Buffer Zone

Overstaffing is the new HR mantra to outwit attrition in the IT and telecom sectors.

WITH the attrition rate reaching alarming levels in India's booming sectors like information technology and telecom, human resource personnel have devised innovative ways such as overstaffing and thinking beyond higher pay packets to retain talent.

"Attrition is a crisis in India, especially in sectors such as IT, ITeS, telecom and retail, that are growing at the fastest pace. Simultaneously, these are the very sectors which get plagued by attrition the most," Global HR consultancy firm Hay Group's Practice Leader Mark Thompson said in New Delhi recently.

Hence, HR managers are resorting to innovative ways to harness and retain talent as the market is witnessing demand-supply constraints, Thompson added.

Business process outsourcing firm Genpact resorts to rotation of talent as a phenomenon or culture. "GE overstaffs around 15 to 20 per cent to tackle attrition," Genpact Executive Vice-President (HR) Vivek Jain said.

The high attrition rate experienced by 60 per cent of the BPO units is due to higher salary expectations. Over 80 per cent of the respondents from BPO firms surveyed by industry body Assocham recently, felt attrition rates in future would rise over 40 per cent, while the remaining 20 per cent were optimistic that it would drop and stabilise between 20-25 per cent.

There should be a balance between attrition and retention of employees to ensure maximum growth of an organisation.

Nowadays, a hike in salary is not the only incentive that attracts talent, Thompson said.

"Companies now offer an ideal relational reward that balances work and family life. This is because salary alone cannot ensure retention and loyalty as others can match this," he added.

According to a report by Hay Group, IT and ITeS companies are facing high attrition rates of 30-40 per cent mainly at the junior and middle-management levels and are looking at tools beyond compensation to arrest this trend.

In contrast, attrition in old-economy sectors like pharmaceuticals, manufacturing and engineering was negligible.

The top four Indian IT firms — TCS, Infosys, Wipro and Satyam — witnessed an exodus of about 10,000 people for the quarter ended July.

TCS, the biggest IT firm in terms of revenue as well as headcount, saw an exodus of about 2,500 employees, while just over 2,000 people quit the country's second largest software exporter, Infosys.

Attrition is estimated to be much higher at about 3,500 at Wipro, the country's third-biggest IT firm, while Satyam, the smallest of the four, saw 1,600 people leaving.

TCS reported an attrition rate of 11.5 per cent, Infosys 13.7 per cent, Satyam 14.9 per cent and Wipro 20 per cent.

The talent pressures in these new-economy companies get compounded with the entry of multinationals, which try to attract talent from established companies based on a high compensation differential.

"MNCs are more than willing to pay a 30-40 per cent hike in compensation and may be double the current package in case of employees with key qualifications and potential," a Hay Group report said, highlighting that salary growth in India during the last two years has been a striking 12.5 per cent.

Besides, the demographic constituent of the country is one of the reasons behind this high rate of attrition as the young people aggregate to over 50 per cent of the total population. — PTI