TCS CEO expects more employees to leave the firm in the coming months, but he is not worried about it — Here is why

• TCS announced that its employee attrition rate continued to rise during the January-March quarter as well, reaching 17.4%.
• However, the company’s management said that the attrition rate is cooling off and may come down after a few quarters.
• The IT major has hired over 1 lakh employees in FY22, taking the total count to almost 6 lakh people.

The rate of employees leaving information technology (IT) firms continues to remain high as opportunities across the sector are growing with high digital acceptance across industries.

However, the rise in attrition rate pushes such companies to hire more employees at competitive salaries, which eventually impacts their incomes.

Today, Tata Consultancy Services (TCS) announced that its employee attrition rate continued to rise during the January-March quarter reaching 17.4%.

However, the company’s management said that the attrition rate is cooling off and may come down after a few quarters.

“The reported attrition number of 17.4% will get worse for the next couple of quarters just because of the way LTM attrition is calculated. But what we are seeing is that on a month on month basis, we are starting to see flattening of it. So in absolute terms our attrition still went up this quarter compared to last quarter, but in percentage terms it has actually started to flatten and we think that the trend will continue into next quarter. So will [sic] have to wait and see, early days yet, but the curve is definitely flattening,” said Rajesh Gopinathan, chief executive officer (CEO) at TCS in a press conference for Q4 earnings release.

The employee benefits expenses, which usually includes health insurance benefits, transport facilities, work from home policy and education assistance for retaining and hiring an employee grew by ₹15,740 crore in FY22 compared to the previous financial year. This shows a big hit on the firm’s expenses.

The issue is not limited to TCS, but each IT firm in the industry as companies are hiring more employees with good hikes, promotions to mitigate those leaving the firm.

On a brighter side, the IT major has hired over 1.03 lakh employees in FY22 with an army of almost 6 lakh people. TCS added 35,209 employees in the last three months.

SEE ALSO: Electric two-wheeler sales surge over 5 times – Hero Electric, Okinawa corner half the market, Ather’s market share declines
Adani Power and Tata Power in a race to cross ₹1 lakh crore market value
Koo cofounder urges Elon Musk to work with Twitter’s rival in India