India is witnessing “great departure” in its workforce

‘I quit’. These dreaded words from workplaces have become the buzzword of the world in the post-pandemic era. A large number of workers are leaving their jobs in developed economies. Such is the effect that this wave of resignation has got a moniker now as ‘Great Resignation’. According to the U.S. Bureau of Labor Statistics (BLS), an estimated 3% of U.S. workers quit their jobs in September this year. Not only in the United States, but the phenomenon is also seen in some developed economies in Europe such as Germany and the United Kingdom.

While the United States and some regions of Europe are raging under this new resurgence of labor, India appears to be relatively immune to this global wave. But the country is witnessing a different kind of work phenomenon. The decline in employees for some industries, especially in the technology industry, is going through the roof. So India is experiencing huge declines in its workforce across many industries with declining Covid pandemic. There is no doubt that some of the workers are also resigning permanently and joining the burgeoning startup ecosystem, but the percentage of people leaving the workforce forever is minimal.

Also read | Employment activity in India is growing by 43% annually in October: Report

“The big wave of redundancies is not like being someone leaving their job and not coming back to work. There are a lot of people who come out (from jobs) and start something on their own. But at most people withdraw. “From here and joining another place. So recruitment is at a record high. That’s why it’s a balance shift (in India),” said Supaul Chanda, Vice President of Experis at Manpower Group.

“Obviously there are a lot of crunch in the technology sector and companies are hiring aggressively. Similarly, startups are hiring like crazy. So India is not losing talent. Employees are not looking at logos. They are looking at the work they are doing and the projects they are carrying out. “In the United States, unemployment benefits are very high. That is why workers can afford to leave the workforce. That is not the case in India,” he added.

Retirement of employees in India’s technology industry

In the United States, the big wave of layoffs has been seen among workers in low- to middle-paid jobs. The largest increases in the number of terminations were in sectors such as leisure and hospitality, where teleworking was rarely an option and wages are typically low. Similarly in manufacturing, interruption rates are higher among lower paying non-durable goods segments. According to experts, factors such as burnout in the workplace, changing priorities in the midst of the pandemic, low wages, unfair treatment by employers and healthy social security are driving this trend in the United States and European nations.

Also read | US economy adds 531,000 jobs in October

In contrast, the rising staff turnover in India is mostly limited to well-paid, salaried jobs to a large extent. Record-breaking attrition among India’s large and medium-sized technology companies is an example of this. In the quarter ending September, many IT companies experienced a wear rate of more than 20%.

Infosys saw its departure increase by 620 basis points during the first quarter to 20.1%. Similarly, Wipro’s wear rate reached 20.5% in Q2 of FY22, up from 15.5% in Q1. For HCL Technologies, the wear and tear rate reached a record high of 15.7%, up from 11.8% reported in the first quarter. Market leader Tata Consultancy Services had the lowest departure in the industry, which came in at 11.9% in Q2 from 8.6% reported in Q1.

Cognizant, the Indian-born IT company with more than 70% of the employees working from the country, experienced its attrition rate of 33% during this period. Employee turnover rate is similar in mid-tier and small technology companies during this period.

Also read | Recent employment trends

“Increased demand for labor in the technology sector leads to a higher severance rate. And these people work in some other companies. Of course, some people also choose concert jobs as that part grows. But people in India do not stop and do not work anywhere. It does not happen in India. Because the opportunities are so many in the technology sector right now, ”said Neeti Sharma, co-founder and president of TeamLease Edtech.

No wonder, Indian IT companies are hiring aggressively to meet the high demand from customers and the tide over these high attrition rates. The four best IT service companies in India alone plan to hire around 1,60,000 new graduates in the second half of this financial year. In addition, side hiring is also in full swing.

India may not be in the league:

The fundamental shift that is taking place in the labor market in the developed economies may not affect India to a great extent. This is due to the difference in the nature of social protection and income per capita. per capita between developed economies and developing economies.

With an income per. per capita at around $ 2,000 and poor social protection, the conditions of Indian employees are not comparable to their American or European peers. Moreover, a large population size with a majority of workers makes young people, India one of the countries where people are always on the lookout for new opportunities.

Against this background, India may see glimpses of great resignation in some pockets of the economy, but India will remain the powerhouse of the skilled and unskilled workforce globally in the time to come.

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