The ‘Quick Joiner Incentive Plan’ rolled out by the ₹15.2 trillion (market cap) Tata Consultancy Services offers vendors ₹40,000 per candidate over and above their fees, for senior candidates who join in less than 30 days.
The urgency to get experienced employees is a sign that markets are probably opening up for the IT services firm.
“Incentives will be paid over and above the rate card for the assigned skill and job code…..with experience range of 10-15 years….The overall paid amount (Base rate and incentive) will be recoverable if the candidate leaves the organization in 180 days,” said a mail sent to some of the TCS vendors in March seen by Mint.
A few of the skills required by TCS, as per the email, include proficiency in Microsoft Teams, and Microsoft 365 tools such as OneDrive, Word, PowerPoint and Outlook. TCS is also on the lookout for skills in Endpoint and SharePoint, which allow users to create, manage and publish content on a website.
“While incentives were offered in 2022 during the hiring frenzy, last year was subdued,” said a TCS vendor who received the email. “This year, these additional perks to vendors indicate that the IT services firms are expecting new mandates for which they need experienced employees to implement projects.”
TCS declined to comment.
Typically, a vendor gets 8-12% of the annual compensation that a candidate earns for permanent recruitments. For those on staffing or contract (not on payrolls), vendors get paid at a flat rate. According to recruiters, candidates with experience levels of 10-15 years draw annual salaries upwards of ₹30 lakh.
Analysts tracking the sector note the preference for experienced employees over fresh hires. “TCS has a robust deal pipeline and they are hiring mid- to senior-level talent with 10 years of experience and above because of deals that are ramping up,” said Omkar Tanksale, research analyst at Axis Securities, adding that TCS needs experienced business analysts and software experts to develop complex algorithms for clients.
In January 2024, TCS won its biggest outsourcing deal from British insurance group Aviva. The deal runs through 15 years and is valued at atleast $2.5 billion. Most recently, the IT major inked a multi-million dollar deal with Danish communication service provider Nuuday, on 14 March. Extending its footprint in the Nordic region, the software services company also signed a deal with Enento Group, Finnish business and consumer information services provider on 8 February.
Tanksale said freshers cannot help the company ramp-up deals as quickly. “The hiring is deal-specific and there is no change in the macro-economic environment. It will take a couple of quarters for IT demand to recover going ahead,” he said.
The move for experienced employees stands out starkly at a time when IT services firms have gone slow on campus hiring from the batch of 2024. Cognizant, HCL Technologies, even TCS are recruiting in smaller-than-usual batches from campuses, while Wipro is not hiring at all in the fresher category. Infosys hired a select number of students from IT background who are specialized in cybersecurity and data mining.
TCS’s additional incentives also highlight the company’s needs and those of other IT services’ firms to streamline their bench strength and stabilize utilization rates. In IT sector parlance, utilization rate indicates the percentage of staff engaged in active projects, while bench strength comprises staff who have not yet been assigned a project.
While TCS does not disclose its utilization rate, analysts peg the IT major’s utilization rate to hover around 85-89% for the three months ended December 2023. Rivals Bengaluru-based IT peers Infosys Ltd, Wipro Ltd and Tech Mahindra have reported utilization rates of 82.7%, 84% and 88% respectively for the December 2023 quarter.
Having a utilisation of 89% as its upper band is good to address current client needs. It has fallen from the COVID times in 2022 when utilisation rates for top IT providers across the globe touched 94%,” said Mrinal Rai, assistant director and principal analyst for ISG Group.
The market is seeing rising demand for people experienced in programs like Flutter, Windchill, Workday, SAP, amongst others.
Flutter is Google’s Google’s open-source UI software used to create mobile, desktop and web-based applications.
Windchill is a product lifecycle management (PLM) software which provides intellectual property (IP) security and traceability while managing product development and its manufacturing process. A PLM software is used in managing data through all stages of the product’s lifecycle, from its ideation to its disposal post service.
Workday is a cloud-based software program used by human resources (HR) teams to handle payrolling, onboarding employees, and performance evaluations.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!
Download The Mint News App to get Daily Market Updates & Live Business News.
Published: 17 Mar 2024, 10:23 PM IST