While there is a lot of head-scratching among pundits on how Tata Consultancy Services has managed to keep its employee costs much lower than its peers, the secret could be its higher intake of freshers and a lean middle management. This focus on new hires has allowed India's largest IT services player to earn the fattest margins in the software industry and also have considerable flexibility on deploying its resources. Analyst firm HfS estimated that the Mumbai-based company effectively achieved a 6.3% reduction in average employee costs every year over 2007-2013. During this period, the percentage of new graduates hired of the total rose from 50% to 80%. TCSBSE 0.77 % has over 3,00,000 employees globally. Hiring more freshers gives TCS the flexibility to use them in lower value and transactional activities, freeing up the more experienced employees for higher value work, HfS said.
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