India's big four services giants wrestle with staff attrition amid COVID-19 pandemic

With high enough vax rates, HCL, Infosys and Wipro say hybrid work environment is the way of the future, while TCS is going to want you to come right on in.

India's big four IT services providers – HCL, Infosys, Tata Consulting Services, and Wipro – have all highlighted increasing staff attrition rates in their most recently completed quarters.

Wipro had the highest attrition rate at 20.5 per cent – up from 15.5 per cent in Q1. Next highest was Infosys, which reached "voluntary" 12-month attrition of 20.1 per cent. This reflects an ongoing situation, as in April 2021 the company reported that its workers had started to believe the COVID-19 pandemic had ebbed to a point at which they felt comfortable looking for a new gig.

HCL reported an all-time high attrition rate of 15.7 per cent – up from 11.8 per cent in Q1. TCS claimed to have the lowest attrition in the industry – 11.9 per cent in the last twelve months – chalking it up to "industry-wide churn".

HCL turned to stock options, quarterly bonuses and salary hikes to retain employees while Wipro gave a salary increase to 80 per cent of its people – the second such boost within a year.

Losing staff didn't dent sales, revenue or profit for any of the four providers. HCL reported 14 large new deals and total new bookings of U$2.3 billion, up 38 per cent year-on-year and a quarterly record. Infosys secured US$2.15 billion in deals. All four of the big outsourcers had double-digit year-on-year growth in Q2, with Wipro reporting the fastest growth at 30 per cent and Infosys the second highest at 20.7 percent.

Summary of Q2 FY22 results for HCL, Infosys, TCS, and Wipro

  Q2 Revenue YoY Growth Net Income YoY Growth Vaccinated Attrition Rate Hiring Trends
HCL US$2.79B 11.3% US$441M 4.0% over 70% 15.7% 11,135 new hires
Infosys US$3.99B 20.7% $734M 11.9% 86% one dose 20.1% (voluntary LTM) 11,664 new hires
TCS US$6.33B 16.8% US$1.30B 6.5% 95% one dose, 70% full 11.9% (LTM) 19,690 new hires
Wipro US$2.7B 30.1% US$395M 18.9% 85% one dose, 50% full 20.5% 8150 new 'freshers' in Q2

All four companies have hung out the "Help Wanted" sign, to replace staff and find new workers to deliver on new deals. For HCL, this means 11,135 new hires, for Infosys it's 11,664 new hires and 45,000 new grads. TCS hired 19,690 and Wipro has 8150 "freshers" coming onboard for Q2. Wipro also is looking at 25,000 fresh hires of early career staff in 2022.

Getting back to the office is also on the agenda, now that vaccination rates have improved. Wipro, TCS and Infosys reported first-shot vaccination rates at 85 per cent, 95 per cent and 86 per cent respectively. At TCS, 70 per cent are fully vaccinated, and half at Wipro. HCL did not mention the vaccine in its Q2 earnings call or press release. However, in July the company reported rates around 70 per cent.

According to the earnings call (and a tweet from Wipro chairman Rishad Premji), all senior staff are fully vaccinated and attending company offices twice a week. The remainder of employees will return on a staggered schedule.

TCS plans [PDF] to move its employees back to the office by the end of the year, while Infosys and HCL are preparing for hybrid work models.

In terms of a return-to-work strategy, HCL CEO C. Vijayakumar said [PDF] planning has been initiated for a "calibrated return to office in a phased manner and in compliance with the local guidelines and controls in the respective geographies".

"We believe the future operating model is a hybrid operating model and we believe a significant part of our work force would be in the office in the next twelve weeks," said Vijayakumar. ®

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