TCS has nearly doubled its hiring plan for the year as attrition remains high

• Tata Consultancy Services hired 43,000 freshers in the first half of 2021, which is also the highest ever for a six-month period.
• TCS has declared a dividend of ₹7 a share.
• The IT services behemoth has reported 14.1% year-on-year growth in net profit to ₹9,625 crore for the September quarter.

The information technology (IT) services giant Tata Consultancy Services (TCS) said on Friday that it has had the highest ever intake of freshers in a six-month period.

TCS hired 43,000 freshers in the first half of 2021 and almost doubled its hiring target of FY22. It expects to hire another 35,000 in the next six months.

But this can also be seen as an after-effect of its attrition rates going up. The IT behemoth’s attrition has increased to 11.9% in July-September quarter from 8.60% in April-June period.

Nearly 12% attrition rate of TCS is high when compared to the average attrition rate of 8.67% in the IT industry for the September quarter as per a report by professional services firm Teamlease.

Although the company accepts the attrition rate is very concerning, it believes they can still manage it.

“We believe this attrition level will continue for the next 2-3 quarters. Having said that, our strong employer brand and our robust talent acquisition and talent development models will help us significantly overcome the supply side issues…We will continue to hire more and more and keep the supply ready since our model is robust. The attrition level is definitely concerning, but we can manage through that,” said Milind Lakkad, global head of human resources at TCS, in a press conference post earnings.

TCS’s attrition rate has been rising consistently in the last five quarters:
The workforce of the company stands at 5,28,748 at the end of the September quarter. The company added 19,690 employees in September.

The company posted a revenue growth of 3.2% quarter-on-quarter to ₹46,867 crore in the September quarter. Its profit for the quarter stood at ₹9,625 crore, higher by 6.8% quarter-on-quarter.While the company’s attrition rate remained a concern, the company reported strong numbers considering it had signed as many as 14 new deals in the last three months ending September.The company attributes this to the rising demand for digital transformation.

“The strong and sustained demand environment is a once-in-a-decade opportunity to position ourselves as the preferred growth and transformation partner for our customers,” said Rajesh Gopinathan, chief executive officer and managing director at TCS.

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