IT firms in hiring mode for bigger bench strength

Domestic IT firms are continuing their hiring juggernaut, but it is their bench strength or reserve employees that is growing at a higher rate than the overall pace of recruitments.

The total headcount of the Fab Five club of Indian IT space—TCS, Infosys, Wipro, Satyam Computer and HCL Technologies—has increased by nearly 38 per cent with the addition of more than 75,000 employees in the past one year.

At the same time, the bench strength of the top five players has grown at a higher rate of 48.5 per cent, with approximately 28,000 employees being added to their reserves during the same period.

The high levels of attrition and poaching prevalent in the technology sector has always forced companies to maintain a strong bench staff team with them—which enables them to cope with any sudden outgo of employees as well as in times of any major contract win that requires a bigger talent pool.

However, the trend has been further shifting toward maintaining a bigger bench strength in the recent past, an analysis of the total hiring patterns of the country's top five IT firms over the past one year shows.

The five companies had a whopping 2,73,468 employees on their payrolls at the end of the September-2006 quarter, out of which about 1,88,400 are estimated to be attached to certain job profiles—leaving over 85,000 at the benches.

This represents a sharp increase from an estimated bench strength of 57,300 employees a year ago, as on September 30, 2005.

The five companies are estimated to have maintained a bench size of 25-35 per cent of their total headcount in the latest quarter.

Infosys had an employee utilisation rate of 67.4 per cent in the September-2006 quarter, down from 71.4 per cent a year ago, while that of TCS rose to 75.2 per cent in 2006, from 75 per cent last year.

Satyam's utilisation rate stood at 64 per cent in the July-September period this year, while Wipro and HCL Tech are estimated to have utilisation rates of 65-70 per cent.

While TCS, the country's largest software exporter, is the largest employer (in this sector) with a total headcount of over 78,000 people, Infosys and Satyam have a larger bench strength as TCS also enjoys the lowest attrition rate, industry experts say.

The companies define the employee utilisation rate as the percentage of hours spent on billable projects versus the total number of hours worked. It is considerably lower for the domestic companies than global leaders, which averages around 80 per cent as compared to 65-70 per cent in India. — PTI