Infosys to hire 1,000 expats this year

News Posted - 2010-05-03

Infosys Technologies plans to give the pride of place to foreign faces in its sales and consultation teams in a radical hiring shift that the company believes will help land lucrative deals and boost its image as a global IT powerhouse.

Infosys will hire nearly 1,000 foreigners this year to push its sales and consultation practice as the company turns its gaze on high-margin consulting and transformational deals, said chief financial officer V Balakrishnan.

Overseas markets contribute nearly 98% of the country’s second-largest software services exporter’s business, but the so-called front-end workforce has just 5-6% foreign members. “We have to improve that,” Mr Balakrishnan told ET in a recent interview.

Infosys has about 550 people in its consulting business and 700 in the sales team. In contrast, bigger rival Tata Consultancy Services has nearly 700 consultants, while around 6.7% of its workforce comprises foreigners.

For IT companies, consulting services is a money-spinner, customarily holding out margins that are up to five times more than the average deal. They also provide ample scope for secondary sales for other divisions.

Software services companies such as Infosys and TCS struggled during the recession as customers took to sharp budget cuts. But recent earnings of tech majors such as IBM and Microsoft show that sales are again humming, a telltale sign that global markets are emerging from the shadows of recession.

IT sales, though, this time are not driven by technology, but by outsourcing to reduce costs, said Mr Balakrishnan. Reversing the hiring strategy was also in order because the seemingly simpler application development and management contracts are now a hive of fierce competition. “Some part of the business is always going to get commoditised,” said Mr Balakrishnan, explaining the rationale behind the company setting its sight on consulting and non-linear services.

For this, the company felt the need to have better people in the front, he said, adding that the recruits must have consulting expertise to heed to clients’ needs. Analysts welcomed Infosys’ move. “Functions like consultancy and customer support are better done with local flavour,” said Gartner’s principal research analyst Diptarup Chakraborti.

Local staff also make governments more comfortable just as they reflect the image of true-blue global companies present in India, a la IBM or Accenture, that hire in swelling numbers from the country, he said.

Infosys employs 1,13,796 against TCS’ 1,60,429. In any case, Mr Balakrishnan said, Accenture and Infosys do the same work, though the scale is different.

Infosys, which forecast a 16-18% growth for this financial year in its fourth-quarter results, is praying for a rosier economic environment for its new hiring plans to yield results. “The world has to stabilise before we can talk about growth,” said Mr Balakrishnan. “Clients are very cautious and nobody is willing to make a long-term commitment. People have budgets, but are taking a very short-term view on things.”

Source: ET 29/04/10