Infosys’ employee utilisation or the efficiency level in December quarter was the highest the company achieved in any quarter in the last 11 years. It increased every quarter in the last one year indicating the company is experiencing or expecting good growth, according to analysts.

However, with an employee utilisation of 82.7 per cent (excluding trainees) Infosys is behind leader Tata Consultancy Services’ 86.7 per cent.

Key driver

The higher utilisation, which was a key driver for margin expansion during the third quarter, and hiring concomitant with a decrease in attrition means that the company is experiencing growth, said an analyst.

HR Binod, EVP and Head - Talent Fulfillment Function, Infosys, said the company has been working towards renewing the existing services that it offers through better use of automation, Artificial Intelligence and innovation.

“We have also been investing in complementing and amplifying people’s ability with better technologies, improved efficiency and superior tools. In the newer areas, we have started engaging through strategic projects with clients in the area of Design Thinking, Big Data and Artificial Intelligence,” he told BusinessLine .

Frederic Giron, VP & Research Director, Forrester, said the increase in utilisation rate could be due to change of strategic direction driven by the company’s CEO and a positive sign that Infosys employees embrace the new strategy.

Infosys’ key success metric is moving in the right direction. The realised revenue per employee metric has started to move upward, albeit slightly. It will take some time before the changes in terms of education (different initiatives with Stanford), investments, in automation, software assets and new, higher value offerings have a meaningful impact on the revenue per head metric, Giron said.

According to Aditya Narayan Mishra, President, Staffing, Randstad India, a HR company, higher utilisation leads to higher employee engagement and this could reduce attrition. When someone is on the bench or on a long spell of training, one does not contribute in the short term, to any client project or assignment. This leads to disenchantment and eventually to disengagement of employees could trigger attrition.

Target levels

Pravin Rao, Chief Operating Officer, Infosys, told analysts while discussing the third quarter results that the company was targeting utilisation level of 80-82 per cent. Historically, it has been 78-80 per cent.

But on a quarterly basis there could be some volatility because of large influx of trainees from campuses. However, it is comfortable with operating at the current range and target is also around this range, he said.

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