Infosys BPO, a unit of India’s No. 2 software services firm Infosys Technologies <INFY.O>, plans to bring down employee attrition levels next year, but will closely watch underperforming employees, a company executive said on Tuesday.
The number of job-hopping employees in India’s once highly competitive business process outsourcing (BPO) sector has plummeted in the face of job-security fears fueled by a widening global economic crisis.
Infosys BPO has no plans to cut jobs but will strictly adhere to its employee performance appraisal program and, given the current market condition, decide whether to give underperforming employees a chance to improve, the executive said.
“Some kind of irrational cut across the board is never going to happen, but yes, the bottom 10 percent of performers will get weeded out,” Anantha Radhakrishnan, a vice president at the outsourcing firm, told the Reuters India Investment Summit.
The company’s attrition rates have steadily declined over the last couple of years from 43 percent in 2006 to about 32 percent in the second half of this year.
Radhakrishnan said the company currently projects a further decline in attrition levels to the low 20 percent range in 2009.
“It’s a great opportunity for a corporation like us to tell our employees that you will have your job tomorrow, provided you do three or four things better,” Radhakrishnan said.
HIRING SLOWDOWN
As the world’s biggest economies, including the United States and Japan, battle recession, India’s outsourcing sector is also bracing itself to cope with the slump.
Even though it would not resort to cost cutting through layoffs, Radhakrishnan said his company would be cautious while hiring and would recruit fewer people next year.
India’s BPO sector employs about 700,000 people and is expected to provide direct employment to about 2 million by 2012.
Bangalore-based Infosys BPO had about 17,500 employees on its payroll as of Sept. 30, up from 3,966 in 2005.
India produces about 2.5 million graduates every year, but only about 15 percent are considered suitable for employment in the BPO sector. Fueled by a skills shortage, wages rose by 10 percent to 15 percent a year in recent years, but increases are expected to slow, in keeping with the gloomy economic scenario.
“It is a supply-and-demand equation in the market so you know which way it (wages) will head if I go by the pure market economics of it,” Radhakrishnan said.
