Infosys faces quality problems in staff

The company's attrition rate rises to 13.5% in Q3 as compared to 10% last year, reports Venkatesh Ganesh.

Can there be problems when a company is surging a wave of plenty with $1 billion in cash? Apparently, yes.

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Infosys Technologies may be rich and hiring by the thousands, but has to compete with giants like IBM and Accenture in wooing engineers and programmers, and staff attrition is a looming problem.

The company's attrition rate rose to 13.5 per cent in the latest October-December quarter compared with 10 per cent during the same period last year. But not all of them left on their own.

About 1.3 percentage points of the 13.5 per cent attrition are attributed to poor quality of work by trainees who could not match up to expectations.

"Some trainees have not performed up to the mark. Hence, they are asked to leave after the training period. Hence, attrition at the entry level is high," said an analyst at a Mumbai-based brokerage firm who asked not to be identified.

Analysts are of the view that entry-level retrenchment is about 2.5 per cent for large IT companies. That makes Infosys's entry-level attrition of 1.3 per cent look better, but given that it is an employer known for its tough selection processes, the problem does appear significant.

Infosys's head of human resources, Mohandas Pai told HT that the company had beefed up its training programme for fresh recruits.

"As Infosys looks at getting into high-end consulting projects, the company is starting to raise its bar in terms of quality of people," says an analyst from Mumbai-based Edelweiss Securities.

In the fiscal year ended 2005-06, Infosys had announced that in order to ramp up its business and increase work in the high-end margin consulting practice, the company will look to add 15,000 employees across all levels.

Email Venkatesh Ganesh: Venkatesh.ganesh@hindustantimes.com