The HR Olive Branch

Aadesh Goyal is 37, loves driving his gleaming bottle-green Opel Astra at ‘I

won’t admit’ speeds, heads the human resources division in one of the

country’s fastest-growing software companies, lives for his morning jog and

workouts, and likes to keep his hair short. For the last few months though,

Goyal has been sporting long hair. He has been busy, for life, obviously, has

been hectic…and his tough job brief just got tougher. "The HR assignment

in any software company has always been crucial. But the last few months have

been an altogether new grind. We have managed to stick to our employment and

retention schedules, but its taken a lot of doing," he admits.

Goyal, vice president, HR, Hughes Software Systems, received

the coveted ‘Best HR Manager in the Asia-Pacific Award’ last year, but still

remembers the year more for its "my toughest professional period"

status. "With 180,000 new jobs set to open up this year and only 121,000

prospectives coming off the educational system, competition to lure these people

in has been fierce. As it is, the challenge of retaining staff already on the

rolls has been tough enough for all software companies," he says.

Typically, attrition rates have been high in the industry,

with 20—24% being the norm. The reason? GenX’s latest employment mantra and

the software HR manager’s greatest enemy today–poaching by fellow recruiters

from rival firms. Paradoxically, a country of a billion people–also the

preferred software manpower outsourcing destination of the world–is facing an

acute manpower shortage itself.

With the employee becoming IT companies’ most valuable

asset, HR managers are now playing a cat-and-mouse permutation game with their

‘People Practices’ policies. If customer is king, employee is emperor.

Similarly, viewed from the chairman’s eagle nest, while R&D and

marketing/sales are king, HR is the new emperor.

"Companies affected by job-hopping should sit together

and consider the worsening situation. If we don’t have a clear policy laid

down to hire and retain quality people, all of us might end up losing,"

laments Chanda Hate, vice president, HR, Tata Infotech. Navyug Mohnot, executive

director, QAI, concurs. "Earlier, the top management was worried more about

business development, stock markets and investment. Today, top managers realize

the need to invest in human capital. The managers of IT companies are today

completely seized of this issue."

The current scenario has created diverse pressures on HR

departments industrywide. On the one hand, top priority has to be accorded to

business goals. On the other, people needs have assumed an even greater mandate.

"The real challenge for the HR manager is to keep this in harmony. The HR

manager today forms an important part of all business meetings. His opinion is

valued and sought in all important decisions," says Rosida Rabindra, head,

corporate HR, NIIT.

Recruit, reward and retain

Maintaining this critical balance between business targets

and people needs is not an easy task for any company, and more so because the

employee has more options to choose from. On an average, any IT professional has

3—4 job offers at any given point when he approaches the HR manager in his

present organization to explore his options. An HR manager, therefore, not only

has to assess and offer what he’s looking for, but also needs to ascertain

whether the employee wants to continue in the organization, and for how long.

And

that’s what companies like HSS are trying to do. Among Goyal’s constant and

continuous aims is to analyze what attracts people to HSS and what turns them

off. "We are the top communications software developer in the country today

but as far as recruitments go, we still have to work hard to hire the right

people. We continue to look at why are we able to attract the people who are

coming to us. What is the current brand attraction of the company? Who is

influencing their decision to come to us? Who takes the final decision on which

company the prospective employee should join are what we have been trying to

find out," he explains.

According to Madhavi Misra, consultant, Hewitt &

Associates, IT companies need to concentrate more on their recruitment

practices. Besides technical capability and qualification, another aspect that

crept into appointments and choice of employer is that the candidate and the

company should both fit in with one another’s culture. "If there is a

misalignment in this facet, employees leave quickly. If you hire the right

people, they stay. Therefore, culture, on both sides, is becoming an important

qualification for the prospective employee," she says.

Companies are investing a lot of time and money on recruiting

the right people to fit their needs. Microsoft, for instance, has employed 300

people focussed only towards keeping track of the best talent across the

industry all over the world. NIIT likes to spend more time in understanding the

attitude of the person they hire than look for formal qualifications.

Furthermore, online recruiting technology that can help

corporations target candidates, sort resumes, and evaluate prospects on the web

is being developed. Online spending on hiring-related advertising was only $105

million in 1998, but should soar to $5 billion by 2003 in the US alone,

estimates Forrester Research. "Speed to hire is critical in this

labor-short economy," says an analyst, who adds that the total potential

market in the United States alone could be $30 billion.

India is not going to be far behind for very long…the

challenge is coming in fast, and from many directions.

Retention, the new Holy Grail

…And if recruiting has become important in the IT industry,

retention has become the Holy Grail. Every single HR policy is coined keeping

retention and employee satisfaction in mind. "Retention doesn’t mean you

have to keep everyone around. Retention means retaining the right people, the

good performers or the high performers. In the IT industry, retention is

extremely targeted," explains Misra. For instance, Mumbai-based Datamatics

claims an attrition rate of 0.3% for its staff above project managers and 9.5%

for staff below that grade. Incidentally, it also believes that some minimum

attrition rate is desirable to provide a means for non-performers to exit.

Finally, the rewards. ESOPs, multimillionaires at 30, 30—50%

increments every six months are just a few of the incentives that form today’s

HR policy at IT companies. Every company needs to invest judiciously to optimize

performance and retain people. For instance, when asked what attracted them most

to the company, most Infosys employees answered with "wealth creation and

job satisfaction". However, while money remains a big and obvious

incentive, most IT companies now offer a whole range of other benefits as well…

overseas assignments, regular training programs, sharing of wealth through

further ESOPs.

Environment for learning

HR managers have also realized that no amount of rewards will

yield results, at least not with the fast track software employee, unless he

gets the right kind of work opportunity to grow and widen his knowledge base. In

this knowledge era, where skills need to be upgraded before they become

redundant, the average IT professional is seeking exposure to cutting edge

technology. If he doesn’t get it in his own firm, he will move.

"A very important thing that a software engineer or

knowledge worker wants from an organization is a competency path or growth in

learning. Everything else, good infrastructure and salary, makes up just the

hygiene factors, they have to be there anyway. I know of firms that are not big

names, but still attract the best because they do top-of-the-line work,"

reveals Mohnot.

Back to the basics

And finally, to the basics. All IT companies need to create a

good work environment that motivates employees and looks after them well. A

large part of Infosys’ Bangalore campus is devoted to "de-stressing

activities"–employees can play a game of golf, use the swank bowling

alley or sweat it out on the other game courts. HSS has regular bashes on

campus, while the gymnasium in the basement is a hot favorite with the

20-somethings that fill up its staff roster.

So gone is the old-hog maxim of flexi-timings, open work

culture, casual dressing and round-the-clock pantries–today’s hygiene

factors! These perks are no longer key differentiators, simply because everyone

is offering them. And this leads to the greatest challenge–staving off

advances on employees by the competition. While the new economy might have

created challenges for HR, it has also spun off HR’s earlier role as a mere

administrator. Today’s HR boss is the software company’s forest guard. His

mission: keep out poachers…after all, it’s a jungle out there.

Shweta Verma in New

Delhi with inputs from Sarita Rani in Bangalore and Bijesh Kamath in Mumbai