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High Attrition Rate in Infosys

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130 views9 pages

High Attrition Rate in Infosys

Uploaded by

raspinderkaur13
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Analysis of Infosys’ huge

Attrition Rate
Presented By :-
Sahil Raj
MBA-BA
About Infosys :-

 An Indian multinational corporation that provides Business Consulting, IT, Software Engg.
& Outsourcing services.
 Founded in 1981 by N.R. Narayana Murthy along with his colleagues with capital of Rs.
10,000.
 3rd largest India based IT company, headquartered in Bengaluru with around 1,60,000
employees.
 Currently Listed on NASDAQ, NYSE, BSE & NSE with US$ 8.25 billion in annual revenues.
 Its current CEO designate is Dr. Vishal Sikka, who joined Infosys on 1 st Aug. 2014 from SAP
AG, where he was a member of the Executive Board.
 Infosys has a global presence with 73 offices and 94 development centers in the United
States, India, China, Australia, Japan, Middle East, and Europe.
 One of its known products is Finacle which is a universal banking solution with various
modules for retail and corporate banking.
Recent Developments at Infy :-
 Infosys is suffering an “Attrition” attack, with 19.5% attrition rate in Ist quarter of 2014-15
fiscal year.
 Since return of NRN Murthy from 9 th of July 2013, 13 senior officers including several Vice
Presidents, CFO, Board Members and Country Head have left company.
 Infosys reported a healthy 21.6% growth in consolidated net profit for the first quarter
2014-15 fiscal, but market capitalization has decreased substantially over period of
time.
 Infosys is on a down fall and lost its top position to TCS as IT Services exporter, which it
held for decades.
 Facing heavy competition from companies like CTS, Wipro Technologies, HCL etc. in terms of
margin and quality of services.
 Investor expectation is at all time high because of negative outlook for Infosys future
business due to several underlying reasons.
 Off late image of Infosys as a brand has diminished and investor sentiments have been hurt
& they are losing their faith in Infosys.
What is Attrition?

 Attrition in HR refers to the gradual loss of employees over time.


 In general, relatively high attrition is problematic for companies.
 Attrition rate is calculated by dividing the number of employees who leave in a
given year by the total number of employees you have.
 It may be due to several reasons – Low salary, unfriendly environment etc.
 It prohibits a company from enhancing its collective knowledge.
 It is a costly phenomena and also dangerous to business of service providing
companies.
 Moderate attrition can be termed as good, because it lets the company grow on its
own and non-performing or non-willing people leave over the period of time.
Comparison with
competitors :-
Name of IT Firm Rate of Attrition in 1st Average salary
according to current Qtr. of 2014-15 package for 5yrs Exp.
Rank In 2013-14(in Lakhs)
1. TCS 10.9% 5.4
2. CTS 12% 5.3
3. Infosys 19.5% 5.2
4. Wipro 15.4% 4.3
5. HCL 16.1% 4.1
Why Attrition is Happening ? -
Insight
 Other companies are paying 20-25% more than Infosys this fiscal.
 People are finding Infosys as great place to begin due to great training facilities, but
not to build a long term career due to unenthusiastic management.
 Indecision with in the management over next successor as CEO, before an outsider
was hired, hurting employee sentiments.
 Cases have come up showing deplorable HR policies, leading Infosys to legal suites,
denting its image among job seekers & current employees.
 H1-B visa frauds too have irritated employees and created a distrustful image of
Infosys for onsite projects.
 Current Infosys staff’s morale has been dented by a series of senior management
exits and worries about career prospects as the company's revenue grows at a slower
rate than competitors.
 Not enough projects to engage “Bench Strength”, leading them to leave.
Effect of Attrition on Infosys :-

 Share prices going down.


 Market is skeptical of Infosys performance.
 Client bonding is eroding due to ousting of employees willingly or forced.
 High rate of Attrition is venturing in ‘negative marketing’ for Infosys, which can be
threating for long term business perspective & customer relation.
 It is going to hurt Infosys financially in doing a cover up job, as it will be expensive
HR practice to fill up positions left vacant and training new ones.
 Thus bringing down the overall profits and starting the whole circle of dipping share
prices, cynical market behavior, and jeopardizing investors money.
 It can also make the remaining employees more stressed out because they have to
fill in the gaps until a new employee is hired and trained thus leading to more
people leaving the firm.
What Should Infosys do ?

 It should start acknowledging employees on bigger scale and start appreciating them.
 Infosys needs to look into its pay packages afresh.
 It needs to setup a committee to look into real reasons of such high numbers of exits
from such a renowned company.
 Infosys needs to re-think and confirm that it offers best and congenial working
conditions. Employees leave when they feel the compensation & working environment
is not proportionate to the stress they endure.
 Infosys needs to ensure full staff potential exploitation, workers who feel that their job
is meaningless are highly likely to leave.
 Autocratic behavior of managers requires to be checked on, as people might feel
offended & label it as bullying, or abuse, when harsh and then leave.
 Regain its Charisma of an influential company, which still has got what it needs to be at
top, by acquiring some big projects and delivering current ones timely by engaging
everyone and creating a family & ownership effect, where it will be hard to leave.
Thanks!

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