Filed in archive Offshoring by prashanth on July 15, 2007
TCS is making some serious investmenst in building its brand visibility, most of us have probably seen the "Experience Certainity" campaingn, but another aspect seems to be the executives becoming more available. Some time back we covered an interview with their CFO, this time its Surya Kant, Vice President and Head, TCS America.
Indian IT salaries have been rising at a rapid pace of 15% per year. If this were to continue, the competitive cost advantage that companies like TCS and Infosys offer will slowly diminish. With GDP growth in India reaching 9.2% in 2006-2007, inflation at 5.66% and a shortage of skilled labor, it would be hard to step away from salary increases? How are you handling this risk?
The competition for talent is certainly intensifying, not only as TCS grows, but as other multinational companies open large R&D and service facilities in India. However, we believe this high wage inflation won't last for too long before it levels out; it should settle down in two or three years.
We expect the impact of wage increase to be very similar to the impact that it had last year because we expect the Indian salary to go up by 12-15%, and as far as overseas is concerned it, is going to be between 3% and 5%. This is the same as it was last year. So the impact is going to be more or less the same and we have worked out this kind of a detailed plan to meet that impact.
Employee attrition is another major problem faced by most Indian IT companies. What steps is TCS taking to reduce attrition and improve employee retention?
TCS has the lowest attrition rate out of all IT services companies headquartered in India (11.3%, well below the industry average). It is important to continually invest in the long term growth of our people, with frequent training to upgrade their skills, by rotating assignments, and providing opportunities for travel and foreign assignments. Well planned job rotations give our employees the opportunity to work on varied technologies, varied customer and industry domains and geographic locations.
In terms of recruiting we have a highly evolved recruitment process across the globe. For instance, the number of colleges we go to in India alone each year just crossed 300. We've been successful in ensuring we get invited to campuses early in the game (achieved 93% day 1 slots). We also engage students through summer projects, training and have strong ties with the faculty.
As you look towards the future, what will be the key drivers of growth at TCS?
Service lines like global consulting, BPO, Infrastructure management, and assurance services fetched 18% of revenues in FY '07 up from 10 per cent in the previous financial year. For instance, TCS' Global Consulting Practice achieved a robust 50% year-on-year growth in Q3 2007. All of these growth engines will continue to gain momentum in the coming quarters. At the same time the IT services including package implementation are also expected to grow well.