Infosys Faces Talent Drain Amid India’s Unicorn Boom

Shifting Dynamics in India’s Tech Landscape

Infosys, long hailed as a premier employer for engineering graduates in India’s IT services sector, now grapples with a new challenge – retaining talent amidst the burgeoning unicorn boom in the country. Traditionally coveted by early-career professionals, Infosys now faces stiff competition from India’s rapidly expanding cohort of tech unicorns, private firms valued at over $1 billion. With 10 unicorns emerging in the first four months of 2021 alone, compared to 11 in the entirety of 2020, the Indian startup ecosystem is witnessing unprecedented growth.

The Threat of Talent Drain

Pravin Rao, Chief Operating Officer at Infosys, acknowledged the shifting landscape during a media briefing following the company’s first-quarter results for the financial year 2021-22. Rao highlighted the allure of startups as an attractive alternative for Infosys employees, posing a significant retention challenge for the IT giant. Despite reporting strong financial performance for the April-June quarter, Infosys is increasingly concerned about talent attrition as skilled professionals gravitate towards the dynamic startup sector.

Addressing Attrition Challenges

Rising attrition rates, up to 13.9% in the June quarter from 10.9% in the previous quarter, pose a near-term hurdle for Infosys. Despite a net addition of 8,000 employees this quarter and plans to hire 35,000 employees globally in FY22, Infosys faces intensifying competition for digital talent. The company’s revenue growth of 6% quarter-on-quarter, reaching ₹27,896 crore in the June quarter, underscores its robust performance amidst evolving market dynamics.

Navigating the Talent Landscape

To combat talent drain, Infosys has implemented various retention initiatives, including increased promotion frequency, skill enhancement programs, and employee engagement activities. Rao anticipates the talent shortage to persist for several quarters until supply aligns with demand. While Infosys aims to address attrition challenges through strategic measures, including pay hikes and enhanced recruitment efforts, the company remains optimistic about its ability to adapt to changing market dynamics.

Leveraging Strengths and Heritage

Rao emphasizes Infosys’ historical strength in recruiting and nurturing talent, leveraging its legacy as a technology startup founded in 1981. With a legacy of training and deploying college graduates effectively, Infosys remains poised to navigate the evolving talent landscape. As the company continues its efforts to retain and attract skilled professionals, it relies on its reputation, heritage, and resilience to overcome emerging challenges in India’s dynamic tech ecosystem.