Is industry utilizing employees? Or exploiting?

Akanksha Prasad, CIOL

BANGALORE, INDIA: The recent Nasscom and other reports signal that the wave of recession is slowly receding. Companies are reportedly posting positive employeeutilization, but this is done on the cost of the employee. IT companies increased working hours, work pressure putting more stress on the employees, and in return, they were not eligible for over time benefits.

As Business Directory.com defines, employee utilization means "a method that attempts to maximize the efficiency of a company's employees".

Kris Lakshmikanth, founder CEO and chairman of Headhunters India, said that till 2007, the average employee utilization of the IT companies was less than 70 per cent. But 2008 onwards, the utilization went up to 80-82 per cent.

He said, "The factors responsible for this movement is reduction in workforce, utilization of the bench and increase in the work timings."

During the recent quarterly announcement, Wipro reported an increase in the utilization to 73.2 per cent in Q3 FY 09. HCL reported its employee utilization level moving up to 76.4 per cent in Q3 and that of Infosys came around 68.8 per cent in Q3. TCS reported the highest utilization rate of 81.1 per cent (excluding trainees) and 77.2 cent (including trainees).

Speaking to CIOL, requesting anonymity, a Kolkata-based IT professional, working in one of the leading IT companies in India, said, "Starting April 2009, our work timingswere increased by half an hour officially but one hour internally. If we worked for less than nine hours then we were penalized. But when we worked for 12-15 hours, we were not given overtime."

Lakshmikanth elaborated, "As per the reports the companies had increased the working timings by half an hour every day, which would come around an increase of two and a half hours in a week. This increase in the entire workforce can effect the total employee utilization to as much as five per cent."

Some of the IT companies reported to have increased their work timings from fifteen minutes to half an hour are TCS, HCL and Accenture.

When contacted these IT companies refused to respond, while others like Wipro and Infosys refrained from making comments saying that these timings had been around since long time.

According to them, these norms have been around for years, and it was just during the period September to December 2008 that they made compulsory office working of 9 hours 15 minutes and 9 hours 30 minutes respectively. In other words, every employee needs to work for around 8 plus one and half hour and on record, though they end up spending more than that.

Elaborating on the concept of increasing work timings, Praveen Bhadada, engagement manager, Zinnov Management Consulting Pvt. Ltd said, "For IT companies working on time and material basis, working extra hours means more revenues at the fixed salary of the employee, i.e. increased profitability. For fixed bid contracts, the work is executed faster – i.e. higher efficiency. Increased work hours reflect in increased overall productivity.

Another IT professional working in Bangalore reported that in order to show good performance and high efficiency, employees end up working for 12 hours, but still were not eligible to claim for the overtime.

She said, "Our targets were increased by double, in order to meet them under the deadlines, we worked for almost 12-14 hours. We were not only devoid of the overtime claim, but also the performance sheet did not reflect our hard work. This is the high time, when government should make strict labor laws and work timings."

Through an email, the spokesperson from the Union Labor Ministry said IT employees shall have a minimum of 48 working hours in a week but the maximum working hours have not been defined in the law and left to the discretion of the employer company. He said the department is examining the issue of working hours beyond 8 hours a day- without any extra monetary benefits.

Interestingly, none of these companies seem to bring back the gold old working experience of relief and luxury at work. Lakshmikanth opines that companies might continue with these policies for yet another six months, till they comfortably see not only recovery but growth.

Bhadada raised a very valid point that if the employee is stressed it can result in lower productivity and lower utilization as well. And this would soon become a challenge for the companies, perhaps one the reasons behind employee attrition.