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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Indian Biggies eye Software Product and R & D Thrust

By fe Bureaus

Major IT companies in India like Infosys (INFOSYS.BO : 2623.4 -37.25), Cognizant and Accenture are gearing up for a big pick-up in the IT product development market, according to a Forrester report. The report, which covers the positions of the three IT companies in cashing in on the R&D-based product development market, says Cognizant now looks at

offshore products as another growth engine in order to be a top offshore service provider.

Over the past 18 months, Cognizant's R&D practice grew nearly 30% and it now has 6,500 resources across various sub-areas like software products, online platforms and industry-focused software products. The firm is now substantially larger than many many firms which specialise in these segments. Cognizant recently announced an Invensys partnership, in which the company re-badged more than 520 resources from Invensys' Hyderabad facility and secured two labs, as well as expertise in more niche product engineering areas like process control software and a railway operation management platform.

Infosys is another IT major looking to make it big in the product engineering development market. The company has already started modifying its product engineering divison's leadership and offshore delivery management with extended management and investment support. The company is building skills and capacities in new areas such as medical equipment, green, sustainability and network products and is also aligning this practice to its vertical-focused manufacturing and telecom sales team in order to achieve better internal support and position services in more-client situations.

To make the offerings complete, Infosys has also merged its mechanical engineering service practice with its product engineering practice to create an integrated engineering unit suitable to a large set of verticals that span across automotive, aerospace, healthcare, energy and various other high-tech verticals. While Infosys is yet to see a huge success in this space, it is clearly investing more to become a recognised player.

Riding the innovation wave

through investments in R&D expansion, Accenture will continue to invest substantially to create several innovation centres in Bangalore, New Jersey and Rome and generate intellectual property assets in domains such as enterprise mobility, user experience and convergence of device technologies and intelligent homes.

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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

21 Indian Companies among top 100 BPOs of the world !

New York, May 9 (IANS) Twenty-one Indian companies, including Infosys Technologies, Tata Consultancy Services (TCS) and Wipro, are among the top 100 BPO firms in the world, according to a new study.

Five of the Indian firms figuring among the 10 best outsourcing service providers are: Infosys (No.3), TCS (6), Wipro (7), Genpact (9) and Tech Mahindra (10), according to the study - '2008 Global Outsourcing 100' - compiled by the International Association of Outsourcing Professionals (IAOP).

Accenture and IBM head the list published as an advertising feature by IAOP in the current Fortune 500 issue of Fortune magazine.

The other 16 Indian companies in the list are HCL Technology (11), Mastek (16), WNS Global Services (19), Hexaware (22), ExlService (26), 24/7 Customer (28), Cambridge (36), ITC Infotech (40), KPIT Cummins (42), Patni (46), Zensar (53), MindTree (54), Mphasis (56), Aditya Birla Minacs (62), FirstSource Solutions (73) and Cross-Tab (78).

The key strength of Wipro and TCS is their 'employee management' while the strong point of Infosys and Genpact is their 'executive leadership', according to the New York-based IAOP.
The Bangalore-based Infosys is one of India's largest IT companies, with nine development centres in the country and 30 offices abroad with 88,000 professionals on its rolls.
Founded in 1981 by N.R. Narayana Murthy and six others, it announced a consolidated net profit of Rs.46.59 billion for the last fiscal, a 21 percent growth over the previous year.

TCS, part of the Tata group, is one of the world's largest providers of IT and BPO services. It has the largest number of employees among Indian IT companies with a staff strength of over 110,000 in 47 countries. It posted a profit after tax last year of Rs.50.26 billion, up 19 percent over the previous year.

The evaluation team was led by IAOPs' managing director of Thought Leadership, Jagdish Dalal, a renowned outsourcing expert.