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.”

Though the year began on a shaky note, last two months saw the job scene improving by leaps and bounds. In fact, 2009 went much beyond the most optimistic predictions.

Of course the situation in India was never as bad as that in the US and other western countries hit badly by economic downturn. But the ripples were evident here as well, though pay cuts and job losses were minimal. The restriction on new recruitment was one of the worst fallouts of meltdown.

Things are gradually returning to normalcy at the end of the 2-year long trauma and heartburn.

After years of bullish run, 2009 was significant in infusing some sort of sanity in the job market. The gloomy phase brought home the realization that short-term goals are detrimental to career growth. Obsessive focus on compensation brought on the downfall of the entire system. A more realistic single-digit growth seen throughout the year has brought in more stability in the job scene than ever before.

The maximum brunt of recession was felt in the financial services sector. Many banks and NBFCs closed down loss-making units, thus resulting in a number of job losses in the sector. The debt capital market was the least affected. The second quarter has brought in much cheer with better hopes for the third quarter.

IT, ITeS and telecom sectors, that were experiencing growth plateaus in the first half of the year, are looking forward to moderate and realistic hiring by yearend. Hiring is expected to improve during the course of 2010.

The news has generated much cheer on the occasion of New Year to employees and across Indian campuses.