Analysis of Infosys huge Attrition Rate

Analysis of Infosys huge Attrition RatePresented By :-Sahil RajMBA-BA

1About Infosys :-An Indianmultinational corporationthat providesBusiness Consulting, IT,SoftwareEngg. &Outsourcingservices.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 1st 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 isFinaclewhich 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 9th 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 according to current RankRate of Attrition in 1st Qtr. of 2014-15Average salary package for 5yrs Exp. In 2013-14(in Lakhs)1. TCS10.9%5.42. CTS12%5.33. Infosys19.5%5.24. Wipro15.4%4.35. HCL16.1%4.1Why Attrition is Happening ? - InsightOther 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 staffs 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.Autocraticbehavior 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.

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