As projects get delayed, bench staff at IT firms rise

As enterprises halt ongoing projects or cancel them, all staffers working on such projects are placed on the bench.

In some cases, IT firms have to reduce billable staffers in a project as clients ask for scaling down support, leading to rise in reserved employees.

As a result of an increase in cancellations and deferment of projects because of the COVID-19 pandemic, IT services firms are seeing a rise in their bench staff - those who are unassigned or not working on any billable project.

According to human resources experts, there has been at least a 1 percentage point increase in benched staffers in the past three months.

Typically, IT firms maintain 7 per cent of their workforce on bench, which has now gone up to 8 per cent now.

“Since there are a lot of project postponements with few new deals, people on the bench has gone up by around 1 percentage point.

"Typically, tier-I IT firms maintain around 7 per cent of total staffers on the bench,” said Sunil C, head of specialised staffing at TeamLease Digital.

He said that this is a temporary phenomenon and companies are taking measures to reduce bench concentration.

Maintaining people in reserve, which is called bench in IT services parlance, is a necessary aspect of the industry as companies win contracts from clients by showing them that they have enough readily deployable resources to execute projects.

However, as enterprises halt ongoing projects or cancel them, all staffers working on such projects are placed on the bench.

In some cases, IT firms have to reduce billable staffers in a project as clients ask for scaling down support, leading to rise in reserved employees.

While at normal times, this would not have been an issue given the flow of new deals, companies are devising optimising strategies to conserve cash in the wake up the COVID-19 pandemic.

According to HR experts, many IT firms are redeploying their own staffers in ongoing projects by reducing engagement of contractual staffers, apart from cutting down the time spent on bench.

“IT firms are deploying their own staffers from the bench in ongoing projects wherever possible by reducing dependence on contractual staff.

"Time on bench is also being reduced. In normal circumstances, companies provide extension to staffers to find a project even after the scheduled period of staying in bench.

"However, firms are aggressive on this now and are doing stringent productivity reviews,” said Aditya Narayan Mishra, director and chief executive officer at CIEL HR Services.

Normally, an employee can remain without a billable project for 45 to 60 days.

“Retraining and new certifications are being done as part of the reskilling initiatives to deploy these resources in new opportunities,” said Mishra.

While currently bench is under pressure because many outsourcing projects have been halted, HR experts feel the situation will improve in the coming months as most key nations in Europe and the US open up.

“We see situation improving in  coming months with contractual staffing going up. In that sense, the pressure on bench is short-term in nature,” said Sunil C of TeamLease.