STUDY ON RETENTION OF EMPLOYEES IN THE IT SECTOR

Abstract

The IT sector is the most booming industry in today’s world. The demand for IT products and services was already high, but in the COVID and post-COVID period, they have skyrocketed. IT organizations serve as a backbone to many product or service-based organizations. Their demand is never ending. Still these organizations faces several problems of their own. One of them includes retention of employees. Employee turnover is quite high in the tech sector. Companies are fighting quite hard to fight this issue. Still it’s a long way to victory. There can be many reasons for employees leaving an organization such as unsatisfactory compensation packages, stress, unhealthy work culture, poor work-life balance, etc. When the turnover rate is in the range of 0-10%, it is considered an acceptable range. However, a turnover rate of more than 10% brings in huge losses to the company that is not just financial. The current scenario in which IT companies laid off many of their workforces creates trauma in the minds of the workers that might not be today but later on will eventually turn into a turnover. The first major layoff happened in 2008-09 during the Recession period, the second happened during the COVID period and the third happened to start from November 2022. In the recent layoffs that happened in the month of January and February 2023, major companies cut off their workforces by huge percentages. It can create a sense of fear in the minds of the remaining employees and the loyalty factor, which binds an employee to the organization decreases. Layoffs might cause the workers who are left behind to quit. A study by Visier, a human resources analytics company found out that when employees were laid off, the likelihood that their direct colleagues would quit was 7.7% higher than if those employees had remained. A principal researcher at Visier said that if a company layoffs its employees, then it might add 7% to 8% to the count which is very likely to leave as well.