Average Bench Time Drops to 35-45 Days as IT Companies Optimize Workforce Utilization
India’s top IT services companies, including Tata Consultancy Services (TCS), Infosys, Wipro, HCLTech, and Accenture, are increasingly reducing bench sizes and bench time as they adapt to slower revenue growth, rising cost pressures, and evolving technology demands.
According to a report by market intelligence firm UnearthInsight, the average bench time—which refers to the period employees spend waiting for project assignments—has declined to 35-45 days, down from 45-60 days in FY20 and FY21, when double-digit growth in IT services allowed for a higher bench strength.
This trend is expected to persist in FY26, with companies focusing on higher workforce utilization, leaner hiring models, and specialized skill development to meet changing industry needs.
Why IT Firms Are Reducing Bench Time and Size
1. Revenue Growth Slowdown and Cost Optimization
- The Indian IT industry, which experienced rapid expansion during the pandemic-led digital transformation surge, is now facing slower deal closures and budget constraints from global clients.
- As a result, companies are focusing on higher efficiency and cost-cutting measures, leading to reduced bench time and a leaner workforce structure.
- Experts indicate that bench sizes have shrunk by 15% compared to last year and by 22% over the past two years, reflecting a significant industry shift.
2. Demand for Emerging Technologies Over Legacy Skills
- Employees with 9 to 14 years of experience in legacy IT skills are at a higher risk of layoffs, as companies prioritize new-age technologies such as Artificial Intelligence (AI), Machine Learning (ML), Cloud Computing, and Cybersecurity.
- IT companies are now prioritizing project-specific hiring over maintaining a large bench, ensuring that employees with in-demand skills are deployed quickly.
3. Increased Utilization Rates Drive Workforce Efficiency
- Utilization rates—which indicate the percentage of employees actively working on projects—have increased from 70-75% to 80-85% in recent months.
- Reduced attrition rates (now at 11-13%, down from 28-30%) mean companies are retaining employees longer, thereby lowering their reliance on benched resources.
- This shift is largely due to Global Capability Centers (GCCs) hiring directly from India’s talent pool, increasing competition for skilled IT professionals.
Industry Experts Weigh In on Workforce Transformation
Post-Pandemic Hiring Boom Led to Excess Bench Strength
Industry analysts point out that the high bench volumes in 2022 and early 2023 were a result of hyper-hiring during 2021-22, when IT firms expanded aggressively to meet growing demand for digital transformation.
- Kamal Karanth, co-founder of staffing firm Xpheno, explained that companies are now rebalancing headcounts to maintain profitability amid slower revenue growth and shrinking deal sizes.
- IT firms are relying on just-in-time hiring models, subcontracting talent instead of maintaining a large bench.
A Shift in Business Models Driven by AI and Automation
With AI adoption increasing productivity, IT firms are rethinking traditional service delivery models.
- HCLTech CEO & MD C Vijayakumar recently stated, “The business model we’ve followed for decades is evolving. We’re now focusing on delivering the same or higher revenue with fewer employees, leveraging AI and automation.”
- As AI enables faster project completion, the need for large teams and long project durations is diminishing.
Location Strategy Also Plays a Role in Bench Management
The location of IT delivery centers is another factor affecting bench layoffs and talent distribution.
- Companies are relocating vanilla (legacy) skills to Tier-II cities, where costs are lower, while retaining niche technology expertise in Tier-I cities.
- Managing a bench in smaller cities, both in India and globally, is increasingly challenging, as demand for specialized talent remains concentrated in top IT hubs like Bengaluru, Hyderabad, and Pune.
Impact on IT Staffing and Hiring Models
Tier-I IT Firms Shift Bench Costs to Staffing Agencies
Some leading IT firms are shifting bench-related costs to staffing companies, instead of bearing the financial burden themselves.
- A senior executive from a staffing firm noted that Tier-I IT companies are reducing internal bench sizes and relying on staffing firms to retain talent until project requirements arise.
- Instead of maintaining a bench, IT firms now hire employees on-demand, ensuring cost savings and greater workforce flexibility.
Utilization Over Hiring: The New Normal in IT Workforce Planning
While the Indian IT industry continues to hire, companies are emphasizing workforce efficiency over aggressive expansion.
- Negative quarterly headcount addition across most top IT companies reflects this shift toward optimized staffing models.
- IT companies are investing in upskilling initiatives to ensure employees stay relevant in a rapidly evolving tech landscape.
Looking Ahead: What’s Next for IT Workforce Strategy?
With digital transformation accelerating, IT firms must navigate multiple challenges, including AI-driven disruption, evolving client demands, and intensified competition from GCCs.
Key Takeaways for the Indian IT Industry:
- Bench time has dropped to 35-45 days, down from 45-60 days in previous years.
- Benched employees now make up just 2-5% of the total workforce, compared to 10-15% earlier.
- Utilization rates have improved to 80-85%, ensuring higher efficiency and lower costs.
- AI and automation are reducing project durations, challenging traditional IT service models.
- GCCs are directly competing with IT firms for top talent, driving leaner hiring models and workforce optimization.
- Staffing firms are increasingly managing benched employees, as IT firms shift towards project-specific hiring.
As technology evolves and client expectations shift, Indian IT companies must continue to redefine their workforce strategies, focusing on AI-driven productivity, lean staffing models, and specialized talent development to stay ahead in an increasingly competitive market.
