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Hexaware Q2 nos hit by US talent crunch

PUNE: Hexaware is looking to use its Mexico centre to servic..

PUNE: Hexaware is looking to use its Mexico centre to service clients in the US, after the Mumbai-based mid-size IT firms attempts to accelerate growth in North America got derailed due to a talent crunch in its main market.

Business grew slower than it should have in the last quarter because of multiple factors, a key one being the tight labour market for lateral talent in the US, chief executive R Srikrishna told ET.

“The talent supply situation in the US did have an impact on the business in the previous (July-September) quarter, but we expect this to get solved in the next quarter,” he said. “We already have 500 people there (in Mexico) and one option is to source talent locally (in Mexico) and move them to the US if required”.

Indian IT services firms are facing a talent crunch in the US, a market that is witnessing its lowest unemployment rate in 45 years. Demand for computer science engineers is increasing as traditional companies adopt technology to combat rising competition from upstarts and pure online companies in retail, hotels and taxi services. ET on Friday reported that Indian IT services firms were poaching from each other in the US as they struggle to find local engineers and the gradual decline in people they send to the US on H-1B visas.

Hexaware has a three-pronged approach to remedy this situation: offering better compensation packages, hiring fresh graduates from campuses in the US and using the Mexico centre to deliver projects, Srikrishna said. “We are increasing our campus hiring and training in the US and have been doing this since Q1 (January),” he said.

These employees will soon be working on actual projects, which will help ease the strain a bit. The company would also consider hiring locally in Mexico and moving people to the US should the need arise. This would be done through the TN visa, a work permit similar to the H-1B visa, but for Mexico and Canada.

Hexawares North America operations, which grew 2.1 per cent sequentially and 8.6 per cent year-on-year in the September quarter, contribute 77 per cent to its total revenue. In constant currency terms, the company grew 1.6 per cent sequentially and 11.1 per cent annually. The other issues that had an impact on business growth were unseasonal furloughs, cross currency issues and delayed transitions and ramp ups.

Srikrishna said the company would continue to hire in India as well, having added over 2,500 people in the last quarter, primarily freshers. “There are lesser issues around talent in India and we have a better programme for training and skill creation here,” he said.

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