Indian IT firms continue hiring; foresee good innings

by p b    Jun 16, 2011

June 16, 2011
By Ashwani Mishra

The fear of a double-dip recession after a series of disturbing economic reports has not been a dampener for Indian IT firms who continue to be on a hiring spree.

After hiring 70,000 new employees last year, the outsourcing services unit of India’s largest IT service provider Tata Consultancy Services (TCS) plans to hire 60,000 workers this fiscal, indicating strong demand for its services. The company had 198,614 workers on 31st March this year as per the company’s annual reports.

Bangalore-based Infosys Technologies had a headcount of 130,820 employees at the end of 2010-11. It plans to hire 45,000 people by the end of 2011-12.

Mahindra Satyam too has a bright outlook on the hiring front as it plans to hire nearly 17,000 people this fiscal. It had a total headcount of around 30,000 last fiscal and this year’s hiring will take company’s headcount closer to its pre-crisis staff strength of 53,000.

Wipro Infotech plans to hire over 7,500 people for its India, West Asia and Africa business this year.

These trends suggest that though expectations from the economy may have declined, hiring sentiment still remains positive amongst Indian IT firms despite recent reports that suggest fears in the US slipping into a second recession owing to high unemployment rates and a slowdown in the GDP growth rate. The US is India’s biggest IT revenue geography and contributes to about 60 percent of its billings.

However, industry watchers and executives of Indian IT firms believe that even if this happens, they seem to be well prepared to handle such a crisis and for some companies any economic slowdown would create more opportunities for them.

“As long as there’s growth, you don’t want to leave business on the table. We are trying to ensure that the supply chain is large enough to meet our growth requirements in the future,” said Ajoyendra Mukherjee, Vice President, Human Resources, TCS.

In recent times, TCS managed to leverage its low cost IT work force successfully. The software major outpriced more expensive labour in developed countries to win large contracts with Deutsche Bank AG, Hilton Worldwide Inc and Air Liquide SA last fiscal year.

In addition, most of these companies are building their presence in emerging markets. For example, Infosys, which has 3,000 workers in China, plans to double its headcount within the next 18 months. TCS is opening offices in China and Latin America, and hiring locals to staff them.

These IT firms are also working towards finding revenue streams that don’t depend on headcount, such as intellectual property and cloud-computing platforms.

The IT sector is likely to witness a 20 percent increase in overall workforce levels in the coming year as this segment will continue to see double digit growth, according to the IT Employer Survey by - a job search portal for senior management professionals. The survey revealed that 76 percent of respondents expect the increase in headcount to be in the range of 11-15 percent whereas 36 percent expect this figure to be as much as 16-20 percent.

The IT hiring spree is also fueled by the expansion of Asia’s third-largest economy, China, which the International Monetary Fund said would grow by 8.2 percent this year after expanding 10.4 percent in the prior 12 months.