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Analysts point out IT companies are responding to a more challenging environment, in which the momentum has slowed, by increasing utilisation.
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Employee additions at the country’s top IT firms are slowing with the quarterly increase in headcounts having come off to below 5 per cent 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.
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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 Nasscom has forecast the sector will create about 20-38 per cent fewer jobs in the current year or 1.3-1.5 lakh new jobs, including freshers and lateral hires.
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.
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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 firms have traditionally been around the 70 per cent level but in recent times this has consistently stayed above 80 per cent. In effect, the number of IT employees on the bench is also lower. TCS’ employee headcount at the end of Q2FY18 was only slightly higher at 3,89,213; up 4.7 per cent. In Q2FY17, employee additions had clocked a robust 10.6 per cent. Infosys’ employee strength at the end of Q2FY18 was 1,98,440, flat compared with 1,99,829 in Q2FY17. In comparison, the IT major saw a 6.3 per cent rise in employee addition in Q2FY17. Wipro ended Q2FY18 with an employee strength of 1,63,759, up 2.4 per cent over 1,59,791 in Q2FY17. FE
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