Hop, skip and jump: Decoding why IT will face the highest attrition of 21% this year

The irony is hard to escape. It is a sector where the perks for the staff are top notch, but it is also one where attrition is extreme. The sector in question is information technology and IT enabled services (ITeS).

A recent survey by executive search firm MANCER Consulting reveals that ITeS will face the highest overall attrition of 21 percent this year with the junior level seeing exits at almost 30 percent.

Interestingly, there is no perk the companies in the sector do not offer: from pick up and drop facilities, flexible work hours, crche, the right to rate your peers, bosses, to even reach out to the CEO without asking for permission from your immediate manager, besides good salary packages. Of course, all these may not apply to all the companies in the sector, but largely the cross section has some of these services mentioned.

Then what is the reason for the high employee churn in the sector?

The fresher challenge

A fresher working for an Indian IT firm gets a package of Rs 8,000-12,000 and in an MNC, between Rs 10,000 and Rs 15,000, says Subhodeep Dutta, head, corporate strategy, new business initiatives, Mancer Consulting.

Gaurav Gupta, a 29-year-old Delhi-based IT sector employee, has changed five jobs in four years of joining the industry. The longest stint he has had in an organisation is 18 months and the shortest, 4 months. Of the five companies he has worked, one was a firm in the big league of IT firms.

"I left my first job at an MNC as they did not give me the increment of 30 percent they promised; exited my second job after 9 months as I did not want to continue working on UK timings in the severe cold in Delhi," says Gupta.

Currently, Gupta works in a firm that offers him flexi-hours, cab facilities, etc., but he says, "If I get a job with a higher pay and designation sans these facilities, I will pick that up."

Mark Driscoll, Human Capital Leader, PwC India, says, "This is a peculiar situation besetting Indian firms or rather BRIC countries." He says that he often finds a candidate is not interested in investing in relationships at the work place, picking up new skill sets or honing what he has. "The majority of people who are moving jobs have just 1-3 years of experience. Jumping jobs may help in getting high pay but what about learning new skills sets," he asks.

Reasons for jumping jobs

Stress factor: Employees usually work on projects which can run for a few months or years. For instance, if you are working on the supply chain management of a large auto firm and there is a technical snag, an immediate service ticket will be raised. These are service agreements that a vendor has with the company that says that the latter will tackle such a situation within hours.

It is a high pressure job, said a HR head of an MNC, requesting anonymity. "Many times we find that the young professional chooses to sit on the bench (not work on the programme) as he finds he can't cope with the stress of the project."

In this sector, employees have the luxury to sit out and not do anything till they hunt for another project. The comfort of sitting on the bench enables the employee to enhance his skills through in-house training programmes or even hunt for a job while on the pay roll of the company.

Lack of global exposure: Some firms send employees abroad for their offshore projects. That is an incentive to stay in the company for most youngsters, says an HR analyst. "If a company does not have a policy of sending employees abroad for projects, then employees will look out for another job that gives these facilities once their basic needs of a salary, perks, etc are met with in the existing job."

Lack of growth curve: Sometimes employees leave if they find there is nothing new to learn. V M Manish, a IT analyst now working for an Indian firm in the US, left one of his earlier jobs because the "learning curve became stagnant and there was nothing new to discover in the project from a technical perspective. I was looking out for an onsite opportunity and also a better pay package," he says.

Money factor: It seems to be the factor that drives an employee, especially in the initial stages of his career. "If I get more money, I will move jobs even if I have joined a firm only a few months back," says Noida-based Manish Kumar who has changed two jobs in a short span.

Sanchit Gogia, Chief Analyst and CEO of Greyhound Research, an independent IT, telecom research and advisory firm, says it helps to have a transparent HR policy at the workplace. He reasons that employees in the IT sector leave jobs quickly because of two factors: the basic salary structure and lack of communication skills. He says when designing the salary structure, employers should give the employee options of how he wants it structured within the company policy. Don't's use one bullet for all, he adds.

Communication skills: "Lack of internal communication is another drawback," says Gogia. When Narayana Murthy of Infosys was quitting, the employees got to know of it through the media, says Gogia. "Take your employees into confidence. They need to know the news first or they feel threatened and fear for their future."

Exits at mid-level management

A mid-level manager in a domestic firm with three-four years experience takes home a salary of Rs 35,000 to 40,000 while in an MNC, it would be in the range of Rs 50,000-60,000.

Attrition at the mid-level management level would be 20 percent while at the top management level it would hover around 13-15 percent this year, says the MANCER survey.

"Generally, experienced employees leave as they get better opportunities. This is usually seen to be high at the mid-management level for the employee at this level knows the limits to his growth in the firm. Hence, the turnout is high," says Sarabjit Kaur Nangra, VP Research-IT, Angel Broking.

Reasons for leaving

Stress is a factor here too. The 'plug off' is one of the reasons that the mid level manager prefers to look out as his career stagnates. A plug off is a threat of an international company that outsources business to India and exits the contract if there are performance issues or if there are chances of getting a better price or value proposition from a different partner from the same country or another geography.

The mid-level manager has experienced this Damocles sword of the plug off often and wants to steer himself clear from this potential threat, says an analyst. "He would even prefer to go to another sector with a salary structure that will not see such a rapid rise or hike as the IT sector but is assured of job satisfaction without a threat of a plug off or may choose to join a domestic IT firm which does not face this threat."

Easy mobility of skills: Dutta, Mancer Consulting, says, "The salaries at the leadership level in the ITeS sector (especially in MNCs) can vary from as low as Rs 18 lakhs and can go up to more than a crore including other perks like ESOPS, club membership etc, which their counterparts in the other sector may not earn with similar years of experience."

To sustain the current job and growth, certain competencies are needed which is relatively very different based on the market scenario. The next level movement has many contenders and can be at times tough since most the companies seek brilliant track record with matching pedigree.

The senior executive who had an early growth and does not fulfill above criteria moves on. However, "if he has shared competencies and skill sets, he can shift to other industry since his shared skills from ITeS sector can help him settle in a new industry which is moving onto a global platform."

"Currently, certain industries that are working with global partners need leadership who can manage and lead the relationship compared to their current teams. Here, the mid level manager with his skills of process centricity, ability to comprehend the business scenario, manage large operations and client relationship comes in handy."

At the middle-management level, an employee is in his early or mid 30s and would seldom move since now he wants to reach stability to grow in the same organization unlike those at the junior level who keep hopping jobs for making quick money rather than seek out a career in the same organization.

Updated Date: Jul 28, 2014 13:57 PM

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