The year 2004-05 was another successful year for the Information Technology (IT) industry in India with total software and services revenues recording a high of $22 bn for the year (Refer Exhibit I). The employee base also showed a huge increase to cross the one million mark in the year 2005. However, despite the growth in the overall employee base, companies are struggling to retain their existing employees. s observed that managing attrition in the industry is important because skilled professionals formed the crux of this knowledge-intensive industry. What's more? The cost of recruiting and training is a huge expense for most IT firms. Attrition affected the quality of service and also led to higher Training & Development expenditure, affecting the overall performance of the organization.

IT companies in India have been taking steps to counter the rising levels of attrition. Companies have realized the importance of factors other than salary with which to motivate their employees to stay. A healthy work environment, continuous employee learning, work-life balance, recognition and corporate brand building are some of the key initiatives taken up by IT companies in recent years to manage attrition. In 2004, Infosys Technologies Limited (Infosys) devised a policy of taking security deposits from fresh graduates who joined the company at the entry level to discourage them from leaving the company during the training period whereas Wipro Technologies Ltd., (Wipro) started a matchmaking service for its employees. The purpose of this service is to help employees choose their life partners within Wipro in the hope that if employees picked spouses from the same company, they could spend more time together, say while traveling/dining etc., thereby improving the work-life balance.

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