IT firms double training period for freshers

IT services firms, which are benching more professionals because of the slowdown, are doubling training period for freshers to better equip them when the good times return.

However, this means rise in costs for the firms, which are already facing diminishing revenues.

TCS, the country’s largest IT service firm by employees, has increased the training period from three months to six months from the first quarter of FY2009-10.

“We have changed our training curriculum and regime to ensure better and effective training to meet the future needs of the industry,” Ajoyendra Mukherjee, vice-president and head global human resources, TCS, said.

The firm aims to make trainees deployable in projects through extended training. “This will help employees to prepare better for the future technologies/multiple technologies and domains,” Mukherjee said.

An extended training period would mean a delay in deployment of people for projects termed “billable” in IT services parlance. Besides, it would mean increased costs for training.
 
TCS’s utilisation rate is a little over 79%. And, with trainees the utilisation rate is about 71%.

Responding to analyst queries after announcing TCS’s Q1 FY2009-10 results, N Chandrasekaran, chief operating officer, TCS, agreed that utilisation of people will decline further.

“It depends on the volume growth, but we will factor in a slight decline,” he said. Volume growth in IT lingo means growth in the number of billable professionals.

 Infosys Technologies, India’s second largest IT firm by employee strength, too, has increased its training period from three-and-a-half months last quarter to 26 weeks in the first quarter of the current fiscal. 

Chandrasekhar Kakal, head, packaged software implementation services, Infosys Technologies, said, “We are honouring all the commitments of recruitments we have made. However, due to current downturn, the utilisation of people on projects has reduced.

So, the training period has been extended to enhance their skillsets. Now, the freshers get to train on multiple technologies.” 
 
Analysts tracking the sector said that IT service firms do not have anything to lose by increasing training tenure.

“Since IT firms have declared their commitment to honour recruitments, they would accommodate people over a longer training period. This will give them time to wait till a clear demand scenario emerges,” Apurva Shah, an analyst with broking firm Prabhudas Liladhar, said.

 He said that even on the cost side, the IT firms stand to gain more due to the current trend of recalling onsite people home.

“About 70% of the employee costs are for onsite people. And they are coming back gradually. This will make up more than the cost a firm would incur on extended training period,” Shah said.

TCS recalled 1,000 people from onsite in the fourth quarter of 2008-09 and followed that up by calling back another 1,200 in the first quarter of the current fiscal.

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TCS has increased the training period from 3 months to 6 months

TCS’s utilisation rate is a little over 79%. With trainees the utilisation rate is about 71%

Infosys Technologies has increased its training period to 26 weeks in the last quarter