All the major IT companies have been showing encouraging growth with large deal wins, there is an equal increase in attrition rates as well. An increase in employee attrition will pull down productivity and thereby bring delays in project execution timelines. There is an outright talent war in the market. Organizations have quickly resorted to unscheduled pay hikes, tweaked the compensation and benefit policies, and are looking at rolling out luxury cars/bikes; however, there is very little impact on attrition rates. The turf is heating up and organizations are dipping into the same talent pool thereby ending up poaching each other’s talent. Organizations can solve the talent deficit through three main models:
- Build: Fresher hiring is the best model of pyramid correction. Freshers are also the most apt candidates for this model. The fresh pass-outs from universities are easy to train and quickly adapt to the organization culture. They normally take the route of hire-train and deploy. These fresh recruits pick up the ropes fast and become valuable assets for the organization over a period. With technologies changing fast and the need for combinational skills on a rise, companies can adapt and make upskilling – imparting training on next-level technologies to existing employees, re-skilling – replacing the retired skills with new-age skills through training programs and near-skilling – imparting trainings to the existing employees on adjacent skills an integral part than ever before. However, the build model needs a lot of planning and results can take a longer duration.
- Buy: As the talent war is heating up, innumerable opportunities are opening for trained and seasoned campaigners in the IT sector. Most of them get multiple employment offers with 2x,3x salaries. This is mainly happening due to the demand-supply gap. Moreover, organizations would get a plug and play solution if laterals are hired. However, the risk is upsetting the applecart, existing employees compensation vs new lateral hires compensation is leading to loss of a productive employee. Despite the risk, at times organizations have to take this route to fix the talent problem to a large extent.
- Borrow: Another option that companies can resort to is contract staffing with organised and experienced contract staffing organisation. The staffing organization can also hire, train, deploy and manage talent based on the skillsets where there is an urgent need. The contracts can be customised for 3, 6, 12 months with an option to convert these employees to permanent employees as well. Staffing organizations today provide many options based on client requirements. This model also helps the organization to borrow employees who don’t need a big learning curve at the same time if the projects or technologies are either getting completed or changing, they can give back the talent to staffing organizations. This option gives a lot of flexibility to the organizations and seems to be the best fix to address the current talent war.
To conclude, a combination of build, buy & borrow will ensure organization talent is strong, productive, agile and flexible. Globally, organisations have adopted a combination of these modes with borrow proportion increasing exponentially( aprox18% in US & 16% in Europe). However, in India organizations employ only 3-4% contract staff to the total employee base. As IT employment is poised to double in the next few years, organizations should adopt all three modes in decent proportions to stabilize the talent pool and reduce dependency on one segment of talent. This will ensure consistent productivity and timely completion of all the projects.
The article has been written by Sunil C- Head, Specialized Staffing, TeamLease Digital