INFOSYS "Salary hike" & "New recruitment"

After a long delay in campus recruitments this year, IT company Infosys is likely to visit colleges for fresher hiring in December-January next year.

INFOSYS:

"Most probably we will be going to campuses in January after we assess the situation. Since there is a slowdown and if the situation improves, we will be going to campuses," Infosys CEO and Managing Director S Gopalakrishnan told reporters on the sidelines of a CII conference here.
About 18,000 candidates, selected from various campuses across the country last year, will soon join the company, he said.

Normally, the IT industry goes for campus recruitments a year in advance and this year due to slowdown, this process has been delayed, Gopalakrishnan, who is also CII Southern Region Deputy Chairman, said.
"There are signs of recovery in India, which is still a fast growing economy, while unemployment rates in the US are still going up. We believe by 2010 we will see the benefits. All factors point that the worst is behind us. If the trend continues, and with government stimulus package, recovery will start," he said.

On the decision of the US Government to restrict outsourcing, he said it was a cause for concern. The industry is trying to monitor the situation and work with the Government and  industry associations like the CII and NASSCOM, he said.
Asked if the IT industry would focus o n other markets, he said, "Our best markets will continue to be the US and Europe

SALARY HIKE:

Infosys Technologies will offer up to 17% salary hikes for over 100,000 of its employees this year, as the company seeks to retain staff and also attract new recruits in the year when most of its rivals are expected to lock horns in the war for talent.

With top customers, such as General Electric, British Telecom and Microsoft, expected to send more projects offshore to lower their operational costs by half, multinational rivals, such as IBM and Accenture, apart from Indian offshoring firms including Infosys, will have to deal with double-digit attrition rates, and ensure uninterrupted delivery of services. “There will be a war for talent and it’s one of our biggest worries in the medium-to short-term,” said S Gopalakrishnan, chief executive of Infosys.

This year, India’s $60-billion outsourcing industry is expected to hire around 150,000 new staff in order to cope with higher demand for offshore outsourcing.

Indeed, nearly 4,500 Infosys employees decided to quit the company after introduction of a new employee rating system called iRace — a new grading programme started by Infosys to grade employees last year across different levels according to their roles. Of these, nearly 2,500 staff were given promotion, while the remaining were retained at the same level.

The salary hike will translate into $135 million, as a cost for the company, and also affect its profitability by 3%. “This is the largest-ever salary hike given by any company in the IT industry,” said TV Mohandas Pai, V-P, human resources, Infosys. The company, which began the FY10 with no salary increases due to the recession offered an 8-10% mid-term increase in salary during October last year. The latest salary increase will be effective from April, while senior managers will be getting the same in July.

Besides iRace, the reason behind this hike is the improving market conditions and search for talent. Despite the improving conditions, employees in many companies are holding on to salary levels of 1-2 years ago. According to a senior company official, this salary increase is also a message to its competitors who are indulging in “irrational pricing” and would now be forced to look at salary increases.

For its onshore employees, Infosys plans to give a 2-3% raise in salary. At the end of FY10, the total number of employees in Infosys stood at 1,13,796 and made a gross addition of 27,639 during the fiscal. For FY11, Infosys plans to hire 30,000 people, of which 19,000 would be trainees.

However, the attrition rate of Infosys went up during the fourth quarter of FY10 touching 13.4%, against 11.6% in the third quarter.

However, about 3% of the 13.4% was involuntary attrition of trainees, which Infosys claims were unable to pass its ‘benchmarking’ tests. According to Mr Pai, the company expects the attrition rate to stabilise in the next six months.

According to Mr Pai, the remaining impacted employees can expect promotion during the next promotion cycle in October. The iRace programme created a furore in the organisation, on blogs, in town hall meetings and even on websites. The company is now trying to pacify those employees, and plans to promote them too. “Our learning has been that managers need to communicate with employees better. For an employee, it’s the manager who represents the company to him,” said Mr Pai.