FY22 Attrition Trends:

Variances By Employee
Experience
RESEARCH INSIGHTS

January 2022
 FY22 ATTRITION TRENDS: VARIANCES BY EMPLOYEE EXPERIENCE
With growth returning, attrition is on the rise. IMA India’s October 2021 Attrition
Benchmarking Study reveals that overall, cross-industry attrition in FY22 is back at pre-
pandemic levels. After dipping briefly in the first quarter (Apr-Jun) employee churn is projected to
jump over the remainder of FY22. Voluntary attrition rates are also on the rise, especially at the
entry-level, signalling that job opportunities are opening up but also that people may be re-
prioritising lifestyle/career choices. In general, attrition rates are inversely correlated with years of
experience but the relationship is not purely linear. What drives these trends? What can
organisations do to counter it? The paper, which is based on the results of the study as well
discussions among CXOs, looks at attrition trends by employee experience levels, and shares
some broad observations.

ATTRITION RATES: NEW JOINER VS EXPERIENCED

Our data indicates that ‘new-joiner’ attrition (people with up to 2 ‘New joiner’ attrition
years of experience) outpaces that in other experience bands, as it will remain high in
has for the last two years. It peaks among those with 1-2 years of FY22
experience, falling steeply thereafter. Interestingly, y-o-y declines
are expected across most groups – possibly owing to lingering
uncertainties around the pandemic that are causing people to ‘stick
around.’ However, the least experienced (<3 months) workers are
projected to see a sharp increase (110 bps) in attrition in FY22 Rates of churn
compared to FY21. A more dynamic job market, growing feelings generally decline
of disconnect with and shifting attitudes to work are key past the 2-year mark
contributing factors. Further, with the war for talent intensifying,
entry-level salaries are seeing big jumps – it is no longer
unusual to get a 40-80% pay hike, for either switching or not
switching jobs. Established businesses are also losing staff to new-
age start-ups. Flush with cash and in the process of hyper-scaling,
they are attracting people with above-market pay, more flexible
work arrangements and lucrative employee stock options (ESOPs).
Among the more experienced (>10 years), attrition rates remain
low (5.8% expected in FY22), but with a slight increase over FY21.
For this group, goals such as personal development and the
empowerment to learn are at the epicentre of the new ‘work deal.’

Attrition, FY22: By Experience Differential in Attrition,

FY22 over FY21
<3 months 7.6% 1.1%
3-6 months 10.5% -1.3%
6-12 months 11.7% -2.9%
1-2 years 12.8% -3.2%
2-5 years 11.1% -1.4%
5-10 years 6.8% -1.0%
>10 years 5.8% 0.6%

2 2021 IMA India. All rights Reserved

TURNING ATTRITION INTO ATTRACTION
Companies are throwing money at the problem by paying above- Financial quick-fixes
market wages and boosting their salary budgets. Clearly, these are may have a limited
expensive solutions that are hard to sustain – and they may not impact on longer-
ultimately do much to reduce employee churn. Our survey findings term attrition
suggest that the pandemic has irreversibly altered people's
expectations of work. Freshers are more concerned about making
ends meet, whereas more experienced employees value personal
fulfilment and purpose. On their part, employers need to come
up with different solutions for each group. For younger
workers, businesses must re-examine the employee value
proposition (EVP) and perhaps redesign jobs to make them more
attractive and meaningful. For more experienced workers, the focus
must be on reskilling efforts that help them develop and progress
while ensuring that they realise their personal ‘purpose.’

Regardless of their experience levels, today’s employees seek Revisit and focus on
deeper, more enriching experience at the workplace, something that improving your
is becoming harder to achieve within hybrid models. For leaders, overall EVP
this makes it imperative to step back and reflect on future strategy.
Consider the following questions as you plan to bolster your
internal systems and processes:

 Do we have the right leaders and managers in the right places?

 Do we have a positive work culture that people want to associate with?
 Are our benefits aligned with employees’ priorities?
 Do we have optimal workspaces and systems for employees to freely
express their creativity?
 Can we provide employees with enriching career paths and developmental
opportunities?
 Are we building a sense of community?

In sum, the relationship between attrition rates and numbers of

years of experience offer interesting insights for organisations to
revisit their employee hiring and engagement strategies, and
optimise their organisational culture to build a more stable talent
pipeline.

The contents of this paper are based on IMA’s FY22 Attrition Benchmarking Study, which assesses
trends in attrition, by function, level of management and gender across companies. Multiple organisations across a
wide gamut of industries and of varying size and ownership participated in a survey on these issues in October
2021. The report presents data in highly segmented formats to enable both high-level trend analysis as well as fine peer
comparisons. The report is available for purchase from IMA’s offices or online at this link.

3 2021 IMA India. All rights Reserved