to its staff every three months.
IT Firm Attrition Rates
In the June 2022 quarter, TCS’ attrition rate was 19.7% based on the previous year. Its attrition rate was at its highest level in the previous six quarters. The rate was 17.4% during the quarter that ended in March 2022. In the quarter ending in June 2022, Wipro’s attrition rate peaked at 23.3% but decreased from quarter to quarter. In Q4FY22, Wipro reported an attrition rate of 23.8%.
In addition, HCL Tech reported a high attrition rate of 23.8%, compared to the same figure for the quarter ending in March 2022, which was 21.9%. HCL Tech’s attrition rate increased by 12% year over year, from 11.8% in the first quarter of FY22 to 23.8% in the first quarter of FY23.
Salary Hikes and Promotions
In order to keep talent, the corporations provide wage increases, frequent promotions, and flexible work arrangements. Thierry Delaporte, CEO and MD of Wipro, stated, “We announced going to a quarterly promotion cycle, which is extremely fresh, from when we were on the yearly cycle, in order to retain the talent. The quarterly promotions have started this month (July 2022), and those who qualify will also receive pay increases in September 2022.
Wipro has announced that it will start giving its staff raises in pay and promotions every three months as of this summer.
In addition to this, IT businesses are providing retention bonuses, salary increases, and out-of-cycle compensation modifications, all of which have a negative impact on their margins.
Work From Home Status
The majority of IT organisations employ remote workers. Some businesses, nevertheless, are calling their staff members once or twice a week. However, most businesses have stated that they would adopt the hybrid approach of working in the long run. Additionally, TCS has put up hot desks and temporary operating areas (OOZs). In the long run, Infosys has also stated that it intends to function according to the hybrid approach.
TCS’s combined net profit for the June 2022 quarter was Rs 9,478 crore, up 5.2% from the same period last year. When compared to the same period last year, the company’s revenue for April through June 2022 increased by 16.2% to Rs 52,758 crore from Rs 45,411 crore.
Wipro reported a 20.9 percent year-over-year decline in its June 2022 quarter earnings to Rs 2,563 crore. HCL Technologies said that their net profit increased by 2.4% year over year in the quarter ending in June 2022, from Rs 3,218 crore to Rs 3,283 crore.