IT services firm HCL Technologies made a net addition of 11,135 employees in the quarter ending September 2021, the highest ever addition in a single quarter. This comes on the back of increased demand for technology services and rising attrition.
Speaking to media persons after the company’s Q2 FY22 result announcement on October 14, Chief Human Resources Officer VV Apparao said that as the demand environment remains robust, the company will continue to hire laterals and freshers.
HCL Tech added close to 5,800 freshers in Q2 FY22 and will add about 10,000-12,000 freshers in the next two quarters. The firm employs about 1.87 lakh employees.
With attrition increasing to 15.7 percent from 11.8 percent in the last quarter, the company is taking several measures to address the issue. This includes stock options for senior hires, salary hikes effective July 1, and 100 percent quarterly bonus for junior management.
Rising attrition, incentives
To retain senior employees, the company’s board approved Restricted Stock Unit (RSU) grants as part of the compensation mix, as it looks to retain high performers amid the war for talent. This is a part of the company’s long term incentive plan.
Under this model, which was approved by the board on October 14, the company will move from 100 percent cash awards to a mix of 70 percent cash and 30 percent RSUs for the grants, which will be offered in the later year subject to shareholder approval.
In addition, the company also rolled out wage hikes, 7-8 percent for offshore employees and 3.5 percent for onsite hires. This came into effect for junior employees on July 1, 2021, and for senior executives, this will come into effect on October 1. Junior management will also be getting a 100 percent quarterly bonus for the quarter.
Return to work
As vaccination gains pace, close to 5-6 percent of employees are returning to office currently, which is expected to increase in the coming quarters.
Apparao explained, “We have encouraged our senior managers to come to office at least twice a week. Depending upon the rules, customer requirements, data, and privacy guidelines, each line of business is encouraging people to come at least once a week. So we do expect this momentum will increase by the end of this calendar year.”
The company reported $2,791 million in revenues for Q2 FY22, up 2.6 percent sequentially and 11.3 percent year-on-year, driven by the manufacturing and life sciences segment. While the company did not offer guidance, it said that the IT services will see double-digit growth in FY22, considering the robust demand environment and the deal pipeline.
The company signed a $2.3 billion new booking for the quarter, a mixture of small and medium deals. However, the company’s product and platform segment reported a decline of 5.5 percent due to delay in closing large deals.
“There was a blip that can be attributed to delays in closing some large deals, which is likely to be done in the next quarter. Usually, the product business has a lot of licence sales of our products and a big part of our revenue gets booked and recognised towards the end of the quarter. I want to assure you the core of this business is intact, though we overall expect this year to be flat to one person growth compared to the low single-digit growth that we had shared earlier,” C Vijayakumar, CEO, HCL Tech, said during the earnings call on Thursday.