The largest IT services firm in India is providing a unique incentive to its suppliers in exchange for prompt hiring of senior staff; however, the suppliers forfeit the incentive should the person depart within six months.
For senior applicants who join in less than 30 days, Tata Consultancy Services, which has a market capitalization of ₹15.2 trillion, has launched the ‘Quick Joiner Incentive Plan,’ which provides vendors ₹40,000 per recruit in addition to their costs.
“Incentives will be paid over and above the rate card for the assigned skill and job code…..with experience range of 10-15 years….The overall paid amount (Base rate and incentive) will be recoverable if the candidate leaves the organization in 180 days,” stated a mail sent to an assorted TCS vendors in March as reported by Mint.
“While incentives were offered in 2022 during the hiring frenzy, last year was subdued,” added a TCS vendor. “This year, these additional perks to vendors indicate that the IT services firms are expecting new mandates for which they need experienced employees to implement projects.”
For permanent hires, a vendor typically receives 8–12% of the candidate’s yearly salary. Vendors who are on contracts or staffing and not on payroll are paid a fixed fee. Recruiters claim that applicants with ten to fifteen years of expertise earn upwards of ₹30 lakh annually.
“TCS has a robust deal pipeline and they are hiring mid- to senior-level talent with 10 years of experience and above because of deals that are ramping up,” stated Omkar Tanksale, research analyst at Axis Securities.
“The hiring is deal-specific and there is no change in the macro-economic environment. It will take a couple of quarters for IT demand to recover going ahead,” he added.
The decision to hire experienced staff members is particularly notable at a moment when IT services companies are hiring fewer college graduates from the class of 2024. Wipro is not hiring any freshers at all, while Cognizant, HCL Technologies, and even TCS are hiring from campuses in smaller-than-usual batches. A small number of students with an IT background who specialize in data mining and cybersecurity were employed by Infosys.
The extra incentives offered by TCS also draw attention to the necessity for the business and other providers of IT services to simplify their bench strength and stabilize usage rates. The percentage of employees working on active projects is known as the utilization rate in the IT industry, whereas bench strength refers to employees who have not yet been given a project.
The decision to hire experienced staff members is particularly notable at a moment when IT services companies are hiring fewer college graduates from the class of 2024. Wipro is not hiring any freshers at all, while Cognizant, HCL Technologies, and even TCS are hiring from campuses in smaller-than-usual batches. A small number of students with an IT background who specialize in data mining and cybersecurity were employed by Infosys.
The percentage of employees working on active projects is known as the utilization rate in the IT industry, whereas bench strength refers to employees who have not yet been given a project.
‘”Having a utilisation of 89% as its upper band is good to address current client needs. It has fallen from the COVID times in 2022 when utilisation rates for top IT providers across the globe touched 94%,” stated Mrinal Rai, assistant director and principal analyst at ISG Group.
The industry is witnessing an increase in demand for individuals with expertise in various applications, such as Flutter, Windchill, Workday, and SAP.
