BENGALURU: The attrition rate in IT services firms is slowly inching up, with many companies seeing an increase in the March quarter compared to previous quarters. HR experts say this is owing to various factors including single-digit salary hikes in comparison to double-digit offers from elsewhere and better opportunities across global capability centres (GCCs), start-ups and product companies.
Infosys' voluntary attrition in Q4FY25 was at 14.1% compared to 12.6% in the year-ago period. TCS' attrition rate stood at 13.3% in IT services in the March quarter, 13% in Q3 and 12.3% in Q2.
"The slow recovery year, from a talent action point, in FY2025 remained largely in line with the low and slow recovery curve pattern that began in the second half of FY2024. FY2025 saw large players slowly hiring to regain capacity they lost in the previous fiscal," said Kamal Karanth, Co-founder, Xpheno, a specialist staffing firm.
"While the IT services talent action picked up in relative terms, GCCs kept their hiring engines on through the year. With this dual effect from IT services and GCCs, mobility of talent increased and moved the average up by 1% point to nearly 14%," he said.
Sunil Nehra, CEO – IT Staffing, FirstMeridian Business Services, said GCCs are offering better career opportunities. "The power of AL, ML and cloud computing has gained immense recognition in India and talent who have specialised in these new age skills are enjoying better career growth trajectories. As approximately 1.5 lakh jobs are expected to be created by 2026 across the GCC sector in India, there is also a shift in the way that talent is being engaged," he said.
HR experts also pointed out that the rapid adoption of AI and machine learning is reshaping business models and there is demand for specialised skills.
"GCCs are a glimmer of optimism in terms of stability, opportunities, and better pay. They are expected to drive growth in the IT and BPM sectors. These centres utilize the skills of the Indian workforce to expand the parent companies," said Sachin Alug, CEO, NLB Services.
He said there is a possibility that the attrition rate in the Indian IT sector will normalise by the end of 2026. "Several factors, including the global economic environment, advanced retention programs, and flexible work models, will contribute to this positive change. Currently, the industry is undergoing significant digital transformations, due to which it might take some time to achieve workforce stability," he added.