Fewer working days put IT firms on their toes

Information technology (IT) services companies, especially those depending on offshore to a large extent for delivery of services, are finding it difficult to complete unfinished projects. Reason: fewer number of working days in the third quarter.

Q3 of most Indian IT services companies has 61 working days this year, at least three days less when compared with the previous quarter. This not only reduces the billing hours, but IT companies also find it difficult to finish projects well in time as most employees take their annual leave in December.

Recently, employees of Infosys, the country’s second largest IT services firm, worked on two Saturdays (November 19 and December 10). Company sources say whenever the project is in the final stages of delivery, employees are given the option of working on days-off in lieu of which they are later given compensatory leave.

“Some employees worked on two Saturdays this quarter because the number of working days in this quarter is less because of festivals like Diwali, Christmas and Thanksgiving day,” according to a source with the company.

According to industry analysts, most Indian IT services firms ask employees to work on Saturdays, based on the specific projects’ needs and the clients’ requirements.

“Most clients follow the January-to-December cycle,” notes Amneet Singh, VP-global sourcing, Everest Group. “This is why they prefer the pending projects to be completed in December. This helps them think about the continuation of the projects — and new project starts as per their new budgets once they are back at work after the vacation in January.”

The October-to-December quarter is the fourth quarter for most global clients, who follow the calendar year. The employees working with most global clients, especially American, take annual leave almost two weeks before the Christmas. This continues till the second week of January. The Indian IT services industry has got tuned to this leave cycle.

According to Kris Lakshmikanth, CEO (HR) of consulting firm Headhunters, there was a backlog of projects when the market was booming in 2007. “Some IT companies made the employees to work half an hour extra a day,” he recalls.

“If this is happening now, this is because most people go on annual vacation during Christmas time, which creates an artificial crunch of resources, adds Lakshmi-kanth. “We are also seeing large companies have kept their bench (reserved employees) strength quite low to improve utilisation. When there is a sudden spike in demand, they have to manage with the existing ones.”