The Hindu Business Line : `Head hunting to get tougher for other sectors'

It is going to be a tough job for the rest of the industry to recruit the people they are looking for, according to Mr Mohandas Pai, a member of the Board of Infosys Technologies.

Speaking recently after the publication of the third quarter results by the company, he said the entry level wages in the country were being influenced by only two industries — IT and financial services.

While the financial services sector might hire about 75,000 to 1-lakh people this year, the IT sector's head count will nearly be four times of that — about 3,80,000 people.

These two industries are driving up the demand for entry- level people and the IT sector was the largest hirer.

He said: "They get the best of the crop. And obviously competition is for the best of the best."

Salaries

Referring to the entry wages, he said: "We raised them from Rs 2,40,000 a year to Rs 2,70,000 a year for the next year. And this could go up by may be 10 per cent a year after that." If the entry-level salary is up by 10 per cent, one could possibly pay slightly more to the middle-level employees.

But he said: "Definitely going forward for the rest of the industry in this country, it is going to become very, very challenging to get more and more people in."

Mr Pai said: "Right now, the retail industry is hiring. They are not able to get people." The construction industry also was finding it difficult to get the manpower it wanted "because all engineers want to join IT."

The manufacturing industry was going to find it more difficult. He expected "right-skilling" to happen in the next 3 or 4 years. Most of the companies would start identifying people for the "right job at the right time" and not getting over-qualified people to do work. This would be in contrast to the current trend where Indian industry has been traditionally a place where over-qualified people are hired to do more mundane work, he said.

Mr Nandan Nilekani, CEO and MD, Infosys, observed that "IT spending will go up a few percentage points in this year" and was confident that the trend of Infosys' clients increasing the proportion of the spend on offshore and global sourcing would go up, which would be favourable to Infosys.

He said the risk perception of clients about offshoring had come down even further which was a positive sign for the future of the industry.

Responding to a query, Mr Kris Gopalakrishnan, COO, President and Joint MD, Infosys, said the company's "target for onsite versus offshore is to keep onsite between 30 and 35 per cent." It looked at services that have significant offshore content like infrastructure management, resting etc. Services such as consulting and package implementation were more onsite-centric. But overall, the ratio was maintained for operating margin.

Budgets

Mr. S.D. Shibulal, Director and Head-Worldwide Delivery and Sales, Infosys, commenting on the demand environment and growth areas in fiscal '08, said the customer feedback was that the budgets would remain stable or slightly up, may be by 2 to 3 per cent. He said: "There is definite indication" that their spend on outsourcing as well as offshoring was

"definitely on the rise." He did not see any slowdown at this point from Infosys' customer base.

Commenting on Finacle, a bank automation product of Infosys, Mr Mohandas Pai said the company would like "Finacle to grow faster than the rest of the business on a relative basis." It has seen openings in Europe and in South East Asia. The company has got a very large Singapore based bank as customer and was seeing opportunities in Russia, Eastern and Western Europe. There were "first turnings of the need for the Western banks in Europe to open up and look at change."

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