Average quarterly attrition up at 4.7%: Zinnov

The findings of the study reveal that for the period January to March 2010,the average attrition rate stood at 4.7%,up 1% over the previous quarter and up 0.5% for the same quarter last year. This translates to an attrition rate of 18.8% on a yearly basis. The launched study was based after Zinnov analyzed over 50 MNC R&D companies in India for the period January to March 2010.

Among all the cities that were studied,Bangalore witnessed lowest attrition during the quarter with an average attrition rate of 3.1%. In comparison Pune’s attrition levels stood high at 5.6% for the same period. Bangalore witnessed lower attrition levels on account of factors like timely salary increments,alignment of roles with better career growth,maturity of workforce to understand the company’s economic situation and therefore more value for work than salaries.

Speaking about the findings of the report,Praveen Bhadada,Engagement Manager,Zinnov Management Consulting Pvt. Ltd,said,“We had earlier predicted that lower increments could result in short term spike in attrition levels and we are starting to see that happen. However,clear communication around the economic situation,career growth and performance led incentives,clubbed with the increased maturity of employee base,will put attrition under control over the next 6-9 months. We expect that H2,2010 to witness much less attrition and the yearly average to settle around 10%. We also expect that the demand for cost control will force R&D centers in India to put a check on salary escalations in the near term.”

The study’s findings reveal that attrition levels in large companies were relatively higher than their smaller counterparts. Companies with over 1,000 employees witnessed average attrition level of 8%. On the other hand,the attrition level among companies with less than 1,000 employee size came down to half at 4%.

Dissatisfaction with salary increments,re-alignment of center level goals,forced attrition to create bandwidth for new hiring for mission critical and value added projects,and better pay packages with other large MNC companies,were among the factors that contributed to higher attrition levels among larger companies.

However,smaller companies offered relatively better salary increments in terms of absolute percentage with the aim to bring salaries closer to their bigger counterparts for the critical resources,helping them retain them.