The top four Indian IT companies - TCS, Infosys, Wipro and HCL Tech - have doubled their hiring targets for 2021-22 to 1.6 lakh freshers, as enterprises accelerate their digital transformation journey on the back of the pandemic and a rising attrition.
The IT top four had hired some 82,000 freshers in FY21 and added 53,964 employees in the quarter ending September 2021, up from 17,076 a year ago.
Enterprises across the world stepped on the gas on digital transformation as the world moved into new normal last year. Technology is no longer just about driving cost-efficiency, but also about driving business.
For instance, aviation and hospitality - the two sectors that bore the worst brunt of the pandemic - are investing in contactless check-in facilities, as restrictions are being lifted. Retailers also can no longer be offline only and are now investing in IT to drive business.
Rajesh Gopinathan, Chief Executive Officer and Managing Director, had rightly said that this strong demand environment was “once-in-a-decade opportunity”. IT companies, in step, have revised their outlook and are looking at double-digit growth.
All these have translated into a strong demand for skills like cloud architecture, cybersecurity, full stack development and AI/ML expertise.
Attrition, fresher hiring
As the IT companies set out on a talent hunt, the sector sees a spike in attrition.
TCS has seen the churn rate rising to 11.9 percent from 8.6 percent between the last quarters. Wipro and Infosys reported over 20 percent attrition and HCL Tech 15.7 percent. For the previous quarter, the attrition stood at 10-15 percent for these three IT companies.
"One of the issues that we must do even as we build talent at scale is attrition," Wipro CEO and MD Thierry Delaporte had said during the earnings call last week.
Milind Lakkad, the chief human resources officer at TCS, recently said that the attrition might continue for the next two-three quarters.
Hiring freshers has come up as a solution to contain the attrition as well as address the rising demand. "We have doubled down on our fresher intake and I'm happy to share that we are well positioned to add over 25,000 freshers in the next financial year," Delaporte said.
TCS plans to sign up 78,000 freshers this year, instead of 40,000, it had planned initially. It has already on-boarded 43,000 freshers. Wipro and Infosys have revised their hiring targets to 17,000 and 45,000, respectively, for FY22. HCL Tech plans to hire 22,000 freshers and made a record addition of 11,135 employees in the second quarter.
"Supply side constraints will not impact our growth, which is a priority for us. If you see, this is the second quarter where at the company level we've added more than 10,000 people as a net headcount due to the higher attrition environment. We will continue to look at both freshers and laterals as our strategy. We added two-times more freshers this year, and we will further increase it by three fold in FY23," Saurabh Govil, Chief Human Resources Officer, Wipro, said last week.
Incentives, stock options
The IT firms are also looking at additional incentives to retain and attract quality talent.
Wipro and HCL Tech employees’ salary hikes came into effect on July 1, and TCS rolled out pay hikes effective April 1, 2021. UB Pravin Rao, COO, Infosys, recently said that his company was weighing measures such as compensation intervention and career growth opportunities to stop the churn.
The HCL Tech Board approved Restricted Stock Unit (RSU) grants as part of the compensation mix, as it strives to retain high performers. This is a part of the company’s long-term incentive plan. Under this model, 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.
The company also rolled out 7-8 percent hike for offshore employees and 3.5 percent for onsite hires that came into effect for junior employees on July 1, and for senior executives, on October 1. The junior management will also be getting a 100 percent quarterly bonus for the quarter.