Firms with lower employee utilization will do better
By
siliconindia | Thursday, 01 April 2010, 16:42 IST
Chennai: For the companies, who maintain lower employee utilization it doesn't need much effort to survive, reveals a report. A strong pick up in lateral hiring and concomitant wage inflation will hit IT companies that struggled last year in the wake of global recession
IT sector outlook for Q4 2009-10, released by Prabhudas Lilladher on Wednesday, says: "We believe that though fresh graduates are available for hiring, which contributes 20-25 per cent of employee strength, the strong pickup in lateral hiring would be followed by wage inflation. We expect wage inflation to trouble Indian IT companies in the next two to three quarters."
After the slow down in the first two quarters of 2009-10, the Indian IT industry bounced back in the third quarter. Major companies have also announced recruitment plans and salary hikes. Companies like TCS, Infosys, Accenture, Cognizant and IBM are planning to hire nearly 92,000 employees in the coming quarters.
According to the Prabhudas Lilladhar report, major firms like Infosys, Patni, and MindTree are said to be better off in the coming quarters because they have been maintaining lower employee utilisation rates below 75 percent.
"In the wake of increased attrition, companies that have been maintaining lower utilisation levels are comparatively safer," said Venkatesan Varadarajan, Vice President and Centre Head of MindTree, Chennai.