The Hindu Business Line : Net manpower addition in IT muted

Net manpower addition for the top six Indian IT services companies seems muted in the two quarters ending September. While nobody is yet shouting out from the rooftops that this is linked to a possible IT spending slowdown in the US economy, Indian IT services companies have clarified time and again that there is no sign of alarm visible in the US, for now.

Barring TCS, these companies have either added around the same number, or added a lesser number, for these two quarters compared to the same period the last year.

Infosys

Infosys, which saw the sharpest drop in number of people added, has clarified that candidates who were to join in September did so in October. Mr T.V. Mohandas Pai, Director-Human Resources, had earlier said in a call with analysts that this stemmed from the lack of training capacity in the company’s Mysore training facility. “This was due to non-availability of cement to complete the buildings,” he said.

Cognizant

Cognizant, which saw a drop of 28 per cent in the numbers added, said it had been increasing global utilisation rates to offset the rising rupee. Its utilisation rates have gone up from 61 per cent end of January this year to 65 per cent end of September. As a result, says Mr R. Chandrasekaran, President and Managing Director, Cognizant, “We have back-loaded our net hiring a little bit to approximately 6,000 professionals in the quarter ending December, while adding a net of approximately 10,000 professionals in the first three quarters.”

Asked if it were not too ambitious to add 6,000 people in one quarter, a spokesperson said that the recruiting and training engines were in place. Also, he said, compared to the about 4,500 it added in the quarter ending December 2006, it may not be a challenge to add 6,000 people in the quarter ending December “considering that we add approximately a gross of about 500 people a week.”

Small companies

Smaller companies too show a trend of acquiring aggressively in the middle two quarters ending in December of the fiscal year. iGate Global Solutions, which initially estimated that it would add about 1,000 through the fiscal, has seen its manpower count remain flat in the June and September quarters. However, in the next two quarters ending March 2008, it hopes to add between 600 and 800 people.

Says Dr Srinivas Kandula, Global Head-HR, iGATE Global Solutions, “Some colleges declare results as late as August and students ask for a month before joining. In addition, we will hire at least 300 employees with experience. Performance reviews take place in the June quarter in most companies. Based on that, employees start looking out in the September quarter. Hence, most of the hiring happens in December quarter.

Actuals vs estimates

Now for a look at the actual numbers added versus the estimates at the beginning of the year. Infosys’ gross addition (that is, total recruited less the number leaving the company’s rolls) is to be 30,000.

Satyam is to add between 16,000 and 17,000 this year, while TCS has indicated that this year, it would recruit at least the number it did for last year, i.e., 32,500. Cognizant, which gives net addition figures, says it would increase its headcount by 16,200 for the year ending December.

Interestingly, parts of the media today quoted Mr S. Ramadorai, CEO of TCS, as saying that the US sub-prime crisis has not affected the company. Additionally, he said, salaries are flattening while attrition rates are coming down, signifying the maturity in the industry.