No signs of slowdown in attrition at TCS; firm says it has enough hands

TCS which had shared in Q4 of FY22 the hiring target of 40,000 for FY23, said the target remains

Attrition at India’s largest IT services provider Tata Consultancy Services (TCS) continues to rise at a fervent pace.

For the Q1 of FY23, the company reported an attrition rate of 19.7 per cent.

The management said the high number was partly due to the seasonality impact when junior employees opt for higher studies as well as supply-side constraints.

The management added that attrition will see some moderation only in the second half of this financial year.

“On an absolute basis, it is continuing to increase, though on a percentage basis, it is starting to flatten. And, we expect it to continue into Q2 also. It will be H2 when we will start seeing some amount of moderation. That’s our immediate short-term view on attrition but from a medium-to-long term, we think that both the supply side as well as the demand side is easing up. This is in terms of talent coming from outside of the immediate industry system and that should play into moderation,” said Rajesh Gopinathan, chief executive officer (CEO) and managing director (MD), TCS.

However, the 19.7 per cent attrition rate is much higher than 17.4 per cent reported in the preceding quarter and way ahead of the 8.6 per cent in Q1 of FY22.

Meanwhile the company, which had shared in Q4 of FY22 the hiring target of 40,000 for FY23, said the target remains. But unlike last year, this number may not go up significantly.

In FY22, the company had started its hiring target from 40,000 and ended the year by adding 100,000 freshers.

With a record number of employees being added in FY22, the TCS management said it has a good number of people to manage demand. Going ahead, if need arises, it can quickly ramp up its numbers.

During the quarter, the company added 14,136 to its headcount. This is lower than what it added in Q4 (35,209) and Q1 of FY21 (20,409).

N Ganapathy Subramaniam, chief operating officer and executive director, said normally in Q1, TCS hires more laterals as contracts are in ramp up positions.

On salary hikes, the company said it announced a hike of at least 8 per cent. However, people with higher roles and skills are getting double-digit salary hikes.

Milind Lakkad, chief HR officer, said: “Following our annual compensation review, employees received salary increases of 5 to 8 per cent, with top performers getting even bigger hikes. Our empowering and performance-driven work culture is helping us attract local talent across all our key markets.

Continued hiring momentum resulted in a milestone quarter, with the employee strength crossing 600,000.”