The relatively high GDP growth we see in India is accompanied by significant job growth. When top talent sees increases in the numbers of positions available, they perceive greater opportunity elsewhere.
Not surprisingly, a recent report from the Hay Group forecasts this year, India is expected to lead the Asia-Pacific Region in turnover rates at 26.9 percent actually, the highest attrition rate worldwide. Even worse, this percentage is expected to increase further in 2014 to 27.5 percent.
We believe these numbers may be underestimated. Moreover, we think that turnover rates in other high-growth countries, including Brazil and China, also will be high. The United States also will see increasingly high turnover, as job creation continues apace.
The key reasons that Hay found were concerns among the Indian employees about "fairness of their compensation" (55 percent); the extent to which benefits meet their needs (48 percent); and "career objectives" (37 percent). The report added they are also concerned about "opportunities for learning and development" (39 percent) and "supervisory coaching for their development" (36 percent).
"Make no mistake, we (in India) are in the eye of an employee turnover storm. In order to protect employee retention, organizations in India must give serious thought to what drives employee commitment," said Mohinish Sinha, Hay Group India leadership and talent practice leader.
Though growth in the Indian economy will be warmly welcomed by businesses, what these employers do not realize is that they will need to make an extra effort to hold onto their top talent. Otherwise, they will find themselves victims of their own success.
Globally, the number of workers leaving is expected to reach 161.7 million in 2014 a 12.9 percent increase in people departing compared to 2012. Along with the upticks in attrition, we can expect upward pressure on salaries. As reported by Aon Hewitt, the average overall salary increase globally in 2013 is likely to be 10.3 percent.
According to staffing firm Kelly Services’ Indian Salary Guide 2013-14, recruits in key sector, mid to senior level jobs in will likely see a 15 to 20 percent salary hike, in spite of challenging economic conditions. India is on the frontline of the War for Talent. Many other countries are not far behind.