Even I have heard that Anil Ambani had visited Rcom and he has told the HR to slow down the recruitment process as the company has not acheived their targets.
Economic Times, dated 24 May 2008, Page 18- THE GATHERING STORMS.
The IT conundrum
The real bolt from the blue came from IBM which laid off 700 employees in India early this year. Majority of the employees sacked by the Big Blue were entry level trainee programmers who had put in around one year at IBM India’s global delivery business. Some days later, India's largest software company, TCS, too asked about 400 of its employees to quit. TCS said that this was part of its annual performance driven exercise. “With less than 500 employees resigning every year, this reduces less than 1% of the total employee strength,” the company says. The company had earlier cut down on its incentives to employees.
Hiring for additional bench strength is being deferred as companies resort to just-in-time approach. In fact, some companies like Hyderabad-based Satyam are doing away with bench altogether. Others are delaying joining dates of selected candidates by more than six months to a year — thus creating a 'virtual bench' for themselves. Companies however, gain by showing that they have stuck to their plan of hiring the targeted numbers. Moreover, they don't have to a pay a penny like in real benching where you have to feed an employee even if he is not working on a project. “If students have not received their offer letters this quarter, they will surely get them in the next,” says Pradeep Bahirwani, VP (resourcing) at Wipro. “This is a general phenomenon and we will surely hire them.” Infosys also reaffirms it commitments. Many IT firms are cross training employees to quickly deploy them in new processes as and when the need arises.
Companies don’t admit openly, but many have internally frozen all recruitment. IT & ITeS is said to be seeing a 50-60% reduction in number of assignments and projects compared to the situation six months back, say HR consultants. “Though the slowdown started becoming evident since the beginning of January and does present a danger, the real impact would be clear only by the last quarter of calendar 2008,” opines KPMG’s Ganesh Shermon.
Nasscom President Som Mittal also admits there is a slowdown: “There is definitely a slowdown in the industry and it has hurt the BPO companies most because of their dependence on the US for work, but we believe it is a shallow recession, not a deep one. The hiring is continuing, but its rate has slowed down.”
Mindtree chairman Ashok Soota, however, presents an optimistic view on the slowdown. He says that salaries in the IT industry were growing at 14-18% per annum for last many years and this created a disparity in the industry. “On one hand, it created a lack of talent in other sectors, on the other it put a pressure on the industry itself. So, a moderation in growth of salaries (which is happening currently) is good for the economy and for the health of the Indian IT industry. It will help India maintain its competitive edge.”
Infosys, however, says it will go ahead with its hiring plans. “We have already made campus offers for 18,000 this fiscal (FY2009), we assume about 80% of them will join. We will also hire about 6,000 laterals and 3,500 freshers,” says says TV Mohandas Pai, Infosys’ HRD head.
Numbers have come down in the low-end non value added services domain based on US off shoring. As a result, the industry is seeing moderated attrition levels ranging between 20% and 25%.
While hiring momentum has taken a hit, companies are also lowering the salary hikes. The hikes this year are about 12-13% compared to about 17-18% last year. The decline is partly due to an effort by the IT companies to save their margins in the wake of rising rupee and increasing taxes. Analysts say that there will be a salary correction this year. The companies are expected to hire at lower salaries and without sign-on bonuses.