The Covid-19 pandemic has been a key catalyst for the drastic shift in workplace culture globally over the past year. And it is now evident in India’s $190 billion information technology (IT) industry — one of the largest organised private sector employers in the country.

As employees voluntarily quit their jobs in large numbers, the attrition rate in top-tier Indian IT companies were in double digits during the quarter ended September, recording a steady rise from its previous quarters. Besides buoyancy in the job market for techies with specialised skills — such as cloud, cybersecurity, artificial intelligence, machine learning and others — a shift in employee perspective and work dynamics has been some of the key factors for the rise in attrition, say analysts and human resource (HR) consultants.

“Today there is a lot of demand for futuristic skills, and in India the availability of such skill sets have been limited. Hence that has led to a crunch in talent in the Indian IT industry. So, those who are in the job market currently have multiple job offers,” says Rituparna Chakraborty, co-founder and Executive Vice President, TeamLease Services.

Chakraborty points out that the preferences of today’s workforce have changed in the wake of Covid-19, especially the way they view work or jobs. “Many are seeking complete work from home models, some are seeking hybrid [work] models and that has become an important conditionality around whether they want a particular job or otherwise,” she adds.

According to research firm Gartner, the attrition rate rose from 10% in 2020 to 20% in 2021. Some IT service providers are even battling higher attrition rates of up to 30%.

During the July-September stretch, attrition at Tata Consultancy Services (TCS) — the country’s largest IT firm — was at 11.9% up from 8.6% in the April-June quarter. For Bengaluru-headquartered Infosys, voluntary attrition on the last twelve months trailing (LTM) basis was at 20.1% in the September quarter, compared to 13.9% in the preceding quarter. However, during the period under review, Wipro recorded the highest attrition rate among the top-tier pack at 20.5%, as against 15.5% in Q1. In the September quarter of FY22, Noida-based HCL Technologies’ attrition rate rose to 15.7%, from 11.8% in the June quarter.

“The way we do our business is changing. A recent Gartner poll showed that 48% of employees would likely work at least part of the time after Covid-19 versus 30% before the pandemic remotely,” says D.D. Mishra, Senior Director Analyst, Gartner, adding that “organisations will continue to expand their use of contingent workers to maintain more flexibility in workforce management post-pandemic, and will consider introducing other job models that have emerged during the pandemic, such as talent sharing and 80% pay for 80% work.”

During the earnings call earlier this month, Infosys management pointed out that while its attrition has increased on the back of “high industry growth and supply tightness, especially in the niche skill areas,” the IT major has ramped up its hiring programme and have added more than 11,600 employees on a net basis, highest ever in a quarter.

According to Infosys, most of its attrition has been for employees with three to six years of experience, and this has been the trend in the IT industry as well. “In this experience level, people are still not emotionally connected with the company and sometimes, it is easier to move around,” says Pravin Rao, Chief Operating Officer and Whole-time Director, Infosys, during the earnings call.

However, Rao admits that in the long term, the IT major is also taking a “fresh look” at the talent strategy approach. “This is not only due to the current high attrition, but also our belief that there will be fundamental shifts in employee thinking behaviour in the post-pandemic world, and that means you have to relook at the employee value proposition and fine-tune that. So, that is something we have started taking a hard look at.”

Similarly, Thierry Delaporte, CEO and Managing Director, Wipro, feels that one of the issues to cope with is “attrition”.

“Wipro acknowledges this change of talent landscape and has adapted quickly to the new world of work. Hybrid work environment is definitely a part of this mix. We have doubled down our fresher intake with 8,150 young colleagues joining us from campus in Q2,” says Delaporte, while announcing the quarterly results. Wipro plans to add over 25,000 freshers in the next financial year.

“I frankly don’t believe that attrition will improve in the next quarters. I actually believe that given the environment, we will continue to face the high level of attrition at least in the next two-three quarters,” adds Delaporte.

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