Tata Consultancy Services, the country’s IT bellwether, has confirmed better times may be ahead for IT companies by announcing its intent to extend 25,000 campus offers next fiscal and raising this fiscal’s hiring target to 50,000 from 45,000.
“We are already in the process of campus hiring. They (the new 25,000 recruits) will start joining from July 2014,” said TCS’s human resources (HR) head Ajoyendra Mukherjee.
Ankita Somani, IT analyst with Angel Broking, said the 25,000 campus hiring figure is decent and reflects that TCS is seeing a healthy deal pipeline and good demand environment going forward. She expects TCS’s overall hiring target to be in the range of 40,000-45,000 next fiscal.
TCS, which hires trainees a year in advance, had made 25,000 placements last fiscal. Some 6,300 freshers joined in July-September (second quarter); the rest are likely to join in the third and fourth quarters.
Mukherjee expects nearly 18,000 freshers to join this fiscal out of the 25,000 placements made.
The joining ratio, he said, has also improved from 69-70% to 72-74% due to several trainee engagement programmes. TCS had made 43,000 offers last fiscal and all were accepted.
For TCS, the attrition rate – it reflects the efficiency and effectiveness of an IT firm, but could pose major problems if it is high – so far at 10.9% was the lowest among peers. It was below 10% of the IT sector in the second quarter.
Somani said TCS manages its attrition very well compared to other IT companies mainly due to its robust deal pipelines, on-time wage hikes and quality projects. Its bench size is hardly 15%, much lower than other IT players’.
Analysts attributed TCS’s enthusiasm for hiring to its nine-quarter high volume growth of 7.3% in the second quarter and improvement in the utilisation rate to 83.4% (excluding trainees) and 75% (including trainees).
TCS’s highest utilisation rate so far has been 83.8%. Mukherjee believed there is scope to push it further to 84-85% and beyond now.
Although TCS hires experienced professionals (called ‘laterals’) in advance, Mukherjee said the number of hires this year would be announced only after studying the demand environment.
“There will be a certain number of professionals on the bench always. This is needed to manage growth.”
TCS’s hiring across geographies has been robust of late, he said. It hired more than 600 in the US during the second quarter, and expects hiring to remain stable in the 500-600 range in the coming quarters.
In Europe, too, hiring remained “good”, and would continue to increase on the back of requirements of France-based Alti, a firm that TCS bought in April.