TCS, HCL Tech see headcount additions dip further in Q1

Headcount at the country’s largest software exporter stood at 615,318 at end-June, while attrition moderated to 17.8% in the first quarter compared to 20.1% in the preceding quarter.

Chief human resources officer Milind Lakkad is optimistic about a better showing in the months ahead though. “Expect industry-leading retention numbers to be back in H2,” he said.

TCS today reported a forecast-beating 17% year-on-year rise in first-quarter net profit to Rs 11,074 crore.

Also read | TCS Q1 Results: Profit rises 17% YoY to Rs 11,074 crore, beats estimates; revenue up 13%

The company’s financials show that employee costs have increased by over 15% in the past year. TCS is still planning to bring 40,000 freshers on board, although the timeline is not clear, Lakkad said.

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Meanwhile, attrition for the first quarter at HCL Technologies stood at 16.3% compared to 19.5% in the last quarter. HCL Tech’s headcount at the end of the first quarter stood at 223,438, with a drop of 2,506 over the previous quarter, said chief people officer Ramachandran Sundararajan. This compares to 1,597 hired last quarter — the highest among peers in a slow demand environment.The company said it has taken a conscious decision to delay its annual compensation reviews by a quarter.

Also read | HCL Tech Q1 Results: Profit rises 8% YoY to Rs 3,534 crore, misses estimates

Headcount concerns at TCS

ET had previously reported that Q1 headcount growth for the IT majors is expected to be flat, in line with the numbers reported for the January-March quarter. TCS has been plagued by concerns over unfavorable hiring practices and onboarding delays of even experienced employees during the first quarter.

The company said its return-to-office initiative has brought about 55% of the workforce to campuses at least thrice a week. “We have given a 12-15% raise for exceptional performers in our latest annual compensation review, and also commenced the promotions cycle,” Lakkad said.

The company will be rolling out 100% variable pay for 70% of its employees, as done in the previous quarters, he added.

“There are certain delays because of the environment we are in. As a result of that, the onboarding of the associates is also delayed in certain cases…but I commit today that we are going to honour all the offers,” Lakkad said, responding to ET’s question on onboarding delays.

The company refrained from commenting on the cash-for-jobs scam that recently came to light at TCS’ resource management group.

“Naturally as an organisation, we always improve our processes, but sufficient to say we are working on this,” said NG Ganapathy Subramaniam, TCS COO, addressing queries on the changes the company would introduce to prevent a repeat of such incidents.