Leading IT Provider Seeks to Cover Talent Crunch in Latin America
In an effort to solve a possible talent shortage for the next three quarters, Tech Mahindra has designed a rescue plan to broader its talent base, reskill workforce, increase its hires and upgrade training while boosting its presence in tier II towns.
“We will step up our base in Latin America to increase talent supply. We are focusing on South America through our development centers in Chile, Argentina, Colombia and Brazil. Tech Mahindra has four additional development centers in Mexico with 4,000 employees at the moment,” said C.P. Gurnani, CEO, Tech Mahindra.
An expert at Tech Mahindra highlights the value of the skilled and leadership talent in Latin America, especially within the Argentinian and Mexican markets, as the company currently has approximately 2,500 employees throughout the region. However, in Chile and Colombia there are only around 800 distributed employees and its corresponding development centers have been launched.
The Indian-based company is one of the top 15 fastest-growing global entities in the IT service provider industry. Its integration in Latin America is an important step within its plans to expand the company’s talent base, according to Gurnani.
However, the company’s expert sees labor regulation in Latin American markets not favorable to its talent expansion plans. “The supply base is pretty good, especially in places like Argentina but the labor laws do not favor elastic demand and supply,” said Gurnani. “I would rather not build scale because I cannot adjust to the elasticity in demand and supply.”
Despite this, the company reported that by the end of 3Q21, there was a 26 percent increase in net profit with a registered revenue of US$1306 million, or a 16 percent increase, while expecting a US$1473 million revenue in 1H22.
By the end of the same quarter, Tech Mahindra increased its net employee base by 14,390 hires despite the 4 percent attrition growth and it plans to duplicate its fresher hiring, meaning the candidates with zero years of professional experience in FY 2022 according to Gurnani.
“EBITM (earnings before interest, taxes and corporate overhead or management) remained flat QoQ at 15.2 percent, as the benefits from the offshore shift and revenue growth-led operating leverage were negated by lower utilization, higher subcontracting costs and supply-side inflation. Tech Mahindra expects an acceleration in revenue growth, improvement in the performance of portfolio companies, flattening employee pyramid, offshore shift and other costs,” said Dipesh Mehta, Emkay Securities, a global research and investment powerhouse.
The company’s webpage reports that Tech Mahindra as a federation of companies that has developed pioneering systems, processes and solutions, for enterprise clients across the globe as well as having coverage in the communication, media and entertainment, manufacturing, banking, healthcare, retail, energy and hi-tech industries.