TCS fares better with lowest attrition rate; Infosys, Wipro lag

The big three of Indian IT industry, TCS, Infosys and Wipro have announced their fourth quarter financial results and all of them have ended the financial year 2020-21 on a high note. A high attrition rate amid huge demand for professionals, however, remains a worry. India's largest IT services company Tata Consultancies Services (TCS) continues to have the lowest attrition rate among the top three tech companies in India at 7.2 per cent for the quarter ending March 2021.

Also read: TCS FY21 net profit rises 0.27% to Rs 32,430 cr; revenue rises to Rs 1.64 lakh cr

The second biggest IT firm Infosys reported the highest attrition rate at 15.2 per cent in Jan-March quarter, followed by third biggest IT firm Wipro, which in its quarterly result announcement on Thursday recorded 12.1 per cent attrition rate in the fourth quarter.

TCS has recorded consistently low attrition rate as compared to its peers in previous quarters as well. In Oct-Dec quarter, the company's attrition rate was 7.6 per cent compared to 10 per cent of Infosys and 11 per cent Wipro. TCS' attrition rate remained lowest at 7.2 per cent throughout the financial year.

Infosys had reported a similar level of attrition rate at 15.3 per cent in Q4 FY21, followed by a significant reduction at 11.7 per cent in Q1 FY21. It declined further to 7.8 per cent in Q2FY21.

Infosys' attrition rate started rising in the third quarter of FY21 and rose to 10 per cent in Oct-Dec quarter. Wipro's attrition rate rose to 12.1 per cent in Q4. During the same period last year, Wipro had reported 14.7 per cent attrition rate, followed by 13 per cent in Q1 FY21 and 11 per cent in Q2FY21.

Also read: Infosys announces open market buyback worth Rs 9,200 crore

TCS, being one of the largest campus recruiters in India, hired a record 40,000 freshers in FY21 despite the pandemic hitting India hard. TCS also plans to add a similar number of employees in the current financial year. In the last quarter alone, it added 19,388 new employees to its workforce. The Mumbai-headquartered company boasts an overall headcount of 488,649 at the end of March quarter.

Infosys on the other hand hired 16,500 new employees last year. It plans to increase hiring in FY22 by adding 24,000 new employees. Bengaluru-based company has a total headcount of 2.59 lakh as on March 31, 2021. Rishad Premji-led Wipro also made a net addition of 15,000 employees in FY21, of which 9,000 were fresh graduates. The IT behemoth has a total headcount of 1.97 lakh employees.

Also read: Infosys FY21 net profit rises 16.6% to Rs 19,351 crore

TCS' ability to retain top talent amid the explosion of demand for professionals in the IT industry has kept it ahead of its peers in the tech business. Industry analysts attribute it to aggressive campus hiring and skill training programmes, which have helped it improve internal fulfilment rate even as the demand is rising due to limited availability.

However, by and large all the three big companies expect attrition rate to inch up in the April-June quarter of FY21, thanks to a significant demand for IT talent. The only factor that will make the difference is each company's retention policies, including increments, promotions and other perks.

Also read: Wipro Q4 profit jumps 27.7% to Rs 2,972.3 cr; revenue up 3.4%