Contract staffing attrition is expected to increase by 9 percentage points over the next fiscal, as the attrition factor continues to vex the IT sector. Contract staffing attrition rate stood at 40 percent in FY21 and will reach 49 percent by FY22, reported The Economic Times, quoting the findings of a survey by Teamlease, a staffing firm which specialises in entry-level and blue collar jobs.
The IT and ITES segment has been experiencing higher attrition rates recently. Full-time employee attrition is also expected to increase to 24 percent by the start of FY22, against the 13 percent attrition rate seen in 2021. The sector employs 42 percent of the total contract staffing workforce.
Despite higher attrition rates, the total workforce and the demand for contractual hiring in the IT sector is expected to increase over 2022. Teamlease expects a 17 percent YoY increase in the demand for contractual hiring from the IT-BPM sector, added the ET report.
As the demand for IT skills due to the rapid digitisation brought on by the COVID-19 pandemic increases, the war over talented personnel with 3-7 years of experience also heats up among IT giants.
As a result, skilled professionals have been able to command multiple offers and get salary hikes of over 100 percent in some cases. Companies have been moving towards hiring freshers, as a result. Freshers can be rapidly trained and integrated into organisations at much lower salaries.
According to a report by market intelligence firm UnearthInsight, the industry will witness higher attrition in the second half at 17-19 percent, but will have a net employee addition of around 1.75 lakh people during the period.
“The IT industry’s perceived ‘war on talent’ is real and it’s getting intense with attrition a rising concern for the industry. It’s crucial for the industry to focus on employee value proposition (EVP) even more aggressively to keep attrition in check,” Gaurav Vasu, Founder and CEO of UnearthInsight, said.
Major tech companies like TCS, Infosys, Wipro, HCL Tech and Tech Mahindra have already posted multi-quarter high recruiting figures and recruitment is only expected to ramp up over the next few quarters.
“On the supply side, all the IT companies were constrained so we had a large number for the last quarter. I mean our highest hiring in many, many quarters. This quarter also, we expect our hiring should be a reasonably decent number, costs continue to go up and that is an area of worry for us and I believe, for most players in the industry as well,” Milind Kulkarni, CFO at Tech Mahindra, told CNBC-TV18.
(Edited by : Shoma Bhattacharjee)
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