Indian Multinational IT companies Wipro, Infosys are changing their hiring strategy

India's IT companies, which hired approximately 1.5 lakh students from campuses last year, will be hiring much less during this placement season starting August-September. 

Country's third-largest software exporter Wipro, which had planned to keep the ratio of on-campus and off-campus hiring at 90:10 in the beginning of the year, has now changed it to 70:30, a senior executive from the Bangalore-based company said. "We will hire in a measured way till we get more (demand) visibility and increase off-campus numbers," the executive added. 

In campus hires, companies have to make offers and wait for at least six months till the student finishes his degree. But it can hire off-campus as and when there is demand for more hands. Off-campus recruitments include freshers who had opted out of placements and some with very little work-experience and are picked by companies through hiring drives and job fairs. 

"Off-campus hiring is gaining traction, especially among large IT firms that are cautious and are not able to take long-term business decisions," says Nasscom President Som Mittal said. "It helps them to take hiring decisions based on their needs." 

Nasscom has cut IT-BPO industry's growth forecast to 11-14% this year, down from 16% last year. Some companies like Infosys have given a revised projection of 5%. IT companies are looking to calibrate hiring to the slowdown. 

Last month, country's second-largest IT exporter Infosys said it could delay the joining dates of over 25,000 freshers it had hired from campuses in the 2011 placement season. Its mid-tier rival iGate, too, has delayed joining dates of close to 1,000 fresh engineers by a month or two. 

TCS, India's largest IT firm which will hire 50,000 people this year, plans to maintain its campus hiring. 

Companies say that quality is not an issue in off-campus hiring - despite many of the applicants being rejects from previous placement processes - if one is prepared to search harder for the right hires. "If 3 out of 10 people are suitable on-campus, that ratio will be much lower off-campus. You have to drudge a lot more to get the right people," says Naveen Narayanan, Global Head -Talent Acquisition, HCL Technologies. 

HCL is willing to take the extra effort and will maintain its 70:30 ratio of on-campus to off-campus this year. It makes economic sense to spread hiring across all months, instead doing the bulk during placement season. 

Mid-tier firms are following suit, but to break the monopoly enjoyed by the IT mammoths during placements. "Off-campus increases our chance of finding the right talent," Parthasarathy NS, COO of MindTree, said. "Large companies often visit campuses and recruit 95% of the best students on day one. Smaller firms, which typically visit on day 3 and 4, are left with a very small number," he added. 

MindTree has therefore decided to increase its off-campus quota from 10% of total hires to 30% this year. This strategy is expected to give the Bangalore-based firm wider reach in tier-III and -IV colleges. 

"Given the uncertain economic scenario, I would assume that on-campus placement numbers are going to come down this year," says Bhaskar Chavli, Chief Delivery Officer at NIIT Technologies. "Companies may want to see how business turns out and then decide on hiring targets." 

Gurgoan-based start-up CoCubes.com - it connects companies and colleges through an online recruitment platform - has seen on-campus hiring over the past one year drop by 30-40%. The start-up, which works with companies like Capgemini and UST Global, had experienced a rush for off-campus demand in 2010. Back then Accenture placed urgent orders for 1,500 freshers off-campus in eight weeks and feels sudden demand will come their way again. 

"A similar trend seems to be coming back this year as more companies wait for the economic environment to stabilise and then finalise their hiring plans," says Harpreet Singh Grover, co-founder and CEO of CoCubes.com. 


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How the big IT gaints like Wipro, Infosys, Cognizant create their leaders...

Every year, Wipro chairmanAzim Premji and the CEO of the company's IT business TK Kurien block one week of their time to review succession slates in the company. The search is not restricted to front-line leaders who would occupy corner room positions; it runs deeper in the organization covering a large number of leaders across different business units. 

Wipro's Talent Review and Succession Planning exercise assesses its leadership bench strength annually and makes sure there is a ready pool of successors to fill critical roles. "The talent review process gives us a leadership-level talent inventory and capability map that reflects the extent to which critical talent needs are fulfilled vis-a-vis business drivers. This process covers 600 senior leaders in the organization," said Saurabh Govil, global HR head for Wipro's IT business. The annual exercise is timed around the completion of the annual performance appraisal in May. 

Many of the major IT companies have put in place, or are in the process of putting in place, succession plans for not just their top management executives, but also their leaderships at different levels. For US listed companies, CEO succession planning is now almost a mandate. In 2009, the Securities and Exchange Commission provided shareholders the right to demand more transparency in CEO succession planning. 

Infosys Technologies put in place succession planning early last decade, when it identified some 400 potential leaders. Its Leadership Institute in Mysore has played a big role in training leaders. Over 800 employees have undergone the programme at this institute. Incidentally, Infosys even has an IT solution for succession planning called TalentEdge that helps organizations determine successors for employees who play critical roles. 

Mid-sized IT firm MindTree has initiated a leadership review process to identify 100 leaders in the company by 2015-16 . "In managing talent, it's either a make or buy decision. We are creating a leadership pipeline with 80% of talent requirement being groomed in-house , while we will acquire 20% externally ," said Ravi Shankar, chief people officer at MindTree. The company also focuses on succession mentoring where the CEO and chairman of the company spend 15-20 days in a year with the successors who have been identified. 

HCL Technologies has a well-defined succession plan for its top 30 managers including its CEO Vineet Nayar. Currently, the top three second-level leaders manage 30% of HCL's business and one of them could succeed Nayar. These include Rahul Singh, president of financial and business services , Anant Gupta, president of infrastructure services and Steve Cardell, president of enterprise application services. 

Cognizant Technology Solutions recently benchmarked the skills and competencies of 22 senior executives in India as part of its succession planning. "They will eventually play a larger role in the company, heading critical functions," said a source privy to the development. However,the company denied undertaking such an exercise. 

Though companies are secretive about succession planning, they follow a rigorous process to get visibility into the company's leadership talent pool. "This assessment leads to an identification of short-term and long-term successors for each key role," said Govil. Wipro identifies three successors for each critical role. 

MindTree follows a multi-tier assessment process to benchmark competencies of internal candidates under its Leadership Talent Review process. This includes peer reviews, mapping competencies by teams internally and by external consultants. "The successors are put through a nine-month structured leadership programme to prepare for critical openings. An action plan is drawn up with live projects to review the results and bridge the existing skills gaps. A personal coach is assigned to groom potential successors," Ravi Shankar said. 

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Infosys, TCS, Wipro Created 2 Million Jobs in FY 2011-12

The resilient Indian IT industry has shared the grave concerns expressed by Infosys' chairman emeritus N R Narayana Murthy and Wipro chairman Azim Premji on policy paralysis in the UPA government holding up reforms and growth.

"Our concerns are no different from what Murthy and Premji have expressed. Key policy issues and executive decisions pertaining to our industry have been pending for long. They require urgent attention of the government if we have to remain competitive in a challenging environment," Som Mittal, president of the National Association of Software and Services Companies ( Nasscom), told IANS.

Along with IT bellwethers Tata Consultancy Services ( TCS), Infosys and Wipro, the $100-billion Indian software and services industry contributed significantly to the Indian economic growth story, creating over two million direct jobs and accounting for 25 per cent of the country's merchandise exports, generating $69 billion in fiscal 2011-12.

Alarmed over the failure of the federal government on many fronts and its prevarication over taking tough or quick decisions to revive growth, Murthy was quoted recently as saying that he was saddened by the state of the Indian economy and the crisis of confidence gripping the country due to lack of "big ticket" reforms since 2004.

"There was a huge expectation on the introduction of many reforms by the (UPA) government. There was a lot of confidence that India would do whatever was necessary because the person ( Manmohan Singh) who was the face of economic reforms in 1991 is our current prime minister," Murthy told global financial services firm Morgan Stanley recently.

Echoing Murthy, Premji lamented how policy paralysis was hurting investor sentiment. "We are working without a leader as a country," Premji was quoted as saying at his company's meeting with analysts in Mumbai.

Murthy, who co-founded the $7-billion global software major in the 1980s, observed that the government decision to apply tax laws retrospectively had sent a wrong signal to overseas firms on investing or doing business in India.

"The government would have to take steps to do something very positive. It should indicate that it means business, and foreign investors are welcome. This has to happen in FDI (foreign direct investment) because portfolio investments are fickle," Morgan Stanley quoted Murthy saying in its research report.

Endorsing the views of Murthy and Premji, Mittal said that policy paralysis and lack of reforms were hurting even the IT industry as the government had, for instance, not yet resolved the transfer price issue or introduced the safe harbour provision for past and current claims.

"Given the widening current account deficit, we also need the government to take pro-active measures to boost exports and give incentives to promote entrepreneurship in innovative product firms. Providing basic and social infrastructure, especially in tier-two and tier-three towns is another area where the government initiative is wanting," Mittal asserted.

As a former chief executive of HP India Ltd. and an IT services expert with Wipro earlier, Mittal expressed concern over the lack of government support to small and medium enterprises (SMEs) after tax holidays were withdrawn to the industry since 2011.

"Though Special Economic Zones (SEZs) were announced with much fanfare in place of the Software Technology Parks of India ( STPI) for the industry, Minimum Alternative Tax ( MAT) on SEZ income discourages firms from opting for the scheme," Mittal said.

Sharing the industry's concerns, former Infosys director and Manipal Global Education Services chairman T V Mohandas Pai regretted that the UPA government had been simply watching the deterioration of economic activity during the past six months. 


News Submitted by Mehnaz Ahmad