Moonlighting is an ethical issue says TCS HR head

• TCS reported a surge in attrition rates in the September quarter – at 21.5%, it is the highest in the past six quarters.
• Overall, the company’s headcount stood at 6,16,171, with a net addition of 9,840 employees.
• The IT major says while attrition has likely peaked, the compensation expectations of experienced professionals are also moderating.
• Milind Lakkad, the HR head at TCS, also touched upon moonlighting, calling it an ‘ethical issue’.

Attrition rates for IT major TCS worsened in the September quarter, in line with analyst expectations. However, the company believes attrition has peaked and compensation expectations of experienced professionals have moderated, too.

However the company explained that attrition rates won’t come down significantly anytime soon.

“We believe our quarterly annualized attrition has peaked in Q2 and should see it taper down from this point, while compensation expectations of experienced professionals moderate,” said Milind Lakkad, the company’s chief HR officer.

Overall, TCS’ total headcount stood at 6,16,171, with a net addition of 9,840 employees in the September quarter. The company hired 20,000 freshers in Q2, an increase of 33% over the previous quarter.

Its fresher hires, however, have slowed down – it hired 35,000 freshers in H1 FY23, down from 43,000 in H1 FY22. It is worth noting that at the end of previous year TCS had set a target of hiring 40,000 freshers in FY23. At the current pace, it looks set to cross that number comfortably.

When it comes to attrition rates, this is TCS’ worst quarter, at least in the last six quarters.


Source: Company reports

Analysts expect attrition rates to narrow towards the end of the year, but that is more due to a material decline in demand, according to a report by ICICI Securities.

Lending credence to this is the fact that Lakkad said the compensation expectations of professionals are likely to moderate, too.

‘Moonlighting is an ethical issue’

Lakkad also talked about moonlighting – a controversial topic with divided opinions – saying that it is an ethical issue.

Of late, high attrition rates have brought the focus on moonlighting – a practice where a person works at multiple jobs. Wipro’s executive chairman Rishad Premji even called it “plain and simple cheating”.

A major reason why people are working multiple jobs could be the fact that average wages have declined – from ₹4.54 lakh in Q1 FY22 to ₹4.5 lakh in Q1 FY23, despite a surge in inflation.

Another oft-cited reason is that an additional job boosts employee skill sets – companies are trying to counter this by increasing internal training programmes and learning opportunities.

“In Q2, TCSers clocked 11.7 million learning hours, resulting in the acquisition of 1.5 million competencies,” the company said in a press release. Interestingly enough, despite the rise in headcount, its learning hours have declined when compared to the previous quarter, which came in at 12 million.

TCS reported a 10% surge in its net profit sequentially, at ₹10,431 crore, with net margin improving to 18.9% in the period. It declared a dividend of ₹8 per share.

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