ECONOMY

TCS CEO Says Attrition May Worsen; Doubles Hiring Target

We are currently at about 11.5% on an LTM (last twelve months) basis. We have been at 12-13% and we have had a peak of 16% in the past. So, in a high demand environment, 12-13% is something that we have seen in the past. But, this significant increase quarter on quarter will start tapering off in a couple of quarters.

Menaka Doshi: You’re preparing us for maybe a worse attrition number, but you’re hopeful that it will ease in Q1, Q2 of FY23. How does this hurt your ability to maybe achieve the growth that you want?

Rajesh Gopinathan: Again as I said, having spotted the demand opportunity earlier, having invested in that capacity side, currently, the capacity crunch is not yet impacting our growth momentum.

But our bench is getting squeezed with the kind of attrition that we are seeing and it is not a stable one. So, we are offsetting that by more campus hiring and more tactical, lateral hiring that we are doing. So, currently it is not impacting our ability to meet the demand that is immediately with us. But this is something that we need to be very vigilant on and stay on top of it and that’s why the 78,000 comes in.

Menaka Doshi: If you wanted to hire more than let’s say 78,000 people is there talent available?

Rajesh Gopinathan: Oh absolutely, we’re in a good position to hire. 70% of what we are currently hiring, in fact, more than 70%, is coming to us directly.

And, the investments that we have made in the TCS national qualifier test and the platform that we have created, more than 3-3.5 lakh people participate in each of our hiring waves. So, we are still hiring only 1 out of 5, or less, people intending to apply to us.

We have done this in a very digitally transformative way. Even the ones who are near but didn’t qualify, we go back to them and share with them the areas where they were short on because they are interested in working for us, we’re interested in them and then they use the opportunity to skill themselves. We are very interested in bringing them on. So, the digital platform that we’ve created, that’s a hugely powerful data set that we have which we are constantly mining. That’s why we are able to, midway through the year, go from 45,000 to 75,000—because we have the pool available with us.

Menaka Doshi: I’m looking at revenue per employee. Accenture has 6,24,000 employees and a total revenue of $50 billion in FY21. You’re at 5,28,748 employees with an estimated total revenue of around $25-26 billion this year. Does that ratio change anytime in the near term, over the next three to five years?

Rajesh Gopinathan: That is not a metric that we target per se. As I said, in most areas you will think of value addition per employee. And, the economic value addition per employee that we have is actually much higher or almost, I would say 70-80% higher than the next largest competitor. That’s a more important metric because the key resource for us is the employee and for each employee, are we able to create that economic value? That is the key question for us, and we have built our model to maximise that.

Menaka Doshi: Doesn’t that have a direct linkage to costs—wages or remuneration per employee?

Rajesh Gopinathan: It’s a free market. Everybody is in the same space, in the same operating model.

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