BANGALORE: What’s your bench size? That was a question HR managers used to run away from. Not anymore. Ask now and they happily, but confidentially, will tell you that it’s negligible or in single digits.
Critical verticals like oil & gas, energy and utility, as also captive units of some like HSBC, JP Morgan, Stanchart and Citi maintain a bench at high single digit rates, but many leading domestic and MNC tech firms have only 5% of their people sitting on benches at present, say external hirers who are privy to these details.
The bench refers to employees who currently do not have any projects on hand. Longer benches mean thinner margins and profitability. Technology companies on an average had a bench size of 15% to 20% while some even had up to 30% of their people sitting on benches, waiting for new projects.
The duration of ‘benching’ was anything between a fortnight to a couple of months. But during the recession, the volume of unbillable bodies became too huge for comfort.
“The bench size is an indicator of a company’s ability to manage talent holistically. It is a reflection of its ability to forecast and assess the pipeline properly.
Most firms failed in these fronts and therefore they all incurred huge bench related losses,” says K Jayshankar, MD of Pune-based strategic consulting and training firm Empowered Systems.
IT and ITES firms in India collectively had about 4 to 5 lakh people on benches when recession hit the industry. Once the business hit a negative spiral, organizations had to resort to flab-cutting.
“Being unbillable bodies, talent on benches became the easy victim of the environment. This has broken almost all benches in the system,” says V G Nirupama, MD, AdAstra.
The recession made companies think smart, says B S Murthy, CEO ofLeadershipCapital. “They are now trying to increase their visibility and access into the virtual talentscape, so that they can hire as soon as the demand arises,” he says.
Mohan Menon, MD of Sentient Consulting, agrees. Companies, he says, have mastered the art of finding talent quickly. “That does not mean benches will be fully eliminated, but they will be really thin and short now,” he says.
Despite the substantial fall in bench size, many leading IT firms continue to report utilization rates of no more than 80%. Does this mean some 20% of their people are ‘benched’?
Not so. The bench has an implication on the utilization rate, “but a zero bench need not mean 100% utilisation”, says Amit Bansal, CEO of PurpleLeap, an entry level talent management firm.
“One reason for low utilization despite the reduction in bench is that lot of clients reduced the number of workers working on their requirements. This reduced the utilization number but those people did not come to the bench, but continued working on the projects,” adds Bansal.