IT Companies - Hiring Up and Attrition Down !

The just-concluded earnings season of the country's top four IT firms reveals that the recruitment levels in the $60-billion IT industry has returned to its October-December 2007 peak. The icing on the cake is the news that average attrition in the industry saw only a marginal rise during the quarter on a sequential basis and job hopping is also expected to stabilise in the next two quarters.

Infosys Technologies (INFOSYS.BO : 3053.25 0), the country's second largest IT exporter, added 7,646 employees during the July-September quarter, which almost touches the net hiring of 8,100 people done in October-December 2007. The current hiring by the company has been the highest in the last three years.

TCS, the country's largest IT firm, broke all records as it surpassed its October-December 2007 peak. During the July-September quarter, the firm added 10,717 employeescompared to 7,522 in October-December 2007. TCS has upgraded its gross hiring target from 40,000 to 50,000 on the back of higher demand.

Though hiring of employees by Wipro (WIPRO.NS : 448.9 -21.25) Technologies at 2,975 during the quarter was relatively lower compared to its peers, the company surpassed net additions of 2,389 made during October-December 2007. Unlike Infosys and TCS, Wipro's hiring picked up during the April-June quarter itself with 4,854 net additions.

According to Saurabh Govil, Wipro's senior vice-president (HR), demand is healthy in the industry at all levels. The company is also hiring more sales executives and consultants for its onsite work. However, the main recruitment focus remains on technical professionals.

Surprisingly, attrition levels in the industry, which had shown a significant increase last quarter, seems to be stabilising now. "As most of the salary hikes have taken place and people have made job changes, this was not a quarter of peak attrition. However, the percentage increase in attrition is not low, though it might have increased in absolute terms as the base now is higher," says E Balaji ,director and president, of HR firm Ma Foi Randstad.

Govil stresses, "Our attrition levels have increased only marginally this quarter compared to the last quarter (from 23% to 23.5%). We had given most of our salary hikes in February and now things are stabilising. There is a balance in the overall demand and supply of professionals."

Attrition rate at TCS increased marginally to 14.1% in July-September from 13.1% during the preceding April-June quarter. In case of Infosys, it went up from 15.8% to 17%.

Overall, the growth rate in attrition for the industry slowed down during the quarter compared to the preceding quarter.

Arup Sengupta, associate director, IT practice at recruitment firm Manpower, says, "Attrition has not increased significantly this quarter because in the preceding quarter, companies concentrated on lateral hiring. Since IT companies now have global delivery centres, they are sending their employees for onsite work, which is an influential retention strategy. However, attrition levels are expected to be flat in the next two quarters."

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Employee Retention Strategies to curb attrition

Bangalore: Desperate to rein in high attrition levels, India’s top information technology (IT) firms are offering mid-term hikes, promotions and even restricted stock (shares that are locked in for a fixed period before they can be sold) to keep employees from hopping on to rival companies.

Most IT firms had cut perks and frozen salary hikes during the downturn of 2008-09 as business from customers had slowed.

But with the economy improving in the US—the largest market for Indian IT firms—customers are offshoring more work to save costs and remain competitive.

Graphic: Paras Jain; photo: Madhu Kapparath/Mint

To meet this spurt in demand, IT firms are scouting for experienced employees who can deliver quality codes to their customers.

Much of this requirement is at the three- to seven-year experience level, the segment where most IT firms are losing employees.

Some “85-90% of IT-ITeS (IT and IT-enabled service) companies now are looking at off-cycle compensation-related interventions such as retention bonuses, off-cycle salary increases and equity-based incentives to control this situation,” said Sandeep Chaudhary, performance rewards consulting practice, South and West Asia, for US human resource consultancy Hewitt Associates.

Infosys Technologies Ltd, India’s second largest IT firm, has given two salary raises —8% and 13-17%—since October. In June, it gave at least five shares to each employee to commemorate the beginning of its 30th year.

These measures, though, haven’t cured it of its troubles yet. In the June quarter, Infosys lost 15.8% of its employees—its highest attrition since 2002.

Chief executive officer S. Gopalakrishnan isn’t daunted. “We expect attrition to subside in the next two to three quarters” as the churn settles in the industry, he said.

Wipro Ltd, the third largest IT firm in the country, gave promotions to 20,000 employees earlier in July—more than double its typical number in a year—and handed out restricted stocks (securities locked in for five years) to 8,000-9,000 middle and senior managers.

“Typically, promotions are given to 7-8% of the workforce,” says Saurabh Govil, senior vice-president, human resources, at Wipro Technologies, the firm’s IT services arm that has some 112,925 employees.

“Steep hikes are not the only answer,” he said. Staff would also be given options to work onsite or in different roles. Wipro’s attrition in the June quarter was 23%.

Tata Consultancy Services Ltd’s (TCS) attrition at 13.1% was the lowest among the big three. India’s largest IT firm gave promotions and average wage hikes of 10% in April, after a gap of one year. Its focus now is on non-monetary components: rotating jobs more often, not just within projects but across technologies, verticals and locations; and encouraging more first-time managers to take up people management courses.

“Retention is the focus today,” said Ajoy Mukherjee, vice-president and head of global human resources at TCS.

He ruled out a mid-term pay hike, but the variable pay component distributed every quarter, he said, would help retain people.

Chaudhary, too, does not favour excessive hikes. “While compensation may seem to be the most obvious cause of the current attrition, excessive usage of compensation-related interventions is not recommended as this will actually intensify the problem of wage inflation.”

The IT biggies, meanwhile, are adding to the churn in the industry.

Infosys has raised its hiring forecast for fiscal 2011 to 36,000 from the 30,000 it announced in April. TCS plans to hire 40,000 people. And at least a third of these hires would be experienced professionals from rival firms.

poornima.m@livemint.com

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Attrition on the High !

BANGALORE: As in case of Infosys Technologies, the attrition rate of India's third largest IT bellwether Wipro too jumped to 15.8 per cent during the first quarter (April-June) of this fiscal (2010-11) from 9.8 per cent in like period year ago (2009-10) and 12.1 per cent quarter ago.

As a result, net addition for the company's flagship IT services business was 4,854 people in the quarter under review as against 3,725 in the previous quarter (Jan-March) of last fiscal (FY 2010) and minus 735 a year ago.

"Overall demand for IT skills has gone up with a rebound in the economy and uptake in tech spending. The attrition has gone up also due to many employees leaving for higher studies or business schools," Wipro Executive Director Suresh Senapaty told media here Friday.

On a quarterly basis, the voluntary attrition rate shot up to a whopping 23 per cent as against 8.4 percent year ago and 17 percent quarter ago.

Business Process Outsourcing (BPO) services alone accounted for 16 percent of the attrition as against 14 percent a year ago and 17 percent a quarter ago.

The total number of employees in the firm's IT services business has increased to 112,925 at the end of June from 108,071 quarter ago (March-end) and 98,521 year ago.

Involuntary attrition, however, declined sharply by 1.4 per cent from 7.7 percent year ago and 2.1 per cent quarter ago.

"Our net utilisation of employees during the quarter was 78.4 per cent as against 77.1 per cent year ago but marginally down from 79.3 percent quarter ago," Senapaty added.

Earlier, Infosys July 13 admitted that its attrition rate increased to around 16 per cent from 11.1 percent year ago and 13.4 per cent quarter ago.

Source ET

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Why Employees leave Job ?

Do you get into the office without a plan of action for the day? Are you not being rewarded for your efforts? Does your boss often pull you down and embarrass you in front of colleagues?

If any or all of these ring true, it might be time to shake things up.

Here are 10 signs that could indicate that it’s time for you to move on – either from your current job function or from your organization – to other adventures.

1. Social networking but not working

Are Facebook, LinkedIn and Twitter taking up more of your working day than preparing that PowerPoint presentation? If your company doesn’t allow access to these sites, perhaps your energies are focused on finding proxy sites which allow you to access sites that have been blocked by your company.

Or, do you simply dread coming to office and wait for the day to end quickly?

If this happens some days a week, then maybe you simply need a holiday. “But if one spends more than a month populating Farmville on Facebook, then yes, it’s stagnation and you need to move on,” says Purvi Sheth, chief executive officer of Mumbai management consulting firm Shilpusti Consultants.

2. Been there, done that

If your job has become so routine or monotonous that you can do most of it without thinking much, what are you doing in it? Essentially, you are not learning much or growing in that role, so you won’t be able to stay motivated for long. “Careers are not ponds, they are streams; they have got to be going somewhere from somewhere,” says Dony Kuriakose, director of Delhi-based recruitment firm Edge Executive Search Pvt. Ltd. “If you’re not moving, you’re dead in the water.”

Remember that if you have become too complacent and start taking the company for granted, your employer will soon recognize that, putting your role in jeopardy.

3. Not challenged enough

This is related to the point above. But if you feel that your organization is not giving you the right exposure or a challenging enough position, you could end up becoming very frustrated. “Take the initiative of engaging with (your) employer and…ask for more responsibilities,” says Pankaj Arora, managing director of Protiviti Consulting Pvt. Ltd, a business consulting and audit firm. If that doesn’t work, look for challenges elsewhere within or outside your organization.

4. Unmet goals

You want to become a team leader or a business head but your employer is moving you around into different departments without really promoting you. “It is time for you to move on when you feel your career objectives are not being met or fulfilled by your employer,” says Ms. Sheth.

5. Too big for your shoes

You were good at your first job, so you were promoted to the next level and the next level and so on. But now you have reached a position which is too much for you to handle. This is popularly referred to as the Peter Principle which states that in a hierarchy, employees rise to a level of their incompetence.

Either you need to re-skill and reinvent yourself pretty quickly to survive in that role or you need to move into another position which is a better fit for you.

6. Closed to change

Today’s organizations are nimble on their feet and are often changing their processes or businesses to meet delivery and cost pressures. If you can’t handle that change because you are too set in your ways, you could end up getting left behind. Or, maybe you don’t agree with your organization’s changes at a philosophical or an ethical level. “There are certain reasons why you work at a place and there are certain things that enthuse you,” says Mr. Kuriakose. “If those core issues change and you suddenly find that you’re working for a place that you wouldn’t have joined” it might be time to rethink.

7. Politics over mechanics

Every organization has politics and it’s smart to keep on top of major changes as well as the movers and shakers of your organization. But if your professional relationships at work have become so entangled and complicated that they are keeping you from your work, that’s a problem. Don’t let politics become more important to you than the mechanics of your job.

8. You’ve been overlooked — again

Are your batch mates from school and college more successful than you are? Or is your company promoting people with less experience and fewer achievements above you? Figure out why that is happening. If they’re working harder and are smarter than you, then consider adding to whatever skills are keeping you from that next job. But if your company is overlooking you, then it might be time to go where you get more recognition.

9. Don’t want your boss’s job?

We typically envy our bosses not only for their higher salaries but also for the responsibility and authority they command. But if you don’t aspire to be in your boss’s position at some time in the future, then it’s time to look around and reconsider your career plans. You can’t stay in your current position forever. Not everyone has to be the top dog, but a career path that promises advancement and satisfaction is a good road to be on.

10. Evil thoughts about your boss?

Ok, so all of us have some evil thoughts about our bosses every now and then. That’s normal. If you hate him or her as a person, deal with it. But if your professional relationship is troubled, then you have a problem. “You have to work with all kinds of people,” says Mr. Kuriakose. However, a boss who is always pulling you down, and maybe embarrassing you in front of colleagues, could be harmful for your morale and progress. Time for some introspection and perhaps an exit strategy.

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Has hiring come down in your company ?

Bad News !

HIRING DROPS BY 33 %

The financial crisis in the US continued to dampen hiring sentiments with net manpower addition by top 5 Indian IT companies combined tanking 36 per cent in July-September quarter. The net additions by TCS, Infosys, Wipro, Satyam and HCL Technologies were nearly 17,000 professionals in the just-concluded quarter, against 26,500 professionals in the year-ago period.

Seen sequentially, the cumulative net addition is significantly higher than 10,700 professionals added during the quarter ended June 2008, but HR honchos attribute that to second quarter being a traditionally strong one for freshers and campus hires to join, as also the impact of `staggered onboarding' being witnessed in the industry.

"The overall recruitments are lower for the industry this time as companies remain cautious amid the global financial crisis," Mr D. K. Srivastava - Global Head HR, HCL, said. While most companies have retained hiring targets, Satyam has trimmed its hiring targets for the year by around 33 per cent to hire between 8000 and 10,000 in the current fiscal. "IT companies are still visiting campuses and handing-out offer letters, but joining dates are getting pushed by a quarter or so," Mr Rajan Kanagasabai, global head sourcing - Satyam said.

GOOD NEWS -

Attrition falls

The prevailing uncertainty has also had a sobering effect on attrition - once considered the biggest nightmare of HR managers in these IT bellwethers. While Infosys' attrition dropped from 14.2 per cent to 12.8 per cent between the September 2007 and September 2008 quarters, Satyam's fell from 13.89 per cent to 12.27 per cent in the same period. According to TCS, while the company's IT Services attrition is stable, the BPO attrition has gone up slightly in the current quarter.

Overall, TCS was the only, among the top five, to show a rise in attrition from 11.5 per cent to 13.2 per cent. A TCS spokesperson said that the company has made gross additions of 18,664 in the first six month in line with its plans to add 30,000-35,000 people during FY09. "We have also not delayed any campus joinings," he added.

Significantly, companies have also increased utilisation rates (number of people billed per hundred, as against people on the 'bench' who are yet to find a client). Including trainees, utilisation rates for TCS (73.7 per cent to 74.7 per cent) and HCL Tech (69.2 per cent to 74.4 per cent) have seen improvement.

Source : Businessline.com
Authors:Moumita Bakshi Chatterjee &
K Bharat Kumar