OREANDA-NEWS. January 21, 2013. An industry experiencing a drop in attrition and an increase in utilisation has not deterred India’s leading information technology services provider Tata Consultancy Services from achieving its hiring target. The company might also file for a higher number of H1-B visas for FY14.

For the fiscal year 2012-13, it will end up hiring 10,000 more than its target, signifying its growth momentum. TCS had a target of hiring 50,000 for FY13. But, by the end of this year, the company would have hired 60,000.

“We have already hired 49,600 over the last three quarters and they have joined the company. In Q4, we will add 10,000. Of these, 9,000 are trainees. We are not postponing the joining dates,” said Ajoy Mukherjee, executive vice-president and head, global human resources.

The company had applied for 5,900 H1-B visas for FY13. He said the application numbers might go up for FY14. “We are to finalise the numbers, but they will be high. As people will have to rotate, replacements etc. H1-B is also a much more long-term planning,” he added.

But with a total headcount of 263,637 as of the end of December 31, 2012, TCS’s campus hiring numbers in the future may tone down. For the fiscal year 2013-14, TCS has extended offer letters to 25,000 students so far and visited 340 institutes. This is almost half of last year, when the company gave offer letters to 43,000.

“We are yet to finalise our FY14 hiring. So far the campus hire is 25,000 but I have the option of going in for off-campus hiring. The number could also rise depending on the business growth, mix and utilisation. Moreover we have hired more in FY13, a significant chunk of which will get onto projects only in FY14 due to their training period,” added Mukherjee. TCS will finalise its final numbers closer to the end of February or by the end of FY13

TCS, unlike peer Infosys, has managed to bring down its attrition to an industry leading 9.8 per cent (last twelve months) in IT services. Including BPO, the company’s attrition was 11.2 per cent. Add to this the company also increased its utilisation to 81.7 per cent (excluding trainees) and 72.1 per cent (including trainees).

Mukherjee however is hoping that attrition goes down further. “On a long-term basis we would want to bring attrition down because this is a people’s business and we have invested in employees a lot. If I have created a pool of employees with certain skills then I would want them to stay within the company,” he added.

At TCS, and for that matter at any IT services firm, employees are the biggest cost structure. “For us maintaining the employee pyramid is important, otherwise it will have an impact on increment and cost structure,” he added. TCS has a fresher to lateral ratio of 70:30.

Managing an employee base of 2.63 lakh then becomes crucial for the company in managing its numbers as well. TCS hence over the last few years has been increasing its utilisation numbers. Mukherjee is comfortable with a utilisation rate of 82-83 per cent. At present it is 81 per cent.

“Moreover, while 83 per cent utilisation means these are the actual number of people on customer engagement, there is another 17 per cent employee base which is into research, administration etc. This is still a huge number, so this pool need not grow in the same proportion,” he added.

The other aspect that helps Mukherjee manage the cost structure is the involuntary attrition and fixed-term hires. “In voluntary attrition is very low at TCS. It is generally at 1 per cent. But as a strategy we also hire people on fixed term employment. This happens in BPO because there are certain skills that are available in abundance. We take these employees for a fixed period and once the project is over they go,” he added.