| Big bytes beckon
Calcutta, Nov. 2: Recruitment in the software sector is looking up and people are switching jobs more often. These may be signs that the sector is emerging from the slowdown that retarded its growth in the last two years.
Increased recruitment and a rising attrition rate are proof enough that the Indian software industry is finally coming out of the woods.
The attrition rate for the quarter ended June has already increased 2 to 5 per cent in companies like Infosys, Wipro and Satyam. This has resulted in increased recruitment from the open market and in campuses.
“Three key factors have contributed to the rise in recruitment — high utilisation, high volume growth and the entry of multinationals into the Indian scene,” said Pramode Sadarjoshi, human resource director at Cognizant Technology Solutions.
During the last quarter the top four listed companies — Infosys, Wipro, Cognizant and Satyam — have reported utilisation levels between 75 and 85 per cent. Because of stiffening prices, companies have resorted to cost optimisation measures, recruiting in increased utilisation to meet bottom-line numbers.
The increase in utilisation for the quarter ended June has gone up between 5 and 10 per cent on a sequential basis, which has reduced the bench buffer that these companies normally carry in anticipation of new customers and probable ramp-up.
Moreover, volume growth in the software industry is at an all-time high. Each of the companies has reported substantial growth in business volumes at lower or stable prices. On a sequential basis, the business volume growth went up 5 to 12 per cent.
The third reason for recruiting is the entry of multinationals like Accenture, IBM Global Services, Ernst & Young, Oracle and Xansa. These companies have indicated that they would cumulatively recruit more than 15,000 professionals in the next few quarters. In their initial years, MNCs recruit heavily at the lateral level to build their senior and middle management teams.
Cognizant has recruited over 1000 professionals in the last two quarters and plans to end the year with a headcount of nearly 9,000 professionals. Infosys has added 1,700 people recently, which is one of the largest additions in a single quarter. The company also plans to add around 5000 professionals for the Kerala and Pune development centres.
Wipro recruited 895 people while Satyam added 833 in the quarter ended June. This was the biggest addition for Satyam in the last 10 quarters and has also signalled a revival of their campus recruitment programme.