Expect attrition to drop close to 12-13 percent by H2FY24 : TCS CHRO Milind Lakkad

Milind Lakkad, CHRO, TCS

Tata Consultancy Services (TCS) expects to bring down its attrition rate close to its pre-pandemic range of 12-13 percent by the second half of the fiscal year 2023-24, Chief Human Resources Officer (CHRO) Milind Lakkad said. The IT services behemoth has started to slow down hiring and focus on improving employee utilisation rates.

The attrition rate of the January-December quarter stood at 20.1 percent on a last twelve-month (LTM) basis. This is an improvement from the previous (Q3) attrition rate of 21.3 percent. TCS has also reduced hiring, adding only around 821 new employees in Q4FY22-23, compared to 35,209 employees in Q4 of FY21-22.

Speaking to Moneycontrol, Lakkad said, “We want to go down to our original levels. So 12-13 percent is the band which we are comfortable with… I know my numbers will really come back close to this range. We expect to reach pre-pandemic number levels in the second half of this year.”
TCS rolled out 46,000 offers to freshers in FY22-23, and plans to hire around 40,000 freshers in FY23-24.

Besides these 40,000 freshers, Lakkad said the company will also hire between 5,000-8,000 employees across its offices in Latin America (LATAM), Asia-Pacific (APAC), United Kingdom (UK), Europe, and north America. The north America, UK, APAC, and LATAM offices also hire a significant number of trainees.

“40,000 is the number of trainees hired primarily from India. Apart from that, we do hire a significant number in LATAM and APAC. In Europe, not a very big number yet, but yeah, we do hire in Europe, North America,” he said.

Lakkad added that in Europe the company had started with a few countries and will expand its presence further.

Skills expected to be in demand this year include analytics, Internet of Things (IoT), cybersecurity, artificial intelligence (AI), and machine learning (ML) in roles across industries such as banking, retail, manufacturing, pharma, etc., Lakkad said.

Return to office

In September 2022, TCS had mandated that employees would have to work from the office three days a week. TCS COO N Ganapathy Subramaniam, in an earlier interaction with Moneycontrol in January, had said that 2.1 lakh of the company’s 6.13 lakh employees, roughly a third of their workforce, had started working from office at least thrice a week.

Lakkad updated that as of now, nearly 53 percent of its employees across campuses are working from office twice a week, and about 43 percent thrice a week.

“There are multiple challenges. People have moved to their hometowns, and some of them have kids who joined schools in that area. So they are taking time. Others have some other genuine challenges. We're working through all of that. It’'s taking longer than what I initially thought it would. But it’s moving in the right direction. I want it to move faster,” Lakkad said, explaining why they still don’t have everyone coming to office every day.

TCS had announced its 25/25 vision earlier, wherein by 2025 only 25 percent of the employees were to work out of TCS facilities at any time. Lakkad said that while that plan was still on, his priority was to first get all employees to come to work thrice a week.

“And then we will see how it’s going, what the work model is, what the people and industries are thinking,” he said.

He added, “We have been working 100 percent remotely, during which time we have actually delivered to our customers reasonably well. But we still believe we should not lose that connection with the people. Just talking to them only in the context of work and nothing else is not a good thing.”

Generative AI to aid employees

During its earnings call on April 12, TCS had said that all its clients are actively looking for the integration of generative AI and ChatGPT into the offerings of the IT services firm.

"In my interactions with clients over the last quarter, the conversation starts and stops with ChatGPT. Everybody talks about ChatGPT and what it's going to do. That’s the theme in all the deal wins we have, and a huge amount of focus on cloud data. Machine learning is also a very, very important area of focus,” Subramaniam had said during the earnings call.

Now it turns out that not just for its customers, TCS is exploring generative AI solutions even for its own employees, to enable them to be more productive.

Around two quarters back TCS had started to work on an internal gig platform to let its employees have the opportunities to learn quickly, explore, and work on different technologies, environments, customers, and industries beyond their regular jobs.

But the gig platform will now require some reconsideration and tweaks as generative AI and AI co-workers can do the same work without involving the core teams, Lakkad said.

“These things are evolving as we speak. With new technologies coming in, our own thinking is also evolving. We are looking into what generative AI means in the context of an enterprise, not just from the standpoint of what the operating model will be, but also what will be the role of an employee versus the role of an AI co-worker,” Lakkad said.

Lakkad added that with generative AI being used, there are also discussions underway about safeguarding intellectual property (IP), security, etc.

Rival Infosys too has been talking about betting big on generative AI and ChatGPT as demand from clients and active projects around the technology continue to grow.