IT firms like Infosys, Wipro, LTIMindtree and others set to hire this fiscal with utilisation peaking
Hiring by GCCs will continue to be on upward trajectory
Despite the positive utilisation rates, net headcount declined across most IT companies. (Reuters)
With IT firms like Infosys, Wipro, and LTIMindtree, along with mid-tier ones, reporting multi-year high utilisation rates during the April-June period, hiring of freshers is expected to gain pace later this fiscal.
With hiring by Global Capability Centres (GCCs) already on an upward trajectory, compared to IT firms, analysts said that openings for freshers as well as senior-level staffers, are set to rise this year.
Infosys’s utilisation improved significantly, from 82.0% in the March quarter to 83.9% in the June quarter. Similarly, Wipro also saw its utilisation rate increase to 87.7% in June quarter from 86.9% in the preceding one. In the case of LTIMindtree, utilisation rose to 88.3% from 86.9% over the same period. Persistent Systems also recorded an increase in utilisation from 80% in March quarter to 82.1% in the June quarter.
Saurabh Govil, chief human resources officer of Wipro said: “We have seen the utilisation going up every quarter. We can believe this is the right time for us to look at the supply side, so that we can have much better conditions”.
Pareekh Jain, founder of Pareekh Consulting and EIIR Trend, said, “IT companies over hired during the great boom after Covid. After that there was the low-growth period, so then they didn’t hire that much and started focusing more on the utilisation and the margin side. Now that growth is coming back and the utilisation of these IT companies are at their all-time high, they will have to hire”.
To address the rising workload, major IT firms have already announced substantial hiring plans for FY25. Infosys plans to hire between 15,000 to 20,000 freshers, focusing on both on-campus and off-campus recruitment. TCS aims to hire around 40,000 freshers, having already onboarded 11,000 in the June quarter. HCLTech plans to bring in 10,000 freshers, and LTIMindtree also intends to continue aggressive hiring.
Despite the positive utilisation rates, net headcount declined across most IT companies. Infosys’s headcount decreased by 1,908, continuing a trend of workforce reduction seen over the past six quarters. TCS added 5,452 employees on a net basis, reversing three consecutive quarters of decline, but its overall headcount still dropped by 1,759 sequentially. HCLTech’s headcount decreased by 8,080 due to a divestiture, but excluding this, the headcount remained flat. LTIMindtree, on the other hand, added 284 employees. Persistent Systems’ total headcount decreased from 23,850 in March quarter to 23,519 in the June quarter.
According to Jain fresher hiring will likely have a positive impact on margins in the short to medium term. Since fresher salaries are lower, the overall cost per employee goes down, which can improve margins. However, utilisation rates may decrease slightly as a result of increased hiring, but this will be offset by the benefits of having more freshers in the system, who generally cost less and contribute to a better margin mix.
Meanwhile, the aggressive hiring by GCCs is expected to continue during the current fiscal also, albeit with a cautious approach due to the ongoing geopolitical tensions and economic uncertainties.
“Both GCCs and domestic IT companies are navigating the challenges with a balanced approach, but GCCs continue to invest in emerging technologies which drive their hiring needs,” Anshul Lodha, managing director at Michael Page India, said.
According to TeamLease Services, GCCs generated around 400,000 jobs, with 12 to 15% of these positions being filled by fresh graduates, reflecting around 10% growth from the previous year.
In FY23, the GCC ecosystem generated around 364,000 jobs, with approximately 12 to 15% being freshers, reflecting a 38% increase from the previous year. Subburathinam P, chief strategy officer at TeamLease Services, said, “The expansion of data centers in India necessitates a robust infrastructure, which in turn creates more job opportunities across various sectors”.