Inter-state migrants coming back; IT employee headcount heading to 10 mn: TeamLease

Manish Sabharwal, Executive VC, TeamLease Services, said that hiring in the IT industry has been remarkable. In fact, he is confident that employee headcount in the industry is heading to 10 million.

"Overall, the economy seems quite confident at least on the domestic consumption front and on the IT front - in terms of productivity and in terms of numbers - it is just remarkable. I don't think anybody doubts that 5 million IT employment is going to 10 million," he said.

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Sabharwal expects growth to continue in Q4. He highlighted that companies are now forced to hire as demand has come back. Sabharwal mentioned that he is breathing easy knowing that he doesn’t need to look for labour any longer as inter-state migrant workers are now back.

"The Q4 will continue the trend that we had in Q3. Demand has come back. So the companies are being forced to do hiring. Interstate migrants, which were 65 million before the first lockdown went down to 50 million and there was a little tightness at the bottom of the pyramid. But our estimate is inter-state migrants are back up to 75 million. So the huge pressures that we had in finding people and you had to raise salary too, that also has eased a bit because the migrants are back," he explained.

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On hiring in other sectors, he said that the confidence among companies is at an unprecedented high. He said that education and healthcare industry is normalising while hospitality is far from it.

"Our view on the structural change is that with the digitization acceleration that has happened, confidence is at levels that we have never seen before. Education and healthcare are totally normalizing now. Hospitality is still far away from normalization," he said.

On merger and acquisitions (M&As), he said that the company has had a tough time with it owing to the valuations. He also mentioned that the company is investing in tech and geographical footprints. Elaborating on the company’s margin, he explained that their target is 3-3.5 percent.

"We have had a really tough time doing M&A in the last year to a year-and-a-half just because of the way that private markets have been valuing companies," he said.

"The opportunity in the next 5-10 years is nothing compared to what it was in the last 20 years. So we are investing in technology, we are investing in the geographic footprint.," he added.

"This is our 20th year as a company and fifth year as a listed company, we went public at 0.9 percent margins, we are up to 1.92 percent margins. In the long-term 3-3.5 percent - I would volunteer - is our target," he mentioned.