HR depts in focus as IT cos vie talent
Changing Dynamics Beyond Hiring
- IT cos on hiring spree in adding freshers
- HR managers facing biggest challenge of retaining talent
- Attrition shooting over 20%
- IT cos offering incentives, bonuses, stock options to lure talent
The functions of HR departments have increased manifold. Usually, leaders of HR department report to chief executives of companies and don't get a seat on the board. However, this is likely to change in the near future as HR functions become critical to the growth of IT companies in coming years, said Pareekh Jain, an IT outsourcing advisor and Founder of Pareekh Consulting
Bengaluru: Human Resources (HR) departments of Indian IT services companies are on aggressive mode to retain talent and add new employees aggressively as there is no signs of talent war abating in the near future.
Experts are of the opinion that the importance of HR departments has increased across IT companies in the last one and half year as the functions of the HR professionals have increased manifold beyond hiring and backfilling functions.
"With the industry facing high attrition, the functions of HR departments have increased manifold. This is giving new recognition to the HR department within the companies. Usually, leaders of HR department report to chief executives of companies and don't get a seat on the board. However, this is likely to change in the near future as HR functions become critical to the growth of IT companies in coming years," said Pareekh Jain, an IT outsourcing advisor and Founder of Pareekh Consulting.
Attrition has seen a rising trend in the September quarter with many companies witnessing more
than 20 per cent attrition rate. In Q2 of FY22, Infosys saw its attrition rising by 620 basis points over the first quarter to 20.1 per cent. Similarly, Wipro's attrition rate reached 20.5 per cent in Q2 of FY22, up from 15.5 per cent in Q1.
For HCL Technologies, attrition rate touched an all-time high rate of 15.7 per cent, up from 11.8 per cent reported in the first quarter. Market leader Tata Consultancy Services (TCS) had the lowest attrition in the industry, which came at 11.9 per cent in Q2 from 8.6 per cent reported in the first quarter. Cognizant, the India born IT firm with more than 70 per cent of employees working from the country, saw its attrition rate at 33 per cent during this period. To retain talent, companies are not only planning to hire more number of freshers this fiscal year, they are also dolling out various incentives and promotions in recent quarters. Most large IT firms have given incentive-based quarterly bonuses, stock options, salary increments, and rapid promotions to their employees apart from various upskilling initiatives. In July, HCL Technologies announced that it would reward top performers with Mercedes-Benz cars. Cognizant, which has seen attrition rate of 33 per cent in September quarter, is planning to give big bonuses and promotions in the December quarter.
"HR function has become very critical to get the delivery right when the supply-side constraints are rising due to high attrition. Currently, the talent war is so high that the companies are receiving one candidate for every five candidates shortlisted. Fresher salaries have also doubled in the last one year. So, the companies have to develop innovative ways to retain talent apart from monetary measures at a time when the global career opportunities have reduced due to increasing restrictions," said a HR professional who work with many IT firms closely to hire talent.