Attrition, hiring at IT companies continue to float on choppy waters

After a brief halt, attrition at India’s top information-technology (IT) services companies is creeping up again, even as hiring remains subdued or stagnant across the board.

 

This comes in a tepid job market, where overall demand remains soft but companies are scrambling to find talent with niche digital skills like artificial intelligence (AI), cloud, and cybersecurity.

 

For the top five companies — Tata Consulting Services (TCS), Infosys, HCLTech, Wipro, and Tech Mahindra — the net addition was 4,703 in the quarter ended June 30.

 

TCS’s net hiring was 5,090. The rest except Infosys saw a slight drop. Infosys added just 210. In comparison, last year’s headcount dropped by 2,074.

 

Attrition, on average, has gone up 1-2 per cent for all of them. But most company executives say the numbers are within the comfort range and they expect attrition to come down over the next few quarters.

 

TCS’ attrition rose to 13.8 per cent in the first quarter ended June 30 from 12.1 per cent a year earlier.

 

Wipro’s went up to 15.1 per cent from 14.1 per cent while Tech Mahindra’s stood at 12.6 per cent from 10.1 per cent in the same period. 

 

“It is more than our comfort level, which is 11-13 per cent,” Milind Lakkad, outgoing executive vice-president and chief human resources officer, TCS, had said earlier this month.

 

The company said it was making efforts to bring it down again with deeper employee engagement.

 

Experts from HR staffing firms say that attrition has gone up due to three main factors: Tepid increment during a period of global macroeconomic uncertainties, the lure of global capability centres (GCCs) and startups, and demand for skills such as AI, cloud and cybersecurity.

 

Gaurav Vasu, founder of UnearthInsight, said he expected mid-level attrition to be higher than expected because delays and lower wage hikes created stagnation for top performers

 

Kamal Karanth, co-founder of specialist staffing firm Xpheno, said: “The lack of increment and a 30 per cent hike at other IT services firms or GCCs are causing the attrition. About 163 greenfield GCCs that have entered India in the last 30 months have hired 70,000 people, predominantly from IT services firms.”

 

While companies have committed themselves to honouring job offers made to fresh engineering graduates, the timing remains uncertain and will be determined by demand.

 

HCL has maintained it will hire more from campus this year than it did last year. 

 

Though Infosys’ performance was better than the peers, when it came to people addition, Salil Parekh, chief executive officer and managing director, said the hiring targets remained the same as stated towards the end of 2024-25. The company had said it would hire 20,000 in FY26.

 

At Wipro too, hiring would be the same.

 

“Our hiring is demand-specific. Today we have a good bench, utilisation has gone up, and there is headspace to be better. We are gearing up for the bookings we did, and on the basis of the demand environment, we will continue to hire,” Chief Human Resources Officer Saurabh Govil said last week.

 

The commentary indicates hiring is likely to remain muted unless deal rampups happen quickly and sectors such as manufacturing and retail – the worst affected by tariffs -- stage some rebound in the later half of the year.

 

 “The target is to hire 10,000 freshers this financial year just like last year.”

 

“Unless tech spend picks up, large-scale recruitment is unlikely. Hiring will remain selective and skill-led, with companies watching market signals closely before expanding headcount,” said Neeti Sharma, chief executive officer, TeamLease Digital.