Bigger IT co's on hiring spree...smaller co's bear the brunt

As attrition rates in the IT sector rises, the worst hit are the mid-sized and smaller companies as a consequence of the massive recruitment drive undertaken by their larger rivals.

Over the last two-three quarters there has been a sudden spurt in movement of employees from smaller companies to larger sized ones.

Industry estimates that the attrition levels in smaller IT companies average around 25-30 %, levels that are a nightmare for them. In the case of large technology firms, though there has been a sequential growth in attrition rates, they are at manageable levels of around 14-17 %.

With global IT spends gathering pace, the biggest beneficiaries have been the large IT companies—TCS, Infosys , Wipro , HCL , Cognizant and MNCs like IBM . Owing to their large resources and technical expertise they have been able to corner most of the big contracts over the last three quarters.

Large companies are able to attract employees from smaller rivals through better pay packages and other incentives. “Larger companies are offering employees about 10-12 % hike and also promising better career prospects,” said E Balaji, CEO of Ma Foi Management Consultants.

Most of the recruitment is happening at the middle level. IT companies generally recruit freshers during the campus recruitment cycle, and they typically have a stable top management team that does not switch organizations regularly.

“A bulk of the hiring happening now is for people with 4-8 years of experience. Due to the recession, the bench strength of most companies shrank and therefore they are now ramping up,” said Sudhakar Balakrishnan, CEO of HR solutions company Adecco India.

So, what is that Smaller co's can do here...when bigger IT co's are attracting huge number of talent.