As the recession era of 2023 comes to face, their many trends that have been the talk of the town. Many who are currently employed are facing the risk of job loss while many who are planning to change jobs are fearing that opportunities might be bleak. These industry trends are being predicted all over the Indian market and the IT industry is the biggest talk of the town at the moment. Too many questions and very vague answers have left people in question as to the growth and progress of the IT industry in 2023. This article has everything you need to know about job trends in the IT industry.
The year has taken off with layoffs all over the globe. Leading companies like Apple, Google, Amazon, and more have ended up laying off thousands of employees. If these companies are facing losses, the ripple effects of recessions are being felt throughout the world economy. Many smaller companies have been facing the fear of failing. However, the most interesting fact that stays evident is that despite layoff there are still hiring positions open for people to apply for. These two very contradictory trends have been in the news with every expert trying to decode the facts behind this phenomenon.
Why IT sector is facing a high attrition rate?
Many HR analysts had reported a recent spike in the attrition rate for the IT sector. The last quarter recorded about a 20% attrition rate in the sector, this was more than double the previous quarter. The fear of layoff would have ideally made people stay put but many reasons have instead pushed them into planning careers differently. Here are a few key reasons behind the attrition spike:
Burn Out: Due to the layoffs and companies facing huge losses burnout has been faced by the employees themselves. Thus despite the fear of unemployment, many have decided to take the gamble the change their jobs.
Switch to Start-ups: Start-ups have been a booming trend the past couple of years, they prefer hiring Flexi workers and have competitive pay structures. The higher-skilled groups have also been able to lead their start-ups or gain leading positions in start-ups with impressive ESOP plans. Compared to a regular job, these options have come off as more attractive and comfortable for many.
Skilled Tech: As the world progresses, technology and innovations keep upgrading. There is still a high demand for skilled professionals who have expertise in different techs. Thus the ones who know their worth have decided to move towards a better-paying job as they know they are still the talk of the town.
Just-in-Time Hiring: Freelance work online has given people the opportunity to be paid by the hour and earn more money than their jobs. Finding the right business source initially might have been an issue but once you have market knowledge online contract work can yield much higher profits. This has been a very common exit path for many tech professionals.
These reasons have in totality contributed to the magnitude of the attrition rate experienced by the IT sector recently.
Effect of Attrition
The Indian IT sector attrition has had a very negative impact on the growth and sustainability of the sector at the moment. The trend that most companies faced is that employees who had over 3 years of experience were seen to quitting during this time. This might be the reason that they are now more interested in switching since they have gained a certain experience or they do not have the attachment needed with the company. The consequences of the high attrition rate have been:
Incurring high training fees for an employee leads to a huge loss of money, especially in the days when cost-cutting is a priority
Falling behind scheduled projects and looking for valuable knowledge in human resources constantly is a major setback
Loss of client value as the clients who get in touch with certain employees build a trusting relationship
While we have talked about the impossible cycle of Layoff and Attrition that has been making rounds in the IT industry, there is so much more to this trend. The layoff rate has been high however the employees who added knowledge were made a party to this process. It is the extra load of people that a company picks up in the process of growth which they, unfortunately, have to let go of when a recession strikes. This means that talent and skills are still in demand and shall stay relevant throughout.
Here are some ways to fight the growing Attrition rates and sustain healthy human resources on a long-term basis:
A work environment is a place where people do their jobs and creating an environment that radiates comfort and peace is very important. If you aim to retain your people you need to learn to keep them happy.
While all efforts go to waste if an employee simply wants to leave, you can always hire bench resources as a backup to make sure your projects are completed on time and clients are satisfied no matter what. You can know more about contract hiring in the IT industry here.
A competitive pay structure will make sure that you do not lose out on your talented lot. Attrition usually happens when people aim to switch between for higher pay, if they know that they are being paid beyond the basic structure they would not consider changing.
While the IT sector has been a party to many out-of-the-box trends, this one surely tops the list of all of them. The pandemic has been an eye-opener for companies and their employees. While the companies now value health and safety, employees know that a remote job can give them as many benefits as any other. So to say, the world just became smarter and then the recession happened. With too much happening too soon, the companies must remember who is worth holding on to.