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IT staff forced to work 50 hours/week to meet deadlines: data

Infosys founder Narayana Murthy may have incited a nationwide debate by saying that Indians should work 70 hours every week, but data sourced by ET show that employees in the country’s software companies are putting in longer hours than the industry standard.

IT employees in the country work on an average work for around 45-50 hours per week, translating around 10 hours a day in the 5-day week while the standard is 40 hours a week as a large part of them is often compelled to work longer hours to meet project deadlines, as per data from staffing firms.

Experts believe the industry's emphasis on counting hours worked rather than measuring productivity, lengthy commutes, infrastructural challenges, and work-related stress also hinder employee productivity in India.

Over the past five fiscal years, the productivity per rupee spent on compensation to each employee has remained stagnant.

As per Xpheno data, for all quarters since AMJ (April May June) 2020 (pandemic quarter), for every Re 1 spent on talent cost, the revenue return has remained stagnant at Rs 1.8-1.9. The people cost to revenue productivity ratio of 1:1.8 remaining flat despite revenue growth shows an equivalent growth of people costs.

This number is substantiated by calculating data from the annual reports of top seven IT firms, namely TCS, Infosys, HCLTech, Wipro, TechMahindra, LTIMindtree, and Mphasis.

“Per-person productivity at Indian IT bellwethers, measured in terms of ratio of people cost to revenue, has been nearly stagnant over four fiscal periods,” said Prasadh MS, head - workforce research at Bengaluru-based recruitment firm Xpheno. “No notable growth in productivity has been achieved despite digitalisation, AI and automation initiatives and investments.”

Productivity of the IT industry is commonly assessed through revenue generated per employee, also known as ‘revenue per employee’.

“In Indian culture, hard work is given a lot of value and the number of hours you work is considered directly proportional to your success,” said Aditya, a 27-year-old software developer at one of the IT majors. “But the hours you put in are not entirely executional... The issue comes up when people are asked to work 10 hours a day on things that are not directly reportable or those which can be done with muscle memory… Your brain will get fatigued and you will take longer to solve a problem.”

As per FY23 numbers, the aggregate revenue per employee for TCS, Wipro, and HCLTech saw a dip of 3.8-11% on a five-year compound annual growth rate (CAGR) basis. The same number for Infosys and TechMahindra showed an increase of 2.6% and 5.6%, respectively.

Krishna Vij, business head, IT staffing at recruitment services firm TeamLease Digital, however, said that while the industry's productivity is comparatively lower due to significant employee costs, there are indications of improvement.

“Despite a recent economic slowdown resulting in reduced hiring and cautious spending, higher employee utilisation has driven overall revenues up, consequently increasing productivity per employee,” she said. “In 2023, the average revenue per employee surged by 13%, while the rise in employee costs was 9%, signalling positive trends in productivity.”

Meanwhile, all IT service players incur additional input cost on manpower through subcontracting spends and outsourcing costs.

Salary costs across major IT firms hovered around 50-54% of their total expenses for 2023. In previous years, these costs would have been lesser by 3-4%, officials with both the staffing firms said.

The $245-billion Indian IT industry is also encountered with 58% of the workforce reporting an average to poor work-life balance, higher than the global average of 40%, according to data by TeamLease Digital.

All this at a time when the sector is witnessing one of its slowest growth this fiscal, leading to a dip in fresh hiring and puny hikes across the IT sector.

A large part of the productivity increase is attributed to the spike in demand for IT and tech services since the Covid-19 pandemic outbreak.

Manu Saigal, director - general staffing at Bengaluru-based workforce solutions firm Adecco, said measuring the per-person productivity of an average IT employee can be complex and depends on the specific nature of their work.

“There are different approaches to measuring productivity in various IT roles, and this can vary between support and maintenance projects and product development projects,” she said. “Independent consultants such as business analysts are increasingly opting for more flexible schedules, often working fewer hours, as low as four hours a day. This change reflects a desire for work-life balance and aligns with the trend of remote and flexible work arrangements.”

If the technology sector claims to be revolutionising the industry, companies must go beyond the vanity metrics of number of hours.

TeamLease Digital’s Vij said changing this cultural mindset will be pivotal for a more balanced and productive workforce.

( Originally published on Nov 20, 2023 )