Attrition at Infosys increased sharply to 27.7%, up 220 basis points sequentially and a massive 17 percentage points on a year-on-year basis for the January-March quarter. However, the company management said the voluntary attrition reported at 27.7% is on LTM (last twelve months) basis and the attrition actually started to taper and was lower by 5 percentage points during the quarter.
The company expects the attrition to come down further in the quarters ahead with the initiatives taken on employee engagement and compensation.
Salil Parekh, MD and CEO, Infosys, said: “We see as we look ahead that the various initiatives we have put in, whether in greater employee engagement, the compensation reviews, different ways of people working on projects, different ways that we go on career progressions, all of those are having an impact and will have an impact in the quarters ahead. We have definitely seen a small decline in attrition from the previous quarter and will continue to see stabilisation in the quarters ahead.”
However, the number at 27.7% is fairly high compared with 17.4% LTM attrition reported by Tata Consultancy Services (TCS) earlier this week. While this was a 210 basis points rise sequentially, the pace of increase has moderated. TCS had reported a 350 basis points increase in its attrition to 15.3% in the quarter ended December versus the quarter before. The company management has also guided that the attrition should start to plateau out for the company starting June quarter.
Trajectory wise, both Infosys and TCS have said that the pace of attrition is slowing down. However, the absolute numbers for Infosys still look high.
Nilanjan Roy, chief financial officer, Infosys, said: “We said in the last quarter that attrition had stabilised. The tail effect on an annual basis will continue to climb but there is stability and interventions and with the April 1 hike planned, we should continue to see some improvement in that.”
Infosys added 85,000 campus hires during the financial year ended March 31, 2022, while 22,000 were taken onboard in the fourth quarter itself. The company exited the year with a headcount of 314,015, a rise of 7.5% from 292,067 employees in the quarter ended December 31, 2021. The company’s employee count stood at 259,619 at the end of March 31, 2021.
On the hiring plans for FY23, Roy said the company is starting with a target of 50,000 fresher additions but could revise those as the year progresses with the demand environment and opportunities that present themselves.