HCL Technologies will go slow on lateral hires due to drop in demand on the back of the novel coronavirus, or COVID-19, pandemic. However the company will go ahead with the hiring of 15,000 freshers as planned for FY21.
This is in line with the industry trend, where most IT majors have honoured the offers made, but froze hiring, primarily lateral hires, for FY21 due to uncertainty around the pandemic.
Speaking to Moneycontrol, Prateek Aggarwal, its CFO, said, “Hiring itself will be slow for multiple reasons. For one, iteration (demand cycle) itself has come down. Volumes are going to be lower as well. So, hiring will also reduce.”
In addition, there is increased focus on improving utilisation of existing employees and reduction in employee attrition. The company’s attrition has fallen to 16.3 percent in FY20 from 17.7 percent on a year-on-year basis. Lower attrition means that the need to fill replacement roles is reduced.
Apparao VV, CHRO, HCL Tech, pointed out that slowdown in the hiring process was also on these accounts. The company employed about 150,423 people at the end of March 31.
“At the same time, we want to honour the offers that we have already made to people,” Aggarwal said. There is no delay in on-boarding of freshers. But the focus is on those who are coming in with their own laptops and devices so that they can start work right away.
However, the company is yet to take a call on wage cuts and promotions. “Calls on wage hikes and promotions will be taken in the coming quarter. We have a July cycle and hence we are not taking any call on that right now,” he added.
HCL Tech registered revenue of $9.936 million, up 16.7 percent year-on-year in constant currency for the year ended March 31. This is well within the 16.5-17 percent guidance band that the management had announced. However, it did not issue any revenue guidance for FY21 given the outbreak of novel coronavirus and uncertainty around a demand recovery.
Close to 96 percent of HCL Tech’s work force is working from home (WFH) and the management expects less than 10 percent to resume office by the end of this quarter. The company will re-evaluate the WFH scenario once the lockdown is lifted but expects the 50-50 model to continue.
This is also in line with the Ministry of Home Affairs' (MHA) guidelines that mandates that IT/ITeS firms can work at 50 percent capacity. In the 50-50 model, 50 percent of employees will WFH and the rest in office to maintain social distancing norms and also to ensure safety of its employees.
In terms of business outlook, the company expects Q1 to be impacted due to COVID-19 and also expects pricing pressure, discounts and payment extension requests. Aggarwal explained that some of its customers are impacted by COVID-19 and expects cut in spends and a pullback in some projects.
“There could be some requirement for discounts but that is not the majority of what we have seen. Extension of payment terms is small help we can give them during troubled times. Usually that is for the limited period of three months,” he added.
C Vijayakumar, its CEO, said the company expects digital transformation, cloud, cybersecurity and Internet of Things (IoT) to drive growth during the pandemic.
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