Infosys is taking several steps to control a record-high attrition, which led to nearly one in five employees quitting India's second largest IT outsourcer last fiscal.
Infosys chief financial officer Rajiv Bansal told Nomura analysts Ashwin Mehta and Pinku Pappan that the company is "thinking of instituting restricted stock units" to attract talent. Restricted stocks are not awarded immediately but are tied to duration or certain pre-set performance milestones.
Incidentally, Infosys granted close to 22,800 restricted stock units, valued at over Rs. 8 crore, to its CEO and managing director Vishal Sikka last month.
Nomura says Infosys' competitors such as Cognizant, Wipro and HCL Tech all have some form of stock compensation for senior management.
Infosys has taken measures like wage hikes, regular promotions, and reducing uncertainty on take-home salaries on the monetary front. It is also pursuing softer aspects like improving engagement with employees, Mr Bansal says.
Last month, Infosys gave out-of-turn promotions to 5,000 employees in a bid to boost workforce morale. Earlier, the company had announced 6-7 per cent salary hikes for offshore employees.
However, Infosys lagged behind its competitors TCS and Cognizant in wage hike, both of which doled out an average 10 per cent hike for India-based employees this year.
Infosys, once the first choice of young IT graduates, has steadily lost its charm over the last few years. Its current approval rating onGlassdoor, an employee-rating website, stands at 3.2 as compared to 3.5 for Cognizant and 3.3 for TCS.
Analysts have blamed a series of senior management exits, lower salary hikes and concerns over slow growth for the declining popularity of Infosys.
The company, however, has taken a number of steps over the last few months to make a comeback. On August 1, Vishal Sikka took charge as the first non-founder CEO at the company. Mr Sikka is soon expected to formulate a new strategy to turnaround the company, while sticking to co-founder NR Narayana Murthy'sinitiatives of sales effectiveness, delivery effectiveness and cost optimization.
Mr Bansal told Nomura that the initial feedback from clients on the CEO appointment is positive.
Infosys is also focusing on the fast-growing infrastructure management services, which along with digital will now operate as separate units, Mr Bansal said.
Mr Bansal says Infosys will increase its sales and marketing spends to drive higher growth. The company has hired in excess of 100 account managers for better client-mining and account management and nearly 100 MBA graduates for sales roles. It will add 100 more MBAs for sales role soon, Mr Bansal noted.
The company will also reinvest margins to drive sustainable growth. Mr Bansal expects operating margins (EBIT) to be in the range of 24-25 per cent.
Nomura has a "buy" rating on Infosys with a target of Rs. 3,790. Infosys shares closed 3.4 per cent higher at Rs. 3,734.60 on Wednesday. The stock was among the top Nifty gainers and outperformed the IT sub-index on the BSE, which rose 2.50 per cent.
No comments:
Post a Comment