A Level Playing Field

Uncertainties and volatilities in the IT job market have brought out the
weaknesses and strengths of companies, creating a level playing field, where big
as well as small names are vying for the top spot in the DQ-IDC Best Employers
Survey. But for the second year in a row, emerging companies such as RMSI, SAS,
Tavant, and iGate grabbed the limelight as they succeeded in challenging the
bigger players in terms of employee satisfaction

In the last twelve months, the IT industry has faced a very volatile and
uncertain environment with the slowdown becoming an inescapable reality. This
has impacted the growth trajectory and the industry has undertaken multiple
measures to enhance efficiency, diversify into newer markets, reduce operating
costs and reinvent business models. But still the effects will continue to be
felt for some time. In such times when job losses, salary freezes and maniacal
focus on operational excellence has become a norm, the role of HR within
organizations is undergoing a significant change as well. These developments
have also caused major shifts in perception as to which companies can still be
categozised as good employers and which cannot. While global MNCs have been the
harbingers of great HR practices to India, in the wake of the current slowdown,
most of these best practices seem to have gone out the window. On the upside, in
a way this has proved to be a level playing field in India, with more number of
emerging IT companies quickly going up the learning curve and grabbing a
position in the Best Mployers list. And this is precisely what the DQ-IDC Best
Employers Survey findings indicateseven new companies among the Top20 names.

While majority of the large Indian as well as MNC companies resorted to
layoffs as a business necessity; they did very little to control the knee-jerk
response. Things took an ugly turn, with negative headlines on the HR front
dominating media coverage, sometimes at the risk of the companys image. While
many of these reports were true, many were not entirely so. And this we realized
only on approaching each company for the DQ-IDC Best Employer Survey 2008. The
lack of transparency and hesitation in sharing information was discomfiting.
Four large companies ended up not participating and all for the first time in
the history of this research. The reasons cited were corporate policies
preventing the sharing of sensitive HR information. For all those who love
reading between the lines, the little said the better.

The Silver Lining

With four big names missing, things got tougher, especially when it came to
carrying out a comparative study of the HR performance of these companies over
the years. However, the bright spot is that smaller companies have adopted some
of the mature HR practices, giving a new direction to the survey this year. For
the second year a row, emerging companies have given testimony to the fact that
size and scale are not necessarily traits of a good employer. Majority of the
names on the list have less than 4,000 employees. But then this also throws up
the debate on whether it is easier to deploy better HR practices in a smaller
company where complexities are lower compared to larger companies. While some
companies are globally big, their India head count is still relatively small
which makes replicating global practices easier. On the other hand newer
companies are either following the larger players, picking up best practices, or
have designed their people strategy from ground up. Nevertheless, it is the
smaller emerging IT companies that are continuing to give stiff competition to
larger players, especially in vying for the best employers title.

The figures here indicate relative score among Top20, taking the top company score at 100. Hexaware, which has less than half the number of employees (5,296) as that of HCL Infosystems or Patni, showed a remarkable score of 100. The average retention rate in the industry was 85%, a big improvement from 79% in 2008. The main reason for staying back in the organization was flexibility of office hours, work-life balance, job content, and technology. On the other hand, the average attrition came down to 15% from 18% last year. The reasons for attrition continues to be salary and compensation, overseas opportunities and growth/career development

For example, #2 company iGate which is much smaller compared to HCL
Infosystems and Patni but still managed to retain its position among the top
three names, though it dropped by one rank over last year. Companies like
Synechron, Tavant, Nagarro Software, Ness Technologies, Unisys and Cybage are
also far smaller in terms of size of the workforce. So, it was the perfect level
playing field to recognize the companies that did well irrespective of their
revenue growth, scale of operations, size of the workforce, geographical
footprint and the place headquartered.

While larger companies do have the advantage in parameters such as salary,
job content, and career growth prospects, it is also these very same companies
that should offer more stability, have a better image and other associated
factors. But it comes as a surprise that in a year when job security became the
fifth biggest reason for leaving or choosing a company it is once again
relatively smaller companies such as Hexaware and SAS India that come on top.

The Changing Face of HR

From managing the expectations of employees and guiding them towards their
performance goals, to preparing staff for cost-cutting and surviving the
economic crises, HR is having to transform itself and take a fresh look at
organizational goals and how employees can meet them. Not only did companies to
go through the challenge of communicating information about the economic
slowdown and its impact to employees accurately and honestly, they also have had
to come up with peoples strategies that will enable them to hold on to
existing valuable talent without hiking their wage bills. For an industry, where
over 60 % of the costs for an organization are employee related costs, the cross
linkages between finance and HR became even more critical, especially in an
economic downturn. While the HR has to lead and manage the talent pipeline and
employee engagement, there they are now studying more closely the laws and
regulations that govern taxation and social security of employees and their
dependants. In a number of organizations, HR is devising unique and innovative
ways to enhance employee productivity and efficiency, while maintaining
headcount. Strategies such as flexi-timings and work-from-home are emerging on
the radars of companies, alongside the traditional freezes on annual increments
and hiring from B-level campuses. Also HR is now grappling with bigger
challenges, with the demand patterns shifting from a numbers-driven, entry-level
talent focus to a quality-driven, middle management focus. So, are these
changing needs of organisations and the role of HR in any way contributing to
the way a company ranks on the Best Employers list. For this, we shall delve
deeper into the findings of the survey.

The Survey Results

A quick glance at the Top20 Best Employers list throws up some familiar
names. However, there have been major changes and additions in the list and the
rankings. The most significant names to get into the list include Perot Systems,
Ingram Micro, and Sify Technologies. With Perots commitment towards shifting
more work to India, it increased its headcount to 8,000, accounting for
one-third of its global workforce. It also concentrated its efforts on launching
engagement program called REACH and was recognized as one of the Best Workplaces
in India for 2008 by the Great Places to Work Institute. It is also for the
first time that an IT distribution company has made to the best employers list.
Ingram Micro, the king of distribution and ranked #7 in the DQ Top20 made it at
#11. What helped the company secure a place is the overall work environment and
the defined employee goals. But on the flip side, it topped the attrition list
and scored low on retention. Sify too a relatively small company with just 2,156
employees and having projected flat growth in revenues, also made it into the
best employers club, indicating that HR excellence is not necessarily related to
revenue growth. However, it scored low on training and its relevance to the work
while projecting good scores in the appraisal parameter.

For years, HCLI has been the only hardware company in the BES Top10 club, and
this year too it lived up to its image as a dream employer. It jumped two ranks
to the #1 spot, followed by iGate that got pushed down to #2 this year. In terms
of HR rank, HCL improved its standing by seven notches from ninth to second and
iGate improved by eight ranks from eleventh to eight. In sync with the changing
business goals, HCLI increased its HR strength, with a greater focus on peoples
core competency, and understanding of the needs of the business. Apart from
this, a good chunk of funds were allocated for training, and education of the
employees. iGate, on the other hand had one of the lowest attrition scores as a
result of its transparent communication strategy. It also scored well on the
training parameter. A new entrant to the third spot is Rolta India that climbed
one notch followed by RMSI which fell two ranks to assume the #4 rank just like
in 2007. However, RMSI went up ten notches in its HR rankings. SAS climbed up
two ranks to #5 spot. There were more or less no changes in the employee ranking
at least for the top five companies. Patni Computers which could not make it
within the Top20 best employers last year, jumped thirteen positions to come up
at the #16 rank this year along with its re-entry into the DQ Top20 club. In the
HR rankings, Patni jumped twenty-eight positions. This major shift can be
attributed to the completion of Patnis succession planning and major new
initiatives on the training front and industry academia collaboration. A few
more companies to enter the list is Virtusa having climbed four ranks, and
Novell, Unisys and R Systems. Despite being fresh to the DQ BES Top20 survey, R
Systems has been ranked in the sixth position. The company also has a high
retention score. This speaks volumes about the people-friendly policies that are
practiced within the organization. Also, Infogain which did not make it to the
second round of the survey last year, has grabbed the #17 spot this year.

HCL and Patni are the only two Indian companies on
the list having an employee count of over 10,000. However, HCL surpasses Patni
on all parameters right from company image to retention. Four companies namely
Nagarro Software, R Systems, Infogain, and Nucleus Software also rank among the
top fifteen emerging companies in the IT-BPO sector. Emerging companies are
sought after by career seekers for their close knit, non-hierarchical work
environment, culture of innovation and commitment to employee empowerment. The
focused approach of these companies makes them the perfect platform for
nurturing specialized talent and building cross functional skills.

Retention Becomes Easier

The average retention rate during the year increased 85% from 79% last year.
The companies with the highest retention scores include Hexaware, SAS followed
by RMSI and iGate. The primary reason for employees sticking to their jobs was
the low degree of job security among others, which is not exactly something that
companies should feel proud of. Employees also emphasised on flexibility of
office hours, work-life balance, job content and technology among the key
retention factors. Average attrition dropped from 18% in 2007 to 15% last year,
with the key reasons for people changing jobs even in such a scenario including
traditional parameters such as salary, overseas opportunity, career development
and growth opportunities. More employees are excited about their nature of work,
though there has been a marginal drop in their excitement about the technology
they are working on compared to last year. Also, more and more employees are
concerned about their companys image and the transparency of practices. There
is a visible improvement in corporate governance and work value and ethics as
compared to last year. Looks like the Satyam episode left a lasting impression
on employees especially on the importance of corporate governance and
transparency. Companies are also becoming increasingly responsive to the issues
or problems of employees and have better work environments, which could also be
one of the reasons for better retention this year.