Monday, March 31, 2008

HR Firms Confirm 60% Drop in IT Hires

A new reality is dawning over India's much-pampered software programmer community.

A sharp fall in the ego index has been noticed in Bangalore, indicated by the glaring drop in cocky no-show behavior (candidates not showing up at a new job despite accepting the offer), which has fallen to 10-20% levels from 50-60% earlier.

IT recruitments to drop by at least 60%, informed Kris Lakshmikanth, CEO & managing director of Head Hunters India. This was also confirmed by Vishal Chibber, head of recruitment firm Kelly Services, who added that software companies are now trying to wriggle out of lucrative contracts committed to freshers. Pay rises may be just 5-7%, in keeping with the inflation, instead of the 14-15% last year.

Sampath Shetty, vice president of TeamLease Services, also confirmed the 60 percent drop in IT hiring. He said his company had expected an increase in the March-April timeframe, but there is no clarity from customers yet.

Balaji, who is CEO of Ma Foi Consultants said IT firms are not offering 50-60% salary hikes anymore. Neither are buyout notices paid for. If a software person cannot join, he is simply replaced by someone who can.

India's software folks are now changing track and clinging to their existing jobs, even working longer hours and over weekends. Bench utilitzation (including trainees) is up at 85%, climbing from 70% last year. At Infosys, it is up at 69.4% from 67.5% last year, and at Satyam, it is up at 78.21% from 68.49% last year.

Further, no company is accepting poor performance as a "motivation issue" anymore. Gone are the days when HR spent thousands of rupees training and retraining the "tails" -- today, they are simply being sacked.

As one industry observer quipped, "The joint-smoking "hey man" kind of programmer chilling on Church Street is simply the first one to be booted out. He's kind of person who has overdosed on a Baleno. There are going to be a lot of cars for sale in Bangalore soon."

Read the Hindu Business Line story here





Consider how the crisis has unfolded over the past eighteen months. The proximate cause is to be found in the housing bubble or more exactly in the excesses of the subprime mortgage market. The longer a double-digit rise in house prices lasted, the more lax the lending practices became. In the end, people could borrow 100 percent of inflated house prices with no money down. Insiders referred to subprime loans as ninja loans—no income, no job, no questions asked. - George Soros in latest book

everything’s going up, there’s a feelgood factor and people tell each other how much their houses are going up at dinner parties,” says Professor Mark Stephens of York University’s Centre for Housing Policy. “Then the music stops, as it always does.”

year, Japan was a more attractive market to put money in. If you look at the US, we can now get an internal rate of return of 25% there, so why would anyone want to come to India?” - a senior executive at an international financial services group, who did not wish to be named.

people told us house prices never go down on a national level, and that there had never been a default of an investment-grade-rated mortgage bond, "Mortgage experts were too caught up." - John Paulson, trader, who bet against subprime market and made $15 billion.

most puzzling are the real-estate projects of Parsvnath. Just have a look at the Pride Asia project near Chandigarh. They are asking almost US $300K-$350 K dollars for 2 bed room apartments. They have Villas in this project that costs more than US $1.5 million dollars. It is true that some people in India have that kind of money in India. However most of their wealth is black money and that can not be used to buy these properties. Obviously, these projects have been launched keeping NRIs in mind. - Sanjeev, comment from another site

Desai, aka Bani, the star of Balalji Telefilms's soap, Kasam Se, has been house hunting for over a year. She had almost closed a 2-BHK deal last year for Rs 1.5 crore in a Oberoi Constructions' building located at Andheri, Mumbai, but when she went back to confirm it, she was asked to cough up Rs 2.61 crore. Since then, she is still house hunting. - Mumbai Mirror


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