Attrition woes continue at Infosys; inches up to 19.5% in Q1

Infosys has one of the highest attrition rates in the Indian IT industry at 19.5 per cent, a trend that the software firm terms "worrisome".
The rate of attrition stood at 19.5 per cent for the April-June 2014 quarter, up from 18.7 per cent in the previous quarter and 16.9 per cent in the same period last year.
Infosys, which has been facing an exodus of senior level executives over the past few quarters, added 11,506 employees (gross).
Its total headcount stood at 1,61,284 employees as on June 30, 2014.
"We added about 11,500 employees (gross) in the last quarter. Net addition, however, was only approximately 800-900 people as attrition continues to remain high," Infosys CEO and MD S D Shibulal told reporters here.

Infosys COO UB Pravin Rao said: "...The attrition rates are worrisome and we are implementing various initiatives to retain good talent."

In comparison, TCS had reported an attrition rate of 11.3 per cent, while that at Wipro (IT services) and HCL Services stood at 15.1 per cent and 16.9 per cent, respectively in the January-March 2014 quarter (last 12 month basis).
These companies are scheduled to announce their financial results for Q1 FY2014-15 later this month.
Shibulal said the company has undertaken steps to check the rising attrition rate including steps like introducing quarterly promotion cycles and increasing the variable payout over the last few quarters.

"We hope to reduce attrition as the result of these initiatives in the future," Shibulal said.
In April, Infosys had announced a wage hike of 6-7 per cent for offshore employees and 1-2 per cent onsite employees.
Infosys said it has increased its utilisation rate to 74.8 per cent (including trainees) in the said quarter from 72.9 per cent in the March quarter, a move that had helped it improve operational performance.
Excluding trainees, it stood at 80.1 per cent.
"We improved operational performance as a result of our cost optimisation initiatives and a focus on increasing productivity and utilisation," Infosys CFO Rajiv Bansal said.

This partially offset the impact of compensation increases for the employees this quarter and will help Infosys invest in areas that will accelerate growth, he added.