Monday, April 27, 2009

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Indian IT firms try to reduce or push out benched staff

Keeping a reserve pool of staff is making less sense to information technology (IT) firms. A large bench (people without assigned work) is generally considered to be an asset, a tool to control attrition. But with the global slowdown hitting the sector, it is proving to be a liability.

This is forcing companies to devise ways to reduce bench strength, by posting in other areas and paying them less till they become productive assets.

India’s second-largest software company Infosys Technologies, for instance, has given its bench employees a choice, wherein they can work with the company’s Business Process Outsourcing (BPO) arm with the same salary and perks. It is also encouraging benched employees to apply for projects using the Intranet portal — — the failure of which may also lead to job loss. In some companies, techies on the bench are being encouraged to find projects on their own, internally, by hardselling themselves.

Excluding trainees, Infosys officially agrees their bench strength is 3,500-4,000 people. This will increase once the 8,000 people undergoing training join in the next two months. Besides, the company has issued joining letters to around 16,000 campus recruits, who were given offers last year. To mitigate such pressures, Infosys has already announced an increase in the current training duration from the three months to almost six months.

Wipro has already given an option to its bench resources to work for only two days a week and take a 50 per cent cut in their salary. Close to 1,000 employees, including senior managers and project managers, have availed of this offer so far, according to the company. In some cases, the company is encouraging the bench resources, including managers, to come to office 10 days a month at a stretch and take a cut in salary.

The company is also encouraging some employees to take a sabbatical for six months or more to go for higher studies. About 10-12 per cent of Wipro’s employees with the IT services business are said to be on the bench now. “We want to keep our efficiency level fairly high. We don’t want to create laxity there. It is not just the question of a bad economic situation, but working habits, too, get spoiled by doing so. It is better to keep a tight bench and keep everybody fairly engaged,” says Girish Paranjpe, Joint CEO of Wipro’s IT business.

HCL Technologies has urged its benched employees to take a pay cut of 25 per cent. It is also asking them to find opportunities inside the company on their own, failing which they may lose their jobs.

TCS, India’s largest IT firm, which added 32,000 employees last financial year, including close to 25,000 freshers, says it is very important to ensure utilisation is at least at 74 per cent, though the company claims the increasing bench is not much of a problem. It, however, says the plan is to increase the training period of new recruits.

“The idea is to train people better, utilise people better and also help them gain experience. The normal training period is the same, but in addition to that we will give more training, if there is an additional period for which we have to keep them on the bench. We will definitely use them either in development of some of the assets (IT solutions, platforms) or we will give them some training. It can be an additional two or three months. It will differ on a case by case basis,” said N Chandrasekaran, COO and executive director of India’s largest IT firm.

Moreover, while the physical bench had always been there, mid-sized IT firms like Hexaware and Mastek have coined the word ‘virtual desk’ to define a certain section of their unutilised resources who will be enjoying lesser privileges and perks. Hexaware had said the virtual bench has about 350 employees who will get about half their basic salary.

The ratio of unutilised resources is estimated to have increased by over 4-6 per cent during the past four to five months. Sabyasachi Satpathy, co-founder and director of Mindplex Consulting, concludes: “As the new deal pipeline starts drying up and existing clients tightening scope/volume, outsourcing vendors are facing an increasing pressure in managing resource utilisation levels. It will be crucial to have a balanced bench ratio to meet shareholder expectation (margin impact), as also staff adequately for future projects.”
Courtesy: BusinessStandard


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