Even though Infosys has been pushing hard to contain the rising attrition that started picking up during the period of leadership transitions at the IT services major, a host of external factors are now making the task increasingly tougher.

Among company-specific factors, higher (employee) utilisation level, low increments in the past years and internal turmoil are some of the factors which contributed to the rise in the number of employees leaving the company in the past quarters. But now the Bengaluru-headquartered company is also battling with some of the external factors such as lack of onsite job opportunities, and competitive salaries being offered by global companies for their captives centres.

In the quarter ended March 2019, Infosys reported a consolidated attrition rate of 20.4 per cent, up 50 basis points over the preceding quarter. This is also one of the highest in the industry and is muchmore than that of its larger peer Tata Consultancy Services (TCS), which had an attrition rate of just 11.3 per cent in FY19.

Last Friday, the Infosys management said that a large part of the attrition was happening in case of employees who are in the 3-5-year experience range in India and 2-4 in onsite geographies.

"A big part of the attrition is among people with three to five years’ experience, and for this set, the earlier value proposition was onsite (posting) which was a big thing. But given all the mobility challenges due to restrictive visa regimes, the opportunities are fewer," said U B Pravin Rao, Chief Operating Officer at Infosys. "So that is probably one of the reasons why they (these employees) look forward to move to other companies, where either they are able to get higher compensation or different kind of jobs."

Industry experts said that while lack of onsite opportunities could be one of the drivers of high attrition, it couldn't be the only reason. "H1B visa issue has affected the whole industry and not Infosys alone. Also, hardly one per cent of the total workforce gets onsite opportunities. The other reasons could be higher utilisation levels, which the company has seen in recent quarters," said an HR manager at a staffing company. "Even, lower level of hikes at the entry level in past years plays its role, though the company has started a course correction in this regard," the person added.

While Infosys had re-launched its employee stock option plan (ESOP) for junior- to middle-level staff in FY17, it also consciously brought down its utilisation levels (excluding trainees) to 82.3 per cent in the January-March quarter of last fiscal from around 85 per cent a year earlier. "A high level of employee exits for Infosys doesn't make sense as there isn't enough demand in the market. Perhaps, employees are now opting for captives run by multinational corporations for better salary," said Pareekh Jain of Pareekh Consulting.

A former top level official at Infosys said the Bengaluru-headquartered firm should look at the employee practices at the managerial level to check high attrition. "All the soft issues relating to flexi timing, dress code and others have already been taken care of by the company. Even variable payout and salary hikes have been increased for junior- and mid-level employees. Despite all these, if the attrition is not coming down, then Infosys should look at its employee practices at the managers' end," said V Balakrishnan, chairman of Exfinity Venture Partners, who is also a former CFO and board member of Infosys.