“Bench” Concept in IT:
HCL and Cognizant reduce bench time for employees without projects. The term “bench” describes staff members, including recent hires who are awaiting assignments, who are not actively working on projects. Many IT companies are lowering the amount of time workers can remain on the bench before being let go in an effort to save salary costs.
Shifting Bench Policies in Indian IT Firms:
Due to a slowdown in client spending, organizations are reevaluating their bench policies, which is causing uncertainty in India’s IT services market. The term “bench” describes staff members, including recent hires who are awaiting assignments, who are not actively working on projects. Many IT companies are lowering the amount of time workers can remain on the bench before being let go in an effort to save salary costs. HCL and Cognizant reduce bench time for employees without projects.
For instance, HCL Technologies has reduced the amount of time workers can sit on the bench without landing a project. Additionally, Cognizant Technology Solutions is tightening its policies; benched staff members are being helped to obtain projects, but those who are unable to acquire employment must resign. The utilisation rate, which gauges the proportion of staff members actively working on projects, has gone up as a result of this change.
The “Great Resignation,” a time of intense hiring during the pandemic when IT companies expanded swiftly to meet demand, is followed by the quiet. The current climate is very different, though, with the $254 billion Indian software services market expected to grow at the slowest rate of 3.8% in the year ending March 2024 due to decreased demand from Fortune 500 clients. Growth expectations have been further reduced by clients’ cautious spending.
Employees can usually be benched for up to 120 days in IT businesses, while some have shortened this time to roughly two months. Workers are frequently asked to quit if they are unable to secure a project within this time range. According to one HCLTech employee, poor performers are requested to go sooner, while individuals with outstanding performance ratings may be given more time to locate a project.
Impact on Utilization Rates and Cost-Cutting:
The IT industry has already experienced large job losses, and these changes are expected to have an even greater effect on employment there. The combined TCS, Infosys, and Wipro workforce shrank by 63,759 workers in the fiscal year that concluded in March 2024.
These actions are primarily motivated by cost-cutting, but maintaining employee engagement, upskilling, and alignment with the organization’s objectives is also a top priority. Rather than just firing non-contributing professionals, Team Lease’s vice-president of IT staffing, Krishna Vij, clarified that the goal is to optimize talent deployment to match shifting market demands.
Reducing bench sizes and increasing utilisation rates will probably remain a priority as India’s IT services sector navigates this difficult time, as the sector must adjust to a slower growth environment while still being competitive and efficient.
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