High staff turnover in the information technology (IT) sector continues to be an issue and companies such as India’s largest IT services provider Tata Consultancy Services (TCS), Wipro and HCL Tech are taking steps such as increasing salaries that enable remote working. to keep the talent. Wipro has announced that it will offer quarterly promotions to its employees from July this year.
IT company failure rates
TCS turnover was 19.7 percent on a 12-month basis in the June 2022 quarter, the highest turnover in the past six quarters. The rate rose to 17.4 percent during the quarter ended March 2022. Wipro’s churn was a staggering 23.3 percent in the June 2022 quarter, which was lower quarter-on-quarter. Wipro had a failure rate of 23.8 percent in Q4FY22.
HCL Tech also posted a high turnover of 23.8 percent, compared to the quarter ended March 2022, where the same was 21.9 percent. Year-over-year, HCL Tech’s churn was up 12 percent from 11.8 percent in Q1FY22 to 23.8 percent in Q1FY23.
Salary Increases and Promotions
The companies offer salary increases, frequent promotions and flexible workplace options to retain talent. To retain the talent, Wipro CEO and MD Thierry Delaporte said: “We announced that we are moving to a quarterly promotion cycle, which is very new since we were on the annual cycle. The quarterly promotions came into effect this month (July 2022) and also salary increases for those eligible in September 2022.”
Wipro has announced that it will offer quarterly promotions to its employees from July this year and salary increases from next month.
Aside from that, IT companies are also offering retention bonuses, out-of-cycle wage revisions, and salary increases, which also impacts their margins.
Work from home status
IT companies largely work remotely. However, some companies call their employees once or twice a week. But in the long run, most companies have said they will adopt the hybrid operating model. TCS has also set up hot desks and occasional service zones (OOZs). Infosys has also said it plans to follow the hybrid model of works in the long term.
During the June 2022 quarter, TCS’s consolidated net profit was Rs 9,478 crore, up 5.2 percent year-on-year. The company’s revenue increased by 16.2 percent to Rs 52,758 crore in April-June 2022, compared to Rs 45,411 crore in the same period a year ago.
Wipro reported its quarterly profit in June 2022 at Rs 2,563 crore, down 20.9 percent year-over-year. HCL Technologies reported a 2.4 percent year-over-year jump in its net profit to Rs 3,283 crore in the June 2022 quarter, from Rs 3,218 crore in the corresponding quarter last year.
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