In a study conducted by Zinnov Management Consulting, a management consulting firm, multi-national R&D Centers in India will continue to witness attrition during the first and second quarter of 2010. This is expected to level out during the second half of the year. For the first quarter of 2010, average attrition rate was 4.7 percent. This is an increase of 1 percent over the previous quarter and 0.5 percent increase over the same quarter last year.

Bengaluru witnessed lower attrition rate of about 3.1 percent while city like Pune the attrition level was high and stood at 5.6 percent. Bengaluru’s lower attrition rate is attributed to the fact that the companies provided timely salary increments, provided better career growth and employees having a better understanding on the company’s economic situation.

Companies with over 1,000 employees witnessed attrition rate of about 8 percent than smaller companies which were able to retain their employees and had attrition rate of about 4 percent. Better pay packages with other large MNC companies, dissatisfaction with salary increments, forced attrition were some of the reasons cited for this higher rate of attrition among larger companies. In comparison, smaller companies offered better salary increments which aimed to bring their salaries closer to the bigger companies for their critical resources which enabled them to retain their employees.

According to Praveen Bhadada, Engagement Manager, Zinnov Management Consulting, “We expect that first half of 2010 to witness much less attrition and the yearly average to settle around 10 percent. We also expect that the demand for cost control will force R&D centers in India to put a check on salary escalations in the near term.”

With the Indian economy picking up and revival of the job market, Indian companies are likely to start their recruitment process this year. In 2009 job market was hit by global recession and the recruitment rate was less in certain sectors as companies were forces to cut down their head count. The stimulus given by the Government has encouraged growth and boosted employment which was threatened by the recession last year. The International Labour Organisation also reported that as many as five lakh jobs were created in the third quarter following the government’s stimulus measures.

Attrition is a sign that there is a growth in the industry. This year Global Hunt India has said that attrition rate will also go up in sectors such as BPO, IT and aviation. According to global staffing services firm, Manpower, “Recruitment pace is expected to return to the pre-recession level this year”. As far as attrition is concerned, this year (2010) is likely to be a good year in terms of company growth perspective, industry growth perspective and hence attritions are expected. However, it would be lesser than the levels of 2007, when attrition reached its peak. Though the attrition rate is predicted to be high this year it is expected to be only at the beginners/ fresher level.