Increasing labor costs due to wage hikes and robust retention bonuses along with rising facility, travel and communication expenses are pressuring IT services vendors’ profitability. ![]() Vendors continue to place a premium on skilled resources, offering sizable signing bonuses and higher wages. While vendors continue to recruit via traditional methods, more are investing in reskilling and upskilling as well as launching educational initiatives.įinding and keeping employees in the IT services market is increasingly difficult as talent poaching intensifies for a finite number of resources and companies’ bookings remain high. New job creation and the gradual alleviation of pandemic pressures have encouraged employees to pursue career-building opportunities, leading to elevated employee attrition of 20.8% in 2Q22 compared to 16% in 2Q21, 14.1% in 2Q20 and 17.6% in 2Q19, on average, for the 31 vendors in TBR’s IT Services Vendor Benchmark. There is an ever-increasing need for people as vendors build their benches to capture opportunities and support revenue growth. As TBR predicted at the end of 2021, attracting, retaining, upskilling, promoting and rewarding talent are all necessary HR motions and further accelerated during the past three quarters.
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