Attrition in IT companies likely to stay at 20% over recession fears

Tata Consultancy Services (TCS), in its quarterly results announced on Monday, said that the attrition in Q2FY23 was 21 per cent, it was 19.7 per cent in Q1FY23

Owing to recession fears in the West, attrition rates in IT companies may remain near 20 per cent in the coming months, as reported by Livemint.

Tata Consultancy Services (TCS), in its quarterly results announced on Monday, said that attrition rose to over 21 per cent in the second quarter of the current financial year (Q2FY23). This was 19.7 per cent in Q1FY23.

Although the company said that the attrition will taper off in the coming quarters, experts believe that macroeconomic factors will have to be taken into consideration.

Other IT majors like Wipro and Infosys will announce their quarterly results on Wednesday and Thursday, respectively. In Q1FY23, Wipro recorded the attrition rate at 23.3 per cent. Infosys' attrition rate was 28.4 per cent.

"Attrition rates of IT service bellwethers for the quarter ended September will end as high as the previous quarter, if not higher. While hiring funnels in IT have shrunk and slowed down over Q2, enterprises have honoured offers made in Q1 to lateral talent," Kamal Karanth, co-founder of tech hiring firm Xpheno told Livemint. 

He further said that attrition in the next quarter will be driven by resignations in first quarter as most of the companies ask for a 90-day notice period. 

The report also said that candidates with an experience of four to 10 years are getting a 35 per cent hike while changing jobs. 

"With the cautious shifting of jobs, attrition will come down, but for the next two quarters, it will hover at 18-20% as hopping on and off jobs decline. But it will not go back to pre-pandemic levels," Akshara Bassi, an analyst for global cloud and servers market, Counterpoint Research told Livemint.