IT cos going rural to check attrition

We're opening up new centres in small cities as we feel that work should go to people than people coming to jobs all the time - Debashis Chatterjee, CEO & MD of Mindtree

Covid Consequences

- IT cos setting up centres in non-metro cities

- IT firms going to small cities & towns

- It'll be positive for those who prefer WFH

- IT employees prefer WFH

- High attrition levels major concern

- And also it'll check attrition problem

Bengaluru: Indian IT companies are opening up centres in small cities in order to check the high attrition issues faced by the technology industry for last one year. Most companies feel that opening centres in tier-II & III cities will help them to retain talent who are otherwise not keen to resume work from offices in the metro cities.

According to sources in the know, even global technology giants are also opting for this route. Accenture has opened a large delivery centre in Vizag as part of this move.

Similarly, cities like Coimbatore, Lucknow, Bhubaneswar, Jaipur, Madurai and Mysuru are witnessing a lot of interest from IT companies for opening up new centres or expanding capacity to meet the surge in technology jobs.

"We are opening up new centres in small cities as we feel that work should go to people than people coming to jobs all the time," said Debashis Chatterjee, CEO & MD of Mindtree, in an interaction. Historically, the cost of operations in tier-II & III centres are lower than the big cities. Apart from cost, even employee attrition also remains low in these centres. During the pandemic, most employees of Indian IT firms work from their home towns. As the companies are trying to resume work from offices, they see reluctance among many staffers to come back to the large centres. This, in turn, has led to opting for other options by the employees in many instances given the high demand for tech talent.

In order to address these challenges, companies are going to small cities wherein employee attrition is at a low level. Also, staffers on WFH mode are likely to shift to their nearby small centres willingly when work from office resumes.

"IT companies are facing severe challenges with regard to the company culture. This is because one third of employees joined in last two years have been onboarded virtually and don't have much knowledge about their company culture. This lack of loyalty is leading to more resignations. So, opening up small centres will help companies solve this issue to an extent," said Pareekh Jain, an IT outsourcing advisor & founder, Pareekh Consulting.

Meanwhile, employee attrition continued unabated in the third quarter. However, managements of most companies indicate that some moderation is likely in the next two quarters. In the December quarter, attrition of Tata Consultancy Services jumped to 15.3 per cent from 11.9 per cent a quarter earlier. Similarly, Infosys' attrition moved up to 25.5 per cent from 20.1 per cent in the previous quarter.