Small & medium IT companies hit by high attrition rate after lockdown, says survey

A large number of employees in MSME sector companies are going to other companies for higher salaries after learning the work, said D. S. Rawat

April 05, 2023 10:58 pm | Updated 10:58 pm IST - Lucknow

Small and medium IT companies are yet to recover from the impact of the COVID-19-induced lockdown because of the high attrition rate of their employees after upskilling, according to a survey.

According to the survey by Micro Small and Medium Enterprises -Export Promotion Council (MSME-EPC), the highest attrition rate of 35% is being seen in small and medium sector technology companies after the lockdown, in which skilled employees leave their companies for higher wages.

After this, the attrition rate is 27% in the services sector. Due to this, the hopes of returning to normalcy after the epidemic in these areas have been hit.

Releasing the report of this survey of 700 IT units on April 5, D. S. Rawat, Chairman, MSME-EPC, said that a large number of employees in MSME sector companies are going to other companies for higher salaries after learning the work.

Due to this, these companies are still not able to recover from the shock of the lockdown. Companies in the technology sector spend a lot of time and resources to train their employees, but after training, the employees move to other companies for higher wages.

He said that there is a need to open more and more capacity building centers in the public and private sector to check the high attrition rate. This will increase efficient manpower, due to which the process of leaving one company and going to other companies will also reduce.

Mr. Rawat said that the rate of attrition in the industrial sector is low, but companies in the technology sector are still struggling to retain their employees. Apart from this, the attrition rate is 20% in the manufacturing sector, 27% in the service sector especially the financial sector, 26% in the e-commerce sector and 25% in the pharma sector.

According to the survey, technology companies in the MSME sector are facing tough competition from large and multinational companies. In such a situation, losing a trained employee is increasing the pressure on them, which is ultimately a threat to their business. The maximum pressure is on those who do 'outsource' work or are in the profession of completing the work within a stipulated time.

As per the survey, more and more MSME industries are moving towards digitisation to expand their market both domestically and internationally. In such a situation, the entire business plan of this sector is collapsing due to the high attrition rate of the employees.

Top News Today

Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in


Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.