Managing Attrition in the Indian Information Technology Industry

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Case Details:

Case Code : HROB071
Case Length : 14 Pages
Period : 1991-2005
Pub Date : 2005
Teaching Note : Available
Organization : -
Industry : Information Technology
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

The purpose of this service was to help employees chose their life partners within Wipro in the hope that if employees picked spouses from the same company, they could spend more time together, say while traveling/dining etc. thereby improving the work-life balance.

Trends in Attrition

Liberalization of the Indian economy in 1991 paved the way for the growth of the IT industry. The most prominent players in the Indian IT industry by the mid-1990s were Tata Consultancy Services4 (TCS), Infosys, Wipro, Satyam Computer Services Limited5 (Satyam), Polaris Software Labs6 (Polaris), and Patni Computer Systems Limited7 (Patni) (Refer Exhibit II).

By 1995 there was a new trend of 'poaching' of employees by rival IT firms. Poaching necessarily meant luring skilled employees of a rival company by offering better pay and fringe benefits.

Over the years, more and more software professionals were also emigrating to foreign countries, particularly to the US.

By late 1998, the Y2K8 problem was hanging over companies across the globe and software services from Indian IT service companies were increasingly in demand. In 1999, of the total number of H1-B visas given to foreign workers by the US, half were to Indian IT professionals. The average starting yearly salary in computer software jobs, in that year was $ 60,000 - nearly 10 times the average salary for a computer professional in a comparable job in India. The employee turnover in 1999-2000 in Indian IT companies was around 15-20% with the cost of replacing an employee running at over 120% of the salary per employee.

Excerpts >>

4] Tata Consultancy Services is an Information Technology consulting services and business process outsourcing organization. It was established in 1968. The company posted revenues of Rs. 97.27 billion and a net profit of Rs.22.56 billion for the financial year 2004 - 2005.

5] Satyam Computer Services Limited, established in 1987 is a leading global consulting and IT services company. For the financial year 2004-2005, Satyam reported revenues of Rs. 71.164 billion and a net profit of Rs.34.64 billion.

6] Polaris Software Lab limited, incorporated in 1993, is a technology solutions provider in the Banking and Financial Services sector. Around 58 per cent of the company's revenues come from the financial sector. The company reported revenues of Rs.7.87 billion and a net profit of Rs. 0.74 billion for the financial year 2004-2005.

7] Patni Computer Systems limited, established in 1978, is a global IT Services provider. Patni posted revenues of Rs. 14.13 billion and a net profit of Rs 2.51 billion for the financial year 2004.

8] The Y2K problem refers to a software error due to the small memory space of the first generation computers. To save on space on the first generation computers' memory, the four-digit Gregorian year was abbreviated to the last two digits. This was all right in the twentieth century. With the advent of year 2000, representation of the year in two digits would have caused failures in arithmetic, incorrect software would have assumed that the maximum value of a year field was "99" and would roll systems over to "00" which could be mistakenly interpreted as 1900 rather than 2000, resulting in negative date calculations and thereby causing worldwide information collapse.


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