Top five Indian IT firms added 1.7 lakh employees between January and September 2021

Most of the IT firms have revised their fresher hiring targets for the year given the sustained demand. (Representative image)

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Top five IT services companies – TCS, Infosys, HCL Tech, Wipro and Tech Mahindra – together added close to 1.7 lakh people in the first nine months of this year on the back of strong demand and rising attrition.

The recovery is all the more striking, since it comes after headcount in the top five IT firms declined by 1,125 during the same period last year due to the COVID-19 pandemic. Back in March 2020, countries went into lockdown and IT firms paused hiring, both freshers and laterals, as they braced for volatility. The top five companies’ headcount addition was 77,000 between January and September 2019.

A year later, there is a complete turnaround, in terms of both hiring and the demand.

Hiring and demand

Demand is at an all-time high and supply chain constraint is a key challenge across the industry.

For one, attrition has gone up across the industries. Infosys, Wipro and Tech Mahindra reported attrition rate of over 20 percent for the quarter ended September 2021, up from the previous quarters. Saurabh Govil, chief human resources officer, Wipro, said during the earnings call on October 13 that the high attrition rate is likely for the next couple of quarters, given that the market is hot right now.

It is not just large IT services companies that are looking at a spike in attrition rates, mid-tier IT companies and also clients are in the same predicament.

Sanjay Jalona, CEO, L&T Infotech, in a recent interaction with Moneycontrol, said, “In what the world is calling a ‘Great Resignation’, the US itself has a million openings. Unemployment is only at 7.5 percent. So, the deficit in talent availability is causing them to have huge attrition.”

He further explained, “Our customers are seeing double-digit attrition numbers and they’re looking to partners like us. They are also automating a lot of things because of the shortage of labour. All these three things put together are creating a need for more tech services and jobs. We are just happy to be here participating in this with our customers.” LTI reported an attrition rate of 19.6 percent.

So the companies are hiring in large numbers to cater to the clients’ needs.

Spike in hiring

Hiring, without a doubt, is at an all-time high in recent years and the outlook for the next two quarters looks strong. In the quarter ending September 2021 alone, the top five IT majors added close to 70,000 people. It was 18,000 last year and 37,000 for the quarter ended September 2019.

Most of the IT firms have revised their fresher hiring targets for the year given the sustained demand. TCS increased their fresher hiring numbers from 40,000 it had announced early this year to 78,000 for FY22. Infosys will hire 45,000 freshers this fiscal, up from 26,000 it had announced in the beginning of this fiscal. Wipro will hire 17,000 freshers up from 12,000 it had earlier announced.

This would take total fresher hiring to 1.6 lakh in FY22.

With the momentum expected to continue, some firms have announced they will be doubling their fresher hiring in FY23 as well. Wipro and HCL Tech said they would be hiring 25,000-30,000 freshers in FY23.