Infosys Witnesses Resignation Of 80,000 Employees: What Is Leading To The 'Big Quit'?

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Infosys Witnesses Resignation Of 80,000 Employees: What Is Leading To The 'Big Quit'?

The world today is experiencing the era of the ‘Big Quit’ or the ‘Great Resignation’. Coined by Anthony Klotz, a professor at Texas A&M University, Great Resignation is the new phenomenon where employees are resigning at an astonishing rate.

The trend has clutched India as well, with country's top IT companies such as Infosys, Wipro, TCS witnessing mass employees exodus over the past one year. Out of all these firms, Infosys has recorded the highest 12-month attrition rate of 27.7% during January-March 2022 quarter. It is the third quarter where Infosys has seen an attrition rate of over 20%. So, what follows this voluntary attrition? Let’s delve into some details.

Why is the ‘Great Resignation’ happening at Infosys?

The COVID-19 pandemic is being seen as the single-biggest factor behind higher attrition rates around the world. The ‘new normal’ gave way to new working styles, newer desires and newest trends amongst employees.

A survey conducted by Amazon India in September 2021 suggested that the pandemic is making the Indian professionals rethink their career paths. While 51% of job seekers are looking for new work opportunities in sectors or industries where they have little or no experience,about 90% of the professionals are interested in learning new and transferrable career skills. 1 in 3 Indian jobseekers are looking for a new job where they can indulge in a more meaningful work.

Another study conducted by MIT Sloan School of Management highlighted that toxic culture in workplaces was a major reason for many employees deciding to quit jobs in 2021.

While the above factors hold true for most of the Indian firms reeling under the great resignation pressure, a major reason that is specifically acting against Infosys is the lack of onsite opportunities in the US for the employees due to high scrutiny of the H-1B visa program. This is leading the Infosys employees to switch to other firms that offer better opportunities.

Uptrend in hiring

Companies are on their toes to counter the high attrition rate. In an attempt to neutralize the drastic effect of the ‘Big Quit’, IT firms have added an all-time high number of employees in the recently concluded March quarter. As per the data released, Infosys added about 21,948 employees in the March 2022 quarter and approximately 85,000 in the entire financial year 2021-22. The total headcount of Infosys presently stands at 3,14,015.

Addressing the issue of the high attrition rate, CEO and MD of Infosys Salil Parekh said in a press conference,

“In Q4, our attrition is down by five points from the previous quarter. Many of the initiatives we put in with regard to greater engagement, compensation, rotation of work and career progression, those are already starting to have an impact and we anticipate it will have an impact over the coming quarters.”

Infosys’s profit squeeze

Despite the crisis, Infosys reported a 12% year-on-year increase in the net profit at the end of Q4. However, the net profit has missed the analysts mark by INR 275 crore. While Infosys net profit stood at INR 5,686 crore, it was expected to touch somewhere around INR 5,961 crore according to Bloomberg. The expenditure on retention bonuses and employee benefits have considerably contributed to Infosys missing the said expected mark.

As the IT giant added more employees to its workforce, its standalone employee benefit expenses have gone up from Rs 6,485 crore to Rs 51,664 crore as of March 31, 2022.

However, experts believe that spending on employee retention is going to be fruitful in future for the companies to stand against the high attrition rates. Commenting on the issue, Vijay Sivaram, the CEO of Quess IT Staffing said, “While battling attrition rates and pressures on margins, the continued focus on their hiring and skilling strategies, and investment in employees will yield positive outcomes.”

Even though Infosys reported the highest number of employees calling it quits over the last one year, the company is confident about addressing its high attrition rate.

“We are in an environment where demand is chasing supply. It’s a good problem to have. The way to fulfill the demand is through freshers. Once the freshers feed in into the system, they take 3-4 months to come into production. That’s when you’ll see the overall benefit of hiring. Over a period of 6 months, with more freshers coming in, you will see moderation of this from a more macro perspective.” said Nilanjan Roy, Chief Financial Officer Nilanjan Roy at Infosys.

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