BENGALURU: India’s two top IT firms - Tata Consultancy Services (TCS) and Infosys- have been facing high attrition rates, indicating supply-side challenges, as IT firms are fighting among themselves for a limited talent pool.
The war for talent has been continuing, as Infosys’ voluntary attrition rate for the last 12 months (LTM) stood at 27.7% at the end of March 31, 2022. The attrition rate was 25.5% in the December quarter, and 10.9% for the quarter ended March 31, 2021. TCS reported 17.4% attrition in the fourth quarter from 15.3% in the December quarter. TCS indicated that the attrition could become even worse.
“In Q4FY22, Indian IT players have extensively leveraged emerging digital and cloud capabilities to deliver broad-based growth and gain traction in digital services. While the industry is still not immune to the ongoing talent war with high attrition rates and pressures on margins, there will be a continued focus on hiring and skilling for a future-ready, workforce,” Vijay Sivaram, CEO, Quess IT Staffing told TNIE.
Brokerage firm Anand Rathi said attrition is still at a record high but given moderation in net hiring, we expect it to turn favourable in FY23. All IT companies are now focusing on hiring freshers. While TCS has hired over 1 lakh freshers in FY22, Infosys said it hired 85,000 freshers in the last fiscal year, and it would hire over 50,000 in FY23, and could even step up during the course of the year.
TCS also plans to hire over 40,000 in FY23. During Q4 earnings call, Samir Seksaria, Chief Financial Officer, TCS said, “We had an all-time high net addition in the quarter as well as for the full year at 35,209 and 103,546 respectively, bringing the total headcount to 592,195.”
Rajesh Gopinathan, CEO of TCS said, “What we are seeing is a demand-supply mismatch in our industry. Fresher hiring and productive use of freshers is a long-cycle activity.” When asked about the sudden spike in demand for IT professionals, Yeshab Giri, Chief Commercial Officer - Staffing & Randstad Technologies, Randstad India said, “According to statistics, every IT professional in India has 2.5 offers at a given point in time. The availability of such offers has pushed young professionals to look for tech jobs in new-age start-ups.”