HCL Technologies CEO Vijayakumar on Monday said he expects the rising attrition rates to stabilise in the future quarters as he exuded confidence in the steps being taken by the IT major, including ramping up fresher hiring, to arrest the spike.
The company, which expects its fresher hiring to be around 20,000-22,000 in FY22, has said the number could double in the next financial year.
“This (rising attrition) is getting driven by the demand-supply situation. Since there is a lot of demand, there is obviously a little bit more churn than normal. During the first phase of the pandemic, attrition had come down significantly but in the last three quarters, it has been at elevated levels,” Vijayakumar told PTI.
He added that companies are taking a number of steps to rein in attrition, including offering higher compensation and increasing spending on training and reskilling staff.
“Our attrition is among the lowest in the industry, it’s somewhere in the lower quartile compared to the other industry players. We expect this to stabilise, while the LTM (last 12 months) attrition rate rates may go up a little bit, but we expect the quarterly annualised numbers to start stabilising and coming down in the future quarters,” Vijayakumar said.
HCL Technologies has already added 17,500 freshers as of January 10, and expects to hire 20,000-22,000 freshers this fiscal.
Hiring freshers is a big component of the company’s talent strategy, and it is looking ambitiously at onboarding double the number of freshers in FY23 compared to FY22. At the end of the December 2021 quarter, HCL had 1,97,777 employees with a net addition of 10,143 people.
HCL Technologies’ attrition for IT services (on a last 12-month basis) stood at 19.8 per cent. Attrition excludes involuntary attrition and Digital process operations. Indian IT services companies have been dealing with high attrition rates as demand for digital talent has outstripped supply, leading to what industry experts call a “war for talent”.
In the December 2021 quarter, TCS has seen its attrition rate rising to 15.3 per cent in IT services from 11.9 per cent in the previous quarter. Infosys has seen voluntary attrition (last 12 months- IT services) going to 25.5 per cent as against 20.1 per cent in the September quarter.
HCL Technologies also expects to recruit more than 2,000 graduates over the next 2-3 years in the US, and continues to also scale its presence in countries like Vietnam, Sri Lanka, Costa Rica and Romania.
To contain attrition, HCL Technologies is undertaking a slew of measures, including stock options and better salary hikes. The company is investing significantly in talent and providing them long-term incentives, higher increments as well as towards upskilling and re-skilling.
Besides, HCL Technologies has also identified a pool of about 600 people as its next-generation leaders, who over the course of the next 4-5 years will take up significantly higher roles in the organisation.
Vijayakumar said the demand is fairly secular across all geographies and verticals.
“Some verticals are focused on the middle and back-office transformation having already significantly modernised the front office, while some of the traditional industries are still spending a lot of programs on the front office transformation, so there is work across all industries. The nature of work may vary depending on the segments we operate in,” he said.