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Quality, not quantity, is the problem for IT firms
By siliconindia
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Wednesday, 13 February 2008, 18:25 IST
Mumbai: As a way of offsetting the bad effect of the rupee appreciation, IT firms have begun increasingly focusing on quality by weeding out "non-performers," reported Business Standard.
Indian IT firms like Tata Consultancy Services and IBM (India) recently asked "non-performers" to leave the organization. TCS, in fact, even effected a marginal cut in the variable component of employees for not meeting targets set by the company.
"Some leading IT firms with their recent actions have demonstrated that there will be consequences for non-performers. A company that demonstrates consequence does not create insecurity. On the contrary, it creates an environment where people are far more appreciated for their performance and achievement as they become the focal point," says Monisha Advani, MD, Randstad India.
Analysts also feel that salary hikes this year will be lower than in past years. But a report by Emmay HR, a leading recruitment firm and a part of European Ranstad Group, states that IT salaries will go up by just 10 percent for 2008.
As IT firms are increasing their hiring in smaller towns and cities, they have to increase their utilization and productivity levels without losing employee goodwill.
Market experts feel that instead of hiring huge numbers companies should focus on retention. "India's problem is quantity, not quality. Three to four years back, the interview to hiring ratio was 1: 2 or 3. Today the ratio is 1:16. For one job there are at least 14 to 16 people to choose from. Sorting out the right candidate becomes a humongous task. If the skill sets are not right, it will affect the productivity of the company," asserts Partha Iyengar, Head Research India, Gartner.
The employee utilization rates of the top IT firms are around the range of 70 to 80 percent on an average, which means 20 to 30 percent lie unutilized.
