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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A lakh and twenty five thousand people (15,000 more if you count the subsidiaries) from 78 different nationalities in 50 different countries could be a nightmare for the human resources department of any company.

Or consider just TCS' largest software development centre, in Chennai, the workplace for 30,000 people; that is equal to the seating capacity of the Lords cricket ground in London.

That is one reason why the HR processes are highly digitised (a software tracks every employee, his training needs and development levels and alerts his supervisors on changes needed) at one of India's largest employers probably the largest if one leaves out public sector behemoths like the Railways or Coal India.

Ajoyendra Mukherjee, Head of Global Human Resources at TCS, says that without a digitised system, it would be impossible to manage the careers of so many people. Every individual career is carefully managed in the company, ensuring job rotation, exposure and development of skills. Says Mukherjee: ''At the junior level we rotate them between functions and then when they have gained some experience we allow them to specialise in some areas. We make sure that all employees are able to challenge themselves.'' The company has a very young workforce, with an average age of 28. The attrition rate is a modest 11.4 per cent, which is good for this industry, where the norm is 27 per cent.

But for how many years on an average does an individual work at TCS; and what are the opportunities for growth? Remember, in a difficult year (2008-09) the company had added 48,000 people (in the first six months of the current fiscal it hired another 8,000). Such aggressive hiring has to be resorted to not just to fuel the company's growth but also to replace those leaving (in 2008-09 some 16,000 employees had left).

While there is no ready answer to the question on how many years on an average an employee spends at the IT services major, Mukherjee loves to point to some notable names who have grown through the ranks. These include Vice Chairman S. Ramadorai, Managing Director N. Chandrasekharan and Mukherjee himself; all had joined the company as trainees.

Thirty-five-year-old Naveen Sodhiya, a group leader for TCS in the industry solutions team, would have similar aspirations. He has been with the company for 12 and a half years, and TCS was his first employer after he completed his masters degree from Delhi College of Engineering. ''I do not find a need to move anywhere as I see all my career goals can be met in this company'' he says. Sodhiya had a four-year stint in the US and was trained at Kolkata. Currently, he is posted at Mumbai. TCS has two guiding principles in developing its HR policy. One is to create joy for all the stakeholders and, hence, for employees too.

The second is respect for the individual which, Mukherjee stresses, sets TCS apart from other companies. This is also the principle that drives the company to train employees on cultural diversity. People are trained about different cultures not only when preparing for a foreign posting but even otherwise, as they have to work together with colleagues in foreign countries.

''For example, before employees start interacting with their Chinese counterparts in TCS China over phone, we train them on the cultural aspects of the interaction; what is acceptable in China and what must be avoided,'' he says. TCS has built software development centres, or delivery centres, in a big way in South America, apart from in India, Hungary and in China. The company is present in Brazil, Argentina, Colombia, Chile and Uruguay.

Interestingly, while Infosys has scored higher than TCS in the overall rankings, TCS comes out on top when the survey moves to only employees of the IT industry. This means that although Infosys looks a more inviting place to a layman, the IT industry pro would prefer to work for TCS. Mukherjee would settle for that.

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.