IT firms turn cosy with staff amid talent crunch
Focus now shifted from incentive-based award system to understanding the employee holistically
image for illustrative purpose
- Some firms have continued with ESOP programme
- However, variable pay and bonus pay out have seen a fall
- IT firms predict attrition may rise again once demand environment changes
- Hence, IT cos providing flexibility of work, learning opportunities in addition to ESOPs
Bengaluru: Indian IT firms are continuing with the employee engagement initiatives started during the pandemic though hiring activity has drastically fallen over the last two quarters. According to HR industry officials, the focus of IT firms has now shifted from incentive-based award system to understanding the employee holistically. Such change has come to the fore as IT firms had to face massive attrition during the pandemic period and are trying to mitigate such risks in the future.
“Understanding the employee as a holistic person has now been the focus area. It is no longer limited to work, and KPIs (key performance indicators). Rather companies are trying to understand the aspirations, mental health and related aspects of employees. So, work life balance is looked in a more holistic fashion now. Organisations are now accepting the reality,” Aditya Narayan Mishra, the CEO of CIEL HR Services, told Bizz Buzz.
“That is the reason that many employee engagement initiatives are being continued except those specifics to the Covid pandemic,” he added.
Indian IT industry has seen a fast transition to an employer’s market from an employee one in a period of six months. This has resulted in falling attrition levels apart from very low hiring by Indian IT firms.
The top four domestic IT firms including TCS, Infosys, HCL Tech, and Wipro added 66 per cent lesser employees in FY23 as compared to the previous fiscal. In FY23, while their combined intake of new hires was 82,679, it was 2.43 lakh in FY22.
As demand for IT services comes down coupled with mass layoffs by global technology giants and startups, employee attrition has also fallen sharply. Infosys, for instance, witnessed the sharpest drop in its attrition of 340 basis points to 20.9 per cent in the fourth quarter, while TCS’ attrition fell to 20.1 per cent. Similarly, companies are struggling with high reserved employees, which is known as ‘bench’ in industry parlance. Owing to these factors, fresher hiring has taken a big hit with some companies planning to miss the campus hiring for this year.
Against this backdrop, IT firms are not dropping the employee engagement initiatives as they are aware that attrition will again pick up once demand environment changes. To avoid repetition of this scenario, IT companies are not only providing flexibility of work, learning opportunities, they are also continuing with the ESOP (employee stock option) programme.
Infosys last week allotted over 511,000 equity shares to employees who were eligible in two schemes run by the company. These shares have been allotted as a reward to the employees for their contribution to the growth of the company and to expand their ownership, the company said in an exchange filing. However, bonus pay out and variable pay have seen a reduction for the fourth quarter of FY23 as companies face margin pressure.
Understanding the employee as a holistic person has now been the focus area. It is no longer limited to work, and KPIs. Rather companies are trying to understand the aspirations, mental health and related aspects of employees
- Aditya Narayan Mishra, CEO, CIEL HR Services, tells Bizz Buzz
