High attrition worries Mid-tier IT firms

By siliconindia   |   Tuesday, 26 October 2010, 17:00 IST
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Bangalore: Employee attrition in the IT sector has always been a dreaded issue. Now even the mid - tier firms are facing a real battle. The IT majors like Accenture and Capgemini woo their staff with higher salaries. The attrition rates are already in high double digits. Mid-tier firms like MindTree, Sasken and MphasiS are now facing a challenge in attracting and retaining staff, threatening to disrupt ongoing projects, reports The Economic Times. "Customers start getting worried about whether they can be serviced when the attrition is high and this results in revenue decline as opportunities are lost," said S Ramesh, VP HR of Sasken. At a time when customers are beginning to send more IT and back-office projects offshore to save costs, the war for talent is becoming intense and smaller IT firms are finding themselves on a defensive. Until few months ago, these firms were busy offering salary hikes and other incentives to software engineers in order to retain them as demand improved. However, some of them are now battling attrition as high as 40 percent among their project managers. "Mid-tier companies also do not have a strong succession planning in place because of which when people move out, the order gets hit," Sameer Krayi, Consultant at Stanton Chase International added.