What TCS ‘Smart Hiring’ Means For Private Colleges And The Future Of The Jobs Market

One of India’s top Information Technology companies, Tata Consultancy Services (TCS), which is also among the country’s biggest recruiters of graduates for IT jobs via college campus hiring is looking to fundamentally change the way it hires talent every year.

So far, IT firms like TCS, Infosys, Cognizant, Accenture, among others who tend to hire tens of thousands of freshers annually, have relied largely on select colleges for recruitment.

These firms are derisively referred to as mass companies because of the sheer number of people on campuses who get jobs in their yearly campus hiring drives, especially in top private expensive colleges which then advertise the numbers to prospective students.

One often comes across news items like ‘XYZ university enters Limca book of records for record placement’ such as this.

However, this method of on-campus placements is in crisis now and may go obsolete in a few years. Though this was long time coming, one can certainly blame the Covid-19 crisis for accelerating the timeline.

TCS has announced its ’smart hiring‘ programme, where recent graduates will be tested nationally on 19 November in an online test followed by rounds of interviews.

The firm, which has 5.28 lakh employees on its payroll, is looking to hire another 30,000 people through this programme. This is in addition to 40-45,000 that the company has on-boarded in the first half of FY2021-22, mostly via campus recruitment.

One reason for choosing this new method could be that, demand for talent has arisen due to spurt in economic activity post the Covid-19-induced slowdown.

Moreover, there is the problem of rising attrition (employees leaving the company) which is common for companies like TCS. The current rate is 11.5 and can rise further.

TCS CEO Rajesh Gopinathan justified off-campus employment saying that ‘it would reduce campus visits, improve reach and, most importantly, prevent the institute from serving as a quality benchmark.’

“We are no longer dependent on the institute as a surrogate for quality. We can focus on the individuals”, The Economic Times quoted him as saying.

While the current ‘smart hiring’ programme is only for students graduating in 2020, 2021 and 2022 in BCA, B.Sc (Mathematics, Statistics, Physics, Chemistry, Electronics, Biochemistry, Computer Science, IT), and B.Voc in CS/IT, going by the CEO’s thinking, there is a good chance that the company may junk the on-campus recruitment entirely.

At the very least, the off-campus hiring will be the main driver of on-boarding.

“The traditional system was a lot of campus visits. We had 700 institutes on our list, and each year, we would typically hire from about 300-400, even as we monitor the 700. A few years back, we experimented with the platform-based hiring called NQT (National Qualifier Test). This is allowing us to reach more than 2,000 institutes. We are no longer dependent on the institute as a surrogate for quality. We can focus on the individuals’ quality. If they can get through the test, it doesn’t matter where they came from,” Gopinathan said in an interview to The Times of India.

“Depending on what level they clear in the NQT, their compensation — very different from their batchmates — could be 100 per cent more. Even the person who came in at the lower level has multiple opportunities to jump into the next career trajectory. Twenty years ago, most freshers would learn new things after coming to us. Today, our own people are blown away by the speed at which youngsters are able to react at these hackathons, etc,” he added.

These comments are significant and signal where the industry leaders are heading and the way they are thinking.

What does this mean for the future of jobs?

First, scores of colleges that advertise huge campus placements to attract students will be adversely affected as they lose their biggest attraction. Tuition fees inflation that we have witnessed in the last one and a half decades may be arrested.

Student strength has ballooned in these campuses without even marginal improvements in the quality of education offered. Universities, especially the private ones, will have to rethink their operating model going forward.

Second, the monopoly of not just top colleges but also of attractive streams like Computer Science may go down. It’s quite common for IT companies like TCS, Infosys et al to onboard students (in campus recruitment drives) of other courses like Electrical, Electronics, even Mechanical and Civil engineering because the admission test only checks for verbal, reasoning and numerical ability.

Now that anyone can sit for these exams from anywhere in the country from not so glamorous courses like BSc, BCA, even B.Voc. etc lowers the bar of entry and greatly increases the competition.

This democratisation of access will have a hugely positive effect on tens of thousands of students who may have missed their chance of getting into good colleges but have worked hard and are eager to learn new skills.

Third, the new emerging models of recruitment may make the four/three year degree courses redundant in future because if companies have to test the students on skills such as reasoning and numerical ability and then train them in-house for specific skills and projects, then it makes immense sense to catch them young.

It’s quite likely that firms start hiring people right after school based on specific skills which they can hone after a months of course (which may be online). This will upend the whole higher education scene in the country.

TCS may have made the start but soon others will be forced to follow it because, as Gopinathan put it, off campus recruitment reduces visits to hundreds of colleges (thereby shaving off unnecessary costs) while improving reach.

There is no need to rely on the middlemen — aka colleges — when you can directly reach your prospective employee.