Satyam poaching seniors from rivals
Software firm Mahindra Satyam is aggressively hiring senior executives from larger rivals as it attempts to win back clients, and is returning to offering pay hikes of up to 20 percent, reports LiveMint
Since October, Mahindra Satyam has hired at least three senior executives from IBM, Infosys and Wipro, and is looking to recruit more senior people to strengthen its presence in key geographies and verticals, a company executive said.
Another executive in the firm said that, after concluding its appraisal process for 2009-10 in mid-December, Satyam has offered employees salary hikes of 7-20 percent and hefty retention bonuses as it struggles to stem its steep attrition rate.
After B. Ramalinga Raju, Founder and Former Chairman of Satyam, confessed on 7 January 2009 to having doctored the firm's accounts to the tune of Rs. 7,136 crore, several employees quit. In fact, some of the senior executives walked away with key customers.
According to industry and market analysts, the company's recent hiring appears to be strategic. Without reliable, audited financial data, the company cannot participate in competitive bidding for large contracts yet, but it can after 30 June, by when it has to submit its restated accounts.
Current Chairman Vineet Nayyar had said in May, that the firm had lost 35 percent of its clients since January. Satyam had around 600 clients in September 2008. Industry experts say that most of the clients who left Satyam early last year gave their business to rival Indian IT firms.
In the past three months, Mahindra Satyam has hired Bobby Gupta, previously IBM's Asia-Pacific Head for telecom expenses management, as its Business Development Head for Australia and New Zealand; Sudhir Nair, who was an Assistant Vice-President, infrastructure management at Infosys, to head the same business segment at Satyam; and Vijayanand Vadrevu, formerly a Vice-President at Wipro heading the life sciences practice, as its Head of Strategic Initiatives.
"The very fact that senior employees of our peers are joining us is an indication that Mahindra Satyam evokes confidence as an organization that holds promise for a tremendous future, personally and professionally," a Satyam spokesperson said by email.
But, according to company executives Mint spoke with, the firm's attrition rate continues to be as high as 20-25 percent. As per the company's estimate, it now has around 30,000 employees, down from around 52,000 before Raju's revelation.
As a measure to retain the employees, the firm has introduced retention bonuses of up to 90 percent of an employee's annual compensation package, staggered over four years and paid half-yearly, for those in middle management. Junior employees will be given a one-time retention bonus and those in senior management, stock options.
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