Indian IT firms step up fresher hiring to deal with high attrition

Indian IT services companies are hiring freshers in record numbers to deal with the high attrition rates. The improved demand environment is creating new opportunities for technology professionals, leading to a war for talent.  

India's largest IT services firm Tata Consultancy Services Ltd (TCS) had 43,000 freshers joining in the first half of this year, the highest ever on-boarded in the first six months. TCS which has already crossed its projected hiring target, is expected to hire another 35,000 in the second half of FY22. “The reason for the increase in hiring numbers is a mix of high demand and attrition,” said Milind Lakkad, chief human resources officer, TCS.   

On a trailing 12-month basis, the attrition rate of TCS, lowest among peers, increased to 11.9% in the September quarter from 8.6% in the preceding quarter. “The high attrition levels are likely to continue for the next 2-3 quarters,” said Lakkad.     

Bengaluru-based Infosys Ltd has upped its hiring target for FY22 to 45,000 from the earlier projection of 35,000 on the back of high demand and attrition. For the September quarter, the attrition rate of Infosys rose to 20.1% from 13.9% in the preceding quarter.  

Wipro Ltd., too, hired 8,150 freshers during the September quarter, higher than the earlier target of 6,000. The company said it will hire over 12,000 freshers in the current financial year and will roll out 30,000 offers for freshers to join in FY23.    

Wipro’s attrition rate for the second quarter rose to 20.5% from 15.5% in the preceding three months. “High attrition is a concern across the market but our industry has cycles and when you are at the peak, you have to deal with it. While we are trying to bring it down, we are also adjusting to it so that even with high attrition, we can continue to grow at the same speed. Attrition would possibly continue for some quarters and in this context, we should be able to add new talent in the organization as we have done over the last 2-3 quarters,” said Thierry Delaporte, CEO and MD, Wipro.  

For Noida-based HCL Technologies Ltd, attrition rate rose to 15.7% in the second quarter from 11.8% in the June quarter. To deal with this, it has hired 5,779 freshers in the September quarter and set a target of hiring 30,000 freshers by the second quarter of FY23. “Hiring freshers is a big part of our strategy and that trend will continue for a few quarters,” said C. Vijayakumar, CEO & MD, HCL Tech. 

Analysts believe attrition in IT services companies has triggered a global panic among customers as it may slow down their digital transformation journey. 

“The attrition and resulting talent crunch can be attributed to the growing post pandemic digital transformation investment, which has pushed the demand for digital talent far past its supply. We believe this talent crunch will last at least for the next two years, perhaps significantly longer for some niche and critical skills,” said D.D. Mishra, senior research director, Gartner.  

While hiring freshers may solve part of the problem, it does have its flipside. “Freshers have to go through a learning curve. Also, the employee costs are expected to go up as the demand and supply gap is resulting in wage appreciation,” said Mishra of Gartner.