IT firms making employees billable faster

Written by Vrishti Beniwal | New Delhi, Aug 3 | Updated: Aug 4 2007, 09:26am hrs
As the rupee continues to strengthen against the dollar, IT companies are now focussing on increasing utilisation by making maximum number of employees billable at a much faster pace. Currently, the industry average of billable employees is 70-75%, with the IT companies putting in all efforts to take it in the range of 75-80%. As 60% of an IT companys revenues go into wages, non-billable employees are adding to their woes.

Hari T, director and senior VP, HR, Satyam, said the company was exploring the possibility of making employees billable as early as possible. Agreed Pratik Kumar, corporate VP, HR, Wipro. We are ensuring that the bench is better managed.

Typically, fresh recruits go through a three-month training programme and do not work on any project, thereby not adding to the revenue kitty of the organisation. Moreover, the company has to spend a certain amount on their training. This coupled with the rising rupee is badly affecting the bottomlines of IT companies. About Rs 50,000 is spent on the training of one employee. So we are tying up with educational and training institutions to train employees on campus. This way an employee will be billable from the day one and the training cost will also be reduced to a third, a source told FE.

Nasscom president Kiran Karnik said, I have heard of companies reducing bench size, shortening the time between two projects, and increasing variable components in employees salaries. These measures can help increase efficiency as HR comprises the biggest component of spending by an IT company." IT employs 10 lakh people and is generating 2 to 3 lakh jobs every year.

The move will also benefit employees as increments and promotions are based on the employees getting billed versus the employees on bench. Rather than cost cutting measures, HCL Technologies is focussing on increasing utilisation and right skilling jobs. Arvind Thakur, CEO, NIIT Technologies, said the company was evaluating the possibility increasing variable component in the salary and would arrive at a benchmark soon.