Anshuman Daga

BANGALORE: India's software companies, which hit the clutch this year after a slowdown hit once-heady recruitment, are getting into gear to hire again. This time, they are doing it steadily and carefully.

Until last year, retaining staff and hiring more was the problem, as anticipated demand drove recruitment. After recovering from the initial shock of a worldwide downturn in technology spending, India's high-profile software industry is discovering new opportunities arising from its cost advantage as global customers look for ways to prune spending.

Industry officials told Reuters that India's top five software firms which together employ some 50,000 software workers, plan to add about 9,000 staff in 2001/02 (April-March). The industry's total workforce is about 250,000.

The spectre of layoffs and job freezes rose as firms counted the wounds from the swift slowdown, but job cuts have been very small compared to the United States, which accounts for 60 per cent of India's software exports. On the other hand, talk of sourcing more software from India has gone up.

"I don't think there has been any large scale lay-offs because the fact is that the sector is still growing but at a slower pace than the last few years," Sudip Banerjee, chief executive-operations in Wipro Ltd., told Reuters.

Globally, more than 400,000 job cuts have been announced in the last few months as companies battle with plunging demand. Indian software firms work at less than half the cost charged by US counterparts, industry experts say.

India's software industry, which serves about 200 of the top Fortune 500 giants, saw exports grow by about 50 per cent ever year from $734 million in 1995/96. This year, exports are forecast to grow by 40-45 per cent to $8.5-$9.0 billion.

"We are still hiring but only selectively and carefully," said R. Vidyasagar, head of human resources at privately-held financial software firm i-flex Solutions Ltd. I-flex is braving sluggish markets with a planned listing in the coming months.

Just-in-time hiring
Human resource executives say they are more inclined to hire people with at least four to six years experience, with specific skill sets or industry expertise. The old habit of just looking for some basic programming skills has evaporated.

Data warehousing, embedded software and systems integration are some of the hottest categories where Indian information technology companies are dishing out job offers.

"We have still not reached the stage where the pink slip (redundancy) culture is the norm of the day in the industry," said Vidyasagar. His firm plans to end 2001/02 with a 2,200-strong workforce, up from about 1,450 in January this year. The emphasis is more on cutting back on entry level staff and low-productivity jobs, industry experts said. Underperformers are getting the axe, but job losses simply to prune staff are rare.

From building up "human inventories" in advance in anticipation of higher business from global firms, industry leaders are now talking of "just-in-time" hiring.

Managers have one problem less, as retaining staff is easier. "Overall, there is a wait-and-watch approach in the industry. Also, people are really not thinking of jumping ship unlike perhaps a year ago," said Wipro's Banerjee.

Hema Ravichandar, head of human resources at Infosys Technologies Ltd., India's second-largest software exporter, said compensation was also being linked to a company's overall performance. Just a year ago, mid-year pay rises and juicy stock options were the order of the day. The supply of workers has also gone up. "We have come to ground level from 30,000 feet," Vidyasagar said.

(C) Reuters Limited 2001.