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No work, but still IT companies are hiring
(Ecomonic Times, The (India) (KRT) Via Thomson Dialog NewsEdge) Feb. 3--NEW DELHI -- No vacancy? No problem. They will hire you anyway. Call it pre-emptive hiring, hoarding talent or just a recruitment drive on sixth gear, but tech companies are recruiting engineers even though they may not have work or immediate need for them.
A phenomenon which was prevalent during the boom years of technology in the late 1990s has revisited India. And, with the fight for talent intensifying in the country, recruiters say this is just the beginning.
"We hire dozens of IIT engineers every year not because we need them for current projects, but because we find them good and promising for the future. Most often they are not put on a project for the next six to nine months," says Arjun Malhotra, chairman and chief executive officer of Headstrong, an IT services company.
IT companies have drawn an analogy to manufacturing companies which maintain excess capacity to cater for a spurt in sales.
"A utilisation of 78 percent is a sweet spot because at that point you can have the potential to grow. If you achieve 81 percent, and if you suddenly need some growth, you won't be able to do it. At this point of time, 78 percent could be very good, but 76 percent could be a figure you can look at as you are able to get people," says Mohandas Pai, chief financial officer, Infosys Technologies.
"If we find talent and know that the person would fit into the kind of work we are doing or something we are planning to do in the future we hire them," says Sridhar Sarathy, managing director of the Indian subsidiary of Juniper Networks. "We have senior executives in the company who are looking out for talent at any given point of time."
According to companies, slack is prevalent at the entry level. Says Gautam Sinha, CEO of Bangalore-based recruitment firm TVA Infotech, which specialises in the IT sector, "It is happening more at the fresher level where about 30-40 percent of 70,000 new recruits in the IT sector, by companies big or small, are part of 'hiring for potential'. It is not that prevalent at the lateral level as there pre-emptive hiring might backfire given that techies would not stick with you if you have not given them a challenging job."
Others, however, say that pre-emptive hiring is equally common at the mid-level. "Infact, the biggest talent crunch is at the mid-level where companies use all the tricks of the trade to hire and retain bright engineers or managers," says Monisha Advani, managing director of Emmay HR, a headhunter and recruiter. "It is common for companies to hire first and then find work to keep their latest recruit busy."
However, it's not exactly a free lunch for people who join without a specific job mandate. In most cases the recruits don't sit idle. So, at times, they share the job responsibility with an existing engineer or, if they join at a relatively senior level, they may help in building a team for a future project.
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