For the first time, Infosys has not stated its annual hiring plans and has slowed hiring to improve profitability.
The software exporter will onboard 10,000 engineering graduates by September after which it will hire as per business needs. This is contrary to the approach taken by the industry, which hires people in advance and deploys them in projects as and when they come up.
This piling up is a cause of worry for Infosys and its peers. While TCS, Wipro and others will report their quarterly numbers next week, on an average, around 44,000 employees were not billed at the end of 2012. Infosys, which is increasing the number of employees billed – utilisation, in industry parlance – has a large number of unbillable employees. In the quarter ended March, Infosys had 113,794 people who were unbilled, which is an increase of 2,032 employees when compared to the December quarter.
Attrition high
Despite this, attrition in the company is high. In the last 12 months it rose by 1.6 per cent to 16.3 per cent for the fourth quarter, compared with 15.1 per cent in the December quarter. High attrition in the third quarter is a negative for the company, according to Gautam Sinha Roy, VP – Equities, Motilal Oswal Securities. Competitors TCS and HCL have better utilisation at 72.1 per cent and 75.6 per cent in the December quarter. Higher utilisation for Infosys would mean better profitability in the range of 0.4 to 0.45 per cent, say company officials.
No news of pay hikes
While freshers face uncertainty, for the existing 1,56,688 employees, there is no news of any salary hikes. Newly appointed HR head Srikantan Moorthy on the sidelines said that while promotions will happen in April as expected, the numbers are yet to be finalised as salary structures are getting altered.
According to industry watchers, the hiring will be in certain strategic areas and follow a ‘just-in-time’ strategy in the future.