Benched Employees = Benched Employment
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ndian IT services companies like Infosys, Wipro and Satyam claim to have added 100 plus clients in the last one year. Aggressive marketing efforts by these companies have ensured a steady flow of orders. Yet these companies while aggressively chasing volumes have either ordered a freeze on hiring or are recruiting at a painfully slow pace. An important indicator that will fuel hiring rates is the number of benched employees. For instance India's largest software major added 75 employees in the fourth quarter ending 31 March 2002 as compared to 109 employees in the last quarter. During the boom period, Indian IT companies confident of bagging onsite US projects fought bitter talent wars and lured techies with astronomical pay packages, at times without adequate assessment of technical skills or domain expertise. That 35 per cent of Infosys employees were on bench is a pointer to the industry's hiring policy. Trapped in a full-blown global recession, the flawed hiring model that favored numbers over real need and skills became a liability. Most companies resorted to layoffs, euphemistically disguised as performance related downsizing, but 30 per cent of their workforce is still on bench. Saddled with excessive manpower capacity in a recessionary market, and a need to keep costs low, the focus of Indian service majors is on scaling manpower utilisation rates without incurring additional staffing costs rather than hiring professionals on a large scale.
Recruitment is inversely proportionate to number of benched employees. The greater the number of benched employees, the bleaker the hiring outlook and vice versa. High bench is a primary reason for the depressed job market and withdrawal of offers to freshers. In the last one year, companies have focused on generating revenue through bettering workforce utilisation and deployment. BFL Memphis for adopted stringent bench reduction strategies. Manpower utilisation grew to 78 per cent in 2001 from a 57 per cent low in 2000. Other majors such as Infosys and Wipro recorded marginal success. Wipro, for instance, marginally improved utilisation rates to 71 per cent in the fourth quarter from 67 per cent in the third quarter. Now, the company has 2,800 employees on bench as compared to 3,502 in the previous quarter. Similarly, Infosys has improved utilisation rates to 72.4 per cent from 69.6 per cent in the previous quarter.
The bottomline is that 25 and 30 per cent of employees are on bench. The marginal improvement recorded by IT majors will result in selective hiring and companies are unlikely to open the floodgates to employment. Adding this the industry has recorded an historically all time low attrition rate. On account of the volatility in the job market skip-jump-hop played to perfection has ceased to be the techies favorite exercise. According to Nasscom, on an average, attrition rates in the domestic IT industry have settled at four per cent during the first nine months of the current financial year, as against 14 per cent in the corresponding nine months last year. TCS has already declared that it would be inducting fewer employees this year.
Companies have learnt their lessons from anticipatory hiring that led to high bench rates, Once considered to be an aberration, circumspect hiring will now constitute a normative practice. Firing will be skills rather than need based. This transalates unto demand for IT pros three plus years possessing domain expertise in niche technology verticals. For example, Wipro is on the lookout for project managers, functional experts in the area of package implementation and process consultants. Freshers hold on, just for a little longer.
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