It is probably for the first time that clients in traditionally low-attrition industries are also witnessing a high churn and shortage of tech talent, thus creating opportunities for us to step in and solve their challenges.
By Srinath Srinivasan
L&T Infotech recorded one of its strongest quarters in Q2 FY22, crossing a $2-billion annual revenue run rate with a 20.8% year-on-year increase in profit. The company aims to ride the growth wave while tackling industry-wide talent crunch problems. CEO & MD Sanjay Jalona tells FE’s Srinath Srinivasan about the company’s outlook for the rest of the year. Excerpts:
What factors drove broad-based growth across business verticals in Q2?
First, the pandemic has led to the Great Restructuring across industries, with enterprises embarking on new business models and seeking partners who can co-create with them at speed. Second, we are witnessing several new areas of spend. For example, Environmental, Societal and Governance (ESG) has started playing a key role in business decisions and strategy. Cloud security is also seeing a lot of traction. And third, there’s a fundamental shift on the supply side. It is probably for the first time that clients in traditionally low-attrition industries are also witnessing a high churn and shortage of tech talent, thus creating opportunities for us to step in and solve their challenges. Overall, I believe we have barely scratched the surface of this opportunity.
What is your strategy to reduce sharp attrition rate of 19.6% observed during Q2? How long do you expect this to continue? How many people are you planning to hire this FY? Are you ramping up lateral hiring?
Attrition has spiked across the industry, and we expect it to stabilise over next three to four quarters. To meet the broad-based demand, we plan to increase the fresher intake to 5,500 this year, and we will also hire about 1,000 people in niche areas like cloud, data and digital. To train our employees and to hire and train people from non-tech streams, we are collaborating with L&T Edutech, which is helping us scale even faster.
As observed across the industry, Q2 performances, which are usually toned down, have significantly turned out to be high growth. Do you expect this to continue in future? What is the status of calling employees back to office?
The changes taking place across industries are secular, not cyclical and so we anticipate the current growth environment to continue for the next two-three years. All our offices are now open, and we are welcoming fully vaccinated employees to voluntarily work from office. Keeping their preference and well-being in mind, we will follow this approach till the end of this year.
We are adopting a unique framework called Yin-Yang Model to govern the way forward for a hybrid future. Based on their role, customer requirements, and individual preference, each employee is being assigned a persona to decide how and where they would work. We expect all our employees to be mapped to a persona by end of this year and will be starting office in a hybrid way from early 2022. People will work from office to collaborate, brainstorm, mentor, ideate, solve together or just connect with each other. People will work from home to plan, focus, spend some time learning or indulge in self-care.
With strong deal wins recorded during the quarter, where do you expect headwinds to come from during the second half of this FY?
We are keeping a very close eye on supply-side constraints. We anticipate talent crunch to remain an industry-wide challenge over the next few quarters. We believe the industry can grow even faster if this bottleneck could be solved with more skilled resources. We will continue to scout, screen, and hire the best talent across the globe. We added 2,300 people in Q1 of this year, and 4,000+ people in this quarter.