Attrition is back at IT companies

Economic recovery has brought good times for Indian companies. The same is true for IT companies as well. From uncertain times till about a year ago, these companies are now much clearer about their revenue visibility for the medium term. Clients are back on the discussion table. And they are loosening their purse strings to spend more on IT offshoring.



Now, while all this sounds hunky dory for the IT sector and its companies, there is one concern that seems to be raising its head. We are talking about employee attrition. Given the improved business scenario and the fact that IT companies across the board are back to hiring again, IT employees are suddenly finding themselves with a plethora of job options. And this has started giving sleepless nights to the HR managers at IT companies. Even a company like Infosys is not spared. There are reports that the company is seeing higher attrition as employees are looking out for other options. But this should not be a serious worry for the company given the good amount of bench strength it has. The problem really lies for the mid and small size IT companies that nether have the bench nor the financial strength to retain key employees. In fact, we see employee costs rising for the broader IT sector, and margins coming under some pressure as companies try to retain their assets - their people.