IT cos likely to go for big hiring

Bengaluru: Big talent war is on the offing as the big IT services companies are readying for aggressive hiring in the coming months.

With demand picking up, most IT firms are short of talent with employee utilisation running at unsustainable levels. This has led to attrition numbers showing upward trend in the fourth quarter of current financial year.

Even sources in the know said many large IT services firms are not able to get required talent for manning new projects bagged by them in recent quarters. Therefore, the management commentary on hiring big numbers in FY22 is intended at meeting the operational needs at the current demand environment, they added.

We believe there could be potential war for talents going ahead as companies are aggressively looking for digital talent to grow. Recently, many companies (including TCS, Accenture, Infosys, etc) have announced one-time bonus, additional rounds of promotions and the next round of wage revision for its employees as the supply of skilled talent is short. It has been reflected in the attrition picking up (except TCS) in the fourth quarter," said Sanjeev Hota, head of research, Sharekhan by BNP Paribas.

IT majors such as Infosys and Wipro reported rise in their attrition numbers, though market leader Tata Consultancy Services witnessed a dip during the January-March period. Country's second largest IT firm Infosys witnessed employee attrition going up by 5.2 per cent at 15.2 per cent in Q4 of FY21 as compared to 10 per cent reported in the previous quarter.

Similarly, Wipro has also seen attrition level going up by 110 basis points to 12.1 per cent during fourth quarter.

However, market leader TCS was the only exception. Its attrition level fell to 7.2 per cent in the IT services space from 7.6 per cent reported in the previous quarter. Meanwhile, management commentary of these three firms indicated that hiring plans for FY22 would remain robust.

Market leader TCS said that it is looking to bring 40,000 freshers on board in FY22, which will push up its total employee count above 5 lakh. Similarly, Infosys said that it would hire 26,000 engineering graduates from campuses in the current financial year. Though Wipro didn't provide any specific number, it said it would be hiring more fresh graduates this fiscal over last fiscal year. In FY21, it had hired 9,000 college graduates.

Earlier, HCL Technologies had said that the Noida-headquartered firm would hire 12,000 freshers in the current financial year. On aggregate basis, the top four IT services firm are expected to hire around 90,000 fresh graduates this fiscal year.

Experts said hiring numbers are likely to be more than one lakh for FY22 as mid-tier companies announce their hiring plans in coming days. Apart from demand pick up in the marketplace, higher utilisation levels are another reason for aggressive hiring plans. In the fourth quarter ended March 2021, Infosys' employee utilisation excluding trainees touched 140 basis points at 87.7 per cent.

"On the utilisation side, we are recruiting aggressively. We are also making hires from the campuses and so on. So, as we start getting in such freshers into the mix, the utilisation will come down. The current utilisation of 87.7 per cent is very high and not what we are comfortable with. But over the quarters, it will trend down.

That's our plan," said Pravin Rao, Chief Operating Officer at Infosys during the post-results conference call. Similarly, Wipro's employee utilisation stood at 86 per cent during the fourth quarter of last fiscal year.

Experts are also of the opinion that as offshoring rises amid the pandemic, India hiring numbers will get the benefit of more project works being executed out of the country.