Nov. 8, 2009 (The Hindu Business Line) --
K. Bharat Kumar
Chennai, Nov. 8
In a year that saw the worst global slump of the century, many Indian IT companies have made more revenues and profits per employee than they did during the same time last year.
Historically, each year had seen these companies raise headcount while revenues did not grow at a comparable pace. In other words, companies were using more employees to produce the same unit of revenue. But the last 12 months seem to have been a period of reining in costs, managing foreign exchange volatility and cranking up utilisation rates.
In many cases among select companies (see table), revenue per employee and profits (before interest, depreciation and taxes) per employee seem to have risen. Notable among these are Cognizant and HCL Technologies, among the large players.
De-merging verticals
While we took numbers on a consolidated basis, more than just one player sought to de-link IT services and BPO.
A spokesman for Infosys, which saw revenue per employee falling while profits per employee rose slightly, said, “Considering the total number of employees may not be accurate, as it would include those from BPO/products, support staff and also those on the bench. Per capita revenues derived from effort man-months are accurate.”
BPO and products business are different from IT business in terms of nature of work, skill sets required and employee costs. Thus, Infosys’ revenue per employee for the September 2009 quarter was calculated at $6,752 compared to $7,310 in the same period of the previous year.
At Polaris, without considering BPO, revenue per employee rose to Rs 8.82 lakh for half-year ended September 2009 versus Rs 8.36 lakh the same time in the previous year. Profits per employee too rose from Rs 1.22 lakh to Rs 1.50 lakh.
Mr Srikanth, Executive Vice-President and CFO, Polaris Software, said the company managed this rise as “it has a ‘built-in’ hedge with roughly one-third of the business coming in from the US, Europe and APAC, making for a balanced revenue portfolio. We have four growth engines – customer accounts, product (intellect), new country expansion and the insurance business expansion. We grew in all four.”
As for per capita growth in profit, he said the company had focused sharply on internal efficiencies, optimal utilisation of resources and rationalisation of costs. “The products business has contributed to our healthy margins.”
Outcome-based pricing also seems to have helped companies.
HCL Technologies attributed its growth in per-employee figures to winning deals in the “total outsourcing space”. Mr Anil Chanana, the CFO, said: “These deals are primarily outcome-based and do not require linear deployment of manpower.
