IT firms shrink benches to single digit

By siliconindia   |   Wednesday, 09 June 2010, 03:11 Hrs   |    5 Comments
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IT firms shrink benches to single digit
Bangalore: Earlier companies used to keep 15 percent to 20 percent employees on bench. But now after recession the companies have reduced their bench size as it is detrimental to their profit. Now the domestic and MNC tech firms have only 5 percent of their employees sitting on benches, according to a report by Mini Joseph Tejaswi of Times Business. "The bench size is an indicator of a company's ability to manage talent holistically. It is a reflection of its ability to forecast and assess the pipeline properly. Most firms failed in these fronts and therefore they all incurred huge bench related losses," opined K Jayshankar, Managing Director of Pune-based strategic consulting and training firm Empowered Systems. IT and ITeS firms in India collectively had about 4 to 5 lakh people on benches when recession hit the industry. Once the business hit a negative spiral, organizations had to resort to flab-cutting. "Being unbillable bodies, talent on benches became the easy victim of the environment. This has broken almost all benches in the system," said V G Nirupama, Managing Director, AdAstra. The recession made companies think smart, says B S Murthy, CEO ofLeadershipCapital. "They are now trying to increase their visibility and access into the virtual talentscape, so that they can hire as soon as the demand arises," he said. Despite the substantial fall in bench size, many leading IT firms continue to report utilization rates of no more than 80 percent. Does this mean some 20 percent of their people are 'benched'? The bench has an implication on the utilization rate, "but a zero bench need not mean 100 percent utilisation", said Amit Bansal, CEO of PurpleLeap, an entry level talent management firm. According to him, one reason for low utilization despite the reduction in bench is that lot of clients reduced the number of workers working on their requirements. This reduced the utilization number but those people did not come to the bench, but continued working on the projects.