Managing Attrition in the Indian Information Technology Industry

            
 
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Case Details:

Case Code : HROB071
Case Length : 14 Pages
Period : 1991-2005
Pub Date : 2005
Teaching Note : Available
Organization : -
Industry : Information Technology
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"Our assets walk out of the door each evening. We have to make sure that they come back the next morning."

- N R Narayana Murthy, Chairman and Chief Mentor, Infosys Technologies Limited in 2005.1

Introduction

The year 2004-2005 was another successful year for the Information Technology (IT) industry in India with total software and services revenues recording a high of $22 billion for the year 2004-2005 (Refer Exhibit I). The employee base also showed a whopping increase to cross the one million mark in the year 2005. However, despite the growth in the overall employee base, companies were struggling to retain their existing employees. Analysts observed that managing attrition in the industry was important because skilled professionals formed the crux of this knowledge-intensive industry. What's more, the cost of recruitment and training was a huge expense for most IT firms.

Human Resource and Organization Behavior | Case Study in Management, Operations, Strategies, Human Resource and Organization Behavior, Case Studies

Handling the menace of attrition was therefore very important to IT companies. Attrition affected the quality of service and also led to higher Training & Development expenditure, affecting the overall performance of the organization. IT companies in India were taking steps to counter the rising levels of attrition.

Companies were beginning to realize the importance of factors other than salary with which to motivate their employees to stay. A healthy work environment, continuous employee learning, work-life balance, recognition and corporate brand building were some of the key initiatives taken up by IT companies in recent years to manage attrition. In 2004, Infosys Technologies Limited (Infosys)2 devised a policy of taking security deposits from fresh graduates who joined the company at the entry level to discourage them from leaving the company during the training period whereas Wipro Technologies Ltd3 (Wipro) started a matchmaking service for its employees.

Managing Attrition in the Indian Information Technology Industry - Next Page>>


1] R. Subramanium, "Infy stresses more on human assets", www.economictimes.com, May 22, 2005.

2] Infosys Technologies Ltd, established in 1981, provides consulting and IT services to clients globally. The company for the financial year 2004-2005 recorded revenues of Rs.71.296 billion and a net profit of Rs.18.917 billion.

3] Wipro Technologies Ltd., was established in 1980 and provides IT Services, Solutions & Products. The company recorded revenues of Rs. 81.70 billion and a net profit of Rs. 16.21 billion for the financial year 2004-2005.

 

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