Great resignation impact being felt in India as attrition rate remains elevated at 20% in 2022

• Attrition rate in India stands at 20.3% in the year 2022.
  
• The most impacted sectors are also the ones witnessing the highest salary increases.
  
• Voluntary resignation is the key reason for rising attrition.
  
• The attrition rate in India last year was greater in women than men.

India has been giving double-digit salary hikes since the pandemic, as demand for skilled workers increased. Despite the hikes, the attrition rate still stands at 20.3%, which is marginally lower than last year’s 21%, shows research by Aon, a leading global professional services firm.

In its latest Salary Increase Survey in India, data across 1,300 companies from more than 40 industries in the country was analysed. The attrition rate in India is steadily rising, going up more than 7% within the last two years.

Separately, a DivHERsity Report by JobsForHer found that more women than men had to quit the workforce in 2021.In reference to 'The Great Resignation’, the report reveals the overall attrition rate among the employees was 9% while the attrition rate among women professionals was 13%.

“Sectors most affected by attrition were e-commerce, FMCG, hi-tech jobs and startups, despite them reporting the highest salary increase post pandemic. There is a huge demand for jobs in these sectors but we are witnessing a resignation wave parallelly,” said Jang Bahadur Singh, director, Human Capital Solutions at Aon in India.

A majority of the attrition rate comes from voluntary resignation, i.e when the employee leaves the job voluntarily, taking up 17.5% of the attrition percentage. The attrition rate is expected to remain in double-digits in 2023 as well.

“We also witnessed that war for talent has transcended sectoral boundaries and talent fungibility. As supply struggles to match demand, people costs and attrition numbers will continue to be high,” Aon said.

To retain talent, Aon suggested organisations hire for skills, allow flexible working and gig jobs and focus on revamping employee value proposition (EVP) through rewards.

The survey revealed that salaries in India are expected to increase by 10.4% in 2023, compared to an actual increase of 10.6% to date in 2022, which is slightly higher than the 9.9% increase projected in February.

“Volatility is a key determinant of salary increases by industries – the top salary increases are in the most volatile industries. Businesses must create holistic rewards strategies unique to their situation and sector to retain and attract the talent they need. Data-driven insights give employers the clarity and confidence needed to make better decisions,” Singh added.

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