Infy Plans Salary Hike To Check Attrition

by CXOtoday News Desk    Jan 06, 2014

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IT major Infosys witnessed a spate of senior level exits and high attrition among its other staff in 2013. Even though its Chairman NR Narayana Murthy did not show any sign of unrest, retention was certainly a problem the organization was facing and it has now mulled over a solution. According to a report in Economic Times, Infosys is considering a double digit pay raise for its employees as looks to keep the workforce of 150,000 motivated.

A source at Infosys told ET that although growth was picking up, senior level exits and high attrition has made it imperative for Infosys to offer attractive pay raises to boost employee morale. “Not only have they decided to hand out bigger pay increases, there will also be more promotions. Hikes could fall in the 8% to 12% range to motivate employees,” the source was quoted in the report.

[Read: Can Infosys revive its sagging fortunes?]

Infosys usually announces its salary hike in June. Last year, Infosys raised salaries for staff in India by 8 per cent on average, shortly after founder Murthy returned to lead the company as executive chairman in June. Experts believe for any company to retain its staff, wage hike and a combination of other factors such as conducive work environment and support from senior management become necessary factors.

Many in the industry believe Infosys’ decision to offer higher pay hikes is a welcome as long as it doesn’t affect the company’s margins. “Moreover, at this juncture, improving employee sentiment matters more than worrying about dip in margins,” said an analyst on condition of anonymity in the report.

According to reports, attrition at Infosys was nearly 18% at the end of the September quarter, the highest among the tier-1 Indian IT providers. Inevitably, the company was becoming a fertile poaching ground for rivals, as demand picked up for the $108 billion outsourcing industry.

Competitors such as TCS and Wipro witnessed a much lesser attrition after raising salaries for its employees last year.

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