Staffing woes in IT sector: Nasscom feels attrition problem may reach its peak soon

According to Nasscom, attrition rates in the Indian IT sector may have peaked. Vice Chairman Krishnan Ramanujam said that attrition levels appear to be plateauing or decreasing based on recent data from the top-10 IT companies, .

"Maybe there is hope that we are at the peak, and hopefully it will get better from here on," Ramanujam, who serves as the president and head of business and technology services at the largest IT exporter, TCS, told reporters at Nasscom's strategic review press conference.

In recent quarters, many companies have reported attrition rates of over 20 per cent, ever since the greater demand for digitization from companies across the globe, which occurred after the pandemic, increased the demand for skilled manpower.

Moreover, companies have hired more people than planned, awarded retention bonuses or raise, promoted or trained employees, and taken a slew of other employee retention initiatives, affecting profit margins. It is noteworthy that the high demand for IT services globally has led to a 15,5% growth rate, "the highest in over a decade", creating a USD 227 billion sector employing over 50 lakh people.

Debjani Ghosh, the lobby grouping's president, said that in a survey of over 100 tech company CEOs, attrition was identified as a key challenge. The problem will not be solved until the gap between supply and demand is bridged, she said.

Listing out a slew of measures being undertaken by the companies and also Nasscom, Ghosh said talent retention is a "key success imperative" for the industry and also for India.

To prove that the industry as a whole isn't losing talent, she said companies are expanding to smaller towns and cities, adding women, fresh graduates, and providing more training.

Rather than IT industry employees switching to other fields, Ramanujam pointed out that the IT sector is attracting talent from other industries. 

The need right now is to widen the talent attraction funnel so that people from other sectors can enter the IT sector, and this is his perspective. 

(With inputs from PTI)