‘Virtual bench’ turns into real seats at mid-size IT cos

Adith Charlie

Mumbai, Nov. 11 The concept of a ‘virtual bench’ for non-billable employees may soon be a thing of the past at mid-size Indian IT companies, thanks to the gradual improvement in demand for software solutions.

While Hexaware Technologies has brought back all the virtual benchers on to the regular rolls, Mastek expects to achieve the same by March 2010.

It may be recalled that both Mastek and Hexaware had come up with this out-of-the-box solution to reduce overall employee costs and remain profitable in a tough economic environment.

Mastek had announced in February that it had put about 10 per cent (or 425) of its total employee base on a ‘virtual bench’ for up to 12 months with reduced pay. Alternatively, the benched employees — a mix of trainees and junior employees — were given the option to quit with a severance package.

By the end of September quarter, the company had some 200 employees on the virtual bench, as the remaining were either re-instated or had quit the company.

As things stand, by March 2010 the company expects to call back the ‘benchers’ onto the billable pool, according to Mr Sudhakar Ram, Chairman and Managing Director of Mastek.

“We are seeing an expansion in our order book in the current quarter which should translate into revenue growth for the next quarter,” he told Business Line.

Starting this March, Hexaware had inducted around 220 staffers in the virtual bench who had to take a 50-per-cent-cut in basic pay.

However, things started changing for the Mumbai-based company during the three months ended September 2009 riding on the revival in IT spend across the globe. The company won deals worth $80 million in the previous quarter. Of these, three deals were worth more than $15 million each.

“In the wake of the changing demand scenario, the concept of virtual bench no longer exists at Hexaware. Not only that, we have restarted hiring,” Mr P. R. Chandrasekhar, Vice-Chairman and CEO of Hexaware, said.

In the quarter gone by, Hexaware took on board around 116 employees. “In the current quarter we plan to hire at least as much as we did in the previous quarter,” he said. However, both Hexaware and Mastek agree that attrition did play a role in bringing down the count on the virtual bench.

However, there does not seem to be much luck in store – at least for the time being – for the 5,000 employees covered under the virtual pool programme at Mahindra Satyam.

“As things progress, the situation with regards to employees on the virtual bench will gradually improve. We will reinstate these employees on a case-by-case basis,” a senior company official said.

Recently, Mahindra Satyam offered its virtual benchers the option to continue on the company’s rolls albeit without any pay, for another three months starting December 18.