Accenture announced a seven per cent drop in attrition rate in its quarterly results on Friday. The IT giant announced a 13 per cent attrition rate for the quarter in contrast to their 20 per cent reported in the quarter prior. As of November 30th, 2022, Accenture had 7,37,719 employees. This drop in attrition rates means well for profits in the IT sector and could also mean IT companies would have to make lesser replacement hires.
Accenture’s CEO KC McClure expressed her happiness with the drop in attrition rates as it means the company would not have to look for too many replacements. This in turn means lesser recruitment costs which were already reflected in its general and administrative costs for the quarter. She also mentioned that there was always a structural pattern to attrition but was surprised to see a sharper drop this year, which the company is very pleased about.
Wage inflation still seems to be a persistent issue in the IT sector. Accenture mentioned planned compensation increases which would affect its prices which are notably higher than they have ever been, a trend seen in most industries, across all geographies that Accenture is no foreigner to.
Having reported higher revenue for the quarter ending November 30th, where sales grew five per cent to $15.7 billion, the company’s weak outlook overshadowed its earnings resulting in a reported six per cent loss for the stock on Friday. It mentioned pullback from clients who postponed business improvement projects especially in retail as one of the main reasons for the same.