Attrition up, Infy worried about talent crunch

Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS New deals at 3-4% higher prices: Infy Infosys Tech Q2 revenues grew sequentially by 8.8% Revenue guidance at 34.5-35% for FY08: Infy Infosys down 4% post Q2 numbers Infosys BSE | NSE 10/02/12 Are Mutual Funds betting on Infosys?

Infosys Technologies has seen 0.5% attrition in Q2 FY08. Domestic salary hikes were seen at 13-14% while those for offshore stood at 3-4%. Infy has not seen salary increases of over 12-15%.

 

As per the management, Infy has seen an annual staff addition target of 30,000 employees. "Recruitments were lower due to the seasonality effect."

 

TV Mohandas Pai , Director - Human Resources, Infosys, said the fall in recruitment could also be attributed to the delay in the Mysore project. "The Mysore project is behind schedule by three months. So, people who were supposed to join in the second and third quarter of September are now joining in October."

 

Attrition has gone up in Q2 by about 0.5%, he said. Off this, 0.37% is due to a number of people leaving for higher studies in technology and management. "India is going to see a surfeit of MBAs in the next 3-4 years. We are seeing a trend of young people joining companies like ours, working 2-3 years, and then wanting to do their M-Tech's and MBAs. This is okay because if somebody wants to add to their capability, they will always come back to us. We don't see any signs of a increase in attrition apart from this. People joining other companies have been constant at about 43% of the total that leave us. So, that figure has not changed."

 

According to Pai, the bigger concern at present is the talent shortage across India which is becoming much more acute because of a broken education system. "This is going to impact corporate India in a very big way in the next 3-5 years. To me, that is the biggest risk that India has today.".

 

V Balakrishnan, CFO, Infosys, said the wage hike was factored in the last quarter. "Normally, wages in India go up by about 13-15% and offshore by around 3%. We already observed that in the first quarter and normalization has happened this quarter. The attrition has slightly gone up because this quarter we have seen more people going for higher studies."