In a bid to fight soaring attrition rates, Bengaluru-based software company Wipro Ltd. has planned to offer promotions to its employees every quarter, multiple reports have said recently. Wipro also plans to provide a salary hike of 10 per cent to most of its workforce in September, with the company’s top performers getting a salary hike of over 15 per cent. The Wipro salary hikes will be applicable up to the mid-management levels, the reports said.
This is the first time Wipro has taken such steps to rein in high attrition and attract younger talent in India, as the country’s tech sector continues to witness a uptick in hiring following the pandemic.
“Wipro is expected to roll out the hikes in September, and there are large-scale promotions to be rolled out in July. The company has decided to offer quarterly promotions to top performers, who are not in the leadership team,” said a company executive aware of the development on condition of anonymity, as per a report by Mint.
A spokesperson for Wipro also confirmed the plans to the newspaper, saying that the company “will roll out several promotions for its employees, starting July.”
“Going forward, the company has decided to offer quarterly promotions to its top performers, up to mid-management level. Wipro is expected to roll out hikes in September,” the spokesperson was quoted as saying by Mint.
While there is a high demand for the IT industry, analysts expect attrition rates to remain above 20 per cent. In Q4FY22, Wipro posted an attrition level of 23.8 per cent, while its peer Tata Consultancy Services (TCS), reported an attrition level of 19.7 per cent for the quarter ended June in FY23. Wipro will announce its results for the quarter ended June on July 20.
“As long as the market is hot, with high demand, there’s going to be high attrition. The day it (demand) slows down the attrition will slow down. What I said two quarters ago is that attrition is here to stay. I still believe that it will continue to be a challenge for us going forward,” Wipro CEO Thierry Delaporte had told Moneycontrol after its Q4 results.
Wipro’s recent plan to roll out promotions will result in a salary hike of 10 per cent or more to the employees, an industry executive told Mint. “The 10 per cent (hike) is expected for a larger chunk of the employees while top performers will get much more. Depending on pay scales, it could be 15 per cent plus. The early announcement of promotions is another step the firm will take to hold on to its people,” said the executive, who was not named.
However, analysts predicted that a large pay hike is likely to increase the burden on companies already reeling under monetary pressure. “We expect margins to contract quarter-on-quarter due to wage hike and the continued rationalization of staff costs amid high attrition despite the industry continuing to add record freshers,” said ICICI Direct Research in an earnings preview earlier this month.
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