TCS names new head of hiring amid probe

Tata Consultancy Services (TCS) Ltd has named a new head to oversee the hiring of temporary workers amid an internal probe into the bribes-for-jobs scandal that has led to the sacking of at least 15 executives and the blacklisting of eight staffing firms.

India’s largest IT services company has entrusted Sivakumar Viswanathan, a veteran of about 30 years, as the new head of the Resource Management Group, or RMG, an executive privy to the development said. RMG oversees the hiring of contract workers and internally deploys people to projects.

TCS, the country’s largest private sector employer, has sacked 15 people from the RMG divisions in the US, Canada, and India’s Bengaluru and Hyderabad, the executive said, as the company looks to weed out people who took commissions from staffing firms, compromising the recruitment process.

Mint could not ascertain the names of staffing firms that the company has banned.

TCS is also in the middle of a detailed audit of all the staffing firms it engages with, asking its recruitment arm that hires temporary workers to share details of all contract workers, according to a second executive who also declined to be identified.

“TCS has started auditing all contract staffing vendors working with the company,” said an industry executive aware of the development. “All their procurement and RMG teams across geographies have been asked to file reports of every hire over the last 2-3 years and mention which division and vendor have sourced them and at what price.”

A detailed questionnaire sent to TCS remained unanswered.

The recruitment scandal has posed a significant reputational setback for India’s second-most valuable firm, with a market value of ₹11.7 trillion.

Viswanathan is a trusted lieutenant of new chief executive officer (CEO) K. Krithivasan and is based in Chennai, home to about a fifth of TCS’s 614,795 employees. The former global head of the recruitment arm E.S. Chakravarthy has been sent on leave after a whistleblower blew the lid on unethical practices at the hiring of contract workers, alleging in an email sent to the CEO and the chief operating officer that many executives had been taking commissions from staffing firms for years.

“Let me say he (Chakravarthy) is in the process of getting sacked. The probe is still not over so I will not be able to comment much,” said a third executive on condition of anonymity.

On Friday, TCS, for the first time, acknowledged in a communication to the exchanges that “certain employees and vendors providing contractors” had breached the code of conduct.

For now, TCS has not shared what wrongdoing its ongoing internal probe has found. But four people familiar with the development have said all the sacked executives allegedly took bribes from staffing firms.

The head of RMG at TCS plays a vital role as the division deploys 1,400 engineers to a project every day, averaging a placement a minute.

The genesis of this episode was during the second half of 2020 when TCS, like many of the homegrown IT services firms, saw a huge demand for services offered by them to their customers. Businesses worldwide looked to build digital capabilities as the covid-19 pandemic forced people to stay home. But despite hiring in record numbers, IT services companies, including TCS, found they were short on talent. The situation worsened during the so-called ‘Great Resignation’ when employees quit in droves.

Contract or temporary workers offered by the staffing firms came to the rescue. But it was during this period that cracks in hiring processes started to surface.

Multiple recruitment firms have told Mint that the frequency of calls and meetings on checks and balances dropped since the focus was on immediate hiring. “Now that the sector is going through a low recruitment phase, audits will be back,” said the senior recruitment head who works with the top IT firms,

For now, Mint cannot ascertain if other IT firms are also re-looking at the hirings made in the past, although at least three staffing firms said they wouldn’t be surprised if others, too, ask for an inspection of the employment records of contract workers. “Wipro has a robust vendor registration process and regularly conducts routine audits,” a spokesperson for the firm said.

An email sent to a spokesperson for Infosys on Sunday went unanswered.