Nov 15, 2008

Business - India;IT cos finetune HR code

Shelley Singh

NEW DELHI: Here's some good news for techies: despite the global market slump, they are not being handed out pink slips - at least for now, by big
players. However, for experienced professionals, retaining jobs and getting jobs may get tougher.

Call it tweaking the IT HR code, but here are some innovative steps that companies are taking to fight slowdown blues. Employee utilisation rates are up, the number of lateral hires is down, the number of campus hires has slowed down and wage hikes barely match inflation rate. That apart, companies are trying hard to develop a non-linear growth model, which seeks to delink revenue growth from manpower growth.

IT services companies insist that the focus will be on productivity increases and how best they can squeeze out more from their employees. For fresh engineers, this could translate into more time at work than play. And it could be bad news for experienced guys looking to jump jobs, as companies curb lateral intake. Also, freshers who just got campus offers may be asked to wait longer before they can report for either training or work.

"Companies continue to hire, though at slower rates," says Nasscom president Som Mittal. Employee utilisation rates have gone up by 4-5% across the industry while wage hikes were limited to around 8-11%.

The largest IT services company, Tata Consultancy Services (TCS), plans to hire 30,000-35,000 this fiscal (out of this it has already hired 18,000), but is expanding the employee base to add more entry level staff rather than hire laterally. This simply means that while there may be some jobs for freshers, the experienced guys will find the going tough.

"Strategically, we are looking to expand the employee pyramid base which implies that at least 60% of our recruitment will constitute entry level (technical campus) hiring, up from 47% last fiscal. Lateral hires will be driven by need for specific technology skills and domain expertise," says TCS vice-president & head of global HR Ajoy Mukerjee.

Ditto for Satyam Computer Services which sees a dip in campus hires from 16,800 last fiscal to around 10,000-12,000 this year while curbing lateral hires. "We are being more conservative on lateral hiring. We will take in lateral hires only for high-value work," says Satyam global head for HR SV Krishnan.

Satyam's employee utilisation rate for offshore work was 80% and onsite 96% for the last quarter. And for TCS, the utilisation rate was 81.1%
(excluding trainees) in Q2 FY09, up from 78.3% in the first quarter of this fiscal. For Infosys Technologies, it remained in the 73-75% band over the past 12 months. HCL Technologies' utilisation went up from 71% last year to 74% this year. For Wipro Technologies, it's close to 80%.

As far as hiring freshers is concerned, most companies maintain that they will stick to the offers already made at campuses. Though the joining dates of new recruits could be deferred depending on the market situation. "We are taking people in small batches and have not deferred as yet. But lateral hires are on the decline, as the focus is on enhancing employee utilisation from the existing bench," says Pratik Kumar, EVP, HR, Wipro.

Another aspect is the focus on a non-linear growth model. "We continue to look at a non-linear growth model with increased focus on enhancing employee productivity and strategic growth initiatives like asset leveraged solutions, platform-based BPO solutions, SMB solutions as well other new initiatives," says Mr Mukerjee of TCS.

Most companies have talked about delinking revenue growth from manpower growth, but are yet to make this shift significantly. For employees, it is tough times ahead, with performance being very closely monitored. For average to low performers, the coming quarters could see retaining jobs becoming tough, particularly if companies see new contracts difficult to come by.

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