Increasing Attrition Rates in Indian IT Firms

Recent reports indicate a noticeable uptick in attrition rates among some Indian IT firms, suggesting a moderate recovery in the demand environment and the emergence of opportunities for specialized roles. HCLTech, for instance, has seen its attrition rate rise to 13.2%, up from 12.9% in the previous quarter and 12.8% in the same period last year. CEO C Vijayakumar attributes this increase to the natural consequence of a demand pickup.

Ramachandran Sundararajan, HCL's HR head, predicts that the attrition rate will stabilize and conclude FY25 at 13.2%. The company added 2,134 employees in the December quarter, bringing the total headcount to 220,755.

Comparative Analysis of IT Firms

Among the leading firms, Wipro records the highest attrition rate at 15.3%, up from 14.1% in the first quarter. However, the company's leadership is optimistic, noting a decrease in new resignations and anticipating a decline in the attrition rate. Similarly, TCS and Infosys have also experienced increases in their attrition rates, with TCS rising to 13% and Infosys climbing to 13.7%.

Kapil Joshi, CEO of Quess Corp IT staffing, links the spike in attrition to reviving demand in retail, manufacturing, and the BFSI sector. He estimates that attrition will stabilize at 12-13% by FY26 as the sector adjusts to moderated demand and implements optimized workforce strategies.

Future Outlook and Industry Insights

Sanju Ballurkar, President of Experis, notes that while current attrition rates are rising, they remain below the 20% peak observed during the pandemic, largely due to increased demand for AI-related expertise. Industry analysts highlight the impact of global capability centres' competitive recruitment practices on these trends. Sachin Alug, CEO of NLB Services, emphasizes the need for IT services organizations to match GCCs' career advancement opportunities to regain their competitive edge.

The December quarter saw a decline in headcount across three of the five major IT firms, with a collective reduction of 2,587 personnel, contrasting with the addition of 15,033 staff in the September quarter.