MUMBAI: Mid-tier software services firm MphasiS, which is owned by Hewlett Packard (HP), plans to replace its annual salary increment for its staff with a one-time bonus in order to ensure more variability in its employee wage bill and align it better with the company’s performance.

The bonus, termed as a recompense bonus, was introduced earlier this year, replacing increments, and is likely to be extended over next few years, said a senior company official on Tuesday.

“We have started innovating on the compensation model. We will not do salary increases… If the company is doing well, the employees will be compensated for it,” Elango R, chief human resources officer, MphasiS, told ET.

Unlike some top IT firms, which already have a variable pay structure in place, MphasiS had a predominantly fixed salary structure till 2009. By shifting to a one-time bonus, which is linked the employee’s performance and the company’s performance, MphasiS aims to make about 20% of its employee wage bill variable in the next three years.

In 2009, the demand slump and the need to conserve cash forced the management to reach out to employees, and ask them to forgo salary hikes, customarily given in March or April. Mr Elango said the company didn’t do any layoffs or salary cuts, and employees were promised they would be compensated when the company performed well. True to promise, MphasiS recently gave a recompense bonus of 10% and higher than that will be paid out in December.

MphasiS, which announced results for its fiscal ended October 2009 last week, posted a sharp 44% rise in revenue to Rs 4,283.3 crore and a two-fold jump in net profit to Rs 908 crore. The company also intends to resume hiring and will hire as many as 1,500 experienced professionals to fill open positions in the current quarter alone. In the October 2009 quarter, it had opted not to hire, as it had to absorb around 750 employees from AIGSS — the software captive of insurance firm AIG that it acquired. About 300 of the 750-employees of the captive were on the bench, and MphasiS has now deployed them on client projects.

While larger tech rivals hire employees and keep them on bench in preparedness for new projects, MphasiS has a just-in-time hiring policy. “Our hiring engine is highly tweaked. We don’t carry a huge bench,” said Mr Elango. The company had an 82% utilisation Read more…

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NEW DELHI: Unlike the jobless recovery of the developed world, the Indian economy is creating opportunities as it shrugs off the effects of the slowdown.

The government data shows that sectors such as textiles, automobiles, and IT/BPO, among others, generated around 5 lakh jobs in the July-September quarter this fiscal.

Meanwhile, the public sector banks are getting ready to spread the cheer as they embark on a large-scale recruitment drive in a bid to replace their estimated 40% of their workforce that retires over the next two years.

Currently, there are about 8 lakh people employed in public banks across the country, as per industry estimates.
With about 3.2 lakh employees set to retire by 2011-12, there will be a large number of positions vacant in these banks.

Although not all the slots will be filled, banks are looking to spruce up hiring at all levels and the number will be significant, said senior executives in the banking industry.

MD Mallya, CMD, Bank of Baroda (BOB), said: “We are looking to add talent for two reasons. One, we need manpower to facilitate our expansion plans and two, there will be quite a few slots vacant with senior employees retiring over the next two years.”

Mr Mallya added that the bank plans to add about 1500-2000 heads in the current fiscal itself.
The country’s largest bank State Bank Of India (SBI) is hiring more than 13,000 people in the current fiscal.

However, hiring may not be in direct proportion to the number retiring. Said Bank of Maharashtra CMD Allen Pereira: “We will hire in sizeable number. But not all the positions that fall vacant will get filled up as some jobs get eliminated as a result of improved technologies over the years.”

The global meltdown that shook the financial sector last year and cause developed world to slump into recession caused serious demand drop for India’s exports sector and large-scale job losses. In April-June 2009 quarter job loses were placed 1.3 lakh.

The strong recovery in jobs in the last quarter has taken the net job additions over the 12 months ending September 2009 to a positive 1.5 lakh, limited survey by the government has revealed.

“The stimulus packages given out by the government helped increase liquidity, thereby stimulating production and consumption. Read more…

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MUMBAI: Mid-cap companies, which pulled the plug on annual increments in the last financial year due to the global economic slowdown, are turning the clock back, as hopes of an economic recovery are fuelling the flight of talent. Many of them are offering mid-term increments and promotions, as they scramble to retain talent and build up new leadership teams to accelerate growth plans that were put on the back burner.

Mid-cap companies have a market capitalisation of between Rs 2,000 crore and Rs 11,000 crore that is arrived at by multiplying the company’s outstanding shares with the closing price of its share.

Drugmaker Lupin Pharma doled out mid-term increments in the range of 18-20% in September. “We want to retain our talent and develop new leaders, as we are expanding faster,” said a Lupin spokesperson. Lupin, with a market capitalisation of Rs 10,809 crore, is ramping up its global footprint.

Ditto with textile firms, which face a surge in domestic demand and rise in export orders that dried up after US consumers tightened their purse strings after the subprime crisis. “We have not given increments during the April-May period. We will soon announce mid-term increments of about 15%,” said Nitin Kasliwal, MD, S Kumars Nationwide.

Heads of human resource at various manufacturing companies admit they face pressure from business heads to increase Read more…

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NEW DELHI: Indian companies are expected to give the highest salary increase of 9.2% in the Asia Pacific region next year after giving a 6.3% average salary hike in 2009, said a survey conducted by HR consulting firm Hewitt Associates. Other countries in the APAC region, such as China, Indonesia and Australia, are expected to give salary hikes of 6.7%, 8.7% and 3.4%, respectively, in 2010.

The survey pointed out that salary increases in India and China in the current year have been the lowest since 2005, even as they were much better than markets such as Japan and Hong Kong, where companies increased average salaries by 1-2%.

“Apart from factors like growing business activity and increased domestic demand in India, demographics also play a key role in deciding salary hikes. The fact that many employees in India are in the age group of 24-35 years at junior to senior levels of management, it contributes to higher salary increases than other countries,” said Sandeep Chaudhary, leader of performance & rewards consulting in India, Hewitt Associates.

Consumer durables was one of the sectors in India that grew on the back of consistent domestic demand. LG Electronics director (HR & MS) YV Verma said the sector is expected to give around 14-15% salary hike in the coming year.

The survey, that covered more than 280 companies in India, also revealed that one in every four companies in India froze salaries at the same level as last year. As compared to this, for the coming year, just 6% of those surveyed said they could opt for salary freeze next year. But as P Dwarakanath, group HR director at Max India said: “Companies would be more selective and cautious while giving salary hikes in 2010, particularly double-digit hikes.”

The survey also pointed that over half of the companies surveyed in India added manpower this year and intend to recruit more people in 2010. These would include firms such as auto major Maruti Suzuki which started hiring for its upcoming research facility and is yet to complete the target of bringing on board close to 1,000 professionals for the unit.

Talking about salary hikes planned for next year, SY Siddiqui, head of human resources at Maruti Suzuki, said: “It is important to see if signs of economic recovery are consistent and will lead to sustainable growth and development. Budget announcements for the auto sector in the coming year will also impact salary increases to some extent.”

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NEW DELHI: Corporate India is getting ready with hiring plans and higher pay packets for 2010, as signs of economic recovery are becoming visible along with a rising confidence in the economy’s growth.

“We think Indian companies are getting ready for the revival and plan to hire strategically going forward. 2010 looks to be a good year from a salary increase perspective,” Hewitt Associates Practice Leader (Performance & Rewards, South & West Asia) Sandeep Chaudhary said.

“It will not be the double digit growth (in salary) that we have now become used to in India, but will reflect the growing confidence in the Indian economy,” Chaudhary added.

Hewitt Associates, which released the findings of its ‘Asia Pacific Salary Increase Survey 2009-10′ in a magazine, stated employees in the fastest growing markets may see higher salary increases in 2010 than the others.

Employees in India are expected to receive the highest salary hike of 9.2 per cent in the Asia-Pacific region in 2010, the report forecast. They have received an average salary increase of 6.3 per cent in 2009.

Moreover, about 61 per cent of the firms surveyed reported they were planning on strategic hiring in 2010.

The report also pointed out that employers appear to have much more confidence in the economy in 2010.

Coincidently, Indian companies also project a low percentage of salary freezes in 2010 at six per cent.

The survey further said that employers across the country are now focused on employee performance and are re-looking at compensation budgets and retention of high-performers.

“We believe the metrics of performance and productivity for compensation and rewards will continue to remain in focus.

“Firms should ensure they set clear performance expectations, ensure rigorous measurement and reward high performance. These measures helped firms tide economic slowdown and will remain invaluable in times of recovery and growth,” Chaudhary added.

The survey measured actual and projected salary increases and compensation practices of 238 participating firms across 13 primary industries with 20 sub classifications.

Information used in this report was collected during the period of July to August 2009.

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NEW DELHI: Indian employees maintained high level of confidence in the future of their companies in the third quarter of this year compared to their global peers, a study says.

As per the study by global HR solutions provider Kenexa, except India, China and Brazil, employees from nine other countries surveyed reported a decline in employee confidence in the third quarter as compared to the previous quarter.

“Globally there was about one point decline in the third quarter 2009 (in the employee confidence index), compared to five point improvement in the second quarter.

“China and India sustained and built very slightly on the improvements seen in the second quarter of 2009, while Japan reversed a second quarter downward trend,” Kenexa Research Institute research consultant Anne Herman said.

Global employee confidence, which is a quarterly measure of the degree of confidence employees have in their employers’ marketplace competitiveness and their own careers, dropped to 97.9 at the end of September from 98.9 in June this year.

The country-wise employee confidence index score for India was 100.2 in September quarter, rising marginally from 99.6 in Read more…

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KOLKATA/ CHANDIGARH: Jyoti Bansal, a 32-year-old store manager at a leading retail chain has been looking for a change of job since January. But with the slowdown, opportunities were limited. Forget higher pay, the couple of offers that Jyoti got offered less than her current earnings. Earlier this month, however, Jyoti got the break she was looking for. She finally landed up with an offer from another leading retailer at a modest 10% jump, which she instantly decided to settle for.

Unlike the CXOs and CEOs who’ve already started dictating terms in the job market, underlings are still going through a pretty tough time. In Jyoti’s case, for example, the haggling went on for over a month before she got a 10% raise. It will perhaps be quite some time before junior and middle management is able to find the situation as conducive as the pre-slowdown days for job negotiations pertaining to packages.

Still, good times may not be too far away. Information suggests that recruiters have begun to hire again and have even started doling out 10-15 % more on an average to new hires. “The employment market has definitely improved over last year,” said Mahesh Arora , corporate general manager (HRD & Personnel) of Vardhman Group, an integrated textile producer.

This is in sharp contrast to what was happening throughout the past one year. Now, corporates like Spencer’s Retail, the Future Group, Dabur, Fortis, Ceat, Philips and LG among others, say they have started to offer ‘attractive’ salary hikes to new hires. “Great talent always comes at a premium. Now that the market is improving, we have even paid 15-20 % more,” said Rahul Ghatak of Ceat.

Headhunters indicate that sectors like manufacturing, telecom, shipping, power , oil and gas, insurance, healthcare and consultancy are offering salary hike as high as 15-20 % to those joining now.

“Almost all our clients have given clear indications of hiring people with decent hikes. It presents a good opportunity, especially for people who are dissatisfied with increment or performance evaluation in their current organisation,” said KPMG partner and head (human capital practice ) Ganesh Shermon .

Some badly affected sectors like retail too, have started picking up. “Compared to a year back when this sector was retrenching people, we are now going in for replacement hiring. We are offering around 20% hike to new recruits,” said Spencer’s Retail HR head NR Ghosh.

Incidentally, the retail industry at one point got a lot of flak from FMCG and telecom for poaching talent at 50-100 % salary hikes. India’s largest retailer Future Group, which is hiring people for new stores, agreed there will be a reality check on the salaries now Read more…

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Infosys Technologies has told its over one lakh employees that they can expect pay hikes and promotions by October, joining India’s top tech companies in lifting wage freezes and signalling rising optimism for the software industry’s growth prospects.

India’s second-largest software exporter has kicked off a performance appraisal process right in the middle of the festival season, saying in an email last week to staff that hikes and promotions will be effective next month.

“Yes, we are giving hikes this October. It will happen across the board,” Infosys group HR head Nandita Gurjar told ET NOW over phone from Poland on Tuesday. She did not say what the extent of the salary increase would be.
India’s largest software company TCS, third-ranked Wipro, as well as Cognizant and HCL, have already announced a return to salary hikes and their ranks have been joined by smaller rivals such as MphasiS-EDS, Sonata Software and Symphony Services.

Som Mittal, president of software industry grouping Nasscom, said IT services providers have been winning large deals in recent months and investments in new markets are beginning to pay off, driving the revival.“The downturn has been severe but the industry has worked to see that the impact is minimal. They have done well in the first quarter. This is a people-led industry, so lot of companies are selectively rewarding employees who have worked hard,” he observed.

Infosys’ Ms Gurjar said the company decided to skip the promotion cycle in April this year as employee utilisation and billing rates were low. But a sharp rise in utilisation rates since made it decide to reward staff.

While improved demand and natural attrition have pushed up the utilisation rate at Infosys, operating margins are also seen well ahead of its target of 30%. Infosys’ wage bill is estimated at 45-46% of sales, and the company has projected that FY10 revenue will grow by 3.1-4.6% to $4.45-4.52 billion.

Nasscom has projected that the $60-billion IT services industry, which employs about 2.5 million, will grow by just 4-7% this Read more…

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NEW DELHI: India Inc’s staff cost went up by 11.2% during January-March last fiscal, growing at a lesser pace than the previous three quarters of 2008-09, reflecting the economic slowdown, according to an RBI study. The staff cost of 2,549 companies taken for the RBI study had risen by around 20% in each of the first three quarters of 2008-09.

However, with corporate India reducing its overall expenditure, the rise in manpower costs, too, were arrested. As the impact of the global downturn became severe since September-October, the corporates were forced to cut down the pace of the total expenditure.

“Reflecting the impact of the financial market turmoil, economic activity post-September weakened substantially,” the study said.

The total business expenses, which grew by over 36% in the first two quarters, contracted by 0.5% during January-March Read more…

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BANGALORE: After software giant Wipro lifted freeze on promotions and hikes, although selectively, mid-sized technology firms like MphasiS-EDS, Sonata Software and Symphony Services are also planning to increase salaries and give bonus.

IT services firm MphasiS, which recently bagged new outsourcing contracts, has announced a recompense bonus for its staff which the company feels is possibly an innovative compensation model. “For good performers, the bonus can be 15-25% higher than the average pay hike,” MphasiS chief human resources officer Elango R said.

Recompense bonus will compensate for the salary freeze which was introduced in early 2009. “It is a one-time adjustment in the form of a bonus to reward employees for their commitment and contribution,” said Mr Elango.

The recompense bonus is guaranteed up to the third quarter and is linked to the company’s overall performance and that Read more…

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