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Author(s):
Anonymous
Document types:
News
Publication title:
Businessline

INFO-TECH: No slowdown in attrition yet for IT sector

Anonymous. Businessline. Chennai: May 26, 2008.

Abstract (Summary)

Mindtree Consulting's Head of the 'People Function' Mr Puneet Jetli said, "It is too early to conclude
that the slowdown has anything to do with attrition.

"Software engineers are an optimistic species. They do not react quickly to such signals. And, this is
not like 2000 - we are all still cautiously optimistic. Even the US hasn't admitted that it is going into a
recession." But he added that the environment has certainly cooled a bit with "increments this year
hovering about 10-12 per cent instead of the usual 13- 15 per cent." According to Mr R. Srikanth, Chief
Financial Officer, Polaris Software Labs, the company has maintained a stable attrition rate in the last
four quarters. He said, "It is now a bit easier to get experienced people.

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Full Text

(492 words)
(Copyright 2008. Financial Times Information Limited - Asia Africa Intelligence Wire. All Material
Subject to Copyright .)

from BUSINESS LINE, May 26, 2008 Chennami, May 25 - When an industry faces uncertain times it is
easy to assume that employees would typically stick around with current employers and not jump ship.
But recent attrition numbers for a few companies, both big and small, in the IT software services
industry show mixed signals. The context is that the industry is battling a spending slowdown in the
US.

Attrition rate, in percentage, is the number of employees per 100 leaving a company. Some companies
give out annualised numbers for the quarter while others give out rates for the trailing 12 months. The
purpose of comparison now is not necessarily to pit one company's attritions rate against another's but
to compare each company's March 2008 quarter numbers against its own earlier performance.

Among the top six, only Satyam and HCL Technologies have seen declining attrition rates. For
Cognizant, rates have remained stable between the December 2007 and March 2008 quarters but
improved significantly compared to March 2007. TCS, Infosys and Wipro's rates have either remained
stable or shown a rise.

Among smaller companies too, there is no clear signal. Patni has reported consistently falling numbers
while Polaris has shown the opposite trend.

Mindtree's numbers have remained stable.

Indicating that there certainly is a slowdown, however slight, in recruitment in the IT services industry,
Mr E. Balaji, CEO, Ma Foi Management Consultants said, "Typically, employees from smaller
companies tend to leave for bigger pastures if they sense that bigger companies are better placed to
handle a slowdown. But there is always a time lag in these things. People would be applying the
brakes now and the impact would be known in 3-6 months from now. Clarity would emerge after the
June quarter results." Some of his clients are already coming around to just-in-time recruitments.

Increment time Others point out that this might not be the best quarter to compare numbers.

For, after getting their annual or semi-annual increments, employees are ready to look out.

Mindtree Consulting's Head of the 'People Function' Mr Puneet Jetli said, "It is too early to conclude
that the slowdown has anything to do with attrition.

"Software engineers are an optimistic species. They do not react quickly to such signals. And, this is
not like 2000 - we are all still cautiously optimistic. Even the US hasn't admitted that it is going into a
recession." But he added that the environment has certainly cooled a bit with "increments this year
hovering about 10-12 per cent instead of the usual 13- 15 per cent." According to Mr R. Srikanth, Chief
Financial Officer, Polaris Software Labs, the company has maintained a stable attrition rate in the last
four quarters. He said, "It is now a bit easier to get experienced people.

Probably some companies have more employees on the bench without projects and they start looking
out for work that adds to their experience." K. Bharat Kumar Copright 2008 Business Line

Indexing (document details)

Author(s): Anonymous
Document types: News
Publication title: Businessline. Chennai: May 26, 2008.
Source type: Periodical
ProQuest 1484873491
document ID:
Text Word Count 492
Document URL: http://proquest.umi.com/pqdweb?
did=1484873491&sid=4&Fmt=3&clientId=97393&RQT=309&VName=PQD

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