Why Accenture hires a big chunk of its workforce from India

A big chunk of the 24,000 people that New York-listed technology giant Accenture Plc hired in its first quarter was concentrated in India, the company said in a post-earnings investor call this week.

The company, which operates in more than 120 countries and serves clients across industries, including finance, healthcare, retail, and telecommunications, follows a September-August fiscal year.

The Dublin-headquartered firm had a workforce of 799,000 at the end of its first quarter (September-November), according to Julie Sweet, chair and chief executive officer at Accenture, with half of them based out of India.

“So we did add about 24,000 people in the first quarter, which is really reflective of the momentum that we see in our business…the hiring that we saw this quarter, similar to last, was that it was concentrated in India,” Sweet said in a post-earnings call with analysts.

“Managing supply and demand is a core competency of ours. And what you see is the continued high utilization rates at around 90%. Looking ahead, we’ll continue to hire for the demand that we see and the skills that we need,” she said.

When an analyst questioned the rationale for offshore hiring, especially from India, and if there is any “evidence of a shift back to nearshore, onshore,” Sweet said the focus has shifted from primarily cost-saving through labor arbitrage to seeking specific skills that are available at scale in certain regions.

“A lot of our companies are global. And so they really are looking for optimization of right skills because a big piece of why people, for example, use India is about skills,” she said.

Today, companies are not just looking for lower costs but are also trying to find the right mix of skills necessary for complex transformations and operations in different parts of the enterprise. This may include language abilities or accommodating different time zones to better align with global operations, she said.

“Ten years ago, it was about labor arbitrage, right? Today, it is about like the ability to get these skills at scale. We, at Accenture, are continuing to develop more because in some cases, it is language, right, as you’re kind of doing more transformation, new parts of the enterprise where you want maybe language skills or time zones,” she said.

“So we have a global network with 100 centers around the world. In the US, we’ve been opening some new centers in underserved environments. We just opened a center in the Bronx recently. But all of it is kind of aimed at being very sophisticated, and we see ourselves as part of the integrated talent strategy of our clients. And it’s like right skills, right time zone, right price, continues to be the guiding, with I would say an emphasis on skills,” Sweet said.

When another analyst sought to know more about wage inflation dynamics in India, Accenture chief financial officer Angie Park said there is “no real change in the market dynamics concerning wage inflation.”

“We are always paying market relevant pay based upon skills and locations of our people,” she said.

Regarding pricing, she acknowledged that the market remains highly competitive, but despite those challenges, Park said the company is managing these issues effectively by focusing on competitive pricing, differentiating their services, and improving cost and delivery efficiencies within operations.

The IT firm posted first-quarter revenues of $17.7 billion, beating Reuters analysts’ estimates of $17.12 billion.

Its bookings rose to $18.7 billion in the first quarter when compared with $18.4 billion in the same period a year earlier.

Notably, its generative artificial intelligence (GenAI) business recorded new order bookings of $1.2 billion, while the consulting and outsourcing segments reported $9.2 billion and $9.5 billion.

It also revised its outlook for fiscal 2025 as it sees the full-year revenue growth in the range of 4-7% in local currency terms, when compared with its previous forecast of 3-6%.