Attrition to go up as situation normalizes: TCS

Bengaluru, 10 July Tata Consultancy Services (TCS) will see its attrition level going up in coming quarters as the current low level of attrition is the reflection of ongoing pandemic. The company reported an attrition of 8.6 percent in its IT services segment during the April-June period (Q1 of FY22) of this financial year.

"Our attrition rate of 8 percent is in a way artificial, primarily because of the pandemic. The normal number will be around 11-2 percent. Even in the high demand months like March and April, it can go up to 13-14 per cent. The point is attrition is definitely going to go up, but it is very much part of our operating model," Milind Lakkad, chief of global human resources of TCS said reporters post announcement of Q1 results.

He also said that even if attrition level goes up, it would not impact the operating margin of the IT firm.

"Attrition going up is very much part of our operating model and I don't see any impact of the attrition on our margins in any significant way," Lakkad added.

By the end of June quarter, the employee headcount crossed 500,000 mark with total headcount coming at 509,058 employees. The Mumbai-headquartered IT services firm added 20,409 employees, which is the highest net addition for a quarter.

Over the past five years, TCS has been ramping up its local workforce in major markets. "So, despite travel restrictions during the pandemic, the company's business was not affected," he said.

Despite the pandemic, TCS has rolled out salary hikes twice in the last two years. While the first salary hike was rolled out in October last year, the second hike was given in March this year. In the first hike, 6-8 percent increment was given while around 12-14 per cent increment was given in the second phase.

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