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Fewer software employees in exit mode

Bipin Chandran

The slump in the software services sector has slowed down one of the main features of the industry: the high employee turnover rate. In the last three years, the turnover rate has fallen by two-thirds, from 35 per cent in 1999-2000 to 25 per cent in 2000-01 and to 12 per cent in 2001-02, according to Nasscom.

"The trend of high employee attrition in the software services sector seems to be over. This is mainly due to the slump in the employment market. Moreover, professionals are no longer ready to pick up H1B visas and rush off to the US. They now want stable jobs at reputed firms," said Kiran Karnik, president of Nasscom.

This is reflected in the employee turnover figures of the country's leading software services companies. The employee turnover rate of India's second largest software exporter, Infosys, stood at 6.2 per cent in 2001-02 as against 11.2 per cent in 2000-01. "Infosys' attrition rate has always been lower than industry standards," a company spokesperson pointed out.

HCL Technologies has seen its attrition rate come down from 22 per cent in 1999-2000 to 12 per cent in 2000-01 and to 8 per cent in 2001-02. The firm attributes this decline to the lower demand for jobs in international markets.

Hughes Software Services has also seen its attrition rate falling over the past few years. The firm's employee turnover rate has halved to 7 per cent in 2001-02 from 14 per cent during 2000-01.

"This is mainly due to the setback in the international job market in the communications area, where we operate. People are no longer ready to leave jobs in India and take up uncertain ones in the US," a company spokesperson said, adding that the employee attrition rate during 1999-2000 stood at 18 per cent.

HR consultants point out that attrition rates are higher among smaller software firms. "At a time when jobs are scarce, there is a tendency among professionals in larger companies to stick to their jobs," says the head of a Delhi-based HR consultancy.

"We are only seeing some movement at the top. At the lower levels, there is not much movement," said R Sankar, country head of William M Mercer, India.

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