Notably, the employee wage cost was at a six-year high in the second quarter of the current fiscal year for India’s two major software services companies, HCL Technology Ltd and Tata Consultancy Services. According to the reports, even major IT firms are currently grappling with the cost of employee wages. It is said that the share of employee cost among the total expanses of the companies was at a six-year high in Q2FY24. Two out of the three largest IT firms in India HCL and TCS reported employee expenses at a six-year high. While the third IT firm, Infosys reported a minor dip in the employee wage cost. Since, TCS and HCL reported high employee expenses, people working in IT firms have been startled by this news as the risk of job cuts has developed in the leading IT firms in India. You are asked to stick with this page and go through this article till the end.
Tata Consultancy Services Ltd and HCL Technologies Ltd reached a six-year high in the September quarter in terms of employee expenses. The third IT firm, Infosys which is the second-largest software company in India, reported a minor drop in the expenses of employees. Kindly note that employee costs still make up for more than 60 percent of total expenses during times of cost pressures, which is quite concerning for IT companies. The increased employee expenses show that while IT firms have stopped campus recruits to bring down expenses, lateral hiring from the market at a 30 percent hike remains the norm but retention is difficult. Take a look at the next section and read more details.
Tata Consultancy Services employee costs amounted to 77.4 percent of total expenditure, while HCL Technologies spent 69.6 percent of the total expenditure on employees. Infosys saw wage costs at 68 percent of total expenditure which is slightly down from the peak of 68.4 percent in the first quarter of the current fiscal year.
The co-founder of Xpheno, a tech recruitment firm, Kamal Karanth said, “The high wage costs indicate that talent retention remains a struggle for IT companies. Those with 4-10 years of work experience are heading for the GCC (Global Capability Centers) at a 30 percent hike. To retain them, IT firms are willing to increase their counter offers,” Apparently, the major IT companies are struggling to maximize the use of their workforce. Stay tuned.