TCS, Infosys and Wipro hiring staff as US demand grows
Date: 21-Jan-2010
MUMBAI:
Country's top three outsourcing companies are ramping up hiring and increasing
pay as global corporations, mainly from the US, send morework offshore to cut
costs as they emerge from the
downturn.
Tata Consultancy
Services, Infosys, and Wipro expanded their global workforces by an average of
5.1 per cent last quarter, together adding 16,701 employees, company documents
show _ an early sign that the Great Recession may ultimately benefit India as
cost-conscious companies outsource more work, just as they did after the dot-com
bust.
``Our expectations are
for flat to marginally stronger IT budgets with a greater share of offshore
spend,'' Wipro chairman Azim Premji said in a conference call Wednesday. ``Our
customers remain focused on cost
reduction.''
The employment
revival in India's outsourcing sector, which counts on the US for about 60 per
cent of global sales, comes as unemployment in the US stagnates around 10 per
cent _ near a 26-year high. Inflation-adjusted wages in the US last year fell
1.6 per cent, the biggest decline since
1990.
``When there is a
downturn the compulsion to control costs increases,'' said Dipen Shah, an
analyst at Mumbai's Kotak Securities. ``The demand for offshoring will increase.
That will play to the advantage of Indian IT
companies.''
He argues that the
cost savings from offshoring has helped US companies survive _ and that's good
for the American worker.
``You
might say jobs in the US are getting displaced by jobs in India, but because of
the value provided by Indian companies and lower costs, there are firms who are
able to keep their heads above water and continue to employ their existing
employees,'' he said.
TCS,
Infosys and Wipro, which can do everything from call center management and
claims processing to software development and consulting, all reported stronger
than expected results for the December quarter. Revenues and volumes grew,
signaling that the cost-cutting imperative of this last, lean year may be over
for India's $60 billion software services
industry.
After
about a year of hiring slowdowns, all three companies are sweetening
compensation as the fight to hold on to talented employees in India heats
up.
Infosys offered its
employees an average 8 per cent pay hike in October, their first raise since
April 2008, and executives said last week they are considering another raise to
combat rising attrition.
``The
market is heating up and we want to retain talent,'' human resources director
Mohandas Pai told
reporters.
Infosys last week
raised its gross hiring target for the second time this fiscal year, to 24,000
people.
Wipro executives said
they plan to offer staffers a raise in
February.
Tata Consultancy
Services has paid out 150 per cent of performance-lined pay _ which amount to 20
to 45 per cent of compensation _ for the last two quarters, and executives say
they will raise salaries next quarter, after a year-long wage
freeze.
As demand for workers
revives, employers have begun to worry about rising staff turnover. Employees
who sat tight during the downturn have started to shop around for better jobs
and better salaries.
Attrition
at Wipro jumped to 13.4 per cent last quarter, up from an average of 8.9 per
cent over the prior three quarters. Attrition at Infosys rose to 11.6 per cent
last quarter from 10.9 percent the prior quarter. Attrition at TCS has been
stable, at around 11.5 per cent, though executives say they expect that number
to rise.
Indian firms say they
are increasing global hiring, including in the US, as they pursue higher-end
work like consulting. But US employees remain a fraction of total
staff.
TCS, for example,
recently finished hiring 250 Americans for its Cincinnati campus, but US
employees still account for less than 0.5 percent of the company's global
workforce.
Posted By : Muskan Sharma
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