Attrition returns to bite the unwary

September 2, 2010  |  Mark Hillary
IBA Group

I remember talking to Dr. Phanish Puraman at London Business School some time ago about the ‘war for talent’ – the need to search the world for hard-to-find skills. This applied particularly in such fast-growing industries as IT.

The tremendous economic crash over the past couple of years changed all of that. The big IT firms over in India went from hiring tens of thousands of people a year to layoffs. It was an immense shock to the entire industry.

But there is now a double-whammy taking place. Most developed economies are recovering, somewhat slowly, but they are growing.

This means that companies across many sectors and industries are freeing up budgets again. They are entering a growth cycle and investing to help sustain that growth and also releasing frozen projects that could not be worked on during the slowdown.

So there is a large amount of IT work coming through in the form of RFPs, and new contract wins being announced in the media.

For those of us working in the IT industry that’s all really positive, but are we going to learn from the lessons of the past?

The IT players in Eastern Europe have started maturing, including the Czech Republic, Russia, Belarus, and Ukraine. Brazil is becoming a serious player, and other nearshore (to Europe) destinations such as Malta and Egypt are marketing their regions to decision-makers in the IT industry.

I hope that we do see regions developing centers of excellence and an end to the tendency to just lob all projects over to India. The IT firms there are already witnessing a decrease in employee loyalty as people start jumping ship in a more positive market, leading to the same old attrition and wage hike issues that existed before the crash.

Comments (0)
adoc health insurance 26.09.2010 at 10:10

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PavelC 06.09.2010 at 11:22

hi Fatmatta

Thanks for your recommendation to create an IT flexible thinking workforce in our Eastern Europe country. How could we do our business earlier? However I believe every company has its own way to do its business. I think even IT market in India is diverse. Some companies were affected by slowdown more, some less. E.g. we at IBA were not affected, may be just growing rate became smaller. At least no one was discharged due to the crisis. So, it probably says about maturity of our business, as Mark stated. Our attrition rate is 3-5%, so when Indian companies will approach closer to this number, we can discuss what we have to do to stay ahead. Well, the absolute number of Indian IT workers is unbeaten of cause.

Fatmatta Sawlani 02.09.2010 at 17:43

Although the IT market in India is saturated, but they have more skilled IT workers who are willing to improve their knowledge all the time. For e.g. some IT workers from India are attending courses in UK universities to retrain in order for them to up their skills further to compete in the global markets. Some of the courses are Financial Management, Marketing and even in the area of sustainability.

Indian workers are versatile when it comes to thinking strategically. Countries like Brazil and Eastern Europe will have to create an IT workforce that have a flexible approach in knowledge thinking to stay ahead in the competitive arena which I think it takes time.

Also, don’t forget Africa will soon get out from their comfort zone and you will see the IT players will soon shop around in that continent because governments in Africa are creating a responsible business infrastructure to attract investors.

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