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The employee base at Tata Consultancy Services (TCS) crossed 5,00,000, purportedly making it India’s largest private sector employer. Headcount increased 4.2 percent sequentially in the June quarter, the fastest pace in at least three years. Net additions are up 67.9 percent from June 2019.
TCS added 40,185 employees at the net level in FY21. The company is likely to hire similar if not more employees in the current fiscal. The hiring trend reflects the company’s growth expectations, though the June quarter revenues lagged Street estimates.
That is a remarkable expansion and provides hope for a pandemic-ravaged India. The country needs more such companies.
One such opportunity exists in SaaS a.k.a Software-as-a-Service. The Indian SaaS ecosystem has the potential to create half a million jobs by 2030, equivalent to the current TCS employee base, shows a study by SaaSBOOMi and McKinsey & Company. Indian pure play SaaS firms employed 40,000 employees in 2020.
However, the achievement is contingent on the availability of human resources with relevant skillsets. That remains a big challenge.
The pandemic is forcing enterprises to accelerate their investments in digital technologies. This has sharply raised the demand for technology professionals. Even listed IT companies with campus hiring and reskilling programmes are facing the heat. To retain employees, companies are doling out salary hikes and bonuses. Still, attrition rose at TCS in the previous quarter and is projected to rise further.
“Retaining talent is becoming a key focus as people are thinking about who they work for and why, as now there is a lot of opportunity,” analysts at Investec Capital Services said in a note.
The demand for IT talent is accentuated by the proliferation of start-ups. To mitigate the risks, established IT firms are stepping up hiring in overseas locations, notably in Europe and Canada. The government can help address the supply constraints encouraging industry ready curriculums at universities and colleges.
Talking about start-ups, the initial public offering (IPO) of the food delivery platform Zomato is creating a lot of buzz. Read our piece here on the numbers to track in the food delivery business. Zomato’s IPO has also put the spotlight on other start-ups. Policybazaar, Nykaa and Delhivery are also reportedly firming up listing plans.
Do check out these investing insights from our research team:
Equity inflows moderate in June, but rising SIP folios and assets a bright spot
TCS – A soft quarter does not take away the long-term investment case
Weekly Tactical Pick – Kotak Mahindra Bank
What else are we reading today?Herd Immunity Tracker: Dip in daily run rate of vaccine doses
Cabinet Reshuffle | What's in store for Big Tech?
Chart of the Day: A slip in food prices can cheer up policymakers
The digital divide is a huge setback to rural school education
Infosys' top talent is being hunted by global companies, and it's not complaining
Top Fed official warns Delta variant poses threat to global recovery (Republished from the FT)
Picks from our Technical Analysts: Havells, Just Dial, EIH and BHEL
(These are published every trading day before markets open and can be read on the app)
R Sree Ram