Tag Archives: greyhound research

Hop, skip and jump: Making sense of the attrition puzzle in IT sector #Press #Media #Firstbiz

The irony is hard to escape. It is a sector where the perks for the staff are top notch, but it is also one where attrition is extreme. The sector in question is information technology and IT enabled services (ITeS).

A recent survey by executive search firm MANCER Consulting reveals that ITeS will face the highest overall attrition of 21 percent this year with the junior level seeing exits at almost 30 percent.

Interestingly, there is no perk the companies in the sector do not offer: from pick up and drop facilities, flexible work hours, crèche, the right to rate your peers, bosses, to even reach out to the CEO without asking for permission from your immediate manager, besides good salary packages. Of course, all these may not apply to all the companies in the sector, but largely the cross section has some of these services mentioned.

Then what is the reason for the high employee churn in the sector?

The fresher challenge

A fresher working for an Indian IT firm gets a package of Rs 8,000-12,000 and in an MNC, between Rs 10,000 and Rs 15,000, says Subhodeep Dutta, head, corporate strategy, new business initiatives, Mancer Consulting.

Gaurav Gupta, a 29-year-old Delhi-based IT sector employee, has changed five jobs in four years of joining the industry. The longest stint he has had in an organisation is 18 months and the shortest, 4 months. Of the five companies he has worked, one was a firm in the big league of IT firms.

“I left my first job at an MNC as they did not give me the increment of 30 percent they promised; exited my second job after 9 months as I did not want to continue working on UK timings in the severe cold in Delhi,” says Gupta.

Currently, Gupta works in a firm that offers him flexi-hours, cab facilities, etc., but he says, “If I get a job with a higher pay and designation sans these facilities, I will pick that up.”

Mark Driscoll, Human Capital Leader, PwC India, says, “This is a peculiar situation besetting Indian firms or rather BRIC countries.” He says that he often finds a candidate is not interested in investing in relationships at the work place, picking up new skill sets or honing what he has. “The majority of people who are moving jobs have just 1-3 years of experience. Jumping jobs may help in getting high pay but what about learning new skills sets,” he asks.

Reasons for jumping jobs

Stress factor: Employees usually work on projects which can run for a few months or years. For instance, if you are working on the supply chain management of a large auto firm and there is a technical snag, an immediate service ticket will be raised. These are service agreements that a vendor has with the company that says that the latter will tackle such a situation within hours.

It is a high pressure job, said a HR head of an MNC, requesting anonymity. “Many times we find that the young professional chooses to sit on the bench (not work on the programme) as he finds he can’t cope with the stress of the project.”

In this sector, employees have the luxury to sit out and not do anything till they hunt for another project. The comfort of sitting on the bench enables the employee to enhance his skills through in-house training programmes or even hunt for a job while on the pay roll of the company.

Lack of global exposure: Some firms send employees abroad for their offshore projects. That is an incentive to stay in the company for most youngsters, says an HR analyst. “If a company does not have a policy of sending employees abroad for projects, then employees will look out for another job that gives these facilities once their basic needs of a salary, perks, etc are met with in the existing job.”

Lack of growth curve: Sometimes employees leave if they find there is nothing new to learn. V M Manish, a IT analyst now working for an Indian firm in the US, left one of his earlier jobs because the “learning curve became stagnant and there was nothing new to discover in the project from a technical perspective. I was looking out for an onsite opportunity and also a better pay package,” he says.

Money factor: It seems to be the factor that drives an employee, especially in the initial stages of his career. “If I get more money, I will move jobs even if I have joined a firm only a few months back,” says Noida-based Manish Kumar who has changed two jobs in a short span.

Sanchit Gogia, Chief Analyst and CEO of Greyhound Research, an independent IT, telecom research and advisory firm, says it helps to have a transparent HR policy at the workplace. He reasons that employees in the IT sector leave jobs quickly because of two factors: the basic salary structure and lack of communication skills. He says when designing the salary structure, employers should give the employee options of how he wants it structured within the company policy. Don’t’s use one bullet for all, he adds.

Communication skills: “Lack of internal communication is another drawback,” says Gogia. When Narayana Murthy of Infosys was quitting, the employees got to know of it through the media, says Gogia. “Take your employees into confidence. They need to know the news first or they feel threatened and fear for their future.”

Exits at mid-level management

A mid-level manager in a domestic firm with three–four years experience takes home a salary of Rs 35,000 to 40,000 while in an MNC, it would be in the range of Rs 50,000-60,000.

Attrition at the mid-level management level would be 20 percent while at the top management level it would hover around 13-15 percent this year, says the MANCER survey.

“Generally, experienced employees leave as they get better opportunities. This is usually seen to be high at the mid-management level for the employee at this level knows the limits to his growth in the firm. Hence, turnout is high,” says Sarabjit Kaur Nangra, VP Research-IT, Angel Broking.

Reasons for leaving

Stress is a factor here too. The ‘plug off’ is one of the reasons that the mid level manager prefers to look out as his career stagnates. A plug off is a threat of an international company that outsources business to India and exits the contract if there are performance issues or if there are chances of getting a better price or value proposition from a different partner from the same country or another geography.

The mid-level manager has experienced this Damocles sword of the plug off often and wants to steer himself clear from this potential threat, says an analyst. “He would even prefer to go to another sector with a salary structure that will not see such a rapid rise or hike as the IT sector but is assured of job satisfaction without a threat of a plug off or may choose to join a domestic IT firm which does not face this threat.”

Easy mobility of skills:  Dutta, Mancer Consulting, says, “The salaries at the leadership level in the ITeS sector (especially in MNCs) can vary from as low as Rs 18 lakhs and can go up to more than a crore including  other perks like ESOPS, club membership etc, which their counterparts in the other sector may not earn with similar years of experience.”

To sustain the current job and growth, certain competencies are needed which is relatively very different based on the market scenario. The next level movement has many contenders and can be at times tough since most the companies seek brilliant track record with matching pedigree.

The senior executive who had an early growth and does not fulfill above criteria moves on. However, “if he has shared competencies and skill sets, he can shift to other industry since his shared skills from ITeS sector can help him settle in that industry which is moving into a global platform.”

“Currently, certain industries that are working with global partners need leadership who can manage and lead the relationship compared to their current teams. Here his skills of process centricity, ability to comprehend the business scenario, managing large operations and client relationship come handy.”

At the middle-management level, an employee is in his early or mid 30s and would seldom move since now he wants to reach stability to grow in the same organization unlike junior level who keeps on hopping jobs for making quick money rather than seeking out a career in the same organization.

Source: Firstbiz

Wipro Q1 profit up 29.5% as IT spending returns in North America #Press #Media #ZeeBiz

IT services major Wipro today reported a 29.5 percent growth in its consolidated net profit at Rs 2,103.2 crore for April-June period, helped by large deals in the application and infrastructure space.

The city-headquartered firm had posted a net profit of Rs 1,623.3 crore in the year-ago period, it said in a BSE filing.

Consolidated net sales rose by 15.5 per cent to Rs 11,245.5 crore in April-June quarter of the current fiscal from Rs 9,733.2 crore in the same quarter of 2013-14.

The figures are in accordance with International Financial Reporting Standards (IFRS).

Wipro Chairman Azim Premji said: “We see a significant rise in business confidence in developed markets as well as India.”

The new government at the Centre has brought about hope and confidence in the minds of all stakeholders through reform pronouncements with fiscal prudence, he added.

In US dollars, Wipro reported a net profit of $351 million and revenue of $1.9 billion.

Revenue from IT Services stood at $1.74 billion, a quarter-on-quarter increase of 1.2 per cent and year-on-year increase of 9.6 per cent. Wipro had guided this to be in the range of $1.715 billion-$1.755 billion.

For the July-September quarter, the IT services revenue is forecast to be in the range of $1.77 billion-$1.81 billion.

“We continue to win large deals particularly in the application and infrastructure space. We recently announced our largest ever total outsourcing deal,” Wipro CEO T K Kurien said.

These wins demonstrate confidence of clients in Wipro’s transformational capabilities and re-affirm their faith in its client engagement strategy, he added.

IT Services revenue in rupee terms was Rs 10,510 crore, an increase of 18 per cent year-on-year.

The IT services segment had 147,452 employees as of June 30, 2014 and the firm added 35 new customers for the quarter.

“We continue to drive operational efficiency and invest in our strategy. Operating margins for the quarter was on expected lines, impacted largely due to wage hikes,” Wipro CFO Suresh Senapaty said.

Analysts said the April-June quarter has been lukewarm for the country’s third largest IT services firm.

“Its been a lukewarm period overall for the IT industry at large, including Wipro. That said, few contracts over the last quarter has helped Wipro get access to more high-profile deals at a time when outsourcing demand looks stronger as compared to previous years,” Greyhound Research CEO Sanchit Vir Gogia said.

Wipro shares today rose by 1.31 per cent to close at Rs 576.80 apiece at the BSE.

Wipro’s IT products segment delivered revenue of Rs 770 crore, registering a decline of 6 per cent over the year-ago period, after Wipro’s strategy to focus on services business by engaging in selective transformational deals where products form an integral part of the solution.

Segment wise, BFSI contributed the most towards Wipro’s revenues in the first quarter followed by Manufacturing & Hi-tech, Energy, Natural Resources & Utilities, Global Media & Telecom, Retail, Consumer, Transport & Government and Healthcare & Life Sciences.

Geography wise, the US was the main revenue generator followed by Europe, Rest of the World and India.

Last week, Wipro had announced that it had entered into a multi-million dollar dual pact with ATCO through which the company will provide a complete suite of outsourcing solutions to the Canadian firm as well as acquire its IT services arm.

Wipro signed a series of Master Services Agreements with ATCO under which it will acquire ATCO’s IT subsidiary for an all-cash consideration of CAD 210 million ($195 million or over Rs 1,176 crore).

Besides, Wipro also secured a 10-year IT deal with ATCO for providing outsourcing services, that will result in annual revenues of over CAD 120 million ($112 million or over Rs 675 crore) for Wipro for the next 10-years.

Gogia said ATCO deal will definitely add to Wipro’s overall growth, particularly in the Utilities vertical.

“However, currently it is early to comment on the actual benefits and outcomes will only be visible once all formalities have been completed,” he added.

Going ahead, Gogia said the company is expected to gain substantially if it manages to crack the Rs 1,200 crore call centre deal from Reliance Communications.

Separately, its active conversations with the government on various pending issues like taxation and allotment of new SEZ are clear signs of the expected growth in the near future.

Wipro is also planning to invest in upcoming software firms, a clear sign of their intent to also sell software to their customer base, Gogia said.

Attrition still remains one of the key issues that the management needs to address, he added.

Gogia said attrition still remains one of the key issues that the management needs to address.

Wipro Senior VP Human Resources Saurabh Govil said: “We have RSUs, and salary increases so we expect to see impact of that in the coming quarters.

“Also, we are seeing that among the high performers at Wipro, attrition rates have fallen drastically, which makes for about 25 per cent of our total workforce.”

Last week, Wipro had announced that it signed a series of Master Services Agreements with ATCO under which it will acquire ATCO’s IT subsidiary for an all-cash consideration of CAD (Canadian dollar) 210 million (USD 195 million or over Rs 1,176 crore).

Besides, Wipro also secured a 10-year IT deal with ATCO for providing outsourcing services, that will result in annual revenues of over CAD 120 million (USD 112 million or over Rs 675 crore) for Wipro for the next 10-years.

Gogia said ATCO deal will definitely add to Wipro’s overall growth, particularly in the Utilities vertical. Going ahead, Gogia said the company is expected to gain substantially if it manages to crack the Rs 1,200 crore call centre deal from Reliance Communications.

Separately, its active conversations with the government on various pending issues like taxation and allotment of new SEZ are clear signs of the expected growth in the near future.

Wipro is also planning to invest in upcoming software firms, a clear sign of their intent to also sell software to their customer base, Gogia said.

Source: Zee Biz

Wipro Q1 profit rises 29.5 per cent to Rs 2,103 crore #Press #Media #IBNLive

For the July-September quarter, the IT services revenue is forecast to be in the range of $1.77 billion-$1.81 billion

IT services major Wipro today reported a 29.5 percent growth in its consolidated net profit at Rs 2,103.2 crore for April-June period, helped by large deals in the application and infrastructure space.

The city-headquartered firm had posted a net profit of Rs 1,623.3 crore in the year-ago period, it said in a BSE filing.

Consolidated net sales rose by 15.5 per cent to Rs 11,245.5 crore in April-June quarter of the current fiscal from Rs 9,733.2 crore in the same quarter of 2013-14.

The figures are in accordance with International Financial Reporting Standards (IFRS).

Wipro Chairman Azim Premji said: “We see a significant rise in business confidence in developed markets as well as India.”

The new government at the Centre has brought about hope and confidence in the minds of all stakeholders through reform pronouncements with fiscal prudence, he added.

In US dollars, Wipro reported a net profit of $351 million and revenue of $1.9 billion.

Revenue from IT Services stood at $1.74 billion, a quarter-on-quarter increase of 1.2 per cent and year-on-year increase of 9.6 per cent. Wipro had guided this to be in the range of $1.715 billion-$1.755 billion.

For the July-September quarter, the IT services revenue is forecast to be in the range of $1.77 billion-$1.81 billion.

“We continue to win large deals particularly in the application and infrastructure space. We recently announced our largest ever total outsourcing deal,” Wipro CEO T K Kurien said.

These wins demonstrate confidence of clients in Wipro’s transformational capabilities and re-affirm their faith in its client engagement strategy, he added.

IT Services revenue in rupee terms was Rs 10,510 crore, an increase of 18 per cent year-on-year.

The IT services segment had 147,452 employees as of June 30, 2014 and the firm added 35 new customers for the quarter.

“We continue to drive operational efficiency and invest in our strategy. Operating margins for the quarter was on expected lines, impacted largely due to wage hikes,” Wipro CFO Suresh Senapaty said.

Analysts said the April-June quarter has been lukewarm for the country’s third largest IT services firm.

“Its been a lukewarm period overall for the IT industry at large, including Wipro. That said, few contracts over the last quarter has helped Wipro get access to more high-profile deals at a time when outsourcing demand looks stronger as compared to previous years,” Greyhound Research CEO Sanchit Vir Gogia said.

Wipro shares today rose by 1.31 per cent to close at Rs 576.80 apiece at the BSE.

Wipro’s IT products segment delivered revenue of Rs 770 crore, registering a decline of 6 per cent over the year-ago period, after Wipro’s strategy to focus on services business by engaging in selective transformational deals where products form an integral part of the solution.

Segment wise, BFSI contributed the most towards Wipro’s revenues in the first quarter followed by Manufacturing & Hi-tech, Energy, Natural Resources & Utilities, Global Media & Telecom, Retail, Consumer, Transport & Government and Healthcare & Life Sciences.

Geography wise, the US was the main revenue generator followed by Europe, Rest of the World and India.

Last week, Wipro had announced that it had entered into a multi-million dollar dual pact with ATCO through which the company will provide a complete suite of outsourcing solutions to the Canadian firm as well as acquire its IT services arm.

Wipro signed a series of Master Services Agreements with ATCO under which it will acquire ATCO’s IT subsidiary for an all-cash consideration of CAD 210 million ($195 million or over Rs 1,176 crore).

Besides, Wipro also secured a 10-year IT deal with ATCO for providing outsourcing services, that will result in annual revenues of over CAD 120 million ($112 million or over Rs 675 crore) for Wipro for the next 10-years.

Gogia said ATCO deal will definitely add to Wipro’s overall growth, particularly in the Utilities vertical.

“However, currently it is early to comment on the actual benefits and outcomes will only be visible once all formalities have been completed,” he added.

Going ahead, Gogia said the company is expected to gain substantially if it manages to crack the Rs 1,200 crore call centre deal from Reliance Communications.

Separately, its active conversations with the government on various pending issues like taxation and allotment of new SEZ are clear signs of the expected growth in the near future.

Wipro is also planning to invest in upcoming software firms, a clear sign of their intent to also sell software to their customer base, Gogia said.

Attrition still remains one of the key issues that the management needs to address, he added.

Gogia said attrition still remains one of the key issues that the management needs to address.

Wipro Senior VP Human Resources Saurabh Govil said: “We have RSUs, and salary increases so we expect to see impact of that in the coming quarters.

“Also, we are seeing that among the high performers at Wipro, attrition rates have fallen drastically, which makes for about 25 per cent of our total workforce.”

Last week, Wipro had announced that it signed a series of Master Services Agreements with ATCO under which it will acquire ATCO’s IT subsidiary for an all-cash consideration of CAD (Canadian dollar) 210 million (USD 195 million or over Rs 1,176 crore).

Besides, Wipro also secured a 10-year IT deal with ATCO for providing outsourcing services, that will result in annual revenues of over CAD 120 million (USD 112 million or over Rs 675 crore) for Wipro for the next 10-years.

Gogia said ATCO deal will definitely add to Wipro’s overall growth, particularly in the Utilities vertical. Going ahead, Gogia said the company is expected to gain substantially if it manages to crack the Rs 1,200 crore call centre deal from Reliance Communications.

Separately, its active conversations with the government on various pending issues like taxation and allotment of new SEZ are clear signs of the expected growth in the near future.

Wipro is also planning to invest in upcoming software firms, a clear sign of their intent to also sell software to their customer base, Gogia said.

Source: IBNLive

Wipro Q1 IT svcs sales at $1.74 bn; guides $1.77-1.81 bn Q2 #Press #Media #MoneyControl

IT services major Wipro today reported a 29.5 per cent growth in its consolidated net profit at Rs 2,103.2 crore for April-June period, helped by large deals in the application and infrastructure space.

The Bangalore -headquartered firm had posted a net profit of Rs 1,623.3 crore in the year-ago period, it said in a BSE filing.

Its June quarter IT services revenues rose 5 percent over the April quarter, to Rs 11,140 crore, compared to a CNBC-TV18 poll estimate of Rs 10699 crore. However, dollar revenues at USD 1740.2 million were marginally below the poll estimate of USD 1745 million.

Dollar revenues were up 1.16 percent quarter-on-quarter. The figures are in accordance with International Financial Reporting Standards (IFRS).

Operating margins were down to 22.8 percent from 24.5 percent in the previous quarter, with the company attributing the decline to wage hikes.

For the September quarter the company has guided for IT services revenues in the USD 1770-1810 million range, up 1.72-4 percent quarter-on-quarter. The company said the September quarter revenue guidance was based on a rupee-dollar rate of 59.66.

Wipro chairman Premji said he saw a significant rise in business confidence in developed markets. The new government at the Centre has brought about hope and confidence in the minds of all stakeholders through reform pronouncements with fiscal prudence, he added.

Wipro CEO TK Kurien said the company continued to win large deals in the application and infrastructure services segments. These wins demonstrate confidence of clients in Wipro’s transformational capabilities and re-affirm their faith in its client engagement strategy, he added. Chief Financial Officer Suresh Senapathy said the company would continue to improve operational efficiencies, and invest in strategy.

IT Services revenue in rupee terms was Rs 10,510 crore, an increase of 18 per cent year-on-year.

The IT services segment had 147,452 employees as of June 30, 2014 and the firm added 35 new customers for the quarter. “We continue to drive operational efficiency and invest in our strategy. Operating margins for the quarter was on expected lines, impacted largely due to wage hikes,” Wipro CFO Suresh Senapaty said.

Analysts said the April-June quarter has been lukewarm for the country’s third largest IT services firm.

“Its been a lukewarm period overall for the IT industry at large, including Wipro. That said, few contracts over the last quarter has helped Wipro get access to more high-profile deals at a time when outsourcing demand looks stronger as compared to previous years,” Greyhound Research CEO Sanchit Vir Gogia said.

Wipro’s IT products segment delivered revenue of Rs 770 crore, registering a decline of 6 per cent over the year-ago period, after Wipro’s strategy to focus on services business by engaging in selective transformational deals where products form an integral part of the solution.

Segment wise, BFSI contributed the most towards Wipro’s revenues in the first quarter followed by Manufacturing & Hi-tech, Energy, Natural Resources & Utilities, Global Media & Telecom, Retail, Consumer, Transport & Government and Healthcare & Life Sciences.

Geography wise, the US was the main revenue generator followed by Europe, Rest of the World and India.

Last week, Wipro had announced that it had entered into a multi-million dollar dual pact with ATCO through which the company will provide a complete suite of outsourcing solutions to the Canadian firm as well as acquire its IT services arm.

Wipro signed a series of Master Services Agreements with ATCO under which it will acquire ATCO’s IT subsidiary for an all-cash consideration of CAD 210 million (USD 195 million or over Rs 1,176 crore). Besides, Wipro also secured a 10-year IT deal with ATCO for providing outsourcing services, that will result in annual revenues of over CAD 120 million (USD 112 million or over Rs 675 crore) for Wipro for the next 10-years.

Gogia said ATCO deal will definitely add to Wipro’s overall growth, particularly in the Utilities vertical. “However, currently it is early to comment on the actual benefits and outcomes will only be visible once all formalities have been completed,” he added. Going ahead, Gogia said the company is expected to gain substantially if it manages to crack the Rs 1,200 crore call centre deal from Reliance Communications. 

Separately, its active conversations with the government on various pending issues like taxation and allotment of new SEZ are clear signs of the expected growth in the near future.

Wipro is also planning to invest in upcoming software firms, a clear sign of their intent to also sell software to their customer base, Gogia said.

Attrition still remains one of the key issues that the management needs to address, he added.

Wipro shares today rose by 1.31 per cent to close at Rs 576.80 apiece at the BSE.

(With inputs from PTI)

Source: Moneycontrol.com

Dial D For Data #Press #Media #HealthcareExecutive

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Enterprise major Oracle plans one office in every state capital as it sees higher tech spending #Press #Media #EconomicTimes

Oracle is looking to have branch offices in all Indian state capitals as part of its plan to boost business while some of its larger competitors deal with problems of their own.

Oracle, founded by technology billionaire Larry Ellison, counts companies like HP and IBM as its major competitors. HP is going through a restructuring exercise that may see as many as 50,000 employees cut from its ranks.

Separately, IBM has struck a deal to sell off its x86 server business as it focuses on higher margin products. “We are growing in India and we think that, with the manifesto of the BJP that focussed on technology, we are going to see increased spending on IT. We are looking at a geo-expansion strategy and the plan is to have a branch office in every state capital,” Sandeep Mathur, managing director of Oracle India, told ET.

Currently, Oracle has offices in the five metro cities and places like Pune and Ahmedabad. Mathur declined to give a timeline for the expansion but said it was the company’s stated goal.

The company has been growing steadily in India over the past few years. In 2012-2013, the company grew its revenue 15% to Rs 10,590 crore, according to Dataquest Top 20, making it the tenth-largest technology company by revenue in India.

Oracle does not break out the revenue or growth rate of its India business. “With Oracle, it has been a mixed bag, there has been strong customer demand for their enterprise applications like RightNow and Eloqua and database license renewals have been doing well. But I would think sales of the ExaData and Exologic systems have been a little sluggish outside BFSI and telecom,” said Sanchit Vir Gogia, chief analyst and CEO at Greyhound Research.

ExaData and ExoLogic are part of Oracle of engineered systems business – integrated software and hardware – that promised more efficiency and faster workloads as the components were built to work together rather than stitched together later. The company counts Reliance Commercial Finance, HDFC Securities and HDFC ERGO General Insurance Company as clients.

Source: The Economic Times