How TCS keeps its huge workforce happy

The country’s second largest employer in the corporate sector has over 300,000 men and women on its roles in 50 countries.

Tata Consultancy Services (TCS), the country’s largest provider of IT services, has over 300,000 people on its rolls and plans to add another 55,000 in the current financial year.

This will bring TCS within striking distance of the country’s largest employer in the corporate sector, state-owned Coal India which has 357,000 employees.

For the human resources team of TCS, the challenge is not just the scale but also that these men and women represent 118 nationalities and are located in 50 countries.

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For a services provider like TCS, human resources hold the key to success. Demoralised and demotivated employees lead to bad service, erosion of brand equity and loss of business.

At the same time, they are the principle cost of business. (Employees accounted for 37 per cent of the total cost for TCS in 2013-14, down from 37.84 per cent a year ago because of the weakening of the rupee.)

Pay them too much and the profits will have to take a hit - the margins in the business are very competitive.

For TCS Executive Vice-president & Head of Global Human Resources Ajoy Mukherjee, the challenge is to strike a balance between the need for a charged-up workforce and profits.

IT companies have realised that one way to keep employee costs under control is to hire fresh graduates from campuses in large numbers.

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They are inexpensive manpower. But getting the wrong people requires substantial investments in training and the cost advantage gets negated.

At TCS, according to Mukherjee, manpower planning is done at least three years in advance. The projections get refined for each year. And the company starts visiting campuses for recruitment one-and-a-half years in advance.

Mukerjee’s team visits almost 370 colleges every year from September to mid-February. The team creates a pool of students who are assessed through an online test, followed by two rounds of interview.

Around 70 per cent of these students join TCS. The bulk of these freshers come from engineering colleges at  an entry level salary, which  has remained unchanged for five years now, of Rs 3.15  to  Rs 3.50 lakh.

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Mukherjee in an earlier interaction with Business Standard had confirmed that if there is any revision in salaries at this level, it would lead to a cascading effect on all others.

“The moment you touch it (freshers’ salary), you are changing the employee cost through the pyramid. So, at this stage, we are saying we will stick to it (the current packages),” he had said. Not just in India, TCS hires trainees in markets such as the US, China and Hungary too.

“It’s only in countries where we have delivery centres that we hire from campuses. In the US, we will visit about 35 institutes this year. In China, we get interns and then we eventually hire them,” Mukherjee says.

Since the company hires in such large numbers across geographies, Mukherjee has made use of technology extensively.

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For instance, the entire process of hiring from campuses is done online. TCS has created a portal called ‘Next-step’ where students go to apply for a job. Right from the time a candidate sends in his resume, to enrolling for an online test and getting an offer letter - the entire process is online.

There is also an effort to connect with the future employees. Through Campus Connect, students are made part of TCS even before they join; it also helps the company spot talent much ahead of the placement.

The bane of the IT sector is high employee turnover. Replacements need to be hired and trained, and there’s a cost attached to it. So, most companies want to keep attrition as low as possible.

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TCS’s attrition of 11.43 per cent in 2013-14 may have risen from 10.57 per cent in 2012-13 but it is still among the lowest in the industry. At Infosys, attrition was at 18.7 per cent in the March-ended quarter, while at Wipro it was at 15.1 per cent.

But even at this low attrition TCS has to hire and train at least 30,000 additional hands in a year. One way out of the annual exercise is to give regular increments.

TCS gave 10 per cent in 2013-14 (average of 7 per cent in 2012-13), which compares favourably with the industry benchmark of 7 to 9 per cent for offshore employees.

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The social network

Mukherjee says his prime concern is to meet the aspirations of the young employees (those born in the 1980s and early 1990s) who make up 80 per cent of the workforce.

To keep in touch with the goals of this generation, Mukherjee has again relied on technology.

In 2013, TCS did a survey of India’s younger generation, covering 17,500 high school students across 14 cities. The biggest finding was that this generation was a heavy user of smart devices and had a constant need to be online.

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This led to the creation of Knome, TCS’s internal online social network. This is significant as several IT companies do not allow employees to access platforms such as Facebook or Twitter during work hours, but Knome allows employees to connect though posts, discussions and blogs.

This is also a popular platform for the brass to connect with all. CEO N Chandrasekaran, rather than sending emails to individual employees, has chosen to post his thoughts on this platform, ensuring it reaches out to the largest number.

This is also a platform that helps employees reach their voice to the top. For instance, some employees thought that half-sleeve shirts can be a part of formal dressing in India since the country is hot.

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They created consensus among the employees and now Mukherjee is looking at making such shirts a part of the TCS dress code. In addition, TCS does an annual Pulse Survey which takes every employees feedback on things that matter to them. 

The feedback is confidential and the human resources team works on each of the issues raised during the survey.

More than the sheer number of employees, what worries Mukherjee is how to keep this 300,000-strong workforce relevant in the fast changing world of technology?

“As technology becomes obsolete every two or three years, how do you keep our people current with technology,” says he. 

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TCS does it by shifting employees across departments and organising training programmes. However, because the  training programmes require its employees to move from one office to another across geographies, they  can also be a difficult exercise in compliance, especially to rules pertaining to visas. 

“How do we ensure we are compliant? The risk to reputation is very high,” Mukherjee adds.

In spite of the rapid rise in the employee base, TCS’s revenue per employee increased from $41,900 in 2011-12 to $44,600 in 2013-14.

HR Strategy: Cheap and cheerful

• 300,000 No. of employees
• 50 Countries in which it has it offices  
• 118 Nationalities of its staff
• 20s and 30s Age profile of employees
• 370 Colleges it recruits from
• Rs 3.15 to Rs 3.50 lakh Entry-level salary
• Rs 26.5 lakh* Revenue per employee in 2013-14

*at current rate