Talent War Grips IT Industry: BMW Bikes, 3-Day Work Week, This Is How TCS Is Luring New Employees!

As TCS seeks to reach $50 billion in sales by the end of the decade, CEO of TCS said that the company can navigate its way through any immediate disruptions to the global economy and tap into long-term demand for its services.

There are a host of challenges, from Covid outbreaks in China that are disrupting supply chains to the war in Ukraine as it upends the geopolitics of Europe that the largest player in India’s $227 billion tech services industry TCS must face. The company also provides tech services and support to thousands of companies in the U.S. and beyond that are adopting hybrid labour strategies, with employees working both from home and the office.

TCS Chief Executive Officer Rajesh Gopinathan told Bloomberg News in an interview at headquarters in Mumbai said that the “The long-term demand environment is very strong” and “We’re leaning forward, we’re betting on growth.”

The soft-spoken TCS veteran who joined the company back 2 decades, wears blue formal shirts, is known to be good with numbers and fostering client relationships.

The outsourcing industry of India is based on helping foreign companies by replacing their pricey workers with lowest cost and higher skilled specialists from the likes of TCS, Infosys Ltd. and Wipro Ltd. But easy growth from labor arbitrage has largely disappeared, forcing Gopinathan and his peers to move into more sophisticated offerings, such as cybersecurity, cloud computing and artificial intelligence.

As a part of a wider move to win business from startups as well as large global enterprises, last month TCS revamped its internal structure with specialized groups. Gopinathan said that the overhaul was executed in less than a month.

“We are extremely agile in the way we reorganize,” he said. “We are more micro-focused on the customer sets that we have and the opportunities we have.”

Tata group has conglomerate with dozens of companies in everything from salt to automobiles. But TCS is a cornerstone of Tata Group. Asia’s top outsourcer, TCS closed out its fiscal year ending in March with revenue of more than $25 billion.

Talent Retention Cuts Into The Margins

As expenses to hire as well as retain talent cut into the margins, TCS reported a 7.4% increase in fourth-quarter profit to 99.3 billion rupees ($1.3 billion), short of analyst estimates.

The programmers and developers of giants like TCS are vied by the startups who in turn try to lure these talent. Sometimes this bait includes BMW motorcycles or three-day work week — something the much-larger outsourcers have resisted.

Current Scramble is “Transitory”

Currently an employer of 600000 people, TCS intends to further more hire 40000 graduates in the fiscal year through March 2023. Calling the current scramble by employees as “transitory”, Gopinathan said that no one can pay more when it comes to talent than TCS, as TCS enjoys the structural margins as no other.

He said that “If you look at this industry, we enjoy the benefit of occupying the high point on the profitability side; everybody else is benchmarked below us. So, no, I don’t see a threat to our position.”

Gopinathan, chief financial officer before his promotion, said he does get questions about why TCS is determined to hire and expand, given the apparent challenges in the global economy.

“I’m getting a lot of debate that everybody else is saying the outlook is bad –how come you are positive? We are reacting to what’s there” he said.

“That is not to say that we are living in a bubble,” he added. “We are betting on that growth knowing that even if we turn out to be wrong, we will then step back and reset.”