"Embracing Change: IT's shift from Retention to Encouraging Voluntary Attrition"

IT is undergoing a strategic reassessment, transitioning its approach from prioritizing employee retention to actively promoting voluntary attrition. this indicates a shift in their mindset and a new focus on encouraging employees to voluntarily leave the company.

                                   IT's shift from Retention to Encouraging Voluntary Attrition"

According to top industry officials, while global IT giants have been downsizing to save money and alleviate margin pressures, Indian IT companies are implementing different cost-cutting measures to deal with the problem of excess capacity. several companies are planning to streamline their workforce expenses in the coming months through various approaches. these include adjusting performance appraisals to place more employees in lower pay bands, lowering the thresholds for bench periods, implementing a freeze on variable pay for underutilized resources, and employing other methods to encourage voluntary attrition among employees on the bench.

According to an anonymous top official from a consulting firm, there is a prevailing message within many IT services companies this year to increase the number of employees who fall into the lower rating bands of the performance evaluation bell curve. These individuals may either not receive salary increments, be placed on performance improvement plans, or eventually, be separated from the organization.

Industry insiders said some companies have reduced the bench time thresholds, for instance, from 90 to 60 days, to facilitate quicker company-initiated separation.

 According to the confidential statement made by a top industry official, a technology services company has made the decision to withhold salary increments for employees who have been with the organization for less than 24 months as of March 31, 2023. similarly, another IT company is not providing increments to associates who joined after December 2021.

The aim is to encourage voluntary separation among those who were hired at significant premiums during the pandemic, the individual stated.