Attrition in India Information Technology — How you can arrest it?
An Engineering Manager Perceptive
Indian Information Technology Industry operates at 17 to 25% (year-on-year) attrition rates. Numbers may vary depending on multiple factors like global demand, technology, the brand value of the organization etc., but arresting attrition rates is a constant challenge for the Information Technology industry over the years. Some Stats -
- On average, people stay with an organization for 5 years.
- Churn is more at 3 to 9 years experience level
- 30 to 70% salary hike person gets during the switch
What Engineering Managers can do?
Firstly, anticipate attrition is going to happen, irrespective of how well you lead the team. It doesn’t mean we should reduce efforts around employee engagement, fair promotion policy, constantly generating challenging work opportunities etc. These efforts are NEEDED. But, you need to be always prepared.
“Plans are nothing, planning is everything.”
In preparing for battle I have always found that plans are useless, but planning is indispensable
by Dwight D. Eisenhower
(Supreme Commander of the Allied Force — World War II)
The above quote (read more about this on Google) sums up most of my thoughts. Sometimes attrition rates will be low, below mentioned techniques might NOT be needed, but Engineering Manager needs to go through the planning process, it will not only help deal with attrition but achieve the larger goal of building high performant teams. By the way, people are the only asset managers need to manage.
People have built models (based on AI) around attrition triggers and forecasting. But, we need to understand human is a complex character and have enough potential to beat any AI models.
Let's discuss what simple things we can do…
- Employee Engagement
A lot of talked about this in different forums, and managers should leverage those techniques. I will avoid repeating that stuff.
It is always challenging to find time to engage with team/individual beyond transactional things (especially if you lead bigger > 20 teams). Managers try different things keeping particular open slots, Ask Me Anything channels on collaboration platforms, cadence with the team (/members) etc. What works depends on multiple factors, but dedicated efforts pays off.
Pro-tip: Set aside daily/weekly time in your calendar for non-transactional connects.
2. Continuous Hiring
Managers wait for budget approval/opportunity funnel levels, to open hiring tickets. It may NOT be a good strategy.
Managers should always think of improving the team’s strength. And go into continuous hiring mode, even if you have don’t have budget approvals.
How to do that? Every team has bottom performers. THINK whether we can move them (the bad word would FIRE) to a lower competency job. And replace with a high skill person from the market.
3. Build shock absorbers
Team distribution is generally 20% top performer, 70% average performer and 20% bottom performer.
In many organizations, top performers remain top performers over the years and average performers also remain in that same category.
Challenge managers/leads to move at least some portion of average performers into the top performer category over the stipulated time. Increase high performer band…
4. Expectation Setting
Proactive stakeholder expectation setting is important to onboard executive management, customers, and even employees for continuous hiring, delivery risk mitigation planning, and continuous knowledge transfer to peers.
5. Contractual obligations
The hiring problem (especially in high attrition cases) is more acute in time and material engagements, where contract clauses have slabs (/buckets) in which teams should fit. This adds to extra complexity, as you need to factor in slabs while hiring and may NOT be able to go for high skill and high salary engineers.
It is not easy to solve this problem unless you convince the customer to remove slabs from the contract and let the Engineering manager own and manage team distribution. The workaround might be having a consensual agreement with customers to be lenient with slabs and have flexibility in such a way that team gets high potential candidates at higher price and for some slabs, managers can hire lower experience people. In short, work out a win-win formula.
India IT sector so far has not been courageous to take fixed price contracts. And relied on low-cost labor to win the deal, optimize margins. But, with a new breed of engineers, where skills at par with western countries, it is time to go to fixed-cost contracts.
Conclusion
Treat attrition as one of the constraints. And Theory of Constraints asks us to identify the ONE factor that will determine throughput. You can start with the above guidelines and keep moving to subsequent bottlenecks to resolve the problem.
Lastly, if you’re badly hit by attrition, don’t panic and compromise on the quality of talent, it might generate ample opportunities to get better talent from the market, optimize costs, empower junior people to lead. Think SMART, think bigger…
Do read my other blog on effective staffing…
(Disclaimer: The opinions expressed in this blog are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of organization and organization does not assume any responsibility or liability for the same.)
