The recent performance of Indian IT majors indicates quicker recovery from recession and stronger profit growth, analyses Dilip Maitra.Sridevi Gupta is on cloud nine. The 23-year old engineering graduate from Lucknow, working for an Information Technology (IT) company in Bangalore for the last two years as a software engineer, is also a little confused. She has three job offers – two from Indian operations of American companies and one from a top five Indian IT firm, but is finding it difficult to decide which one to accept. “All three are good offers, have good career prospects and have promised to send me abroad on projects,” she said, admitting that she is seeking advice from her seniors to zero-in on one. She, in fact, had more offers but has rejected those where the final gain in compensation package was less than 30 per cent than her present job.
Sridevi Gupta is not alone. Software engineers in India, with at least two to three years of experience, are in great demand, thanks to the revival in the fortunes of the Indian IT industry. Rising from the ripple effect of the global recession from 2008 till the middle of 2010 that adversely impacted hiring of engineers, Indian IT companies are now on a massive hiring spree. Salaries too are skyrocketing as companies are vying with each other to hire and retain the best brains.
Just sample the following: at the time of its recent announcement of quarter 3 (Q3) result, the country’s largest IT firm TCS said it will hire 62,000 to 65,000 people in the financial year 2010-11 as against the company’s earlier projection of 50,000 gross additions during the year. “With this, TCS’ headcount will be more than 200,000 at the end of March 2011,” said TCS Vice-President and Global Head Human Resources Ajoy Mukherjee at the recent result announcement press meet in Mumbai.
Plenty of jobs
The other big IT firms like Infosys Technologies, Cognizant Technology Solutions, Wipro, HCL Technologies etc are also ramping up their talent pool in a big way. In fact, the top five Indian IT companies are projected to hire between 1,60,000 and 1,80,000 people in the current financial year according to Infosys CEO Kris Gopalakrishnan.
In his recent address at a seminar, Gopalakrishnan said, “Growth is back and most companies are hiring in large numbers again. Such large scale hiring was last seen in 2007 when 4,00,000 new IT jobs were created.” However, job creation dropped to 1,50,000 in 2009 and to 1,00,000 in 2010. The IT industry as a whole will employ around 20 lakh people in the current year, he said.
The new job creation will ride on huge campus recruitment drive companies are planning. TCS, for example, plans to hire 37,000 engineers from engineering colleges in 2011-12, 13,000 more than the current financial. Similarly, nearly half of Cognizant’s planned hiring of 25,000 employees in 2011 will come from engineering colleges. Cognizant’s total employee strength has already crossed 1,00,000 in December 2010. IT companies are hiring freshers in droves to keep the overall employee cost low as freshers cost much less than lateral hiring of experienced people from other companies.
As poaching has returned with the growth, IT companies are also working out new plans to meet the challenge of retaining existing workforce. TCS, according to Mukherjee, has already introduced the system of quarterly promotions of deserving junior employees and from January this year has re-introduced the system of two cycles of promotions for the seniors, one in January and the next in July. Infosys, which has nearly 1,30,000 employees on its payroll, has already hiked salaries by 17 per cent this year and plans to give another wage hike in the next three months.