A Year of New Entrants

It is a clear indication, visible not only in the annual DQ-IDC
Best Employer Survey but other surveys as well, that relatively newer and
smaller players are making their presence felt. It cannot be a coincidence that
companies like RMSI or Tavant have consistently performed well in most industry
surveys. Smaller companies are challenging the established players in terms of
employee satisfaction

Last year we called it The Other Side of the Flat World,
referring to how the non-Indian companies were quickly learning the tricks of
the HR game in India. And competing as equals with the established Indian
companies, who are credited with bringing HR to the center-stage of strategy in
the global services scenario and teaching the others a lesson or two in
innovative HR practices.

This learning of innovative HR practices by the non-Indian
firms, a predominant majority of them American, was acknowledged by researchers
at Harvard and Duke, in a paper published recently. Aptly titled, How the
Disciple became the Guru, in which they studied the HR practices of two dozen
Indian (not necessarily headquartered in India) firms, more than half of them
from IT/BPO industries.

Yet, when it came to a relatively uncertain yearwith exchange
rate fluctuation and slowdown in the US hitting the businessmany of them did
not behave like gurus. They resorted to the same practices of the erstwhile guru
whom they had apparently dethroned. Lay-offs sometimes are a business reality;
the knee-jerk response is not. The result: negative headlines on HR front
dominated media coverage, in a significant departure from what one was used to
seegrowth, innovative HR initiatives, and the likes.

IT Best Employers: The Top 20
Rank 2008	Company	Empex	Rank 2007	Change
1	iGate Global Solutions	82.5	3	2
2	RMSI	81.8	4	2
3	HCL Infosystems	81.1	2	-1
4	Rolta India	80.8		NEW
5	Microsoft India	76.0		NEW
6	Tata Consultancy Service	74.9	1	-5
7	SAS Institute	74.6		NEW
8	Synechron	71.8	5	-3
9	Tavant Technologies	70.7	9	0
10	Span Infotech India	70.6		NEW
11	Hexaware Technologies	70.3	13	2
12	Intel India	69.9		NEW
13	Datacraft	69.9		NEW
14	Infrasoft Technologies	69.3		NEW
15	Fulcrum Logic	68.6		NEW
16	GlobalLogic	68.5	21	5
17	Ness Technologies	68.4	16	-1
18	Tulip Telecom	68.0		NEW
19	Sun Microsystems	67.6	10	-9
20	Nagarro Software	67.0	29	9
No Change Up Down Source: DQ-IDC BES Top 20 Survey
There are nine new entrants into the top 20 list of best employees this year, two more than the previous.The new entrants replaced others like Capgemini, IBM, Infosys, Wipro, Cognizant, CSC, Cadence and others, that decided to give the survey a miss

Ma27ny of those headlines were true. Many of them, rumors.

When28 we approached companies for the DQ-IDC Best Employer
Survey, we started realizingand that is unfortunatethat maybe many of those
headlines were not untrue. The enthusiasm, the transparency was missing. A few
of the large companies ended up29 not participating, many of them for the first
time in the history of this research. Some even tried to rationalize saying that
they were not participating in any such survey this year, not just ours. That,
if true, is even worse.

The New Flattening

With some big names missing, it was not the best of situation to be in for
us. But the survey results actually threw a new positive.

We saw strong HR practices being adopted by smaller companies.
The survey results are a testimony to that fact. You can even call it the year
of small companies. More than half of the top 20 Best Employers have less than
4,000 employees. Even if you exclude some names that are globally big, with
comparatively smaller Indian headcount, it still has a lot of real small
companies.

We believe it is not by accident. While it is true that a few
large companies didnt participate, many of them did. And came nowhere close to
many other small companies.

Ta24ke the #1 company in the list. iGate may not exactly be a
start-up, but compared to many others like TCS and Patni, it is, small.
Companies like Synechron, Tavant, Fulcrum, and Nagarro are far smaller.

We w25ish Tom Friedman was here to observe this and add this to
the next edition of his bookthe flattening of the world between small and large
companies.

in fact, when the fear of slowdown started being discussed
openly, the consensus was that it would hit the small firms more than the larger
ones.

First, the revenue data in DQ Top 20 proved that wrong, with
(for the first time in many years) the top 20 exporters growing less than the
industry. Now, the DQ-IDC Best Employers Survey 2008 indicates small companies
are catching up in the HR front too in a year of growing concern about job
security.

While they have quite a few advantages and naturally do well in
parameters such as salary, quality of job and growth prospects, it is the larger
IT companies that are supposed to do better in stability, company image and many
such factors.

It is surprising that in a year that saw job security becoming
more important than even before in our survey, moving a place up from last year
in employees reasons for leaving/choosing a company it is the small companies
that have come on top.

The Results

Coming to the result of the 8th edition of the DQ-IDC Best Employers Survey
2008, there were some significant changes in rankings of the Top 20 players.
Most significant new names to get into the list include Microsoft and Intel.
iGate has not just met our condition by just doing well (featuring in the list
of twenty is a feat by itself) it has improved its ranking to emerge as the best
IT employer in India, by taking the #1 slot.

On the HR parameters it gained one position, scores however have
declined in comparison to last year. On employee parameters though, it topped
the list. It goes without saying that the rise did not come by accidentit does
not for any companybut what is noteworthy is how fast it has managed to emerge
as a preferred employer.

RMSI, which has emerged as a consistent performer in most HR
surveys, improved its rank by two notches to be at #2 while HCL Infosystems
slipped by one position to be at #3. However, RMSIs ranking in HR went down by
eight points as compared to last year. Nagarro software, a relatively new player
which plays in the OPD space, which could not make it to the list in 2007-2008,
managed to break into the top 20 list this year.

Tata Consultancy Services created history by becoming the
largest private employer in India by crossing the hundred thousand employee
mark. TCS is also the first Indian company to employ over 10,000 non-Indian
workforce, close to 9.2% of the total strength.

Hiring Hit? Not Really

Despite some reports of layoffs and reduction in the number of onsite
workers, the hiring momentum continued with both Indian and MNC companies
announcing their big hiring plans. TCS crossed its 1 lakh employee mark.
Accenture CEO William D Green, announced his companys intention to hire 13,000
to reach a magical 50,000 strength in India. Infosys, Wipro, and Satyams hiring
plans are more or less in place. While Infosys says it will hire freshers in
2008, others have also announced plans to hire in thousands.

Another trend that is very clear and is set to become stronger
in the coming years is the increasing hires in geographies like North America
and UK. For example, HCL America opening a delivery center in North Carolina and
announcing plans to hire more than 500 employees there marks a change in
strategy of hiring only offshore. There are reports of Wipro taking advantage of
the UK governments tax breaks to open software development facilities outside
of London and the South East. It is also said to be evaluating delivery centers
in Birmingham, Cranfield, Edinburgh, Manchester and Warwick. All this is going
to change the HR landscape in the coming years.

The Employability Factor

Industry, especially the R&D and product companies, voice their concern over
looming shortage of required talent in the long run. Getting the right talent is
becoming increasingly difficult for the companies. This is true of both campus
hires as well as lateral hiring. For lateral hires, the easier way some
companies (particularly new entrants to the market) have adopted is poaching
which has created some bad blood between competing companies. For fresh hires,
the situation has improved in terms of employability but it remains far from
satisfactory. The reasons for this are manifold. Outdated curriculum, lack of
any planned training on developing skill-sets beyond the core engineering
domain, mainly soft skills, resulting in a large chunk of graduate engineers
being rendered unemployable. In order to fill the employability gap, several
finishing schools got started last year.

Employability continues to be an issue considering the nature of
the industry. This has gotten aggravated also due to a tendency amongst fresh
engineering graduates to gravitate toward the glamorous services sector. And
this is where semiconductor companies have lost out to services biggies like TCS,
Infosys, and Wipro. But there is also a problem of scale. While semiconductor
companies hire in hundreds, services firms hire in thousands, and this impacts
the probability of getting jobs. Incidentally, the total engineering workforce
in the semiconductor design segment in India stood at 13,000 during the year
2007, according to the ISA-IDC report and this is expected to grow to 218,800 by
2010.

Engineering design as a career is something which has not really
caught the fancy of engineering graduates in India. Though belatedly, some
companies are trying to neutralize this trend by driving home the benefits of
being a design engineer rather than a mere software coder. This was necessitated
by some talk of the long-term sustainability of flow of talent on a regular
basis as these design firms scale up. Till this happens, these companies will
have no option but to struggle to find the right talent, and then spend a
fortune in training.