Opens doors for high attrition IT freshers

At least 43,000 freshers joined India’s largest IT services firm Tata Consultancy Services Ltd (TCS) in the first half of this year, the highest ever in the first six months. TCS, which has already exceeded its hiring target, is expected to pick up 35,000 freshers in the second half of FY12.

Milind Lakkar, Chief Human Resource Officer, TCS said, “The reason for the increase in the recruitment numbers is high demand and job losses.”

On a 12-month basis, TCS’s job loss rate, the lowest among peers, increased to 11.9% in the September quarter, up from 8.6% in the previous quarter. “The high level of attrition is likely to continue for 2-3 quarters,” Lakkar said.

Bengaluru-based Infosys Ltd. has increased its hiring target for FY12 from 35,000 to 45,000. Infosys’ job loss rate for the September quarter rose to 20.1 per cent from 13.9 per cent in the previous quarter.

Wipro Ltd. hired 8,150 freshers during the September quarter, exceeding the earlier target of 6,000. The company said it will hire over 12,000 freshers in the current fiscal and will introduce 30,000 offers for freshers in FY23.

Wipro’s attrition rate increased to 20.5% in the second quarter from 15.5% in the first quarter.

“High attrition is a concern throughout the market but there are cycles in our industry and when you peak, you have to deal with it. While we’re trying to bring it down, we’re also adjusting it so that we keep moving at the same speed even with higher speeds. Wipro CEO and Managing Director Thierry Delaporte said, “Attrition will continue for a few quarters and in this context, we should be able to add new talent to the organization, as we have done in the last 2-3 quarters.”

For Noida-based HCL Technologies Ltd, the job loss rate rose to 15.7% in the second quarter from 11.8% in the June quarter. To tackle this, it has hired 5,779 freshers in the September quarter and aims to hire 30,000 freshers by the second quarter of FY23. C. Vijayakumar, CEO and MD, HCL Tech said, “Hiring new people is a big part of our strategy and this trend will continue for a few quarters.”

According to analysts, leaving jobs in IT services companies has created global panic among customers as it may slow down their digital transformation journey.

“The decline and resultant talent shortage can be attributed to increased post-pandemic digital transformation investment, which has pushed the demand for digital talent far beyond its supply. We believe this talent crisis will last for at least the next two years, probably long enough for some specific and important skills to be acquired,” said DD Mishra, senior research director at Gartner.

Hiring freshers can solve the problem to some extent, but there is also another side to it.

“Newcomers have to go through a learning curve. Besides, the cost of staff is expected to increase as the demand and supply gap has resulted in increase in wages,” said Mishra.