Satyam's attrition woes continue

Satyam Computer Services, which expressed concerns over high employee attrition rates in October last, is still worried about the employee leaving factor as the attrition rate inched up to 17 per cent during the last quarter (Q3) from the 16.5 per cent level during Q2.

"The higher attrition rate is a cause of concern for us and we are taking specific steps such as increasing salaries selectively to retain talented people," Thiagarajan, the vice-president of Satyam, said at a press conference here.

"At the entry level, we face no problem in getting quality people. However, when it comes to retaining experienced people we face problems," he explained.

Satyam added a significant 1,082 associates in Q3, which is the highest quarterly increase in the past three years. Sixty per cent of the new additions was at the entry-level in order to prepare for the future and leverage lower costs.

Enhanced compensation, wider spectrum of opportunities and leadership development initiatives should bring the attrition level under control, B Ramalinga Raju, the chairman of Satyam, commented.

With the new addition of employees, Satyam's total manpower strength reached 12,337 from the 11,250 level in Q2. Around 3,080 associates are working on the onsite projects, while 8,007 are working on the offshore contracts.

Interestingly, the company's offshore export revenues have been coming down gradually for several quarters, with onsite component increasing.

For the quarter ended December, the onsite revenues increased to 58.15 per cent from 57.05 per cent in the second quarter, while the offshore revenues declined to 41.85 per cent from 42.95 per cent.

The component of offshore and onsite to the total revenues was at 46.89 and 53.11 per cent respectively during the last fiscal. Time and material contracts contributed 67.35 per cent to Satyam's revenues during the last quarter, while the fixed bids shared the rest.