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Wipro Results: Attrition falls to 16.3%, In single digits at BPO

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Wipro Ltd said the number of employees leaving the company of their own accord fell to 16.3% in the year 2015 from 16.5% in 2014.

Much of the improvement came from the BPO unit, where attrition fell below 10% for the first time in many quarters.

For the calendar year 2015, Wipro’s BPO division saw attrition of 9.9%, compared to 13.1% for 2014.

In comparison, TCS reported an attrition of 15.3% for 2015 among its IT staff, while that of Infosys was 13.4%.

Like its peer Infosys, Wipro is engaged in redrawing its business around the emerging trends in technology that threatens to make its headcount-based business obsolete.

The declining attrition is not good news for IT engineers, as it shows that many of them are choosing to stick to their companies instead of chasing bigger pay checks outside.

Indian IT companies emerged as cheap providers of IT engineers to American companies. Though they have tried to develop their own ‘practices’ and specializations and move away from being mere providers of engineering talent, their business model is once again under threat from the emergence of new technology.

Digital technologies such as artificial intelligence, cloud computing and big data have led to the emergence of a new breed of IT services companies that do not a large chunk of their work without using human labor. Instead, they use software to carry out sophisticated tasks, including customer facing operations such as technical support.

This has forced some of these Indian companies to lay off some of their workers, which has in turn led to morale issues that has in turn led to a spike in voluntary attrition.

Meanwhile, Wipro’s utilization rate (percentage of employees directly billed to clients) fell to 66.4% from 69.5% in the preceding three months, possibly indicating the influx of new employees into the company during the year-end period. A year ago, utilization was 68.5%.

Utilization used to be a crucial factor that reflected how efficiently a company was able to pass costs on to its clients. However, with firms deploying employees on ‘own projects’, such as research and development, utilization numbers are no longer quite as critical.

Excluding trainees, who cannot be put to work immediately, utilization was 78%, down from 78.8%.

For Infosys, the number was 74.2% on a gross basis and 80.6% excluding trainees. For TCS, utilization was and 80.9%, and 84.9% ex-trainees.

See Wipro’s full quarterly results in numbers.

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