Fears of global recession and spate of layoffs in the start-up space are expected to have a sobering effect on high attrition levels in Indian IT industry over the next 2-3 quarters, say market watchers as majority of large tech companies talked of easing of supply side pressures in September quarter.
Infosys, whose high levels of attrition had alarmed analysts at one point, reported lower attrition of 27.1 per cent in just-concluded quarter, compared to 28.4 per cent in June quarter.
For Wipro, the attrition came down to 23 per cent in Q2FY23, from 23.3 per cent in the previous sequential quarter. The attrition rates for HCL Tech had been rising since quarter ended September 2021 (15.7 per cent in Q2FY22), but it plateaued at 23.8 per cent in Q2 FY23, holding on to the same levels as June quarter (Q1FY23). "It has already stabilised, and it is early indication of where we are in terms of what we look forward to, from here on. So we are in a good place there," Ram Sundararajan, Chief People Officer of the Noida-headquartered HCL Tech said during Q2 earnings briefing.
Tata Consultancy Services (TCS) said its LTM or Last Twelve Months attrition in IT services inched up further to 21.5 per cent but the company was quick to add that it will start seeing the churn "settle" in the coming months.
The technology job market which had overheated in the last few quarters has begun to cool off, and compensation expectations of new hires are also becoming more realistic, the company said during the earnings call.
Overall, the Q2 scorecards of Tier 1 Indian tech companies have clear markers that supply side pressures are set to ease.
Milind Lakkad, Chief HR Officer of TCS said, "With supply catching up across the industry, the pressure to poach experienced talent is easing. So, we should start seeing the churn settle in the coming months.
Based on the monthly trends, we believe our quarterly annualized attrition figure has peaked in Q2 and should start moderating in the second half."
India's largest IT services company saw net additions of 9,840 employees during the quarter, with closing headcount of 6.16 lakh professionals.
TCS said its FY 23 fresher onboarding is proceeding as per plan.