The work load (projects) in Information technology firms is always fluctuating and is not uniform like other manufacturing activity. It is really challenging for the Human resources Managers of IT firms to make available to the IT firm optimum skilled professionals to execute projects received from international customers. It is now common knowledge that advanced countries like U.S., U.K., and others from Western Europe, Australia and Newzealand are out sourcing their software related project work mostly from India and China. A positive aspect in this context for India is that China’s skilled software technology Human Resources have reached a saturation point limiting their capability of taking more and more new projects. While India due to its prudent Human Resources planning and strategy, is still capable of getting the necessary Human Resources for the IT Projects. This is also making China less competitive as their capacities are now fully saturated with possibility of completing projects on time is reduced.
The Indian IT companies are on a hiring spree as a strategy of both Human resource as well as marketing. This will enable them to get more and more projects from international customers. And it’s not because companies have work for all those they are hiring. But because they think they will have work for all at some point in the next several months.
Companies are not just speculative in hiring. They are strategizing with pure logic. That is more and more companies from advanced economies are looking at India for execution of their software projects. The positive factor for them working with Indian IT companies is the higher profitability, faster delivery and assured quality. Indian software companies are very cooperative to rectify anything the client wants even after post payment.
According to analysts, the length of the bench period in IT companies is increasing, mostly in anticipation of big deals. Companies do not want to be in a situation where they have to scramble for people when a big deal actually fructifies, says a Human Resource expert. And since these companies are all cash rich, they don’t mind paying employees to just sit on the bench for some months. Current realistic situation is that the idle period for a specialist employee is negligible.
The size of the deals won by leading companies has also increased in the last 12 months. Companies have begun to bag deals in excess of $100 million. Analysts say some of these deals have forced domestic companies to recruit people in thousands at short notice. Such hurried hiring has resulted in employment of those not sufficiently qualified and candidates worming their way into reputed companies with fake CVs. Therefore, the focus is on the advance ramping up of the talent pool.
Sources say the waiting period too has become longer for those on the bench. Biggies like Infosys, Wipro, TCS, Satyam, IBM, and Accenture all have huge monthly and quarterly induction mandates. At no point of time do big players have an employee utilization ratio of over 70-75% and perhaps this may increase.
All new recruits, hired in thousands, need training. At any given point of time each company will have a long bench of non-billable employees, says an MD of a leading manpower and recruiting company..
- Size of reserve employees in IT companies on the rise.
- Companies do not want to scramble for people when they strike a big deal.
- Mid-level professionals spend on an average 2-6 months on the bench.
- IT giants do not have an employee utilization ratio of more than 70-75%.