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BENGALURU: As IT firms saw revenue productivity increase amid lower headcount,

HCLTech CEO

C Vijayakumar said adding headcount may not necessarily keep pace with revenue growth. He noted that the IT industry's requirement for skilled professionals will continue to rise steadily, leading to higher billing rates. "I think you should keep in mind that some of the growth came from improving utilisation for many companies. There are also some onshore-offshore mix changes that could have driven growth. The service industry has a long-term correlation with adding people. I don't think that is changing. Maybe the people addition may not be at the same level as revenue growth, but your wage bill increase will continue to rise in line with the revenue because you need higher-skilled and more experienced people. All of that will drive the wage bill higher," Vijayakumar told TOI in a post-earnings interaction on Tuesday.

TOI reported that the Indian IT sector's overall revenue per head grew approximately 6% year-on-year in the initial six months of FY25. With a single-digit growth outlook, many large IT firms have not added people for the last two years, and this could be the reason for improved revenue productivity.

HCLTech has reduced its fresher recruitment target from 10,000 to 7,000 for the year. HCL added 2,134 employees in the Dec quarter, taking the total headcount to 220,755. When asked about rolling out low single-digit hikes, Vijayakumar clarified that the average hike for eligible candidates was around 7%.Even as developers are coming to grips with how GenAI will impact their roles, especially with low to medium complexity code already being automated, Vijayakumar said, "I think it's about embracing generative AI that is really the big message to the developer community. If you can embrace and see in the new scheme of the workflows and see where incremental value can be added."He continued, "AgenticAI is still early days and it would have some impact on the number of tasks and all of that. But we're also seeing more work coming because of generative AI. I mean

application modernisation

, which was not even attempted in the past, is now being attempted. So, I think that's going to create some new demand."Vijayakumar said there is a gradual improvement in the number of PoCs getting converted into revenue. According to Vijayakumar, contracts are now being signed for shorter durations, resulting in reduced tenure periods. While this naturally affects the overall contract value, he emphasised that the annual contract value remains strong when compared to the previous year, which serves as a more relevant indicator in the current scenario.

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