IT Attrition Rate: From Crisis to Stability

Imagine an industry where losing nearly a quarter of your entire workforce every single year had become normal, employees hopping between competing IT services firms chasing salary hikes during a talent-scarce boom period, forcing companies into an expensive, disruptive cycle of constant hiring and retraining. India's IT services attrition rate hit almost exactly this level, roughly 23%, at its FY2022-23 peak, before falling to a considerably calmer roughly 13% by FY2025.

This dramatic decline reflects genuinely different underlying causes than a simple return to normal, the same revenue-employment decoupling covered elsewhere on this site, weaker overall hiring demand and reduced job-hopping opportunities as fewer companies compete aggressively for the same talent, has naturally reduced how often employees actually leave, less because retention improved and more because attractive alternative offers became genuinely scarcer.

Niche technical skills, AI/ML, cloud architecture, cybersecurity, covered elsewhere on this site, remain a genuine exception to this broader stabilisation, these specialists continue commanding real competitive offers and correspondingly higher churn, exactly the kind of skill-specific talent scarcity that persists even as overall industry attrition has calmed considerably.

This lower attrition rate carries a genuinely double-edged interpretation worth understanding, from a pure cost management perspective, lower attrition reduces expensive rehiring and retraining costs, but from a broader labour market health perspective, attrition falling this sharply alongside the entry-level hiring collapse and TCS's workforce reduction covered elsewhere on this site reflects reduced job mobility and opportunity across the industry overall, not simply improved company loyalty or job satisfaction.