Indian IT majors resume hiring, and TCS is filling gaps with subcontractors
India's big vendors are adding headcount again. HCLTech added 6,450 people in the September quarter, its largest quarterly addition in 16 quarters and a reversal from a net loss of 3,292 in the June quarter. TCS added 4,258 net, to 598,056, and trailing attrition eased to 13.3% from 13.6%. TCS's CFO said the company has carried a higher bench and hired more subcontractors to cover near-term skills and delivery needs. Infosys reports on October 23.
For a buyer, rising headcount does not mean the people on your account are the vendor's own. Subcontractor use is a margin lever for the vendor and a quality and security variable for you, and it rarely shows up in the SOW. Before your next renewal this quarter, ask for a named-resource list that flags employee versus subcontractor, and write a notification clause for any change. If a vendor is staffing up on a bench, you also have leverage: ask for the bench to be priced into a lower blended rate rather than absorbed in yours.
A question for your shortlist: What percentage of the engineers on our account are your own employees versus subcontractors, and will you notify us in writing before that mix changes?
Why Captive Offshore Centers Keep Hiring the Wrong First Ten Engineers: Most captive centers staff their founding team for feature output. That's the mistake. The first ten engineers set the operating system for everything that follows.