IT cos sign pact to end talent war

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The $50-billion IT industry may be fighting a fierce war for talent as it tries to claw back to a double-digit growth rate this year, but Pune’s Hinjewadi IT park is showing that peace can prevail even among rivals.

Twenty-eight residents of Hinjewadi, including top names like Infosys, TCS, Cognizant and Wipro, that once ruthlessly poached talent from each other, have now agreed to work collectively to reduce attrition.
At their first meeting hosted at the Infosys campus in Hinjewadi last month, CXO-level representatives from all 28 companies keenly explored a no-poaching agreement, but concluded it was unviable.

However, they managed to seal a pact under which they will hire from rivals only after candidates have fully served out notice periods. Earlier, it was common practice for the hiring companies to pay salary in lieu of the notice period. This worked well for the hirer, but caused problems for the previous employer who would not have enough time to find replacements. “We met last month and worked out a broad agenda,” confirmed Mritunjay Singh, the Pune head for Infosys and president of the Hinjewadi Industries Association (HIA). Infosys is Hinjewadi’s largest employer with 42,000 on its rolls.

The companies have also agreed that new employees cannot join without a relieving letter from the previous employer. Earlier, it was common for IT pros to desert jobs without any notice.

All of this will be spelt out in a ‘code of ethics’ that will be honoured by the HR departments of all these companies and by their employees.

These 28 companies account for 100,000 of the 250,000 IT professionals employed in Pune. They contributed about Rs 19,000 crore of the Rs 48,000 crore worth of software exported from Pune last year, though exact figures are not available.
Loss of staff is loss of knowledge

These companies have been crippled by 17% attrition leading to an estimated loss of about 5% of total revenues (nearly Rs 850 crore) every year, says Mr Singh. Hinjewadi may account for only 6-8 % of the sector’s total revenues, but if this peace experiment succeeds, it might find more takers across other IT hubs in the country. The industry, which saw a net addition of just 20,000 people last year, is likely to add about 90,000 to the base of 2.3 million employees, according to industry body Nasscom.

Already, Infosys has reported an attrition of 16% during the last quarter, the highest in 12 months. Nearly 8,000 employees exited during the quarter, a clear sign of the simmering war for talent.
IT companies in India could be losing close to $2 billion annually to attrition, including loss of productivity and expenditure to find replacements, estimates Ganesh Natarajan, vice-chairman and managing director, Zensar Technologies, and head of CII’s IT & ITES committee.