The cost of hiring has gone up amid a talent war in the information technology sector, a top Wipro official said.
“It is an excellent market from the demand standpoint, and when you are in a position like this, it puts pressure on the supply side, which is reflected in the attrition level and in some of our cost structures, which have gone up over last few quarters,” Jatin Dalal, Wipro CFO, told CNBC.
“There is a premium of about 25-30 percent on lateral hiring for similar positions from outside. But the good news is that we believe attrition is now stabilising and we should see the tide turning in the next couple of quarters,” Dalal said.
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Three tech giants, Wipro, Tata Consultancy Services (TCS) and Infosys witnessed the highest attrition in the last three years in the quarter ended December, amid rising competition for talent between rivals as well as global capability centres (GCC) and startups, The Economic Times reported.
GCCs, which offer IT and back-office support to multinational companies, and tech startups are hiring the same set of talent as these leading IT firms. Although IT services companies are luring employees with higher salaries, GCCs are said to have a better brand pull and stronger pay power, Mint quoted Kamal Karanth, Co-Founder of staffing company Xpheno, as saying.
Despite the resurgence in COVID-19 infections, hiring in IT companies has gone on undeterred. TCS, Infosys, and Wipro hired 51,000 employees in the third quarter, the Mint report said.
In 2023, Wipro plans to hire 30,000 freshers, Business Insider reported. Hiring in this fiscal ending March 2022 would be 70 percent more for freshers compared to last fiscal, Dalal told Business Insider separately.
Also read: From TCS to Infosys: 4.5 lakh IT jobs up for grabs in India in 2nd half of FY22, says report
The IT services giant saw a 22.7 percent attrition rate in the December quarter compared with 20.5 percent in the previous quarter.
Meanwhile, Wipro expects revenues from its IT services to be in the range of $2.69-2.74 billion in the fourth quarter, CNBC reported. The company would like to maintain margins at 17-17.5 percent in the middle term or the next 4-6 quarters.
“In the quarter ended December, margins were at 17.6 percent. Between the second and third quarters, margins were reduced by 20 basis points, driven by investments made in hiring talent and other operational investments,” CNBC quoted Dalal as saying.
“Going forward, our priority remains growth and simultaneously talent retention and talent growth,” he said.
(Edited by : Shoma Bhattacharjee)
First Published: IST