Despite the Downturn, Infosys Focuses on Full-Time Staff for the Long Term

Infosys Technologies cares more about its long-term reputation than its short-term staffing flexibility.

That stance helps explain why the Bangalore, India-based technology services company kept 15,000 employees on its payroll even though it lacked work for them. The decision to honor hiring commitments made to thousands of new college graduates and to avoid layoffs of existing staff stems largely from the company’s goal to be an employer of choice over the long haul, says Nandita Gurjar, senior vice president and group head of human resources.

“Our potential employees watch what you do in good times and bad.”

Infosys ended up with surplus employees in the wake of the financial crisis of late 2008.

Its response to the situation highlights the way Infosys has been going against the grain in its staffing strategy. The use of temporary labor is on the rise, and many consultants call for companies to embrace external, contingent personnel to keep labor costs low and adapt to uncertain times.

But Infosys focuses on full-time employees partly because of its home country’s attitude toward free agent work, Gurjar says.

“In India, culturally it is not good enough to be a contractor because this means temporary work and no job security.”

Although a full-time workforce may be less flexible, Infosys tries to prevent hiring too many or too few employees through extensive annual planning. The process takes into account such factors as employee promotion rates, contracts in progress, and estimates of new business and new market penetration.

Overall, the company can accurately predict 60 percent of its labor needs a year in advance, Gurjar says.

“There’re only two years in the last 10 when we’ve been caught on the wrong foot.”

One of them was 2008. That year, Infosys made nearly 20,000 job offers to college students who weren’t slated to join the company until they graduated in mid-2009. By then, though, the global economy had taken a nosedive and Infosys needed fewer than half that many additional workers, Gurjar says.

In effect, 15 percent of the firm’s then-100,000 employees—it now has about 122,000—had little or no work to do. Rather than lay off people or rescind offers, however, Infosys assigned those employees to training assignments and internal projects—such as working on an improved travel management system—until business picked up.

Gurjar says it took a year before demand picked up enough to put all the employees to work on client business. Infosys declined to estimate the cost of keeping all the extra employees on the payroll, but Gurjar says doing so allowed the company to continue its tradition of never withdrawing a job offer.

The strategy represented an investment in Infosys’ strong reputation in the war for top talent, she says. That reputation is “absolutely priceless.”

Sticking with all of those excess employees produced a tangible payoff in the form of more effective college recruiting during the 2009 recruiting season, Infosys says.

Students at top India universities vote to designate a “dream company” that they want to interview with first. Infosys says it won those prime interview slots at 91 percent of the schools where it recruited in 2008. In 2009, the company says, the figure edged up to 93 percent.

Workforce Management Online, February 2011 — Register Now!