Indian IT Attrition Rate is Expected to Slow Down in Q4

In recent times, the Indian IT attrition rate has reached around 15%, which is an increasing concern for IT companies in India. On one hand where the attrition rate at Tata Consultancy Services (TCS), is less than 15%, while on the other hand, companies like Mastek, and Cyient have crossed it.

During the first quarter, many Indian IT companies observed a sudden rise in attrition rates. Such rates amidst the increasing demand for IT services is also a major challenge for companies. According to experts, these challenges are put some extra pressure on these companies.

According to a report by a brokerage firm, Anand Rathi, the companies are performing hirings at a good rate, and supply will also be constrained in the fourth quarter. These factors may help in reducing the attrition rates at IT companies in Q4. Observing the current industry scenario, these companies have boosted their hiring process.

The note mentioned that, even if most companies have relatively high rates of attrition, but if appropriate actions are taken by these firms then it can be brought back in range within 2 months.

According to Anand Rathi, as hiring is picking pace, the industry utilization level is expected to observe a dip in the second quarter, after four back-to-back rising quarters. But the attrition is also expected as supply pressure is increasing due to net additions.

The report added that the large companies have been recording strong revenue growth, which is helping them to increase the number of employees significantly in the firm. The rest of the firms are also expected to experience this in the second quarter.

Anand Rathi is expecting the second quarter of the Financial year 2022 to bring revenue growth to Indian IT companies. It is the tech industry that had recorded high revenue shares after the arrival of the pandemic. Healthcare and BFSI have also been profitable in these times.

But communications and manufacturing are among the industries which observed a decline in their revenue shares.

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