The CEO of Tech Mahindra anticipates that the talent shortage will persist for the next three quarters.

Tech Mahindra | NSE 1.14 percent CEO CP Gurnani stated that the company’s talent supply challenges would continue for the next three quarters, but he also stated that the company was working on new ways to expand its talent pool.

“We are concentrating our efforts in South America, with development centres in Chile, Argentina, Colombia, and Brazil,” he explained, “to increase the region’s supply of talent.” The company’s four development centres in Mexico employ a total of 4,000 people.

According to Gurnani, the company had anticipated the talent shortage and was developing strategies to address it. The company’s plan to expand into tier II cities includes hiring more people and training them in future skills. According to a recent company analysis, attrition rates at Tech Mahindra were lower in small towns than in metro areas.

Despite an increase in attrition from 17.2 percent in the first quarter to 21.20 percent in the third quarter, Tech Mahindra added 14,930 new employees. According to the company, it plans to hire twice as many people in fiscal 2022.

Gurnani, according to Gupta, stated that expanding the company’s workforce in Latin America was critical. It would not expand in India, where it currently employs approximately 25,000 people in cities such as Pune and Hyderabad.

CEO of Tech Mahindra
CEO of Tech Mahindra

Tech Mahindra: Argentina, for example, has a particularly robust supply base

 Gurnani, on the other hand, argued that labour laws do not promote flexible demand and supply. “I’d rather not build scale” when it comes to demand and supply.

He praised Argentina and Mexico for their abundance of leadership skills and talent. With the exception of Chile and Colombia, where the centres were just getting started and had approximately 400 employees each, the company now employs between 1,500 and 2,500 people globally.

“EBITM (earnings before interest, taxes, and corporate overhead or management) remained flat QoQ at 15.2 percent as benefits from the offshore shift and revenue growth-led operating leverage were offset by lower utilisation, higher subcontracting costs, and supply-side inflation,” said Dipesh Mehta of Emkay Securities.

This is followed by him stating that the company anticipates “accelerated revenue growth, improved portfolio company performance, flattening employee pyramid, offshore shift and automation-led operating efficiencies, mitigating the impact of supply-side challenges (recruitment and retention costs)” in the future.

The company reported a 26% increase in net profit to Rs 1,339 crore and a 16% increase in revenue to Rs 10,881 crore for the third quarter ended September.

Read More: The attrition rate at Tech Mahindra is nearly double that of TCS.


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