Hiring spree. IT majors on hiring spree, add 50,000 in Q2; freshers in demand

The top four Indian IT companies added over 50,000 employees in the second quarter of FY22, taking their total recruitment to over one lakh in the first six months of the fiscal year.

While Tata Consultancy Services’ employee base increased by 19,690 in the second quarter, Infosys reported addition of 11,664, the highest ever in a single quarter. Wipro and HCL Tech added 11,475 and 11,135 employees, respectively. This is the highest hiring in the last 24 quarters for HCL Tech.

“Digital services like cloud computing and data analytics have picked up and IT companies are seeing more demand. The pool of senior experienced executives is limited, therefore, the companies are looking to hire and train new entrants to manage client commitments and increase the availability of talent,” Piyush Pandey, Lead Analyst - Institutional Equities, YES Securities, told BusinessLine .

While all the four IT companies have done lateral hires, there has been a rush to onboard freshers. Largest IT services major TCS alone onboarded 43,000 freshers over the past six months. The company plans to add another 35,000 in the current fiscal, taking the yearly total to 78,000 fresh graduates.

“By investing ahead of time in hiring the right talent across the world and onboarding a record number of fresh engineers, we have been able to overcome supply-side challenges and stay on track with all our execution timelines,” said Rajesh Gopinathan, Chief Executive Officer, TCS.

Onboarding freshers

Infosys revised its hiring target to 45,000 freshers this fiscal, up from 35,000 earlier. “We are rapidly expanding our global talent pool and have increased our college graduate hiring to 45,000 for this year. Last quarter, we had this number at 35,000, said Salil Parekh, Chief Executive Officer, Infosys.

Wipro added 11,475 employees in the second quarter alone, of whom 8,000 were freshers. By the end of this fiscal, the company wants to take the total to 17,000 fresh graduates.

Rising attrition levels

The increased hiring is also because IT companies are seeing an increase in attrition levels. “Attrition rates have particularly increased in the 2-6-year experience bracket, where candidates are in high demand. They are getting 50-100 per cent pay hike on switching jobs at the moment. For the attrition rate to temper, the supply of talent has to go up,” said Pandey.

Both Infosys and Wipro reported the highest attrition rates this quarter on LTM (last twelve months) basis at 20.1 per cent and 20.5 per cent, respectively. Infosys’ attrition rate was 7.8 per cent in the same quarter last year while it stood at 13.9 per cent in the first quarter this fiscal.

TCS reported the lowest increase in the quarterly attrition rate in the last twelve months at 11.9 per cent though a significant increase from 8.9 per cent in the same quarter last fiscal. The June quarter attrition rate was 8.6 per cent.

Pravin Rao, Chief Operating Officer, Infosys, said, “We expect this (high attrition) to probably continue for a couple of quarters or so. But once we have more talent available in the system, this should ease and get back to the real level.”

The gap in the supply of and demand for talent is leading to higher salary payouts to retain senior staff. Wipro, for example, has done two salary increases this calendar year.

But the industry is not worried. Milind Lakkad, Chief Human Resource Officer, TCS, said, “When we backfill attrition, yes, there is a marginal increase in the cost we see which is not for this quarter, it has been like this for a reasonably good period of time. The point is we do have strategic talent development programmes where people can significantly accelerate their career paths, and their compensation. There are ways to increase and accelerate compensation internally also.”