The rate of employees leaving the information technology (IT) firms continues to remain high as opportunities are growing with high digital acceptance across industries. However, the rise in attrition rate pushes such companies to hire more employees at competitive salaries, which eventually impacts their incomes.
Among the brands worst hit is Tata Consultancy Services (TCS). The company announced that its employee attrition rate continued to rise during the January-March quarter reaching 17.4 per cent.
TCS CEO expects more employees to leave the firm in the coming months. “The reported attrition number of 17.4% will get worse for the next couple of quarters just because of the way LTM attrition is calculated. But we are also seeing a month-to-month flattening of the curve. So, in absolute terms our attrition went up this quarter compared to last quarter, but in percentage terms it has actually started to flatten and we think that the trend will continue into next quarter,” said Rajesh Gopinathan, chief executive officer (CEO) at TCS in a press conference for Q4 earnings release.
The employee benefits expenses, which usually includes health insurance benefits, transport facilities, work from home policy and education assistance for retaining and hiring an employee grew by ₹15,740 crore in FY22 compared to the previous financial year. This shows a big hit on the firm’s expenses.
The issue is not limited to TCS, but other IT firms in the industry as companies are hiring more employees with good hikes, promotions to mitigate those leaving the firm.
On a brighter side, the IT major has hired over 1.03 lakh employees in FY22 with an army of almost 6 lakh people. TCS added 35,209 employees in the last three months.