Index Insider: Strong demand exacerbating attrition challenge

Hello. This is Stanton Jones with your weekly briefing on what’s important in IT and business services.
In this edition: Strong demand for IT and business services is exacerbating the attrition challenge. Scottish power supply company modernizing FP&A with Wipro. EPAM expanding its digital experience capabilities with acquisition of European design firm.
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As we discussed on the 3Q21 Index call, one of the biggest areas of concern in our market right now for both buyers and providers of technology services is talent. Take a look at the Data Watch chart below. As you can see, attrition abated during the pandemic – but it’s back in a big way and shows no sign of receding in the near term.
Providers are pulling every lever they can to address this challenge: increasing campus hires, hiring laterally, pushing more work to subcontractors – and of course automating more. However, it takes time to ramp up campus hires and automation programs; lateral hires and subcontractors are ready to deliver, but they are more expensive.
This attrition challenge is exacerbated by the fact that demand is strong. For example, over the past 12 months, the industry has added around $4.5 billion of engineering and applications ACV – we estimate that work will require around 100,000 more resources skilled in these areas.
The industry has a long track record of managing 20 percent turnover when growth is in the low single digits; but when growth is strong, like it is today, effectively managing the supply side becomes mission critical.


Attrition Levels in IT and Business Services, 1Q19-3Q21


  • Aggreko and Wipro. Scottish power supply company modernizing FP&A function (link).
  • Nortura and Capgemini. Norwegian agricultural cooperative signs 10-year ITO deal (link).
  • Under Armour and AWS. Athletic apparel giant selects its preferred SAP cloud partner (link).
  • Woolworths and TCS. Expansion of existing relationship with a focus on DevOps and cybersecurity (link).
  • United States Marshals Service and Accenture. Seven-year $600 million modernization task order (link).


  • EPAM acquires European digital agency Emakina Group (link).
  • Accenture acquires procurement spend management firm ClearEdge (link).

About the author

Stanton Jones

Stanton Jones

Stanton leads ISG's Index research, helping providers, investors and ISG clients make sense of the global IT services sector. Stanton’s weekly newsletter, the Index Insider, is read by thousands of market stakeholders each week. An ISG Digital Fellow, Stanton has been quoted in Fast Company, Forbes and, and has appeared on national cable news.