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Avg attrition in MNC R&D centres at 4.7% in March qtr: Zinnov

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Announcement Corporate
Last Updated : Jan 21 2013 | 3:13 AM IST

Bangalore reports lowest attrition rate at 3.1%; At 8% large companies witness double the attrition rate of their smaller counterparts.

Zinnov Management Consulting, a leading management consulting firm, today announced the findings of its recently released study on attrition targeted at the MNC R&D centres in India titled ‘Quarterly Attrition Tracker’. According to the study, MNC R&D centres in India will continue to witness attrition during the 1st and 2nd quarter of 2010. However, this will smoothen out during the second half of the year with minimal attrition. The findings of the study reveal that for the period January to March 2010, the average attrition rate stood at 4.7%, up 1% over the previous quarter and up 0.5% for the same quarter last year. This translates to an attrition rate of 18.8% on a yearly basis. The launched study was based after Zinnov analyzed over 50 MNC R&D companies in India for the period January to March 2010.

Among all the cities that were studied, Bangalore witnessed lowest attrition during the quarter with an average attrition rate of 3.1%. In comparison Pune’s attrition levels stood high at 5.6% for the same period. Bangalore witnessed lower attrition levels on account of factors like timely salary increments, alignment of roles with better career growth, maturity of workforce to understand the company’s economic situation and therefore more value for work than salaries.

Speaking about the findings of the report, Mr. Praveen Bhadada, Engagement Manager, Zinnov Management Consulting Pvt. Ltd, said, “We had earlier predicted that lower increments could result in short term spike in attrition levels and we are starting to see that happen. However, clear communication around the economic situation, career growth and performance led incentives, clubbed with the increased maturity of employee base, will put attrition under control over the next 6-9 months. We expect that H2, 2010 to witness much less attrition and the yearly average to settle around 10%. We also expect that the demand for cost control will force R&D centres in India to put a check on salary escalations in the near term.”

The study’s findings reveal that attrition levels in large companies were relatively higher than their smaller counterparts. Companies with over 1,000 employees witnessed average attrition level of 8%. On the other hand, the attrition level among companies with less than 1,000 employee size came down to half at 4%. Dissatisfaction with salary increments, re-alignment of center level goals, forced attrition to create bandwidth for new hiring for mission critical and value added projects, and better pay packages with other large MNC companies, were among the factors that contributed to higher attrition levels among larger companies. However, smaller companies offered relatively better salary increments in terms of absolute percentage with the aim to bring salaries closer to their bigger counterparts for the critical resources, helping them retain them.

Based on the analysis, the study also projects campus hiring trends for 2010. According to the study, many of the MNC companies will be slow on campus hiring considering they had hired last year and those students will be joining in the current year. However, they will focus more on increasing the experience and capabilities of the existing talent pool within the organization.

About Zinnov Management Consulting Pvt. Ltd
Founded in 2002, Zinnov – meaning Zeal in Innovation – is a leading management consulting company providing services in the area of Offshore Advisory, Market Expansion and Human Capital Optimization to Fortune 1000 companies. Zinnov works collectively with clients to tackle prevailing organizational challenges by analyzing the changing dynamics, improving performance, and building institutional capability. The services delivered to its clients through advanced reasoning and analytical techniques, provides solutions that help in integrating organizational vision, business definition and processes.

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First Published: Jun 02 2010 | 7:55 PM IST

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