IT cos to trim bench strength

India’s Information Technology (IT) industry, one of the largest employment generating sectors in the country (about 2.8 million), is preparing itself for continuing global economic uncertainties.

The industry appears to have drawn conclusions from the latest quarterly results posted by top IT companies that the months ahead would be a difficult period for selling software solutions and services.

The result: IT companies have already begun to go slow on new hiring. There are already indications that the companies are wary of replenishing their bench, the reserve pool of people who wait to move to the actual code-writing job after training.

Most of the bench is constituted by trainees who are hired through campus recruitment and are generally trained for four to six months before joining the main workforce.

The bench-strength of Infosys, for instance, fell 15.5 per cent from 28,931 employees in December 2011 to 25,041 in March 2012. In the case of HCL technologies, the bench shrunk from 27,691 to 25,251 employees during the same period – a 9.6 per cent drop.

Commenting on falling bench strength, an HCL spokesperson said that while employees have been moved from bench to “billable jobs”, the required number of people was not hired to replenish the bench.

“Given the uncertain future, we are likely to hire a lower number of freshers this year,” a mid-level HR executive at Infosys told Deccan Herald. This trend of going for a slimmer bench will have an adverse impact on aspiring techies in engineering colleges as the companies are likely to lower campus hiring.

The slower hiring plan by major players is a fallout of the declining rate of growth in profits for IT companies. Infosys, for example, saw a 2.4 per cent drop in net profit in the March 2012 quarter. Wipro, another IT giant, said that its net income was up by only 1.71 per cent in the latest quarter. Faced with uncertain growth prospects, pruning the bench strength appear to be the first logical step as a cost-cutting measure.

On an average, companies are now keeping around 10 per cent of employees on bench, half of what they normally keep in good times. Of course, Infosys also announced a wage-freeze last month.