Indian IT behemoth Wipro has been battling high attrition rates for the past few quarters amid cost overloads and margin pressures. The tech giant, which employs 2,58, 574 people, has an attrition rate of 23.3 per cent, and added over 15,000 new employees in the first quarter of the financial year 2022-23. The top management of the company, including Thierry Delaporte, Chief Executive Officer, and Rishad Premji, Executive Chairman, has also addressed this issue on several occasions.
The recent attrition trend at Wipro
Wipro’s attrition rate has almost doubled in the past few quarters. Attrition rate refers to the metric used to measure the loss of employees over time.
As per the company’s quarterly results, the attrition rate in the fourth quarter of the financial year 2020-21 was 12.1 per cent. In the next quarter, the first quarter of the financial year 2021-22, the company reported over a 3-percentage point spike in its attrition rate as the rate rose to 15.5 per cent. The subsequent quarter marked the steepest rise in attrition rate for Wipro, a net change of 5 percentage points as the attrition rate rose to 20.5 per cent.
The attrition rate in the December quarter of the financial year 2021-22 was 22.7 per cent and it rose to 23.8 per cent in the last quarter of the financial year 2021-22.
Jatin Dalal, Chief Financial Officer of Wipro, highlighted how high attrition adds to the cost of the company. He said, “One of the biggest impacts on our cost structure is when you are simply replacing a similar scale and similar capability and similar experience employee, but you are paying premium to a lateral of 25-30 per cent.”
How Wipro plans on reducing attrition
The soaring attrition rates have been adding to the costs of the IT major. The company has made a few policy changes to combat the rising attrition and bring down costs. Managing Director and CEO Thierry Delaporte, highlighted how the company has decided to increase frequency of promotion cycles for a chunk of employees to create an incentive for them to stay back in the company. He said during the latest earnings call, “We have decided to increase the frequency of promotion cycles for 70 per cent of our colleagues in junior bands to a quarterly basis.”
Moreover, Saurabh Govil, the chief human resources officer at Wipro, also has a plan to keep attrition in check. He said that the IT bellwether is charting out career paths for its fresher employees for the upcoming five years.
After the above-mentioned policies were put in place, Wipro’s attrition rate marked a steady moderation despite the rising attrition rate at its peers TCS and Infosys. The attrition rate in the first quarter of the financial year 2022-23 was 23.3 per cent.
Delaporte said during the latest earnings call, “We expect further moderation (in attrition rates) ahead.”
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