Good news for the Indian IT industry as the first three big results have confirmed that attrition — which had reached disturbing levels 3-4 quarters ago, is finally coming under control.
Both Infosy and TCS continued to post significant declines in attrition levels in the March quarter.
However, HCL Technologies, the country’s fifth largest IT service firm that outperformed Infosys and TCS, posted attrition levels double that of Infosys and TCS for the March quarter.
While at Infosys Technologies and TCS (Tata Consultancy Services) only around 15-18% of employees are likely to leave during a particular year over the last four quarters, at HCL Technologies, it reached a 34.8% during the just concluded quarter.
During the same quarter, attrition level at Infosys was 18% (annualized from one quarter) while it was 15.4% at TCS. The rate is a 1 percentage point fall from a year ago for Infosys while it is a 3.2 percentage point drop for TCS.
For HCL Technologies, it was an increase from 32.2% during the same quarter last year.
HCL is being bled by its BPO division, which has been losing staff at a high rate for several quarters. Vineet Nayar, CEO of the company, says the loss of strength at BPO is part of the company’s attemp to move into higher margin, more value-added transformational BPO services.
On a standalone basis, the IT services division (excluding BPO) does indeed post attrition levels in line with the rest of the Industry. For the just concluded quarter, for example, it was just 17.8%, compared to 21.5% exactly a year ago.