TCS may soon be world’s second biggest tech employer-News-TOI

TCS has become the world’s third largest employer of people in the technology sector, with over 3 lakh employees. And given the pace at which it is growing, it could become the second largest employer this year, crossing Hewlett-Packard, and would be fast closing in on leader IBM. In India, it’s one of the biggest creators of jobs in recent years, possibly even the biggest. Besides the Indian army, government departments like the Indian Railways and India Post, and PSU companies like Coal India, there’s perhaps no other company that has more employees. And unlike the government departments, which are mostly reducing their staff strength, TCS numbers are rising each year by between 25,000 and 35,000.

In the last fiscal year, the $13.4-billion Tata Group company hired 61,200 people, with the net addition being 24,268, discounting those who left the company. The net addition in each of the past several years has been along similar lines or higher. On the contrary, for some of the leading global tech companies, numbers are dropping given the transformations they are going through to deal with shifts in technology towards areas like cloud computing and mobility. HP had 349,600 employees in 2011, but that number is now down to 317,500. IBM, which has about 4.3 lakh employees, is also in the midst of layoffs.

TCS has said it will hire 55,000 people this year. If the net addition is half of that, it will be well ahead of HP’s number by the end of this fiscal. Among Indian IT companies, Infosys is almost 50% of TCS with 1.6 lakh employees.

Sanchit Vir Gogia, chief analyst at Greyhound Research, says TCS is ahead of many of its Indian peers in identifying new areas of growth, making investments and all the right noises. “It is betting big on the Digital Five Forces—mobility, big data, cloud, social media and robotics,” he said.

Analysts also find it remarkable that it has grown its people strength so quickly, and yet created an organizational structure nimble enough to handle these numbers. Equally, it has kept its people costs under such control that it is seen as a major factor in its extremely high operating margins (over 28%), perhaps the highest among large companies in the global IT services industry.

Pradeep Mukherji, president and managing partner in global management consulting firm Avasant, said TCS is managing the huge workforce by breaking it into smaller business units that each function virtually as a smaller company. “The depth and breadth of middle management and work delegation, managing a good onshore and offshore mix are some of the key drivers in managing the employee pyramid effectively,” he said.

TCS’ employee cost has risen from Rs 90 billion in 2007 to Rs 319.2 billion in 2013, but the cost per employee has barely risen in these past seven years. The cost per headcount has grown from Rs 11.5 lakh in 2007, to Rs 12.4 lakh) in 2013, an annual increase of a mere 1.2%, said a report by US-based IT advisory firm HfS Research. “A conservative estimate of 8% annual wage hike in India, 2% hike in developed countries and 4% hike in developing countries will lead to about 7.5% weighted average annual wage hike for TCS’ mix of employees,” said HfS analyst Pareekh Jain. In other words, TCS has been able to offset its salary hikes through other measures.

One of the biggest of these looks to be a sharp increase in its fresher intake relative to the intake of experienced employees. The percentage of freshers hired (of total hiring) increased to 81% in 2013 from 51% in 2007, finds HfS. “They have stretched the employee pyramid with an army of junior employees. TCS is aggressively hiring in tier-2 and -3 cities that offsets cost to a large extents TCS has also focused on automation and reusable software tools and frameworks to improve employee productivity,” said Sudin Apte, CEO of IT advisory firm Offshore Insights.

Jain believes that hiring more freshers has given TCS the flexibility to deploy them in lower value and transactional activities, thus freeing up experienced resources for higher value work. “Secondly, training freshers for new skills is easier than retraining old resources for new skills,” he said. Ashish Chopra, IT analyst with brokerage firm Motilal Oswal, noted that TCS had also significantly reduced the proportion of employees at client sites overseas, thus reducing the salary burden. But some also caution that adding employees in such large numbers may not be the best way to go in the longer run. “Linear employee growth is not a sustainable solution in the long run as newer technologies are nudging IT firms to explore non-linear revenue growth, growth delinked from headcount,” said Mukherji.

Gogia echoed that: “With new technologies, especially automation, shaping the world, it’s only prudent that TCS utilizes its employees effectively.”

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It’s ‘internship time’ at Facebook, Google, Apple. News-TOI

Sitting in a kitchen stocked with free food, a handful of 20-something Google summer interns weigh their favorite perks, but where to begin? With bikes, buses, massages, swimming pools, dance classes, nap pods, parties and access to their tech heroes, it’s a very long list. “Unlimited sparkling water?” someone says. In the end, however, the budding Googlers are most excited about the work. 

“The project I’m working on is super high impact, and I’m looking for ways to make my mark,” says Rita DeRaedt, 20, studying visual communication technology at Bowling Green State University in Ohio. She admitted to being a bit star-struck after she was assigned to a team headed by a designer she’s long admired. With summer’s arrival comes an influx of thousands of Silicon Valley interns. Well paid and perked, young up-and-comers from around the world who successfully navigate the competitive application process are assigned big time responsibility at firms such as Google, Facebook, Dropbox and Twitter. 

Silicon Valley tech firms pay their interns more than any other sector in the US, according to a Top 25 list of 2014 intern pay by online career website Glassdoor. Palantir Technologies, a Palo Alto-based cybersecurity firm, topped the list with $7,012 average monthly base pay. Also on the list: Twitter, LinkedIn, Facebook, eBay, Google and Apple, all of which pay more than $5,000 a month, or $60,000 annually if these were full time jobs. And that’s not counting the perks, which at Facebook even include housing in this high rent region. Executives hope that a fun and stimulating summer will motivate them to come back after graduation to launch careers. It’s money well spent in a field fighting for talent, says Keck Graduate Institute professor Joel West in Claremont, who hired interns when he ran his own software company, and now helps place students at internships. 

“When you’re an employer, interns are a win-win, because you get relatively cheap labor and you get a first look at talented and ambitious people,” he says. “You get first dibs on them.” Indeed, many of the internships turn into careers. Max Schireson, CEO of database startup MongoDB, with offices in Palo Alto and New York, says they nurture former interns, 35 this summer selected from a pool of 3,000, when they return to their respective schools – primarily Brown, MIT, Stanford and Princeton. 

“We try to keep in touch with them both to keep that relationship warm but also because they can help us in identifying our next crop,” Schireson says. Schireson says that while there’s solid pay, with food, drink and candy around the office, there are limits. Ultimately, he says, “we want people attracted mostly by the workplace challenges.” Typically, interns are assigned to collaborative teams working on specific projects; computer science student might be writing software code to make failed passcode attempts erase data, while a human resources student might be creating online learning modules for new hires. Serial entrepreneur Jon Bischke, currently CEO of San Francisco-based Entelo, a tech recruiter, said interns better arrive ready to hustle. 

“Companies in Silicon Valley are growing faster than literally any companies anywhere since the beginning of time,” he said. “The energy is palpable and for people who appreciate fast-paced environments, you won’t find anything faster than what’s going on in Silicon Valley right now.” But there is an effort to keep hours reasonable, and many said East Coast financial sector interns work longer hours for less pay. “We believe in paying for work and paying our interns, full stop, but we don’t believe in making interns work all hours of the day unnecessarily, and think there are lessons to be learned in terms of managing time and workflow,” said Google spokeswoman Meghan Casserly. Overtime is allowed, however, for projects that warrant it, she says. Chris Crawford was 18, a student at University of California, Santa Cruz, when he landed his first internship at nearby Cupertino-based Apple. He spent the next five summers interning at Apple, two in public relations, three at iTunes. 

“I love Apple technology, I’m a musician and I loved what they were doing in the music industry, and I got real life business experience there,” says Crawford, who went on to launch his own startup, Loudr.fm, in 2009, an online service where musicians can sell cover songs and original music to fans, or through iTunes, Spotify, Google Play and other sites. Now and then, he says, their little firm of eight even gets an intern. Google’s head of global staffing Kyle Ewing says the biggest misconception about their interns is that they are all computer scientists from elite universities. Instead, Google, and many other firms, have outreach programs to both diversify their workforce and provide opportunities for non-technical students. As for the new class of interns, thousands of them, Ewing says she expects them to be tackling major challenges as they sip their sparkly water over the next three months. “Our hope is that we can offer a job to anybody who has a successful summer,” she says. “We have a very, very successful pipeline.”