Tier-2 firms absorbed 8k professionals from Tier-1 players in past 2 years

Tier-2 companies added nearly 100 senior executives from Tier-1 firms over the past couple of years in a range of roles including presidents and vice-presidents

Tier-2 players or the mid-market companies in the IT (information technology) sector observed a net positive impact on their headcount over the past two years, absorbing nearly 8,000 people from the top-tier firms, The Economic Times reported on Friday, citing specialist staffing company Xpheno’s report.

Tier-2 firms including L&T Technology Services, Birlasoft, TATA Elxsi, Zensar, Happiest Minds, and Sonata were among the companies to absorb thousands of professionals from top-tier services firms, including Tata Consultancy Services, Wipro, LTI Mindtree, Infosys, and Tech Mahindra.

The report further highlighted that the top-tier companies suffered an additional blow as they lost about 3,800 employees to the larger rivals.
 

Tier-2 companies added nearly 100 senior executives from Tier-1 firms over this period in a range of roles including presidents and vice-presidents and heads of department. On the contrary, the Tier-1 firms absorbed 22 senior executives from the former.

What is driving talent poaching among companies?

Talent poaching row among top IT firms is a debate that has heated up recently. As India’s economy experiences a surge in growth, the industry is facing a shortage of skilled professionals. With the demand for skilled talent on the rise, companies are engaged in a fierce battle to attract and retain the best brains by offering premium wages.

The medium-sized businesses are ahead in this game due to their faster growth rate and size and agility to adapt to shifting business dynamics.

Will global companies create pressure on Indian businesses?

The fact that global corporations are also part of this race, can result in India facing a human capital challenge in the times ahead, experts have warned. With the government’s pro-business reforms, state-owned enterprises with low-wage capacities built across the country would come under pressure due to this.

The multi-national corporations entering India are set to offer “much higher and attractive” remuneration on US dollar basis which would lead to salary discrimination and raise the cost of working in India within the coming few years, news agency PTI mentioned in a report citing experts.

In October last year, a leading banker strategising for the Indian market told PTI that “it is a conundrum in the making”.

“Going back home to India is not attractive at all when you have worked in high-wage and safe haven environments like Silicon Valley or Singapore,” another executive said.