Wipro is contemplating issuing restricted stock units (RSU) to its management-level employees this fiscal as it sees attrition rates on the higher side for the next couple of quarters owing to the changing market conditions. The company is also looking at recruiting across all units, with an emphasis on getting more freshers on board.
According to Pratik Kumar, executive vice-president, human Resources, ?We are looking at RSUs for employees from the manager level and above. We have not yet confirmed on the amounts or on dates, but I think it should take another quarter. Our stocks have appreciated close to 200% and our employees stand to gain tremendously from that.?
Wipro is one of the first companies in India to issue RSUs. It had previously issued such stock options for its employees in April 2008 when the markets were at their peak. It started the practice in 2004, when it issued around 49 lakh shares to its employees in India. Under its ADS Restricted Stock Unit Plan 2004, the company granted close to 8 lakh shares. In 2007, Wipro granted 3,22,000 ADS restricted stock units while the number was 87,100 in 2009.
However, despite such retention strategies, salary hikes and promotions on the way, Wipro projects attrition rates at around 14-16% for the next two quarters. Wipro?s voluntary attrition rates for its Global IT Services division climbed from 13.4% in Q3 to its highest at 17% in Q4. ?The attrition was partly anticipated and it is a reflection of the demand environment and the active hiring that is going on. I anticipate attrition to remain high, at about 14-16% for a quarter or two before things settle down, and I would say that this is true for the entire industry,? said Kumar. While part of the attrition could be attributed to external market conditions, Kumar said the company was working on resolving internal triggers such as employee concerns in terms of growth, rewards and recognition and career opportunities.
Wipro had introduced salary hikes of 2% for its on-site employees, and hikes in the range of 8-10% for its offshore employees. Its promotion cycle was also due in the next two months. Last year, IT companies, including Wipro, had frozen or delayed promotions and salary hikes.
On the hiring front, Kumar said while the company would continue on its philosophy of ?maintaining a lean bench? and adding manpower in accordance with the rate of market growth, it was looking at recruiting across all units, with an emphasis on getting more freshers on board. ?Hiring this year will be biased towards freshers. We will be going to lesser number of colleges and try to increase the yield. We will also be looking at bringing a lot of non-engineers on to our rolls. The combination of non-engineering and engineering freshers for IT services would be in the range of about 10,000 to 11,000 gross,? Kumar said. For the last quarter ended March 2010, Wipro had added 5325 employees net, one of its highest additions in the last eight quarters. In terms of capacity addition, Kumar said the company had adequate capacity in its Indian centres, but it may consider adding another centre in the US, although it had not decided upon as yet.