Fortune 500 India: Better days ahead for job seekers

AS COVID-19 RAGED, lockdown-induced companies struggled to survive and sustain operations. This hit the job market hard in 2020. The impact was sudden, and dramatic. Worse was feared in the coming months.

A year later, however, there’s a silver lining. Of the 408 companies for which employee numbers are available in the Fortune 500 listing, far from falling, the employee base rose marginally to 60.7 lakh in FY21, from 59 lakh in FY20. The top 10, accounting for 31.5% of the base, increased their headcount by 8.87% in FY21. Led by IT majors Tata Consultancy Services, Infosys, Wipro and HCL Technologies, their employee count rose to 19.12 lakh, compared with 17.6 lakh in FY20.

India’s four leading IT companies together employ over 11.2 lakh people, with TCS leading the pack [4.89 lakh]. With the changing mode of work due to the lockdown, manpower demands of IT solution companies soared and they went on a hiring spree, spearheading the turnaround. The top five added more than 122,000 people during the first half of FY22, against 138,000 in the whole of FY21.

Besides the IT firms, India’s biggest conglomerate Reliance Industries (RIL) figured among the top 10, increasing its employee base by 20.8% last year. During the pandemic year, RIL shifted its focus to Reliance Jio and Reliance Retail, attracting investments from international investors, including Google and Facebook. Both TCS and RIL added more than 40,000 employees each last year.

Four private banks — HDFC Bank, ICICI Bank, Axis Bank and IDFC First Bank — also figure in the list apart from auto ancillary firm Motherson Sumi. “The fresh hiring shows growth. If we add other mid-sized IT companies, it will be in the range of 200,000 people this year alone. Add the hiring by start-ups [around 55,000], and employment numbers could go well over 500,000,” says Mohandas Pai, Chairman, Manipal Global Education, and former director, Infosys.

The demand for hiring is primarily in the technology space. According to the Cognizant Center for the Future of Work, the new roles emerging in the wake of the pandemic include work from home facilitator, smart home de- sign manager, workplace environment architect, among others.

Four PSBs — Union Bank of India, Canara Bank, Punjab National Bank and Bank of Baroda — also figure in the Fortune 500 list, but the growth in their employee base is deceptive because their new employee base reflects the additional numbers garnered from the merger with other PSU banks.

Employee Costs

Among the top 10, IDFC First Bank had the lowest wage bill of ₹2,302 crore. TCS, with almost five lakh employees, had the highest wage bill at ₹91,814 crore. But the real difference is seen while comparing employee cost as a share of revenues. RIL, which topped the Fortune 500 list with revenues of ₹514,217 crore, reported employee costs at just 2.88% of revenues, followed by ICICI Bank [6.85%]. The number is higher in case of IT firms, with TCS leading the list at 54.88%, followed by Infosys [54.1%] and Wipro [51.7%].

In case of employee cost as a share of profits, it is 30. 16% for India’s most profitable company, RIL, and 42.96% for HDFC Bank.

Attrition Rate

With the economy showing signs of recovery, attrition rates have begun to rise. In fact, attrition rates in leading IT companies were in double digits during Q2 FY22, recording a steady rise from the previous quarters. Besides a lucrative market for professionals with specialised skills in Cloud computing, cyber security, artificial intelligence, machine learning, a shift in employee perspective and work dynamics led to the high attrition rates. In Q2 FY22, Wipro recorded the highest attrition rate at 20.5% against 15.5% in the first quarter, TCS 11.9% from 8.6% and HCL Tech 15.7% from 11.8%.

A shortage of trained professionals is another issue that corporate India is grappling with. “There is a huge demand and supply mismatch. Start-ups are poaching, which has led to large-scale exit of manager-level manpower from big companies,” says Chaitali Mukherjee, Partner and Leader, People and Organisation, PwCIndia.

Japanese investments in the Indian IT and start-up ecosystem is expected to create 3.61 lakh tech jobs by 2023, according to a recent report by the industry apex body Nasscom in partnership with Nomura Research Institute.

The Way Forward

Changes are in the offing in the Indian job market. GitHub, one of the largest platforms for gig workers in technology, says India has the largest number of people trained in AI on its platform. AI and machine learning (ML) are increasingly being dovetailed into every application, from the edge of the network to the Cloud. Quess Corp, the second-largest employer after TCS, is India’s largest business services firm providing technology enabled staffing and managed outsourcing services.

Within RIL, too, the focus is on expanding the telecom and retail businesses, followed by the new thrust area — hydrogen. “Hiring is on track particularly in fibre to home, green energy and retail,” says a senior RIL official.

Although small businesses are still struggling to get over the pandemic blues, the rebound of the job market could be the harbinger of good days ahead