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Rising Attrition Or Retaining Talent, What Exactly Is The Challenge?
Employee attrition is one of the business problems that every employer has to tackle, especially when there is a boom in job opportunities. The IT Industry witnessing the talent acquisition war, on one end companies are offering higher salaries to suitably skilled top talent and on the counter side many existing employees are not the best fit for current demanding tech projects, hence upskilling themselves. And the problem continues…
Attrition has always been proportional to the jobs available in the market. The more jobs are available in the market, the higher the attrition rate will be. With the advent of digitisation and the rise in newer vacant job profiles in software development, cloud computing, data analyzing, artificial intelligence, machine learning and majorly aligned with specific tech skills, attrition has been reported higher.
The attrition rate amongst the tech industry has been hitting the roof recently with a whopping 8.03 per cent according to a 2021 TeamLease Services Employment Outlook Report and it gravely reflects the strong demand environment in the industry.
The accelerated digital transformation of organisations in both traditional sectors like manufacturing and contemporary sectors like digitally native organisations fueled by the pandemic has enabled the job market to bounce back like never before. People with in-demand technical skills like AI, Cloud and Analytics have multiple job offers in hand and have better negotiation power than ever before. Manish Sharma, Director, PwC explains the scenario and said, “The pandemic has increased the risk appetite of individuals who otherwise were happy in their comfort zones within their current organisations. These dual factors have increased voluntary attrition tremendously across sectors. Hence organisations are having a tough time in retaining their top talent.”
Why Are Employees Leaving Their Stable Jobs In Turbulent Times?
With the onset of the pandemic, the Indian IT industry has restyled its business models and improved the bottom lines for employees to work in a remote work setting with digital talent. Currently, the Indian corporate ecosystem is witnessing an explosion of tech startups and new companies. Companies like these are looking for the best talent by offering them competitive packages, which is a remarkable benefit for employees. The attrition rate is rising in leading companies like Accenture attrition rises to 17 per cent as demand for services grows, Tech Mahindra's attrition rate jumped to 17 per cent and many other tech companies. The attrition rate of Cognizant is at 21 per cent for the Jan to March quarter of 2021. Infosys has recorded an attrition rate of 15.2 per cent and Wipro’s attrition rate stood at 12.1 per cent in the fourth quarter.
At Tech Mahindra, they have introduced several employee-engagement initiatives to encourage employees to reskill and upskill, and are also giving employees opportunities to be redeployed in upskilled projects so that they can benefit financially as well. While highlighting the paramount need of upskilling, Harshvendra Soin, Global Chief People Officer and Head – Marketing, Tech Mahindra asserts, “We are diversifying our talent pool to hedge against attrition by going global for talent acquisition as well as increasing hiring from tier-II Indian cities like Trivandrum, Nagpur, Bhubaneswar, and Vizag. With all these steps in place, we expect the attrition rate to flatten and hopefully come down in the future.”
The market for skilled digital talent is highly competitive. Experts assert that the impact of high attrition on the company’s growth is clearly visible and that is surely a worrying trend. The era of digitisation has introduced a plethora of job profiles that has resulted in a rise in demand for relevantly skilled and highly equipped talent. The industry has seen an almost 30-35 per cent growth in the recruitment of tech-inclined skills this year. To address the demand, companies are expanding their workforce and are ready to offer relatively higher salaries. The opening up of the market leads to higher attrition as more jobs become available.
Addressing The Skill Gap: Uptick In Upskilling
According to the World Economic Forum report, the rapid acceleration of automation and economic uncertainty caused by the pandemic will shift the division of labour between humans and machines, causing 85 million jobs to be displaced and 97 million new ones to be created by 2025.
Companies are now heavily investing in data science and complex algorithms to mine the snowballing data to drive business outcomes. Indian workforce is also turning online to upskill themselves. The right data skillset is a gateway to a highly rewarding career. Amid the rise of automation and AI, by 2022, 54 per cent of all employees will require significant upskilling, according to the World Economic Forum, which calls the phenomenon 'the Fourth Industrial Revolution.'
“With IT companies progressively competing to hire and retain the best talent, offering hefty packages and greater perks, it becomes challenging for the companies to retain talent. But compensation isn't the only driving force anymore for employees, they need and will be attracted towards a nurturing work culture where they can learn and grow with the organisation,” elucidates Akash Agrawal, Co-Founder & CEO, Sahaj Software solutions.
#Tips To Retain: Treat Employees With The Best
A recent survey by Microsoft revealed that 41 per cent of workers are thinking about resigning from their jobs. The pandemic has led to unimaginable changes in workplaces across the globe, leading HR professionals to inculcate certain practices and trends, which were believed would take years to come to fruition. With a work environment being influenced by factors such as health and economic downfall, it has heralded the dawn of practices like remote working, virtual recruitment and online employee engagement programmes as an integral part of HR. Not to forget, this is the right time for employees to learn and hone new-age professional skills that are in demand.
Compensation and Benefits is an area that is a part of the long term strategy of an organisation and cannot be altered very frequently. PwC’s Sharma has suggested ways to recognise the employees, “As the businesses are rebounding, organisations would have to relook at their compensation benchmarks to ensure not only they are able to retain their key talent but are simultaneously able to attract the best talent.”
“With technology making significant strides within the HR industry, it will change how HR as a function works in the next few years. If used appropriately, technology will make HR practices much more efficient. Companies won't just be limited to investing in technology. It would also be required for them to lead their teams and help in building a work environment that fosters a culture where employees can dream big and grow their intrapreneurial skills”. Moushumi Dhar, Head - HR, Compass India Development Center points out.
As the current times require a tectonic shift in the traditional structures of the people policies, where the leaders are expected to essentially realise that people come above everything. It is critical to control employee attrition with coherent talent retaining strategies. HR leaders must be 'flexible in schedules' and incorporate 'people-centric provisions' in basic policies. Creating an 'equitable workplace' is of paramount importance in this 'Phygital era'. The emotional quotient of employees will be a key driving factor whether to stay with the current organisation or move on to a company whose policies are relatively more employee-oriented. Last but not the least, the good old technique of rewards and recognition with monetary benefits will never go out of fashion.