Mumbai : Infosys Ltd. is wooing employees to reverse record turnover levels with bumper raises, retention bonuses, work rotations and promotions as companies compete for a limited pool of workers in digital, cloud computing, artificial intelligence (AI) and data science. Huh.
The company plans to offer an average 12-13% increase to its employees in India, while employees with higher potential will get a 20-23% hike and a retention bonus. Infosys is also offering top performers better roles and opportunities to learn new skills like AI and Machine Learning (ML). The company is benchmarking salaries with its peers and plans to offer special benefits to key employees.
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“Infosys will offer top performers between 20-23% salary hike. There’s a retention bonus for them too,” said an industry executive requesting anonymity.
Demand for technical workers has been on the rise since the pandemic began as companies embark on digital transformation projects to cope with disruptions caused by lockdowns, remote working and the popularity of e-commerce. Inflation, which hit an eight-year high in April, is also pushing up companies’ compensation.
Growing demand has prompted employees to change jobs in record numbers in search of higher pay, better roles and stock rewards. As a result, Infosys posted a record attrition rate of 27.7% in the March quarter, up from 10.9 per cent a year ago and a 25.5 per cent turnover rate in the three months ended December 31.
In comparison, larger rival Tata Consultancy Services Ltd reported an attrition rate of 17.4% during the March quarter. Wipro saw an attrition rate of 23.8%, while HCL Technologies reported 21.9%.
An Infosys spokesperson declined to comment.
The high rate of job change is a major driver behind wage inflation in technology companies.
However, with 314,015 employees as of the end of March, Infosys is going beyond wage hikes to prevent its employees from leaving. Managers have been asked to reassure employees that they will be given the opportunity to work in different teams and learn in-demand skills such as AI and ML.
“Infosys and its competitors also have to work on legacy technologies, and today, employees want to move forward with AI and ML and learn new skill sets. Hence, line managers are assuring teams that the new technologies are engaging. Projects will get to work on the top lot. It is no longer just about onsite opportunities,” said another executive working with the firm, requesting anonymity.
Another person aware of the changes said Infosys is also planning a flexi-benefit policy that will provide more facilities to its key employees.
Rivals may now have to match the rise in Infosys as the tech sector continues its trend of great resignations. In his post-earnings press conference, Infosys Managing Director and Chief Executive Salil Parekh said the company’s new initiative will help layoff employees.
“We also see that many of the initiatives we have taken with regard to employee engagement, compensation, work rotation, career progression are already beginning to be impacted, and we hope to see them in the future. quarters, so we believe we have many of these initiatives in place that will help us move forward,” Parekh said in April.
Increased employee engagement will attract more lateral and new graduates to the tech firm. Infosys hired 85,000 freshers in the last fiscal and plans to hire around 50,000 college graduates in FY23. A senior technical advisor said top companies have no option but to absorb the rising cost of employees until the level of layoffs comes down.
The tech sector with the highest churn rate also has non-competitive policies, and Infosys is the focus. The Union labor ministry is expected to hold a “joint discussion” on Tuesday on enforcement of the non-compete clause, which bars an employee from joining a rival tech firm within six months of exiting Infosys.
The meeting will be held between the Chief Labor Commissioner and the Pune-based labor union, the nascent Information Technology Employees Senate (NITES), which had appealed to the ministry to remove the non-compete clause of Infosys, and representatives of the company.
The meeting held earlier in April was canceled as Infosys informed the ministry that it had not received a copy of the public grievance.