Top three IT majors – TCS, Infosys and HCL Tech – made a net addition of 1.97 lakh employees for the year ending March 2022. The companies also added 2.08 lakh freshers for the year, and will be taking in 1.35 lakh campus hires this financial year.
This comes on the back of rising attrition even as demand continues to be robust. Moreover, with lateral talents coming at a huge cost, the companies are bridging the demand-supply gap by hiring more freshers.
According to experts and executives, attrition is likely to increase before it moderates in the second half this financial year.
Rising attrition
Spiking attrition rate has been a concern for IT companies.
TCS attrition increased to 17.4 percent in the March 2022 quarter from 8.6 percent in the beginning of the year and 11.9 percent in the December 2021 quarter. Infosys reported 27.7 percent in attrition for the March 2022 quarter, up from 13.9 percent at the beginning of the year.
In case of HCL Tech, attrition increased from 11.8 percent at the beginning of the year to 21.8 percent in the March 2022 quarter. Rajesh Gopinathan, chief executive of TCS, said that the attrition numbers are likely to get worse before they moderate.
According to Infosys finance chief Nilanjan Roy, attrition should come down in the following year as more freshers come into the pipeline.
However, the increasing cost of talent is resulting in IT firms hiring more freshers in FY22, a trend that is likely to continue in FY23. TCS, Infosys and HCL Tech added 103546, 54396 and 39900 people last fiscal, respectively.
Fresher hiring
The top three IT firms consistently ramped up fresher supply from their initial estimates. For instance, TCS and Infosys hired 100,000 and 85,000 respectively against their initial estimates of 40,000 and 26,000 at the beginning of the fiscal.
For HCL Tech, the 23,000 freshers the firm hired was more than the 12,000 hired in the previous year.
In FY23, these companies will be hiring 1.35 lakh from campuses, and this number could increase.
TCS’ Gopinathan said, “The expectation is that the bulk of this hiring that has gone on across the industry in the last calendar year will start coming in and playing a role. So, it’s very similar to what you are saying; just that there is a little bit of a lag and by the middle of the year we should see it.”
He added that fresher hiring and productive use of freshers is a long cycle activity. “But you have seen the industry step up hiring over the last four quarters. We expect that as supply hits productive use it will ease up a lot of what was going on over the last few quarters.”
Roy said, “Volume has to be through freshers, there is no other source of volume. Therefore, we start pumping in more freshers, send them for training, put them into the bench and then get them into production. I think that cycle takes time, and you are already seeing the benefits of this – not only with us but also seeing that with the industry as well.”
In case of HCL Tech, apart from increasing the fresher supply to 45,000 in FY23, the company is also tapping into talents in other regions. It also expects the talent situation to stabilise by the second half of FY23.
During the earnings call on April 21, C Vijayakumar, chief executive of HCL Tech, said that it is also looking to tap the US and Asia Pacific for talents apart from India.
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