Abstract

The case describes the various reasons for the rapid increase in the attrition rate in the Indian IT industry. In the first half of 2022 attrition was 20 percent on average across sectors and was the highest at 24.4 percent in the Indian IT sector. The case first touches upon the attrition woes in the US leading to what came to be known as ‘The Great Resignation’. The case then describes the state of affairs in the Indian IT sector post COVID-19 and the reasons for high attrition such as external inequity of compensation, limited growth opportunities, and role stagnation. The case then touches upon the various initiatives taken by Indian IT major companies such as Infosys, HCL, TCS, and Wipro, to control their attrition rates. However, these initiatives impacted operating margins since higher employee benefit expenses, sub-contracting costs, and travel expenses pushed up the overall costs. The question was which of these companies would be able to continue to optimize various cost levers to drive efficiency in operations while at the same time ensuring employee retention? Will the efforts lead to a standard solution to attrition problems across all major companies and enable the IT sector to gear up for the future?

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Examine various factors that contribute to higher attrition rates
• Evaluate the various measures IT companies take to control attrition
• Describe the changes in expectations among IT employees post the COVID-19 pandemic

Keywords

Challenges of Attrition; Employee retention; Employee benefits; Hiring; Training; Cross-skilling; Up-skilling; Compensation