Wipro too denies layoffs

MUMBAI: Employees with IT firms are spooked by fear of layoffs as demand for IT services slows down.


At some of the top IT firms, talk of layoffs among employees and repeated management clarifications are becoming a regular feature. The latest layoff buzz is coming from Wipro, the country’s third largest IT exporter.

Some employees believe the firm may ask as many as 3,000 to leave because of performance related issues.

Wipro’s HR head-Pratik Kumar has categorically denied this. “This is not true. We have no such plans,” he told ET, in response to a query on whether 3,000 employees with 2 and 2+ years of experience were under review for performance-related issues and could be asked to leave by December.

Wipro is not an isolated case. Recently, there was talk of Satyam laying off around 4,000 people and following reports in the media to that effect, the chairman Ramalinga Raju had sent a mail to all employees re-assuring them that prospects for the firm were bright and urging them not to pay attention to speculation in blogs and the media.

“The mail was sent out to reassure employees because there have been reports in the media that Satyam was handing out pink slips,” a Satyam spokesperson told ET.

India’s biggest IT exporter, Tata Consultancy Services, which has historically had the lowest attrition in the industry at around 10 per cent, reported a spike in its attrition rates to 13 per cent in its second-quarter figures.

The company’s global head-HR, Ajoyendra Mukherjee, was at pains to explain that the spike was not caused by any layoffs but because of certain BPO staffers it took on for a specific project.

“Normally, these staffers are taken on a temporary basis but because of the labour laws in South America we had to take them on our payroll. Th
ey were recruited for the duration of the project. Since attrition is calculated for the last 12 months, you will see a higher percentage even in the third,” he said.

At Wipro, the layoff ‘news’, which has been spreading through the informal grapevine, coincides with the performance-rating exercise the company does twice a year.

“These are not freshers but employees who have been given a ‘below expectations’ rating in more than a couple of appraisals. This is different from what was reported in the media in September--those people are still under review and the actual number is not 3,000 but closer to 1,000,” said one employee. A project manager with one of teams also had similar views.

Involuntary attrition rose to 2.5 per cent in the September quarter for Wipro. In the preceding six quarters, this figure was less than 1 per cent.

“Involuntary attrition of 2.5 per cent is due to performance and other aspects. Our process is very transparent, and employees are aware of where they stand. This is an exercise we do every year,” Kumar said.

To date, there have been fewer layoff rumours about Infosys but the company hasn’t been entirely insulated. Shortly after its Q2 results, there were rumours that it had asked 250-300 people to resign following the discontinuation or scaling down of a BPO project.

However, the top management denied the reports.

Courtesy: Times of India

Infy, TCS still upbeat on hiring

BANGALORE: Though the Indian IT services industry has been cautious in its forecast for growth, two of the country’s top three software exporter
s are not taking the foot off the pedal when it comes to hiring fresh engineering graduates for 2009-10.

Tata Consultancy Services (TCS), the country’s largest software company, has made 24,789 technical campus offers for 2009-10, a 13 per cent increase over its intake of 22,000 for the current fiscal. Its closest rival, Infosys Technologies, will be making around 20,000 offers, an 18 per cent increase. However, No 3 Wipro is lowering the number of campus hires to 8,000 from 14,000.

Typically, IT firms offer jobs to engineering students a year in advance, when they have completed the third year of their course.

Though there has been apprehension that a number of IT companies would not honour their hiring commitments to students, there has been no evidence yet of companies going back on their offers. But there have been reports of some firms postponing joining dates.

“Last year, we made over 22,000 technical campus offers for FY09 employees. There is no delay in joining dates and employee additions are on course with our plans to add 30,000-35, 000 people in FY09,” TCS VP and head (global HR) Ajoy Mukherjee said. Infosys has said it will hire 25,000 staff on a gross basis this fiscal.

Adecco India CEO Sudhakar Balakrishnan says it is too early to comment on how campus hiring by the IT industry will be affected because there is no clarity on the impact of the current economic slowdown.

Courtesy: Times of India

Meltdown: Temping firms rejoice

NEW DELHI: Global financial crisis and the consequent knee-jerk reaction in India--retrenchment and layoffs have given temping firms a reason to
smile.

Amidst layoffs and cautious hiring as means of cost cutting, temporary and contract staffing is fast emerging as a lucrative option. The demand for temporary staff across sectors has been steadily growing at 25-30 per cent over the last six months.

India Inc is increasingly realising that contract or temporary staffing can help reduce cost of hiring, absorption, managing people and compliance. Currently, the top five employers in India account for nearly 1.20 lakh temporary employees in the organised sector.

“With the global crisis affecting almost all sectors in India, companies are now more keen on hiring temporary and sub-contracted staff,” says Kelly Services India country general manager Rajiv Mehrotra.

According to the industry estimates, organisations are saving anywhere between 20-40 per cent in their total wage bills by opting for temp staffing. It is also helping companies to identify requisite talent with specific skills as per their own requirements.

Most of the temp hiring is done by sectors which engage in numerous short-duration projects. Sectors like IT, ITeS, BFSI, aviation, hospitality, manufacturing and infrastructure are reported to have increased their contract staff considerably.

These include companies like Microsoft, GE Money and Big Bazaar, among others. Contract staff is being hired across levels in various sectors as it helps companies take on more time based assignments while reducing costs of permanent hiring.

“When it comes to conditions of working for temporary or sub-contracted staff, they differ across sectors, but primarily, legal obligations remain similar for contracted and permanent staff,” says e2e Business Solutions (a HR consultancy firm) director Yeshasvini Ramaswamy. “However, it helps the organisation because they are able to procure requisite and trained people.”

According to the fourth annual temp salaries primer report, compiled by staffing solutions company TeamLease Services, Bangalore, Mumbai, Kolko
ta and Delhi pay the best salaries in temping, with Bangalore paying the most in IT and HR, Mumbai in engineering and Delhi in sales.

Ahmedabad, Bangalore, Mumbai and Delhi offer the best wage hikes.

However, the positive aspect of the slowdown is that many organisations in the country have been able to control high attrition rates, which prevailed across sectors like IT/ITes, banking, financial services and retail.

Analysts say less productive employees seem to be getting removed, while those with proven capabilities would be valuable to the employers. Firms will find it easy to narrow down on requisite talent.

“History shows that in turbulent times demand for temporary workforce grows steadily. This is quite contrary to the perm business where only critical positions are hired irrespective of the economic barriers. As the global economy gains traction, we will see employers regain confidence and become more willing to add permanently to their payrolls,” says a Manpower India spokesperson.

Courtesy: Times of India

Hiring, attrition come to a halt

MUMBAI: It’s confirmed now. At the annual national human resources (HR) conference organised by SIES college of management studies (SIESCOMS), H
R managers across industries told ET that recruitment has come to a virtual halt.

Larsen & Toubro’s HR manager Karthik Narendra said, “We are only recruiting in our power business since it is an emerging sector. Recruitment for all other businesses has stopped. We are engaged in more internal reshuffling, to try and promote talent in-house.”

Voltas has also stopped recruitment as a result of the recent global financial meltdown. “The services sector has been hit badly by the recent meltdown. We have stopped recruitment but are engaged in training the talent that we have,” said a senior official at Voltas.

High attrition rates, a problem that was prevalent across sectors is no longer a serious issue for HR managers. With many companies laying off people to cut costs, those who haven’t been giving the pink slip are holding on to their jobs.

Ispat Industries, which was hit badly in the recent crisis, is fine-tuning its operations and is trying to cut costs. Ispat Industries human resources director B R Singh said, “We used to hire trainees every year from campuses which we have stopped. We are instead focusing on driving and motivating our workforce. Earlier, with many new plants starting, retention was an issue, but not any more.”

Johnson & Johnson, one of the largest global healthcare company, hasn’t been hit as much, according to Asia-Pacific regional head for labour and employee relations Vikas Shirodkar. He said that attrition will continue because people still want better salaries.

“We are trying to cut discretionary expenditure like travel and conferences. Unlike others, who won’t be hiring this year, we will continue to hire 20-25 students.

T V Rao, a management consultant said, “Instead of halting recruitment and firing people, companies can look at this as a time to indulge in more corporate social responsibility initiatives. Also, if they lay out the problems to the employees and ask for suggestions it will generate goodwill and loyalty. Employees might also be willing to take a temporary pay cut rather than face losing their job.”

Courtesy: Times of India

Job referrals: New hiring mantra

NEW DELHI: While campus recruitment continues to be the dominant mode of recruitment, IT/ITeS companies have substantially ramped up hiring thro
ugh employee referrals and internal promotions.

This could be the fallout of slow hiring phase that most companies are going through.

The slowdown has also led organisations to take stock of the situation and restructure their working conditions. The hiring plans in the IT/ITeS have been attracting much attention, since they are associated with massive hiring of fresh talent.

“Now, almost 40 per cent hiring is through employee referrals and 80 per cent of our promotions are internal,” says Genpact senior VP and HR head Piyush Mehta. “We are more inclined towards it, as apart from saving time on comprehensive background checks and scanning, it also helps in better camaraderie among employees.”

When a candidate is employed through a referral programme, there is a less probability of the candidate leaving the organisation in a small span of time--a fact well established at Genpact, which has a low attrition rate of 25 per cent. That apart, hiring through referral route also saves time searching, headhunting and calling candidates.

Recruiting people and retaining them is becoming a challenge for the HR departments across sectors. In such a scenario, IT/ITeS industry has chosen this mode to ensure effective hiring. “There has been an increase in hiring through employee referrals by 50 per cent across sectors, and at all levels,” says Expertus (a talent management and recruitment firm) sales and marketing VP A Sudarshan.

“The IT/ITeS sector takes the lead in it. At a time when most companies are looking at cost-optimisation, it is a definite tool of cutting on expenses, but it has an adverse impact on head-hunting and recruiting firms like us.”

There are monetary and intangible benefits for employees in case the referred candidate is finally selected. To ensure a successful referral sy
stem, it is important to suitably award employees who are bringing candidates. This is a strong motivating factor. MindTree Consulting, for instance, has an employee referral scheme ‘Each one bring one’. Infosys BPO is also focusing at maximum recruitment and promotions happening internally.

“It also helps in developing employee relations as the employee’s social needs are met and they have a feeling of belongingness,” says Gurukulonline Learning Solutions CEO Shailesh Mehta. However, headhunting and recruitment firms should not be affected to a major extent as there is always a skill gap or difference between the goals of the organisation and the personal goals of an employee.

“Although, there is rampant internal hiring, especially in the IT/ITeS, there would always be a need for specific talent and cross-border appointments. In such cases, it is necessary to leverage on expert recruitment and hiring firms,” said Mafoi management consultants CEO E Balaji.

Courtesy: Times of India

‘When others fire, you hire'

MUMBAI: As the competition hands out pink slips in a down economy, organisations should take advantage by hiring people. “Really good ones are b
eing laid off during times of recession,” says Robert Miller, co-founder of Miller Heiman and a renowned global sales practitioner.

“It’s the hard truth,” he continues. “No company has ever been able to achieve long-term success on the basis of budget cuts. Every business that succeeds over the long haul knows that it needs to invest in order to grow. As the saying goes, you have to spend money in order to make money.”

Bob, as he is fondly called, was in the city to address corporate chieftains, HR and sales workforce on strategic selling in the global economy at the Indiatimes Strategic Summit.
With over 40 years of experience in sales, consulting, and executive management, Bob and his team have helped clients succeed in the sales arena.

The recognised expert in complex sales management said, “Leaders need to think twice before cutting back during a recession. In particular, the benefits of any layoffs can be deceptively elusive.”

Citing an example, Bob spoke about the early 2000s, when Bain & Company conducted a study of the S&P 500. It found that, among companies that had similar growth rates, those that had small or no layoffs during a downturn tended to substantially outperform those that had larger layoffs.

“The reason is simple: because recessions typically last less than a year, so any short-term wage savings obtained from a large layoff are more than offset by the considerable cost of severance packages, any subsequent declines in productivity, and the expense of rehiring and training employees once the economy rebounds,” says the expert.

Undoubtedly its a grim scenario, when prices rise, factory orders drop, unemployment surges and other economic indicators signal rough times. It is then that corporates need to redouble their efforts. A slow economy is an excellent opportunity to improve the quality and size of not just your sales force, but your key people.

“Double up your efforts to get people on the street and capitalise on the strength of your executive team,” he adds.

In the country for the first time ever, Bob Miller, who has developed and introduced Strategic Selling some 30 years ago, said his passion was to elevate the role of the sales profession.

His mentorship drives innovations in sales performance that are consistent with the vision for the company he started three decades ago.

“There are three stages to a downturn,” Bob said, looking dapper in a dark blue suit teamed with a sky blue shirt. “When there are storm clouds on the horizon, as the first signs of trouble appear; when it is wet and rainy weather, when sales plunge; and when the first rays of sunshine appear, when customers start to increase their buying again.”

Studies have found that at each of those stages, companies tend to do exactly what they shouldn’t. In stage one, executives try to exude confidence that their company will be okay (so as not to frighten employees).

In stage two, they slash costs like crazy, often laying off employees and cutting back on the quality of their products or services. And in stage three, they spend freely, partly to try to make amends to alienated employees and customers. All of that might sound reasonable, but studies have revealed that companies that have been better at weathering the downturns tend to do just the opposite.

In stage one, they start battening down the hatches by letting staff know of their contingency plans. In stage two, they treat employees and customers like partners

Courtesy: Times of India

AIG CEO's salary is $1; no pay hike for top executives

NEW YORK: Troubled insurance giant American International Group In (AIG), for which the US government doubled the rescue package to USD 150
billion earlier this month, on Tuesday said that its CEO would get a salary of only one dollar and there would be no pay hikes for its top executives through 2009.

Separately, leading German reinsurance company Munich Re said that it is interested in buying the life insurance business of AIG in Asia.

Announcing compensation restrictions that go beyond the government's directive as part of its bailout package, AIG said its CEO Edward M Liddy would be given an annual salary of just one dollar in 2008 and 2009.

There would also be no annual bonuses in 2009 and no salary increase through 2009 for AIG's top-seven-officer Leadership Group, AIG said.

Besides, AIG has decided against no salary hike through 2009 for the 50 next-highest executives, in addition to bonus, severance and retention award restrictions.

AIG, for which the US government on November 11 nearly doubled the bailout package to 150 billion dollars from 80 billion dollars previously, is planning to sell some of its assets, including life insurance business in the US, Europe, Latin America and Japan, to recover from a financial mess.

Announcing the pay restrictions for its executives, AIG also said that it is developing a funding structure to ensure that no tax payer dollar is used for annual bonus or future cash performance awards for AIG's "Senior Partners," or the top 60 management people.

Commenting on the move, AIG Chairman and CEO Liddy said, "AIG's senior executives recognize AIG's obligation to tax payers.

"We are extremely grateful for the assistance we have received, and we know we have an obligation to use hat assistance to help AIG recover, contribute to the economy and repay tax payers," Liddy said.

The initial compensation for Liddy, who joined AIG on September 18, will consist entirely of equity grants, showing his confidence in AIG and its team.

While he would not receive an annual bonus in 2008 and 2009, he might be eligible for a special bonus for extraordinary performance payable in 2010Liddy will also not be eligible for severance payments.

Besides, Paula Rosput Reynolds, Vice Chairman and Chief Restructuring Officer, who joined AIG in October, will receive no salary or bonus in 2008. In 2009 and beyond, other than her base salary, any other compensation she receives will be tied directly to the progress of the restructuring efforts.

The other five members of AIG's top-seven-officer Leadership Group will not receive annual bonuses for 2008 or salary increases through 2009.

AIG's Senior Partners will not earn long-term performance awards in 2008 and they will not receive salary hikes in 2009, and their 2008 and 2009 annual bonuses will be limited.

Besides the restriction against any severance payment for the CEO, there will be restrictions on severance payments to members of the top-60 management members.

Courtesy: Times of India