The top two IT service providers in India, Tata Consultancy Services (TCS) and Infosys, announced new centers in tier-II towns including Coimbatore, Guwahati, and Nagpur last month.
It’s nothing unusual for IT service providers to go outside of the established metro areas. But up until this point, state administrations eager to expand growth outside of the metro areas had prodded small-town centres in that direction. A significant push is now being made by the workers themselves.
The last two years have shown that, even with employees working from home, it is still possible to meet the high standards of work demanded by clients around the world.
Many workers returned to their hometowns during this time, and they are open to exploring similar opportunities in the post-pandemic environment.
The top two IT service providers in India, Tata Consultancy Services (TCS) and Infosys, announced new centres in tier-II towns including Coimbatore, Guwahati, and Nagpur last month. It’s nothing unusual for IT service providers to go outside of the established metro areas.
But up until this point, state administrations eager to expand growth outside of the metro areas had prodded small-town centres in that direction.
A significant push is now being made by the workers themselves. The last two years have shown that, even with employees working from home, it is still possible to meet the high standards of work demanded by clients around the world. Many workers returned to their hometowns during this time, and they are open to exploring similar opportunities in the post-pandemic environment.
In the meantime, a lack of supply has shifted the power balance in favour of IT workers. Many sizable corporations started extensive digital transformation projects during the epidemic, boosting income for IT services providers. The invasion of Ukraine by Russia increased their workload.
In an April 2022 research report, ICICI Securities stated that the “IT services business in India is in the early innings of a multi-year technological upcycle, with spending on digital transformation formerly scheduled for the next decade now being compressed within a 3-5 year timeframe.
” The data on attrition show this shift in the balance of power the most. TCS reported attrition of 15.3 percent, 17.4 percent, and 19.7 percent in the most recent three quarters, compared to a pandemic attrition range of 8 to 11%. Attrition at Infosys is currently routinely exceeding 20%.
The pace of attrition is anticipated to slow in the upcoming quarters. Since the middle of 2019, TCS and Infosys have grown by around 155,000 and 85,000 personnel, respectively. TCS experienced its highest-ever net headcount growth of 35,000 during the March quarter alone. Large-scale fresher recruitment tends to reduce attrition.
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