BANGALORE: Indian IT service firms are looking to throw open their gates yet again to prospective employees as the gloom of the global recession lifts from the $60 billion industry and demand for outsourcing services improves.

This is in stark contrast to the scenario a few months back when most of them had frozen salaries, promotions and, in some cases, saw their first ever declines in quarterly headcount additions. The sector, which employs more than 2 million people, has been one of the biggest job creators in Asia’s third-largest economy and used to hire people by thousands every quarter, mostly engineering graduates.

India’s top two IT service firms Tata Consultancy Services and Infosys, each of which employ more than 100,000, used to shower employees with hefty pay hikes and perks not too long ago to keep their staff from being poached by bigger rivals such as IBM and Accenture.

“There is some confidence back in the system,” V. Balakrishnan, CFO of Infosys Technologies said at the Reuters India Investment Summit in Bangalore. “Most of the corporates are feeling much better about the economy now than they were some six to eight months back.”

Infosys, India’s second-largest software services exporter, last month raised its hiring target to 20,000 for the fiscal year that ends in March, up from its earlier forecast of 18,000, and Balakrishnan said it wanted to be well-oiled when growth returns.

Infosys, which had earlier put a hold on salary hikes and promotions for this fiscal year, said it would raise pay by an average of 8 percent this year for its employees in India. “In the beginning of the year, the environment was so challenging that we said we won’t give any wage increase for the year, and we also stopped all promotions. We had some buffer on the margins so we gave the wage increase,” Infosys’ Balakrishnan said.

Wipro Ltd, India’s No 3 software services firm, also said the IT industry was back to being bullish about its hiring outlook. “The recovery is still taking place. It’s still very slow. But I think customers have decided to move on and make things happen,” Wipro’s joint CEO of IT business Suresh Vaswani said. Wipro’s CFO of IT business Manish Dugar said there would be headcount growth going forward.

“But I don’t know if we’ll have proportionate increase in headcount to the revenue.” Wipro also said it will announce a decision on wage increases during the course of this quarter. Mahindra Satyam, earlier known as Satyam Computer Services that was rocked by India’s biggest corporate fraud, is also looking to hire people and reinstating various employee benefits.

The company currently has a “virtual pool” of about 5,000 employees, who are not actively involved on any outsourcing project and are on reduced salaries. On Monday, Tata Consultancy Services, India’s top outsourcing company, had said the company was likely to increase wages in the next fiscal year.

The change of sentiment in the Indian IT sector gives millions Read more…

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MUMBAI: With the global economy gradually bouncing back, the IT job market is also picking up and 2-2.5-lakh jobs in the sector are likely to be up for grabs, a top Infosys official said on Wednesday.

“The job scenario is improving…This year the market is likely to see around 2-2.5-lakh jobs,” said Infosys director-human resources Mohandas Pai.

The IT jobs market will, however, not be the same as it was two years ago, but will also not be as bad as it was last year, Mr Pai said, adding that the fresher-lateral hiring ratio is likely to be around 65:35% this year. Two years ago, there were 3-4 lakh jobs available in the IT market, Mr Pai pointed out.

The industry has witnessed a lower growth rate in the past 18 months, Mr Pai said, adding that the market is not so open now.

Infosys has plans to hire around 20,000, he said, adding that, however, campus recruitments will be lower this year as Read more…

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BANGALORE: Guess what’s going to be taught at the Harvard Business School soon — business models adopted by mid-tier companies like MindTree and Zensar Technologies which emerged unscathed from the downturn. And, among the list of personality profiles the students of this high-profile B-school will delve into, will be names like S Gopalakrishnan, CEO Infosys, Anand G Mahindra, vice-chairman and managing director of Mahindra & Mahindra, Britannia Industries MD Vinita Bali and ICICI Bank chairman KV Kamath.

David A Garvin, the C Roland Christensen professor of business administration at the Harvard Business School, is at present on a India mission, building up case studies along with his research associates, on these two midsize companies.

They are also conducting extensive interviews with top 25 senior executives of Indian firms to understand the distinctive qualities of the Indian business environment, organisations and leadership.

Garvin says that the economic meltdown and the aggressive growth of emerging markets was one of the reasons to study more about Indian companies which have surfed past the difficult times successfully.

“What I found is that companies like Infosys takes the perspective of multiple stakeholders. Shareholders are important, so are the executives, employees and customers and the public. It is different from the US where shareholder views dominate,” Mr Garvin pointed out. He said organisations such as Infosys has a wonderful Read more…

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The pick-up in the economy has kicked off hiring plans in India Inc, with companies across the manufacturing and services sectors looking at new recruitments as they go into expansion mode.

They are not just expecting more business from the domestic market, but anticipate a boom in overseas business too, thanks to cash-crunched foreign companies looking at cost rationalisation.

Cisco has drawn up huge recruitment plans as it shifts some of its activities from abroad to India.

The company plans to boost its manpower in India to 15,000 over the next two years, adding 12,000 new workers.

Cognizant has added a net 8,135 people since December last year. Cognizant CFO Gordon Coburn said the company will continue to hire aggressively.

Accenture said it will add around 8,000 new people in India by the end of next year, taking its total employee strength to 50,000.

Accenture’s focus in India is going to be in the analytics space, company chairman and CEO William D Green said at the India Economic Summit where the overall mood was buoyant. Hirings in the IT space have in fact been continuing over the last few months.

Tata Consultancy Services (TCS)has already hired 7,800 people. TCS had made some 24,000 offers in 2008-09, according to its Q2 analyst call.

T major Wipro has also been hiring and after recruiting 1,000 people in the first six months of the fiscal, plans to add another 2,000 in the second half.

The company is also planning to extend salary increments across the board in Q4, which is significant considering it had not even budgeted for a hike at the beginning of the year.

Infosys BPO said it would hire 1,500-2,000 people by the end of this fiscal. The company is also reportedly planning to set up a new delivery centre in the US before end of 2009-10.

Infosys, in its Q2 earnings call, indicated that it would add 20,000 people instead of 18,000 indicated earlier. The additional 2,000 would be partly in BPO while the rest would make up laterals at Infosys Technologies.

iGate said it plans to add about 1,500 new recruitments in 2010. CEO Phaneesh Murthy said he expected IT budgets to be up 2-4% next year.

Hyundai has added a new manufacturing line to meet increased demand, has hired as many as 1200 workers between July and September this year and plans to further boost its strength as it looks to attract NRIs and expatriates to join its Indian workforce.

Nissan has said it would be more than doubling its manpower in India as it hopes that rising economic activity and disposable incomes will boost demand.

The company, which is setting up a new plant near Chennai, has plans to boost its manpower from 700 to 1500 by May.

Maruti, which plans to boost annual production to one million units, has plans to add around 400 new people including a mix of engineers, technicians, MBAs and CAs.

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BANGALORE: It’s become the ‘holy grail’ that every top Indian tech firm is chasing and talking about. After over a decade of growing their revenues at 20-30% every year, TCS, Infosys and Wipro are scrambling to arrest their linear, people-led growth by exploring different ways to ensure that they do not have to hire more in order to serve additional customers, and handle higher volumes of projects.

Together, the country’s top three tech firms already employ over 3,00,000 staff between them, and pursuing non-linear growth is on top of their agenda. For Wipro, India’s third biggest software exporter, the non-linear journey started some two years ago in an abandoned computer making unit, owned by the company’s hardware division at Mysore, which has now evolved as its global services management centre. The centre caters to over 85 customers with around 1,000 staff.

While rivals TCS and Infosys are also pursuing non-linearity as part of their long term agenda, experts say Wipro may have done better in arresting people-led growth by pursuing an ‘on demand hiring’ strategy.

“To some extent, only Wipro has tried to break the one-to-one correlation between revenue growth and employee addition as it so demonstrated through FY09 – an effort initiated before the crisis intensified in September 2008 with the collapse of Lehman Brothers,” said Edelweiss analysts Viju George, Kunal Sangoi and Pratik Gandhi.

When Suresh Vaswani, Wipro’s joint chief executive, was looking for service lines to start a pilot for testing non-linearity, the company’s growing hardware management business or infrastructure outsourcing, appeared to be a safe bet. By moving management of desktops, servers, end user devices and communication infrastructure to a remote location, Wipro wanted to see if non-linearity could be applied to other businesses as well. “Managed infrastructure services offered tremendous opportunity for automation, remote delivery and utilisation of different required tools,” Vaswani said. “Having seen early results, we are now committed to make this a big movement for us, internally.”

Over the past two years, Wipro has grown its revenues from infrastructure outsourcing business at over 40% and has increased its work force delivering such services by less than 10%. Overall, Wipro added around 845 employees during the year ended March 2009 and grew its technology services revenues by over 20%. While TCS added around 32,000 employees during 2008-09 and grew revenues by 18%, country’s second biggest software exporter Infosys increased its yearly revenues by 11.7% and added 13,663 employees during the same period.

Increased automation and use of same platform for delivering services to multiple customers can help the companies bring down additional number of staff required by over 40%, Vaswani added.

Indian service providers are also being helped by the economic crisis when it comes to practising non-linearity. In a normal year, large customers such as GE, Citibank and many others would like to have dedicated offshore teams working for them exclusively. However, a worsening economic crisis has made these customers seek more cost effective ways. And hardware management is not the only area where vendors can become non-linear.

On its part, even Infosys sees more traction in business from shared services platforms, wherein customers such as Royal Philips are paying the company for every transaction processed, irrespective of the number of staff employed by Infosys. “We are already offering complete human resource services based on Oracle platform to customers, wherein pricing is based on number of employees,” said S Gopalakrishnan, chief executive of Infosys.

Wipro has also started offering such platform-based services to customers using SAP, Oracle and other enterprise software applications. “Acceptance does take a while with global customers, but we already have some 8-10 pilots going for clients,” said Deepak Jain, vice-president, technology infrastructure services, Wipro Technologies. “Obviously, there is more acceptability during this downturn.”

For instance, Wipro’s global services management centre in Mysore currently employs around 1,000 professionals serving almost 85 customers. “With linear model, we would have needed at least 2,000 staff for delivering such services,” added Suryanarayana Valluri, vice-president of Wipro’s Communication & Media business.

In one of the infrastructure management projects, Wipro brought down number of manual interventions required by up to 30%. “Newer automation tools from companies such as SupportSoft have helped us achieve these targets over past 1.5 years,” said Jain.

Wipro is surely not alone in pursuing non-linearity. Larger rival TCS, according to experts, is working hard to have more reusable components across different software engineering processes.

“TCS’ two-three year goal is to ensure coverage of 100% of its strategic accounts to deploy these tool-kits,” the Edelweiss analysts said. “TCS claims that cost savings from well-proven components can typically generate cost savings of 30-40% through re-use,” they added.

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Bangalore: In an industry where size matters, India’s showpiece software services firms need to be bold and acquire firms or risk playing second fiddle as bigger IT players emerge as one-stop shops for cost-conscious clients.

Oracle and Dell have snapped up targets to grow beyond their core areas, while Xerox is buying Affiliated Computer Services for $5.5 billion to jump into the outsourcing sector.

By acquiring players with a wide client base, India’s top three IT firms — Tata Consultancy Services, Infosys Technologies and Wipro — can leapfrog in size and clout, helping them win multi-million dollar deals.

So far, India’s near-$60 billion IT sector has shied from blockbuster deals and instead focused on acquiring smaller IT divisions to tap opportunities in areas such as utilities and healthcare.

“For good measure these companies have been conserving their resources and as competitive pressure grows now is the time to fill up some of their skill gaps through acquisitions,” said Ved Prakash Chaturvedi, managing director at Tata Asset Management.

India’s top three IT firms each has a market value of between $18 billion-$27 billion and boasts a global footprint.

These exporters individually employ about 100,000 staff, mostly in low-cost India centers with manicured lawns, pizza and Subway outlets, auditoriums, fitness centres and golf carts to move around the sprawling campuses.

IBM, Accenture and Hewlett-Packard have also expanded their India-based workforce, enabling them to move more of their overseas work to these lower-cost centres.

IBM stole a march in 2004 when it swooped on Daksh, an early local backoffice outsourcer, for $170 million, and now employs over 70,000 staff in India. Accenture has over 40,000.

India’s two-decade-old IT sector already faces cut-rate competition from the bigger players and is struggling to retain experienced staff, usually lured away by global rivals.

“What might happen in the long-term is customers might work with large all-services-under-one-roof kind of vendors, which Indian vendors do not offer,” said Gartner India’s principal Read more…

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NEW DELHI / KOLKATA: Salary-earners are seeing their pinched pockets bulging, as companies are untying their purse strings. Top IT companies such as TCS and Infosys are leading a revival of employee-centric HR policies in India Inc marked by high variable payouts, double-digit salary hikes and promotions, less than a year after the global meltdown forced them to slash salaries and freeze hiring.

Buoyed by signs of faster-than-expected economic recovery from India and elsewhere and a jump in demand, a clutch of companies across sectors including carmakers Maruti Suzuki, Tata Motors and Hyundai Motors are busy paying out variable bonuses ahead of Diwali.

Some others, like top white goods maker LG Electronics, biotech firm Avesthagen, consumer products company Dabur and private insurer Bharti AXA Life Insurance are rewarding select employees with salary hikes and promotions.

India Inc has turned its focus back on its people power as companies are looking to expand, encouraged by improved demand and enquiries, BSE Sensex more than doubling in just six months, and signs of faster-than-expected global recovery that made the International Monetary Fund up its forecast for world economic growth in 2010 to 3.1% from 2.5% predicted in July.

This is in stark contrast to just a year ago when the global recession that felled several global financial giants including Lehman Brothers hit India, forcing companies to shelve expansion plans, downsize operations, cut salaries and freeze recruitment.

“In the past 15 months, HR heads were not at all bothered about attrition. But now that several sectors are bouncing back to normalcy, poaching might see a rise. Hence, companies want to secure their talent pool with mid-term hikes and promotions,” said P Dwarkanath, Max India group director (human capital) and a former president of the National HRD Network.

The drive to please employees is most visible in the country’s $60-billion technology services sector that is seeing more business trickling in.

Worst-hit sectors may give hikes

“It is a people-driven industry. At a time when the sector is witnessing positive signs of recovery, such announcements become even more relevant for both the company and employees. This would not only help companies in retaining their existing talent, but attracting new talent as well,” said Joy Nandi, client partner, global technology practice, with Delhi-based headhunting firm Korn/Ferry International.

Tata Consultancy Services, the largest IT exporter, for example, has restored variable pay it had cut earlier this year due to a drastic demand slump.

Its main rival Infosys Technologies plans to give higher variable pay for the second quarter, besides declaring salary hikes and promotions across levels in October.

The firm will increase the variable component of employee salary if its overall performance is up in the second quarter, said a company executive requesting anonymity. Infosys will announce its Q2 results on October 9.
TCS did not pay variables in the January-March quarter due to overall decline in performance, while Infosys cut its variable pay by up to 55% in the first quarter. The average variable component in both firms is 30% of an employee’s total salary.

The third largest player, Wipro, did not cut any variable pay and will continue to give variable linked with performance, a company executive said. Earlier this month, Mahindra Satyam (erstwhile Satyam Computer Services) announced restoration of variable pay of its 28,000 employees. Satyam had held back variable payouts from April to trim costs as revenues were under pressure.

Zensar Technologies, which employs more than 5,000 people, has hiked salaries by 6.5% on an average on a selective basis, besides paying full variable to 95% of its employees, its CEO Ganesh Natarajan said. With the recovery in economy activating the job markets again, companies in other sectors too are promoting key performers and doling out 8-12% mid-year salary hikes.

Avesthagen, for example, is promoting employees “who have worked overtime during the recession and were loyal to us”, according to Villoo Morawala-Patell, its founder and CMD. Similarly, LG Electronics has just promoted a select bunch of employees in the general manager level and gave them a mid-term hike, according to Y V Verma, its HR director. Bharti AXA Life Insurance’s HR director Priya Ranjan said the insurer will hand out about 15% hike to some 20-odd employees later this month.

Also, several companies that had last year migrated from half-yearly appraisal cycle to one-year cycle due to the slowdown are returning to six-month appraisal cycle. “For companies who had given measly hikes or cut salaries, a mid-term appraisal provides an 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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Mysore: Infosys Technologies Ltd, India’s second-ranked software exporter, said the business environment is challenging and clients are cautious in spending, although pressure for price cuts has eased.

The company, which employs more than 100,000 people, is not seeing any reason to accelerate hiring at this point of time due to the uncertain business environment, Chief Operating Officer Shibulal said.

“We are very honestly over-hired,” he said. “There is a very slight blip of activity, but there is nothing to tell me it (a recovery) is secular in nature.”

Hopes of a pick-up in demand for outsourcing, which had been hit by the global downturn, increased after major Indian IT firms including Infosys beat street estimates in their April-June earnings and announced some large deals in the recent months.

But Infosys officials said that decision making by clients continued to be slow. “The situation is still quite challenging,” S D Shibulal said. “If you look at our customers, they are not really seeing any increase on their revenue side. And because they are not seeing any increase on their revenue side, they will continue to be concerned.”

The head of Nasscom, India’s leading IT industry lobby, said signs of recovery in the United States were yet to translate into real business growth for outsourcing firms, though a pick-up was expected in the second half of the year.

Infosys Chief Executive S Gopalakrishnan said he expected technology spending by the company’s clients to be flat in 2010 from the previous year. Ahead of the news, shares in the company valued at about $27 billion, closed up 0.9 per cent, underperforming a 1.5 per cent rise in the benchmark index. The company’s shares have doubled Read more…

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NEW DELHI: In a year that saw the stock markets crash and a serious liquidity crunch halt companies’ expansion plans globally, the number of Indian companies that added new employees were 30% more than those that reduced manpower, according to an ET study.
The sample of 375 public listed companies of which employee data for the year ended March 2009 is available shows that three out of every five companies added people, led by top IT services firms and banks.
The robust domestic demand has been keeping Indian companies busy even as those dependent on exports such as the textile industry have seen mass retrenchment. As many as 200 companies ended the financial year with more staff as against 150 which saw a decline in the number of employees. The remaining firms maintained their workforce during the year. Read more…

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