1. Infosys, TCS, Wipro employee addition falls under 5 pct; here is why

Infosys, TCS, Wipro employee addition falls under 5 pct; here is why

The growth rate in employee addition has fallen below 5% for the top tier Indian IT services companies — Tata Consultancy Services (TCS), Infosys and Wipro.

By: | Bengaluru | Published: November 3, 2017 5:59 AM

 

Infosys, TCS, Wipro, employee addition, IT services companies The growth rate in employee addition has fallen below 5% for the top tier Indian IT services companies — Tata Consultancy Services (TCS), Infosys and Wipro

By Pradeesh Chandran & P P Thimmaya

The growth rate in employee addition has fallen below 5% for the top tier Indian IT services companies — Tata Consultancy Services (TCS), Infosys and Wipro — at the end of the second quarter of FY18, impacted by factors such as lower demand, increased automation and the focus on healthy bottom line. In case of TCS, the employee headcount at the end of second quarter of FY18 stood at 3,89,213, as compared to 3,71,519 in the same period of FY17, recording a growth of 4.7%. In comparison, during the period between FY17 and FY16 in the second quarter, the growth rate in employee addition at the company was 10.6%. Infosys’ employee strength at the end of second quarter of FY18 was 1,98,440, as compared to 1,99,829 in the same period a year ago, recording a de-growth of 0.6%. In comparison, the IT major saw a 6.3% rise in employee addition between FY17 and FY16 comparing the second quarter period. Wipro, which had an employee strength of 1,78,639 at the end of second quarter of FY18 as compared to 1,74,238 a year ago, recorded a growth of only 2.5%. In comparison, for the second quarter period between FY17 and FY16, the growth rate was 3.4%. For the first time, these three IT majors have recorded the employee addition growth rate of below 5% in the second quarter in the last four fiscals. Employee addition by the top tier companies was healthy at least two years ago hovering around double-digit growth rate. But since then, it has steadily been declining with no visible signs of any strong uptick in recruitment.

Infosys CFO MD Ranganath said, “The trend what we have seen in the last two or three quarters has been that the rise or rate of revenue growth was faster than the headcount addition. If you look at the whole first half of this year and compare to the previous year, we have added about 8,000 employees less.” “It is because of a combination of higher utilisation and some amount of productivity improvement,” he added. The employee headcount of the Indian IT industry at the end of FY17 was 3.8 million, and the future projections is not at all encouraging. The National Association of Software and Services Companies (Nasscom), the IT industry’s trade body, had predicted that the sector would create about 20-38% fewer jobs in FY18. The projection is the industry would create 1.3-1.5 lakh new jobs in FY18 which included both fresher and lateral hiring as compared to 1.7 lakh jobs in FY17. “There will definitely be a decline in the number of people the industry may hire. Two major reasons for this: IT companies are facing pressure on cost and also margin. So they would actually like to see more coming out of productivity and utilisation rather than adding more people. Second part is obviously because of the automation,” said Thammaiah BN, India MD, Kelly Services. “The companies are preparing for the future and slowly they are downgrading the hiring.”

Indian IT companies are also slowly delinking the headcount growth to revenue growth. Wipro HR head Saurabh Govil said, “Revenue growth will be the fastest side given the non-linearity of platforms and digital work and automation which we are doing than what you will see on the headcount side.” IT companies have also responded to the changed environment of a slower business momentum by increasing their utilisation level. Traditionally, the utilisation level for top tier companies was around 70% level, but now this has consistently stayed above 80%. In effect, the number of IT employees on the bench has also fallen. Earlier, TCS had indicated that overall hiring in trainees or freshers will be lower in the current fiscal. Ajoy Mukherjee, executive vice -president and global head, human resources, had said: “The kind of campus hiring that we are doing this year will be very similar to what we did last year.” At the end of September 30, 2017, TCS, Infosys and Wipro collectively had about 751,412 people on their rolls as compared to 731,139 in the same period a year ago. “Paradigm shifts in business models of IT services businesses is upending talent acquisition and firms are hiring strictly on a need basis,” said staffing solution provider TeamLease Services in a report.

  1. No Comments.

Go to Top