Pramod Bhasin

Biz@India

March-April 2014

Talent, attrition biggest challenges in our industry

Pramod Bhasin,Founder and Vice Chairman, Genpact

Talent aquisition has become a major topic of discussing among senior executives at IT firms as they constantly struggle to find employable persons, despite India’s vast population. Attrition is an added challenge. Pramod Bhasin says skills don’t get the respect they deserve and reveals how Genpact has managed to overcome the double trap that many other Indian companies fall into.
 
• How is the Indian IT performing now? Do you see a rebound?
 
growing nicely and even the Eurozone seems to have bottomed out and is now headed for growth. According to NASSCOM estimates, the industry is expected to grow by nearly 15 per cent and I am sure some companies will grow even faster than the rest. The rebound is definitely here and we have also seen a series of acquisitions taking place across the world in the last couple of years. This shows also that the Indian IT industry has come of age and is now comparable to industry in other parts of the world. No longer are companies TCS or Infosys the minnows, but can be compared to the global leaders.

• But are the Indian IT firms still chasing low hanging fruits…or moving up the value chain?

Yes, Indian IT is no longer just a low-cost option. Our companies are definitely moving up the value chain and are now spreading to new geographies and new verticals as well. So the growth has been across new markets and new kinds of markets. The large Indian players now compete effectively against the big boys of the world for practically all the deals in every segment of the market. Over the years, yes, Indian IT has moved up the value chain and is no longer just positioning its competitive edge on abundant supply of inexpensive workforce.

• But if you compare the dollar revenue per employee, where do Indians find themselves?

Yes, from that perspective, we still have some way to go. The Indian firms should now be looking at revenues generated per man-hour deployed, rather than simply bag projects, throw a large army of workers on it and execute the work. Because, ultimately, to be able to compete and profitably so, against the global leaders in western markets, the Indian IT firms need to look at the issue of revenues per employee. This is also crucial because their business models are constantly evolving, especially as they begin to acquire greater human resources in the developed world, either through acquisitions or organic growth. And in the developed markets, the cost per employee of an Indian IT is pretty much the same as that of any other company. So, the question of revenue per head will become a key in the future.

• Is talent becoming an issue? Do you find adequately skilled people?

It is a paradox. Even though India produces millions of graduates, often companies struggle to find the right person for the job. This is perhaps due to the state of our education system and the job market and we often detect a sharp disconnect between the two. People being churned out of our universities are not always properly equipped and skilled sought by the employers. The government has recognised that skill development is an important issue and the Prime Minister himself is looking into it. The government has also sought the assistance of business in ensuring that we can skill our youth properly before they join the job market. The estimates are astounding. Each year, tens of millions join the job market across the country and if we cannot skill them and find them jobs, it might become a nightmare for the country, the business and of course our youth.

• So what can be done about it?

We need to review our education system and link it to the conditions in the real world so that universities can produce the talent that business is looking for. We need to improve the quality of education and for that we should open the gates to foreign universities. I don’t understand what the threat to the country is, if foreign universities can set up over here. It would lead to an improvement in the quality of education and that would be tremendously beneficial to the nation as well the economy.

Skill is something that doesn’t get the respect it deserves. People don’t take it seriously enough as a true means of increasing their own ambitions and earning a lot more money than they could. The evidence is not in front of people. There is also another huge effort that has to happen. Industry must pay greater attention to skills. Today they don’t. The value and training for skills isn’t at the level that it should be. We don’t provide enough training to our employees, we don’t spend enough money on them, we don’t give them enough time and we’re not convinced generally as an industry of the benefit of extensive training.

When I looked around and saw that we were only hiring 8-10 per cent of the people who apply to us (at Genpact), I thought, what a tragic waste! And at the same time when I met the people, they are bright, smart and energetic. They just don’t have that last mile that they need either to become employable. Some of what they lacked would be quite simple. How to interview, how to write a resume, etc. I asked myself, if this is happening at the graduate level, what’s happening at the level below that where you have very smart people? This is going to sound silly but, some of this is intuitively obvious when you walk around and see people. They are smart people and you know that. So then you ask yourself the question: why is it they don’t have a better job? How do you give them careers? Given that we’ve learnt how to train people in the BPO sector and in a massive range of skills, can we take that, take what we’ve learnt about scalability to a new level and then see if we can build an institution around that.

• Can the private sector play a role in this? Can they be more proactively involved with the education sector in upgrading or mentoring some universities?

Some companies like Genpact have started doing it. Most of the employees who join us are first sent for a training which can last about six months. This is the period where they acquire the skills that are needed for the job. And my belief is that in today’s world and especially in an industry like technology, which is dynamic and in constant evolution, companies need to continuously provide opportunities for the employees to keep learning, to keep in touch with the latest developments.

The value and training for skills is not up to the level

What we have to do is do some experimentation whereby we can show industry that people who are skilled well can be much more productive and it is worth paying more for them. There are myths that need to be busted. A lot of industry says once you train them they will leave. But the fact is that in Genpact, the opposite has always been true. Once you train them they stay because they value what the company has invested in them. And every employee is ultimately a link in the chain. But the chain is as strong as the weakest link. So we need to proactively strengthen and improve the quality of our human resources and that is something which only comes when we invest in them. If the employees don’t learn new things and don’t see a growth for themselves, then they tend to leave.

• So, is attrition still a challenge?

Yes, attrition is a big challenge for the industry, though not for us. We have managed to keep our attrition rates really low. But the industry per se is suffering from an annual attrition rate exceeding 30-40 pc. This is such a waste for the employee, the company and indeed the economy as a whole. Every company invests, however little or much, in skilling, training and mentoring every employee. And every time someone leaves the company, he/ she has to be replaced and the entire process has to restart with the new employees. So attrition is a serious retardant for any company’s growth. But what is even more alarming is when I hear chief executives saying that attrition is healthy and a way to keep employee costs under control. This is a completely self-defeating argument as no company can progress without its employees and if the employees don’t see that their bosses would like a long-term association with them, their motivation levels as well as performance slips and all of this shows up on the bottomline.

One of things that really needs to do in India is nurture talent and Genpact is working towards this

• So how is Genpact doing it differently to have the lowest attrition in the industry?

Our attrition rate at Genpact is by far the lowest in the industry and not just in comparison with the Indian players, but any global company as well. At our top management level, the attrition has been zero over all these years and even in the senior management level, the attrition is very low, in low single digits. I am sure that most of our staff has been approached with offers to switch jobs for higher salaries but I am happy to say that few have made the switch. This is partly because it is not just salary that would make an employee switch jobs. It is much more than that. If an employee can see that a company will continue to invest in their career growth and continuously provide them with training so that they are equipped with the skills that the ever changing technology world requires, they have no reasons to care. Many companies say employees are their biggest assets. But often this is simply a message stuck on the board, with little else being done to preserve and enhance the human capital. We make sure that it is actually translated into our corporate and HR practices; and our commitment to our employees is as serious as the commitment that we are seeking from our employees.