India's Infosys Defers Hiring Plans

India's second-biggest software exporter, Infosys Technologies, has postponed its hiring plans for engineering graduates this year by almost six months, as the company seeks to cope with a lower demand for software services in its top markets of US and Europe.

Next fiscal, Infosys will be interviewing potential employees by visiting top engineering colleges during eighth semester, and not sixth semester as before.

"Earlier, we used to give offers an year in advance, even one-and-half years in advance. We have changed that," says Infosys board member and director, HR, TV Mohandas Pai, told ET .

Infosys have a target of hiring 25,000 employees this fiscal and based on this; it will be hiring another 9,000 employees till March, 2009. For the December quarter, Infosys and its subsidiaries added 5,597 employees on a gross basis, much lower than the previous quarter's 10,117. Net employee addition stood at 2,772 for the quarter.

One of the reasons for scrapping advance hiring is that the company is moving towards a leaner bench. According to Mr Pai, Infosys' current bench strength is at 20% of total employees, which is likely to come down to 10% and eventually stabilise between 10 and 15% in the coming fiscal. "Attrition is down because growth has come down and hence the need for bench is less. We are in the middle of an adjustment towards a leaner bench," he pointed out.

The IT major has also tightened performance management norms and has placed around 5% of its global workforce (roughly 5,000 out of a total staff strength of 100,000-plus ) under the scanner. Senior managers have been asked to give the lowest performance rating to the 'underperforming' 5% as a part of the company's consolidated relative ranking. Though rock-bottom rankings have been handed out earlier, this is the first time that Infosys has made it mandatory.

Pai said Infosys has been trying to make the organisational structure leaner and efficient resulting in some 100 positions being knocked off. "They are not being redeployed because these positions do not exist any longer. But it is a modest figure when compared to the overall numbers," he said.

Meanwhile, the company has reduced the variable part of the board members' compensation by 30% in the second quarter of the current fiscal and by an additional 20% in the third quarter.

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