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Thanks to pandemic, IT cos register record high ’employee utilisation rate’

Source | www.thehindubusinessline.com | TE Raja Simhan

In Q3, both Infosys and Wipro reported utilisation of 86.3 per cent

The Covid-19 pandemic has put top IT companies in a Catch-22 situation. It has pushed up its employee utilisation rate. While a high utilisation rate brings higher margins due to better efficiency, companies are working on a low bench strength and existing employees are under strain.

In Q3, both Infosys and Wipro reported utilisation of 86.3 per cent. It was an all-time high level for Infosys. Tata Consultancy Services and HCL Technologies do not report such numbers, but experts confirmed that both operated at the same level as their peers. Three years ago, IT companies used to perform with around 70 per cent utilisation, but that has gradually increased to over 80 per cent now.

Record hiring

The high utilisation was one reason why companies had record net hiring in the third quarter to improve the bench strength.

Pravin Rao, COO, Infosys, told analysts, “utilisation is at a record high. This is not where we want to be. Within the past few quarters, we had comfort in operating between 83 per cent and 85 per cent, and that is where we want to be. We will look at much more aggressive hiring over the next few quarters and try to bring the utilisation down to manageable levels.”

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Source
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