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The top three Indian IT companies — Tata Consultancy Services, Infosys and Wipro — reported a sharp increase in net employee hiring during the September 2018 quarter following good business wins, high employee utilisation and low bench strength. These were the highest hiring numbers for the three companies in the past 12 quarters.
Cognizant, too, saw good hiring during the quarter, but its number was much less than those of its competitors.
Together, the four companies’ net employee hiring was 34,048, nearly five times as many as in the corresponding quarter last year (6,435). In fact, in the September 2017 quarter, both Infosys and Cognizant reported a decline in net hiring (see chart).
Interestingly, the previous high net hiring for TCS, Infosys and Wipro was during the September 2015 quarter (27,045), when the industry was at its peak. However, from then on the industry has seen a decline in growth rates; recruitment numbers too dropped significantly, according to data collated by BusinessLine .
Over the last couple of years, IT companies have focussed on improving employee utilisation, reducing bench strength and tuning the existing employees in line with the digital transformation they were experiencing, which resulted in lower intake. However, this year they reported large project wins; average employee utilisation onsite reached a peak of around 90 per cent, and offshore around 85 per cent (excluding trainees). They also experienced higher attrition.
“These firms are showing stronger growth in their digital practices, which require new skills, and are therefore adding workers. Each of the firms has been experiencing high levels of attrition — 15-20 per cent — and have to hire afresh. Digital requires a mix shift in skills, which cannot be accomplished only by retraining, and hence there is increased hiring,” Peter Bendor-Samuel, CEO, Everest Group, told BusinessLine .
Bozhidar Hristov, Senior Analyst at Technology Business Research, US, said cyclical changes — driven by rising attrition, demand for professionals with skills in new technologies that can not only execute on traditional outsourcing projects but can also drive design-led opportunities — are compelling Indian vendors to hire again.
Further, companies like TCS and Infosys have signed multi-year large-scale outsourcing deals, and additional resources are needed to support their execution, he added.
Focus on local hires
Rajesh Gopinathan, CEO and Managing Director, TCS, said during an interaction with analysts that a substantial part of the hiring during the quarter was made up of local hires, which was the highest net addition that “we’ve done in the last 12 quarters.”
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