IT costs slow in hiring despite high turnover, headcount down 57% in Q2

• TCS, HCL Tech and Wipro collectively hired 57% fewer employees in the second quarter.
• Wipro’s net hires were down 95% in the quarter.
• This was despite high attrition, with TCS reporting a sequential increase of 180 basis points during the quarter.

Three of the four major Indian IT companies have released their Q2 FY23 results. While demand and earnings prospects were among the most important aspects of management commentary, turnover and headcount growth were two other key metrics that stood out.

The four largest Indian IT companies – TCS, Infosys, HCL Tech and Wipro – hired more than 60,000 employees on average each quarter in FY22. This number was expected to decline as recession concerns intensified in the US and Europe – India’s two main markets for IT.

And it’s now starting to reflect in the number of employees hired by IT companies.

According to an analysis by https://londonbusinessblog.com/ India, TCS, Wipro and HCL Tech hired 57% fewer employees in Q2 FY23 than the average of the previous five quarters.

On average, TCS, Wipro, and HCL Tech together hired 44,106 employees per quarter since the start of FY22.

In Q2 FY23, that number has plummeted to just 18,804.

From their respective averages, TCS hired 58% fewer employees, while Wipro’s net additions decreased 95%. HCL Tech was the only outlier, with a 0.5% drop in net additions.

Source: Company Reports

It’s not just a hiring delay, IT companies are Reportedly delaying freshman onboarding – this includes Infosys, Wipro, HCL Tech, and Accenture. Some candidates have been waiting for their letters of application for as long as a year, the report said.

During its Q2 results, TCS said it has honored all vacancies in the first half of FY23 with the addition of 35,000 freshmen to its roster.

Failure rates remain high

Despite the drastic drop in hiring, staff turnover remains high. In fact, it deteriorated for the market leader TCS, while remaining unchanged for HCL Tech and moderating for Wipro.

Infosys, the second largest Indian IT company, is the hardest hit, with a significantly higher turnover rate than its competitors. It is slated to announce its Q2 results today.

Also read:

It is the attrition rates and not the wage increases that are driving down India’s IT costs

Three of the four major Indian IT companies have released their Q2 FY23 results. While demand and earnings prospects were among the most important aspects of management commentary, turnover and headcount growth were two other key metrics that stood out. The four largest Indian IT companies – TCS, Infosys, HCL Tech and Wipro – hired more than 60,000 employees on average each quarter in FY22.

IT companies develop an allergy to moonlight

Softening demand prospects and growing attrition appear to have contributed to IT companies developing an allergy to moonlight – while Wipro’s Rishad Premji was the only major executive to speak out publicly against moonlight until recently, TCS and HCL Tech have now joined in. the chorus connected.

TCS’ HR head Milind Lakkad called it an “ethical issue”, while HCL Tech said the moonlight did not approve.

Wipro’s Premji, on the other hand, called it “just plain and simple cheating”.

The only major exception now is the MD and CEO of Tech Mahindra CP Gurnanic.

IT companies are currently staring at a potential decline in demand, which is also reflected in their hiring strategies. With experts suggesting that employee turnover will decline by the end of this year, it remains to be seen whether companies are easing the side job or not.

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