Attrition rate falls down to 15-20% in IT-BPO sector: ASSOCHAM

The apex industry body, the Associated Chambers of Commerce and Industry of India (ASSOCHAM), has reported that the attrition rate in IT-BPO sector had fallen drastically. According to the body, the level of attrition has come down to 15-20% in the last six months for the year 2012 when compared to the 55-60% attrition rate in same period during the year 2011.

Attrition in call centers. Image source

Attrition in call centers. Image source

As per the recent survey carried out by the apex body, the level of attrition rate has been falling by 45-50% from period of January to June mainly due to the downturn in the global economy. According to the report, slow growth of the economy coupled with weakening rupee against dollar has made the employees in the BPO sector to adopt a wait and watch policy before moving out from the current job position. Nevertheless, this policy adopted by the employees proved to be a boon for the IT/ITES as the sector has been grappling due to talent shortage in the middle and senior level management.

The industry body as part of their survey interacted with consultants, HR professionals, psychologists and managerial officials of various companies from six leading centers of IT-BPO sector in India. Many of the respondents gave economic slump as the reason for the slowing down of hiring activities and increasing retention rate at all levels of management in BPO companies. They further said that the slowdown has been also forcing the other companies to consider only a mere hike in the annual appraisal season which doesn’t have much incentive to employees looking to jump from current jobs.

Most often, attrition in the IT-BPO sector happens mainly in quest of

  • High pay packages
  • Better career opportunities and growth prospect
  • Better management relationship and
  • Avoid performance pressure.

But, according to the survey, decline in attrition rate will prove to be fruitful for the companies which are struggling as expenses incurred on recruiting new staff and training them on the skills sets has fallen considerably.

According to ASSOCHAM, the fall in attrition rate is beneficial as frequent change in the job can be fatal for the growth of the BPO sector in India. The report claims that high attrition rate affects both the companies that pay high pay packages and for the individuals receiving those high pay since high pays do not raise the level of skills and talents of the individuals.

Further the report also discusses that the attrition rate is maximum among the entry level employees due to their aspiration for hefty pay packages, whereas the rate is minimum i.e less than 5% for the employees having work experience for more than 10 years. The rate of attrition is 7-10% among the employees having experience between 5-10 years.

However, according to the report, the companies are planning for salary hikes and promotions to keep a check on the attrition rate and to further lower the current rate.

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