Providers must invest in talent initiatives – TCS’s approach is driving down attrition of valuable talents

The IT industry is struggling with a talent crisis. As demand for highly skilled IT talent – particularly in technologies such as artificial intelligence (AI), machine language (ML), advanced analytics, IoT, cybersecurity, robotics, cloud computing, and data mining – continues to grow, the rapidly draining labor pool is causing more issues for providers and enterprises alike. TCS is attempting to remedy this issue by investing in training and development initiatives, and it shines a light on how other providers can make the most of their IT service delivery teams.

The first solution for many providers is to focus on retaining existing employees and investing in retraining exercises to upskill. Our research and candid conversations with service provider executives highlight a wide variety of approaches IT giants are taking to support retaining and retraining exercises. Many are encouraging and funding employees to learn relevant technology through online courses and building out partner ecosystems with universities and third parties. TCS is one such firm, with an extensive history of talent development that spans a decade.

The proof is in the pudding: TCS outperforms industry attrition rates

Bucking the trend of several firms that are laying off employees in the name of “restructuring” to show consistent revenue growth, TCS is growing moderately while keeping a lid on attrition rates (around 12% over the last 12 months) with consistent hiring every quarter (see Exhibit 1), while the average leading IT service provider’s attrition rate is between 17% to 22% for the same quarter. TCS added 28,746 employees, and the overall number of employees reached 446,675 at the end of 2019; it declined by 0.9% from the previous quarter and grew 7% annually.

Exhibit 1: TCS headcounts data (by calendar year)

Source: HFS Research based on company financial.

Initiatives taken by TCS to solve the digital talent crunch

Crucially, TCS has broader internal development program initiatives that enables it to leverage industry-leading attrition rates to support the rapid growth of its services. There are several examples of how TCS is investing in its people and students to ensures they have the right tools and training they need to support clients.

TCS iON

TCS recently launched TCS iON, an industry honor certification program. The learning program empowers students with digital-skill proficiencies to meet industry requirements. TCS designs the courses in collaboration with industry experts and academia. Through the TCS iON cloud platform, students can access courses on demand on any device. After finishing the course, students will receive a globally verifiable certification and an opportunity for an internship or job in the relevant space. After a successful six-month pilot with students across the region, one of the leading education groups in India signed up for the program to prepare its students.

IT Future

To fill a digital skill gap in the UK, TCS is working with schools, universities, and third parties to inspire young people across the country to take up a STEM career. Recently, the initiatives crossed a considerable milestone by successfully engaging more than half a million students. Girls’ participation increased to 41% in 2019 from 28% in 2018.

In addition to the student initiatives, TCS recently joined with its client to provide digital skill opportunities to the client’s current employees. At an engineering open house at the client’s office, a small group of volunteers from TCS provides information to the non-technical staff to inspire them to consider technology and software career paths.

Ignite My Future

In the US, TCS’ Ignite My Future school program enables teachers and students to adopt a multidisciplinary approach and incorporate computational thinking into their daily subjects. TCS launched the program two years ago; so far, it has engaged more than 300,000 students. Followed by this fruitful program, in 2018, TCS launched the Ignite Innovation Student Challenge, in line with computational thinking. The Ignite My Future program and the contest provide students with the resources required to construct a digital solution to solve specific problems (aligning with three social responsibility pillars: the planet, health, and education). The winner receives a $10,000 scholarship and virtual mentorship with TCS team members and partners. TCS has similar initiatives for Australian school students too named GoIT.

TCS National Qualifier Test

Rapidly changing digital technology requirements forced TCS to redesign its hiring process to attract highly talented students from across the country. TCS launched the National Qualifier Test in 2018, which it claims to be one of the toughest tests in the industry. The process shrinks the campus visits and hiring time from four months to six weeks. In 2018, it attracted 220,000 candidates, of which 30,000 were given the job offers. TCS employees with three years of experience can also take the exam. Of the 30,000 people who cleared the exam, TCS identified 1,300 to take one more advanced test. People who passed that exam were considered hot talent and were eligible for a higher salary in the industry.

TCS Global Reskilling Initiatives

In 2017, TCS launched global reskilling initiatives in partnership with the World Economic Forum to close the skill requirement by upskilling 10 million global workforces by 2020. A recent report (first quarter of 2019) declared that 6.4 million people already been trained on digital skills. The program inspires many international businesses to retrain their workforces, too.

The Bottom Line: Providers can save time and money competing for talent in a depleted labor market by investing in existing teams and ensuring they have the tools and training to succeed.  

IT service providers are striving harder to attract and retain skilled talent. Through a commitment to its people and investments in their future, TCS has successfully battled damaging industry attrition rates. TCS has developed a balanced combination of initiatives—from providing digital learning platforms in support of the education system to internal development programs for reskilling employees and plugging vulnerable talent gaps. All providers in the industry would do well to replicate this commitment to the industry by investing in existing teams rather than hunting for new talent in a hyper-competitive labor market.