1. Big setback for techies, hiring trend loses pace at IT companies IRC, Infosys, Wipro, others

Big setback for techies, hiring trend loses pace at IT companies IRC, Infosys, Wipro, others

Employee additions at the country’s top IT firms are slowing with the quarterly increase in headcounts having come off to below 5% year-on-year at the end of September.

By: | Bengaluru | Published: November 6, 2017 5:39 AM
hiring trend in it companies, it companies hiring, hiring changes decline in it companies Two years back, double-digit growth in hiring was par for the course but the pace of hiring has slackened considerably.

Employee additions at the country’s top IT firms are slowing with the quarterly increase in headcounts having come off to below 5% year-on-year at the end of September. Two years back, double-digit growth in hiring was par for the course but the pace of hiring has slackened considerably. The September quarter saw the hiring increase at the slowest in the last four fiscals and at the end of it, the top three firms collectively had about 7,51,412 people on their rolls compared with 7,31,139 in September 2016. Tough market conditions, rising costs and an eye on automation seem to have prompted IT majors, including Tata Consultancy Services (TCS), Infosys and Wipro, to rein in their workforces. Infosys CFO MD Ranganath said recently the relatively slow hiring at his firm was due to a combination of higher utilisation and improvement in productivity. “Our revenues have grown faster than the headcount addition in the last two or three quarters. “If we consider the first half of 2017, we have added about 8,000 employees less,” Ranganath said. At TCS, Ajoy Mukherjee, EVP& global head, (human resources), indicated his firm would hire fewer trainees or freshers this year. “The kind of campus hiring that we are doing this year will be very similar to what we did last year,” Mukherjee said. In 2016-17, the industry had taken on 1.7 lakh people, taking the tally of employees to 3.8 million in March 2017. The National Association of Software and Services Companies (Nasscom) has forecast the sector will create about 20-38% fewer jobs in the current year or 1.3-1.5 lakh new jobs, including freshers and lateral hires.

Thammaiah BN, India MD, Kelly Services, believes the number of people hired by IT services firms will definitely see a decline given companies are facing cost pressures. “They would like to see better productivity and utilisation than add to the headcount,” he says. Moreover, automation is a reality and companies are preparing for the future, he points out, adding they are gradually downsizing. Wipro HR head Saurabh Govil had observed recently that given the non-linearity of platforms and digital work and automation which his company was doing, revenues would probably grow faster than the headcount.

Analysts point out IT companies are responding to a more challenging environment, in which the momentum has slowed, by increasing utilisation. Utilisation levels for the top-tier companies have traditionally been around the 70% level but in recent times this has consistently stayed above 80%. In effect, the number of IT employees on the bench is also lower. “Paradigm shifts in business models of IT services businesses is upending talent acquisition and firms are hiring strictly on a need basis,” staffing solution provider TeamLease Services noted in a report. In its heydays, the IT industry hired over 2.3 lakh fresh engineering graduates annually but that is now down to tens of thousands.

TCS’ employee headcount at the end of Q2FY18 was only slightly higher at 3,89,213; that’s a growth of 4.7%. In comparison, in Q2FY17, employee additions had clocked a robust 10.6%.

Infosys’ employee strength at the end of Q2FY18 was 1,98,440, virtually flat compared to 1,99,829 in Q2FY17. In comparison, the IT major saw a 6.3% rise in employee addition in Q2FY17. Wipro ended Q2FY18 with an employee strength of 1,63,759, up 2.4% over the 1,59,791 in Q2FY17. In Q2FY17, there was a degrowth of 5.1%.

  1. K
    Kannan
    Nov 6, 2017 at 7:43 am
    PM Modi BIGGEST CHALLENGE is JOB Creation. People request BJP not to MISLEAD people by producing SPURIOS data on jobs. It is rubbing SALT into our wounds. It is SHAMEFUL. We will VOTE AGAINST YOU if you continue with Fudgy-politics. Please stop making promises and ACT/IMPLEMENT good schemes. Demonetisation was UNNECSSARY disruption. aadhar was poorly conceived and is BEING PATHETICALLY implemented. For 7 years, BJ-Congress(indira) discussed GST and within 4 months are amending the CORE i.e. the rates. What did they discuss for 7 years? What a SHAME! Incredible India.
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