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

Posted by Eclectic Investor at 3:41 PM  

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