India's top IT majors TCS, Infosys and Wipro added 45 percent more employees in FY21 compared to the previous year due to rising demand for software services as more companies digitize their operations.
The hiring spree, along with wage hikes and bonuses to retain talent, will continue. TCS, Infosys, Wipro, and HCL Tech could together hire nearly 1 lakh freshers this year to meet rising demand arising out of robust deal pipelines.
TCS, one of the most valuable IT companies in the world, said it will hire 40,000 freshers in FY 22, taking its overall headcount above 5 lakh. Infosys and HCL Tech have said that they will hire 26,000 and 12,000 respectively this fiscal.
Though Wipro did not disclose specific numbers, Chief Human Resources Officer, Saurabh Govil said that the firm will hire more freshers in FY22 compared to the previous year. The company onboarded close to 9,000 freshers in FY21.
In addition, these firms will also hire more experienced professionals over the year to meet the demand.
The hiring frenzy is driven by a few key factors.
Demand and deal momentum
As Thierry Delaporte, CEO, Wipro, pointed out during the earnings call on April 15, the sector is witnessing a new wave of business momentum. This momentum is driven by increased focus on digital, as enterprises across invest in new age technologies such as cloud and accelerate their digital transformation.
This is resulting in increased large deals, which have become the order of day. Executives expect this to continue. For instance Wipro signed 12 large deals with the total contract value of $1.4 billion in Q4 FY21.
TCS clocked deals worth a record $9.2 billion in Q4 FY21 and a total of over $31.5 billion over the last fiscal. Its peer Infosys won $14 billion in total, with over 60 percent in net new deals. HCL Tech is yet to announce its FY21 and fourth quarter results.
All these factors are driving the demand for talent, especially those with skills in data analytics, full stack developers and cloud professionals. Accenture alone has over 20,000 vacancies in India for various roles.
Accenture in a statement to Moneycontrol said, “(we are) hiring for in-demand skills in areas such as digital, cloud, security, data and AI as well as platform and other core skills. We see an increased demand for professionals with cloud skills including those required for cloud migration, native cloud development and data re-engineering, deployment and maintenance across multi-cloud environments.”
Apart from cloud, the other areas where the company is hiring include data science, data engineering, data visualization, DevOps, Machine Learning, Natural Language Processing (NLP), Virtual Agents, Computer Vision are becoming important. “Another key requirement is security skills to support the rapid pace of cloud deployments, cybersecurity services, cyber-defence services and managed security operations,” Accenture said in the statement. The company has 5.37 lakh employees globally, including 2 lakh in India.
Wage inflation, rising attrition
With hundreds of jobs up for grabs, the IT sector is bracing for high attrition rates and wage inflation.
Industry experts Moneycontrol earlier spoke to, said wage inflation is a key issue with employees commanding 20-40 percent more than what they had seen in 2019.
V Ramakrishnan, CFO, TCS, which reported an all-time low attrition of 7.2 percent, said that it expects the number to go up. UB Pravin Rao, COO, Infosys, said 15 percent attrition it posted in Q4 is likely to continue in the next two quarters. Govil too said that Wipro expects higher uptick in attrition in FY22.
What are companies doing?
War for talent, which has now come to characterize FY22, is a key challenge and companies are going to great lengths to retain them.
Delaporte, CEO, Wipro, said during the earnings call on Thursday, that the company is fully prepared to win this war for talent, and has introduced several interventions to retain staff.
After rolling out wage hikes in January 2021, Wipro employees are in for another hike in June 2021. Promotions are in offing as well. In October 2020, the company announced promotions for 80 percent of its employees effective December 2020. “In addition, we are rolling out skill-based bonuses,” Delaporte said.
Bonuses will be given to employees who possess niche skills in new-age technologies such as cybersecurity, and cloud as well as key domain skills. “These bonuses are for differentiated skills and hence targeted,” pointed Chief Human Resources Officer Saurabh Govil.
To contain attrition, Infosys is looking at a second round of compensation in July 2021 after the wage hikes it rolled out in January 2021. “We have a lot of focus on continuous learning and career advancement opportunities. We will look at any intervention required in between,” Rao added.