Increasing employee base: Challenge to IT firms

As IT industry is witnessing a boom and job seekers are hoping for a bright future. Indian IT firms are increasing their employee base significantly. The recruitment drive of these companies is so aggressive that analysts believe they can even beat few public sector companies.

The good recruitment trend clearly indicates the positive economy of companies. But, with success comes the responsibility. Besides facing challenge of curbing operational costs and increasing revenues, the rising headcounts is another task that companies have to deal with effectively.

Recently, India’s largest IT services company, Tata Consultancy Services (TCS) have set an employee base (gross) target of 250,000 by the end of 2011-12. Infosys Technologies, which has seen a decrease in numbers, still has a workforce of 130,820 employees at the end of 2010-11 and is expecting to employ 45,000 people by the end of 2011-12.

As companies are speeding towards double digit growth, the rise in hiring is an impromptu step. So basically, improving domestic and overseas business is responsible for the high hiring numbers. But, the liability doesn’t end here for the companies who are on hiring spree.

Managing such a vast employee base is a demanding task. Forecasters have viewed that if large players like Infosys, TCS and Wipro continue to deliver the same productivity levels then by next decade their employee base will touch close to million.

Are companies blindly following the hiring trend? Experts have asserted that Indian IT services companies’ needs to be scrutinized to determine how employee headcount affects revenue and productivity. This is imperative, considering that employee costs in these companies could account for 45-60 per cent of the total costs.

Big players like TCS have agreed that they are hiring huge in numbers, but pointed that the structure of their company helps them to manage gigantic recruitments. TCS recently remodelled its management and created various business units within the company. Then, growth of each business unit is assessed. This helps the company understand the areas each one of those needs to focus on. And thereon, company’s overall growth rate and the demand scenario have been taken into account. So, overall it is lengthy process.

Infosys too admits that hiring an employee is the time consuming job. An insider form the company revealed that an employee has to sign 25 papers when he joins the organisation. The company has also outsourced its hiring activities.

However, experts feel that as the industry grows, the sector will face a talent crunch.

Employees are the most essential assets of an organisation and managing the assets effectively is crucial for the growth of any organisation.