Bad time to 'Claim' but excellent time to 'Tame'

Major IT firm in India are experiencing a sudden fall in the attrition levels. Available reports show that the rate of at India’s second largest IT firm in terms of software export, Infosys Technologies has declined from 17 per cent to 15.6 per cent during the last two fiscal quarters. At Tata Consultancy Services (TCS), the country’s largest IT firm, the attrition rate dropped from a high of 14.8 per cent in the fiscal quarter ended on June 30, to 13.7 per cent in the quarter that closed on September 30. Meanwhile, the attrition rate at mid-size IT firm MindTree dropped from 25.6 per cent in June last to 21.7 per cent in the quarter ended on September 30.


Now what should be attributed as a cause? There are companies like Wipro who believe that this drop is because of the efforts of their HR departments. In Wipro the attrition level is down by 4.7%. In a recent interview (link) the CEO attributed to their success to variable pay and other HR efforts.

Many industry experts however feel that trend is developing now since people are apprehensive that the economic problems in Europe could escalate into a global downturn. To lend support to this claim it has been observed that the dip in attrition levels is sharpest at middle and senior levels. Additionally, there is a slowdown in hiring, as reported by many employment firms.

It is irrelevant to argue who can be credited the plunge in attrition-levels – the HR or the economy. Instead this period should be looked upon as an excellent opportunity for the companies to engage their people especially their talent. In a recent speech at AdAsia at New Delhi, the PepsiCo Chairman and Global CEO Indira Nooyi said that corporation world over must look at the crisis as an opportunity and need adapt and recognize the fact that they live in a new world. She feels that it is an excellent opportunity for companies to groom talent and build leadership pipeline. (link to speech)

The best time to engage employees is now when most of them have decided to ‘stay’ so that this trend continues even when greener pastures return and beckon. And as of now, this is not the best time to test the power to keep people in one’s fold (the better times shall be) but definitely a very good time to see people remain in fold tomorrow as well. Lon and short of the story is - Bad time to claim (attrition-drop) but excellent opportunity to tame (engage the talent).