Refers to an entire specific group of employees leaving the organization at the same time. Internal movement within the company can be considered a positive, as that employee could have been promoted or qualified for their desired position. Mainly because when an employee leaves their current position, that role is vacant, leading to a position-based turnover. When an employee moves between departments, positions, and roles within the organization it’s considered internal attrition. Involuntary attritionĪ type of attrition is when the company decides to part ways with the employee and relieves the employee of their current job duties and responsibilities.Ĭommon examples of involuntary termination include poor performance, behavioral problems, or being laid off. The employee might be leaving because they are not satisfied with their role or they lack a proper learning and development strategy. This is when an employee chooses to leave the company on their own accord and could point to problem areas in the way you nurture employees. No matter what made the employee churn, conducting an employee exit interview is typically a good way to uncover the actual reason. Moreover, you got to pay a salary for that time as well.Employee attrition rate can be affected by different factors such as an individual employee’s reasons, a company decision, or an entire group decides to leave. Let me give you an example, if somebody leaves, you hire someone new, and you have to train them for six months. He told Business Today, “The cost of attrition is very high. Pai explained how the cost of attrition adds up for an IT company. The cost of attrition includes the expense of training a new employee, salary paid in that time frame, and the foregone billings in the training phase, among other expenditures. Is there a cost associated with attrition at Indian IT companies? They pay relatively more for similar roles.” She said, “Why I and why most people around me leave Indian IT jobs is because of financially better paying opportunities at MNCs like IBM, Capgemini, Accenture, etc. All of them want to join the big companies and build a career and get good training.”Īnother IT sector employee told Business Today that the high attrition rate could be because of better pay by other multinational corporations in the same sector. He told Business Today, “There is a surplus of people in the system. TV Mohandas Pai, former director at Infosys, also stressed that there is an excess of people working in the Indian IT industry. He said, “On an absolute basis it (attrition rate) is continuing to increase though on a percentage basis it is starting to flatten and that may continue into part of Q2 also.” TCS’ attrition rate spiked to 19.7 per cent, a rise of 2.3 per cent from the previous quarter, albeit lesser than its peers. Rajesh Gopinathan, CEO of the largest Indian IT company TCS, pointed out after the quarterly results announcement that the firm’s attrition rate has not come down yet, but might do so in the coming quarters. He said, “In general when an industry goes through a rapid surge, there is shock with attrition rate running at 23-24%, I think that shock stage is now coming down.” CP Gurnani, Managing Director and Chief Executive Officer of Tech Mahindra, reasoned that the high attrition rates could be attributed to the rapid expansions in the industry. Wipro came in next with an attrition rate of 23.3 per cent while the attrition rate at Tech Mahindra was reported at 22 per cent. Infosys’ attrition rate stood at 28.4 per cent, the highest among Indian IT bellwethers, in the first quarter of the financial year 2022-23. Attrition rate refers to the metric used to measure the loss of employees over time.
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