The Hindu Business Line : IT-BPO headcount may stay nearly constant in this fiscal

New Delhi/Chennai, April 14 The overall manpower strength of the Indian IT and BPO industry for FY10 could remain “nearly constant” or be a shade lower than 2.23 million estimated for FY09, according to some top industry officials.

When contacted, Mr TV Mohandas Pai, head of HR, Infosys Technologies, recently told Business Line that he expected the gross hiring by IT and BPO industry in the current fiscal to be nearly 100,000. However, despite the gross hirings, as many as 200,000 workers may potentially move out of the system, primarily on account of attrition. As many as 40,000 industry professionals could face the axe due to non-performance issues.

“Nearly 1,60,000 people are likely to move out of the industry on account of natural attrition, that is people leaving their jobs to pursue higher studies (MBA or M Tech) or those dropping out due to other factors such as medical, marriage or even night shifts in the case of the BPO industry. In my opinion, about 40,000 professionals would be those who are out-placed due to poor performance,” he said.

It is crucial for the Government to open up public sector employment to make up for the shortfall in new jobs in FY10, Mr Pai pointed out.

The Nasscom President, Mr Som Mittal, agreed that in effect, the employee population could remain “more or less constant” in FY10, if the industry growth level is in single digits.

“I tend to agree that the overall headcount figure may not change upwards or downwards in any significant manner, if the growth rate is in single digit. But, it is not as if new jobs will not get created. It means that there will be other factors at play such as attrition, raising of productivity and reduction in bench – all in all, it will enable players to manage with almost similar numbers…But, in case, the growth revives, then companies will again start hiring in anticipation,” Mr Mittal said, adding that he expected to see some growth during the second half.

Mr Mittal, however, felt that even those employees who are relieved on performance related issues tend to remain within the industry. “A non-performer for one company may not be seen as a non-performer in another role,” he said.

Interestingly, industry captains feel that the recent slowing in headcount addition is a reflection of the slower revenue growth, rather than the industry’s attempts to de-link revenue growth and manpower growth through investments in products or reusable tools. According to Mr Pratik Kumar, Executive Vice-President, Wipro Ltd, “also, current recruitment would be based on the outlook for the coming year. The push would be on more utilisation of existing employees.”

In addition, clients are asking tough questions in today’s environment, trying to delink size of projects from manpower growth. Mr E. Balaji CEO, Ma Foi, a manpower recruitment firm, said, “Senior managers sitting in New York or in London have always felt discomfort at mass recruitment.” He says that during a big-time recession, business models undergo a change. “Products may vanish. Careers may undergo a change, especially in investment banking in today’s scenario.”

According to Nasscom, the direct employment in the IT services and BPO segment is expected to reach 2.23 million by the end of FY2009, up from two million in the previous year. At this point, even the FY09 numbers are merely estimates and Nasscom will announce the actual exports and manpower growth attained in FY09, sometime in June. While announcing the annual performance, Nasscom also offers an insight to estimates for the next year.

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