Information technology companies are back on the college campus for bulk hiring with employee utilisation reaching high levels; project signing, picking up, and onboarding started in a major way for the freshers who were given offer letters in the last couple of years. As a result, for the first time in the last two years, all four IT companies - Tata Consultancy Services, Cognizant, Infosys and Wipro - have shown positive net employee hiring in the September quarter. Among the four, TCS, Cognizant and Infosys are the major recruiters from campus.
An official of a large engineering college confirmed that the large recruiters are back on campus for hiring.
Companies are going back to the campus for hiring. The biggest impact of campus hiring happens in the September and December quarters because of large scale, onboarding. The numbers also indicate that companies have taken utilisation to a level where there is very limited room for increase, said an industry source. Utilisation has reached over 85 per cent and attrition has been declining in the last few quarters, promoting the companies to hire, he added.
“Our workforce at the end of the second quarter was 612,724. We added a net 5,726 associates this quarter after adding a similar number last quarter also. We remain on track for freshers on boarding as planned for the year and have also commenced the process for recruiting freshers through the National Qualifier Test for FY ‘26,” Milind Lakkad, Chief HR Officer, TCS, told analysts while discussing the company’s second-quarter financial results.
Giving a similar positive perspective, Jayesh Sanghrajka, Chief Financial Officer, Infosys, told analysts that headcount at the end of the year stood at 3,17,000, returning to positive sequential growth after six quarters of decline with net additions of approximately 2,500 employees. Utilisation, excluding training, increased by 60 basis points to 85.9 per cent. Last twelve-month attrition for Q2 was up by 20 basis points at 12.9 per cent. We are on track to onboard 15,000 to 20,000 freshers in FY‘25.
Yugal Johsi, Partner, Everest Group, says that these firms have pushed out their graduate requirements for quite some time now, so , this initiative does not come as a surprise. However, graduates have complained on various forums that these firms have not honoured their commitment and postponed joining, in some instances by over two years.
The current demand environment continues to be uncertain, and this hiring should not be construed as a material change in demand. These graduates will join next year, and by then, more clarity will have emerged. As the demand has struggled, CFOs are being asked to drive more profitability, and therefore, they need to expand the pyramid further.
If the demand environment improves, it will also enhance employability of people and therefore, these firms may be expecting higher attrition. They need such graduates to manage attrition spikes, he said.
It is indeed encouraging to see the quarterly net headcount additions after seven consecutive quarters of headcount degrowth. The collective QoQ 17K net additions in Q2 by the top 6 IT services firms leaves a 70K+ net loss to compensate for and restore headcount last reported in September 2022. Along with average attrition rates stabilising in the 13 per cent range, this cohort has also controlled QoQ compensation growth, which was on a wild run earlier, said MS Prasadh, Workforce Research, Xpheno Private Limited.
Net utilisation rates exceeding 85 per cent, amidst a rise in order pipelines, has necessitated the need to load talent back for near and long-term capacity creation. This need has triggered the need to go out to campus and also increase lateral intake where needed, he said. “However enterprises are not rushing to hire in hordes and replenish the benches. The outlook is for a balanced positive movement in capacity creation, that will protect the cost-to-revenue ratios in the near-term,” he added.