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IT companies grow without more employees
By siliconindia
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Tuesday, 02 September 2008, 16:25 IST
Chennai: The long carried notion that more workforce leads to more growth is believed to be struck out by some industry analysts, who opine that the IT sector, under the grip of the economic slowdown is inclined towards the maximum utilization of its employee base for growth.
However, there is a different trend adopted by the Indian companies who have taken a contrary route to it. Firms like TCS, Infosys, Satyam and HCL, has shown no in increase in their utilization graph, when the past quarters are considered. Moreover, the figures of optimum utilization of the workforce has infact slowed down, whereby the industry witness that from 77 percent in June 2007, it lowered to 61 percent in December 2007 and again it went went up to 77 percent for the quarter ended March 2008 followed by a marginal reduction to 76 percent for the period ended June 2008.
On the uncertain behaviour of the utilization rate, Infosys CEO, S. Gopalakrishnan opines, "Our utilisation in the last quarter was 73 percent. But we usually try to keep it between 78-80 percent. If it increases beyond that, it becomes uncomfortable from a customer service perspective. "It is not the only driver for growth. We are growing revenues by adding customers, winning deals and creating reusable components that can be used in multiple projects." Moreover, HCL's Global Head of Resource Mnagament, B Ravishankar points out that "There is a lag effect because the manpower addition happens in the first one or two quarters and might even go to the third quarter in certain companies. So, the utilisation is pretty low."
Thus, customer satisfaction comes to the forefront for the companies, as Ma Foi's CEO E Balaji says, "If companies have maximum utilisation, it might be inconvenient for customers. Customers need some kind of buffer because there are redundancy issues and emergencies that need more hands."
