War for talent in new-age technologies will intensify in 2022 for IT companies
Information technology (IT) service companies, both home-grown and global MNCs, are facing double-digit attrition throughout 2021, will continue to witness intensified war for talent in 2022, according to analysts. Return to Office, upskilling, and new companies hunting for talent from the same pool, increased competition among technology organizations for skills.
From hybrid work to recruiting freshers, improving compensation packages, increased focus on training around new technologies in artificial intelligence, machine learning, and blockchain, etc. were some of the strategies adopted by IT firms to enhance their attractiveness as employers of choice.
In 2022 IT services vendors will manage talent issues with increasing success and diminished disruptions. However, they will face continued pressure from cloud and software giants building their own services capabilities and poaching traditional IT services vendors’ talent. For IT services vendors, none of the standard HR moves changed in 2021, according to analyst firm TBR.
Attract, retain, upskill, promote and reward — are all necessary HR motions that continued apace. The pandemic added virtual working arrangements and risks, productivity questions, burnout, and hesitation around returning to the workplace. The success of pivoting almost entirely to virtual delivery in 2020 prolonged the challenges in moving fully to an acceptable hybrid model in 2021.
… IT service firms will face continued pressure from cloud and software giants building their own services capabilities and poaching traditional IT services vendors’ talent.
Compounding these challenges, cloud, and software giants, namely Amazon Web Services, Google, and Microsoft, ramped up their recruiting of IT services talent, building out their benches and more aggressively pursuing IT services revenues attached to their cloud offerings. Certified talent looking to accelerate their career development could easily be tempted to jump to a hyperscaler or an IT services competitor offering a higher pay grade, adding a few more percentage points to across-the-board higher employee attrition rates, especially in 2Q21 and 3Q21, compared to 2020.
IT services vendors will better refine their talent attraction, training, retention, and promotion programs in 2022, expanding to more universities and developing apprenticeship programs as well as expanding geographic footprints, seeking new hires from outside the usual IT services talent hubs. Concurrently, IT services vendors will make their employment packages more attractive, including improved compensation and training offers, to stave off competition from hyperscalers, and IT services, at least in the short term. By the beginning of 2023, TBR expects IT services vendors will shift to emphasizing margin improvement and talent programs will become a lower priority in corporate strategies.
Every company except for TCS and Accenture (to some extent) are buffeted by attrition. TCS’ virtual onboarding platform has attracted a lot of attention during the pandemic for its innovativeness. While Cognizant finds itself in an especially tough situation, Wipro, Infosys and HCL are working around the problem using a range of tools, from training in niche skills, to aggressively hiring freshers. Cognizant reported a steep quarterly annualized voluntary attrition rate of 33% during the September quarter, the highest among peers in the industry.
…employees are evaluating their organization’s flexibility policy, their stance on social justice and their commitment to health and safety…Gartner
A Gartner survey of over 3,600 employees across more than 24 industries and in 5 regions across the world finds that employees are evaluating their organization’s flexibility policy, their stance on social justice and their commitment to health and safety — all of which heavily impact their personal life. Providing employees with a platform to communicate their career aspirations, opportunities to build toward these by connecting them to the skills, and opportunities and experiences that create the pathway to their next career move will be essential to retaining talent in a highly mobile labour market.
Employees want their employers to take care of their holistic well-being, and they experience a 7% increase in their physical, financial, and mental wellness when employers do so.
Without the feeling of being invested in by their organization, employees might take advantage of other opportunities before it is too late.
The attrition crisis facing organizations cannot be solved overnight and will likely endure for the long term. Two common reasons from the Gartner research for seeking other employment are, manager quality and career pathing.
A compensation-increase for specific roles, merit bonus or targeted intervention showcasing potential career paths and skills development within the organization may be beneficial for long-term success and retention.
External factors in the environment have forced employees to re-evaluate their priorities…
As HR leaders face the prospect of mass attrition, the essential question they must first ask themselves is why their employees are leaving. Work has been constant, dominating everyday life. External factors in the environment have forced them to re-evaluate their priorities, and they want a different life experience entirely.
The COVID-19 pandemic has served as a catalyst for new expectations from the employee, who looks to their employer to create fulfilling personal lives, not just professional lives. The employer’s sphere of influence has therefore considerably widened, and they can no longer afford to be static when it comes to drivers of attrition that are not strictly related to the work experience.
After working for nearly two years amid uncertainty and managing larger workloads with more stressors, employees want more support from their employers to harmonize their professional and personal lives: 20% of employees chose work-life balance as one of the main reasons for leaving their previous job. As 2022 unfolds, companies will have to come to terms with not just new technologies but a workforce that has become accustomed to an entirely new way of working for the last 18 months – it’s a new playing field for HR, with rules that are yet to be defined.
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