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IT companies to focus on growth in employee turn over
By siliconindia
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Monday, 07 May 2007, 19:30 IST
New Delhi/ Pune: Deviating from the traditional business model, both small and large IT companies are focusing on higher revenue per employee rather than adding more man power with productivity, says an Economic Times report. The main objective of this exercise is to de-link manpower growth from revenue growth.
This shift will result in dismantling of the linear relationship between manpower and revenue growth. It would in turn, mean a progressive shift in business models or result in a mix of multiple business models and products. And this will not result in reduction of IT professionals in the near term; it will result in more innovation, higher productivity and better use of resources in the medium term.
ÂInfosys is looking at the business model that brings in higher per capita revenue and de-link revenue growth from manpower growth, V Balakrishnan, the companyÂs CFO told ET. According to IT industry experts, the new models for companies could be high-end services like consulting or execution of turnkey projects where margins are higher, R&D services or even IP products and platform portfolio.
Presently, the revenue per employee in the domestic industry is much less compared to global players ranging from 
25 Lakh to 40 lakh, while the global companies revenues ranges between, 70 lakh to 130 lakh. To change the linear manpower and revenue growth, the Indian IT majors who provide services off shore as well as onshore have to move up the in the value chain.
25 Lakh to 40 lakh, while the global companies revenues ranges between, 70 lakh to 130 lakh. To change the linear manpower and revenue growth, the Indian IT majors who provide services off shore as well as onshore have to move up the in the value chain.