Attrition excessive, so Infosys invokes job clause to retain expertise

An overheated job market within the software program and BPO house has triggered a surge in attrition charges at TCS and Infosys, the highest two IT firms within the nation by income, prompting tech firms to fall again on unconventional techniques in an try and retain expertise.

A staff union representing IT and BPO sector workers has mentioned that Bengaluru-based Infosys is imposing a clause within the worker contract to stop staff from becoming a member of a few of its opponents. The union has written to the Ministry of Labour & Employment and the Ministry of Corporate Affairs, in search of intervention within the matter.

Infosys, on its half, has mentioned that such a non-compete clause is a “standard business practice” in employment contracts.

The non-compete clause below competition says that after resigning, an Infosys worker can’t work, for a interval of six months, with one of many named rival firms on a consumer she or he would have serviced within the previous 12 months earlier than quitting.

Among the rival firms named within the employment contract are TCS, Accenture, IBM, Cognizant and Wipro for Infosys’ software program companies wing. For the enterprise processing administration (BPM) wing, the named opponents within the employment pact are Tech Mahindra, Genpact, WNS, TCS, Accenture, IBM, Cognizant, Wipro and HCL.

This comes amid rising attrition within the phase. For the March-quarter, Tata Consultancy Services reported an annualised attrition price of 17.4 per cent, up from 7.2 per cent in the identical quarter final 12 months. Infosys reported an annualised voluntary attrition price of 27.7 per cent throughout January-March interval, in comparison with 10.9 per cent in January-March 2021. Other high IT firms are but to declare their fourth quarter and full-year 2021-22 outcomes.

“This clause has been there for quite some time. There are a lot of job opportunities in the market because of which the attrition rate is very high. Companies were even matching offers received by their employees from rivals to retain talent. But in the last few weeks, I have received around 65-70 complaints, where Infosys is enforcing this (non-compete) clause,” Harpreet Singh Saluja, president of Pune-based IT workers union NITES instructed The Indian Express.

“It is standard business practice in many parts of the world for employment contracts to include controls of reasonable scope and duration to protect confidentiality of information, customer connection and other legitimate business interests. These are fully disclosed to all job aspirants before they decide to join Infosys, and do not have the effect of preventing employees from joining other organisations for career growth and aspirations,” Infosys mentioned in response to a set of queries despatched by this newspaper.

In the corporate’s earnings name for the January-March quarter, Infosys Chief Financial Officer Nilanjan Roy mentioned: “Voluntary LTM (last 12 months) attrition increased to 27.7 per cent. While LTM attrition continues to increase due to the tail effect, quarterly annualized attrition saw a decline of approximately 5 per cent after flattening in the previous quarter… In the backdrop of various supply side pressures, we rolled out various measures to reduce attrition – higher compensation increases, higher promotions, skill-based interventions, etc in addition to higher subcons (subcontractors)”. He added that attrition “should come down in the following year”.

TCS, India’s largest IT companies firm, additionally mentioned that over the subsequent two quarters, its attrition price is anticipated to flat line after which taper.

As of March 31, Infosys had 3.14 lakh complete workers, whereas TCS had 5.92 lakh individuals on its rolls.