Attrition Rate Drastically Falls In The Big IT Firms; TCS Hiring Drops By 85%!
This fall in attrition rate means the companies are now hiring fewer people and are opting for just-in-time hiring strategy.
Job scenario in India IT firms is witnessing two interesting developments, which tell us a lot about the industry as a whole.
While attrition rate across two of the biggest IT companies in India has reduced, recruitment drive in TCS, India’s 2nd largest IT company, has shrunk by a massive 85%.
Meanwhile, TCS has already been selected for one of the largest outsourcing deals in India.
What exactly is happening here?
Attrition Rate Drastically Drops in IT Firms
Infosys and Tata Consultancy Services (TCS) have reported a massive decrease in attrition rate in the third quarter of 2017-18. While TCS reported a drop of 11.1% in the attrition, Infosys reported an impressive dip of 17.2% for the same.
Attrition rate is the number which denotes how many employees have left a company, and a drop in this rate means that fewer employees are now leaving these companies.
This means that employees are happy or they are not able to find a reason to leave.
Maybe, this also means that there are now fewer jobs available in the market, and the employees have taken a wait-and-watch stand.
However, if we ask these IT firms for the reason behind this drop in attrition rate, they say it is higher salaries, better perks and happy employees.
Explaining the reason for low attrition, Infosys chief operating officer UB Pravin Rao said,
“During the quarter, we provided compensation increases and higher variable payouts to our employees. Our investments in employees continue to deliver results as reflected in lower attrition,”
Interestingly, TCS has already announced a 100 percent of the target variable pay, which can be a reason for low attrition.
TCS Hiring Drops By 85% This Fiscal!
Meanwhile, in a related development, it has been reported that hiring in TCS has dropped by 85% this fiscal year- for the 9 months since March 2017.
During this period between March 2017 and January 2018, TCS hired just 3,657 employees, compared to 24,654 employees in the same period last year.
It seems TCS has now adopted a just-in-time hiring protocol, wherein the recruitment process will only start when the actual demand comes in.
Ajoy Mukherjee, executive vice president and global head of human resources at TCS said,
“A year prior, we were building capacity in advance. We made 40,000 campus offers. We made a gross addition of over 78,912 and we made a net addition of 33,000-34,000. We are now looking at just in time hiring,”
This clearly means that the days of mass-hiring from campuses is now over.
However, if we look at the revenues growth in TCS, then the results aren’t that disappointing – In October last year, TCS reported 3.2% sequential rise in Q2 dollar revenue, which was 8.3% more than the same period, last year.
In the 3rd quarter, revenues increased by 1.3% to Rs 6,531 crore.
Besides, TCS has just received their one of the biggest outsourcing contracts ever: $2.25 billion Nielsen outsourcing contract last month.
Considering these developments, it is still not clear how the job market will look like in 2018.
We will keep you updated.