The Fast Track Slows Down

Infosys has done it again. In the Dataquest-IDC India IT’s
Best Employers Survey, the Bangalore-based software giant has topped the
rankings. Equally important, it continues to be the preferred company for nearly
a quarter of the 623 IT professionals interviewed throughout the country and
among 82% of its own employees.

This time, however, Infosys is first by default. Final scores
for IBM were actually higher than Infosys numbers, based on the employee
responses, but IBM did not provide HR-related information and, therefore, could
not be ranked. Warning signals for Infosys had already emerged in Dataquest’s
previous survey of ‘Software’s Best Employers’ (May 31, 2001 issue); now,
they are even more pronounced. The good news for Infosys is that it continues to
rate high on the composite score of employee satisfaction (see methodology), as
also on its status as the ‘employer of choice’ as well as on employee perks.
And yes, Infosys does have the lowest attrition rates among the Top 20
companies.

Yet, if we single out overall employee satisfaction, the
score comes out low. The employees’ ranking of their own satisfaction puts
Infosys at the 11th position, and the company ranks eighth on peer satisfaction.
Much of this comes from a significant amount of dissatisfaction with salary
levels and issues like job content and career development. Also, it is likely
that fed on high expectations, Infosys employees can’t seem to get enough of a
good thing. Despite one of the best employee stock option plans in the industry,
Infoscians have expressed a great deal of dissatisfaction on this score.
However, add factors like company image, work climate and job security, and
Infosys’ composite score shoots up.

Wipro down; HP, Compaq up

The big surprise, however, is Wipro’s fall from No 3
position in the previous survey to No 8 this time. This could partially be due
to the inclusion of hardware giants HP and Compaq in this survey. A crucial
issue that has emerged this time is employee worry about job security. Wipro is
one of the few top companies to have scored low on this attribute. Satisfaction
levels have also fallen, though they remain higher than at Infosys. The good
news, meanwhile, is that Wipro is the second-most preferred IT employer in the
country.

Another company with low employee satisfaction levels but
high overall ranking is HP India in the second place. The company is placed at
No 10 in employee and peer satisfaction levels, but is pulled up by a high
average salary ranking and good performance on attrition, retention and tenure.
HCL Technologies, at No 4, also moves up the ladder largely due to its
status as India’s third-most preferred IT employer.

The two companies with the most consistent performance,
however, are Compaq at No 3 and the Chennai-based Cognizant Technology Solutions
at No 5. Though rankings based on the composite score on attributes, average
salary levels and perks are low for both companies, Compaq boasts the highest
employee satisfaction level. It also tops in peer satisfaction scores and does
well on average tenure, attrition and retention levels. Compaq is also India’s
fourth-most preferred employer.

Cognizant comes next only to Compaq in overall employee
satisfaction levels and ranks third in peer satisfaction scores. Interestingly,
it is one of the few companies where employees have ranked themselves as
slightly more satisfied than their peers. This is contrary to the trend
witnessed in almost every other company, where employees perceive their peers to
be happier at work than they are. The company scores consistently on all
employee criteria, including attribute scores, average salaries and perks.

The parameters and the big picture

Company image, job content/career development and compensation and benefits topped the list of what employees value, with some exceptions. For instance, Infosys employees rated compensation and benefits and job security, as their most-valued attributes. While HCL Tech employees valued “technology” the most, on an average, this attribute scored far lower than HR managers appear to believe. Stock options are dead as a motivator and even overseas assignments have lost their charm

A word here about the methodology (see box on page 54)–of
the 150 IT employers to which HR questionnaires were sent out, 21 were
shortlisted for the next stage–the ‘Employee Survey’. All data collected
from both employers and employees was plotted under nine parameters. Six factors
were drawn from the employee questionnaire–overall satisfaction, perceived
peer satisfaction, a composite score on satisfaction on a set of 16 attributes,
the company’s rating as a preferred employer, average salary and perks. In
addition, three factors were drawn from the employer survey–attrition,
retention and average tenure of employees.

These nine parameters were allotted 10 points each. And IDC
India’s system of indexing gave 10 points to the company with the highest
score in a parameter and the scores for the rest of the companies were
calculated to that scale. Final rankings, therefore, were based on the company’s
score out of a total of 90 points, which was then projected to 100.

One of the crucial parameters of a company’s overall
performance was a measure of satisfaction among employees. This actually had
three components–how satisfied employees say they are, how satisfied they
think their peers are, and their score on 16 pre-specified attributes.

Interestingly, the top two companies–Infosys and HP–ranked
low on employee satisfaction scores, while companies with a far lower final
ranking stood much higher. For instance, I-flex emerges third on employee
satisfaction rankings, followed by Philips Software at fourth, Satyam at fifth
and Birlasoft in sixth spot.

As expected, in almost all companies, employees believed that
their peers are happier. A prime example of the
"grass-is-greener-on-the-other-desk" outlook was Aptech. The employees
of this education major believed that their peers were much happier than they
were! The company ranked 13th on employee satisfaction with a score of 4.96 but
seventh on peer satisfaction with a score of 8.76! The only notable exceptions
were Compaq (which ranked first on both satisfaction parameters) and Cognizant.

Another component of the overall rankings was a composite
satisfaction score on 16 attributes (see methodology). These attributes included
company image, job content, compensation, work culture and job security. Infosys
topped this parameter, followed by Polaris, Cognizant, I-flex and HP. Compaq, on
the other hand, was ranked 10th on this parameter while Wipro came in at No 15.

Compensation faceoff

A surprise finding–employee ratings on salary put SAP at
the top on the average salary parameter, followed by HP, Zensar, Cognizant and
NIIT. In fact, this is the only parameter on which Zensar has performed well.
Salary data also included frequency of pay hikes in the company. Gone are the
days of half-yearly salary revisions. Most companies now have yearly hikes with
a varying percentage of employees in some companies entitled to half-yearly or
quarterly revisions, but even this was witnessed in very few cases.

On employee perks, which included both the number of perks
and the number of people eligible for them, Infosys topped the scores, followed
by the far more reticent and yet obviously well-performing Cognizant. The two
were followed by SAP Labs which was ranked at No 3 on perks, Wipro at No 4, HP
at No 5 and HCL Technologies in sixth position.

Of the three companies that chose not to give out HR-related
information, IBM was rated next only to Compaq on both employee and peer
satisfaction. Its rating on average salaries was extremely low, though it topped
in employee ratings on perks offered.

These were the broad parameters. But what exactly are IT
professionals looking for today? And how do India’s top IT employers rate on
these attributes?

The new motivators

This is a question the industry asks itself periodically–what does it take
to recruit good talent, and keep them?

Only a few months ago, the main motivator that emerged from Dataquest’s
previous survey was compensation and benefits. At that time, industry was
booming and jobs were to be had for the asking and IT employees mostly followed
the money. Not any more. The downturn has taken its toll. Company image has
become far more important, and in an atmosphere of employee layoffs and pink
slips, that big company name on the resume has become a passport to continued
employment.

Job content and career development opportunities have always been important
in the industry, especially among the techies. It gains greater importance now
as bench times increase and working on redundant technologies and jobs is a
sure-fire way of becoming a redundant employee.

It wasn’t surprising, therefore, that over 35% of respondents said company
image was the most important factor, followed by 25% who said compensation and
benefits and over 21% who said job content and career development. On overall
weighted average scores of motivators, however, compensation falls to the third
place, below job content and career development. Interestingly, for the first
time, job security emerged as a crucial factor, with almost 11% of the
respondents saying stability would be their most important consideration.

Before we look at how companies scored on these attributes, a word here on
the scoring pattern for them. Employees rated their companies out of a total of
5 points on each of these attributes. These scores were then analyzed at two
levels–(a) the ranking of that attribute within the company; and (b) based on
the score, the ranking of the company on this attribute when compared to other
companies, called the comparative ranking.

Company image

Given the profile of the companies in this survey, most
professionals inevitably rated their companies high on image. In almost all
companies, it emerged as the attribute with the highest satisfaction score. The
notable exceptions were Cognizant and Aptech–whose employees said the most
satisfying thing about their company was the quality of people they worked with–and
Birlasoft, which scored better on work climate. In all three companies, however,
company image still emerged a close second.

The company with the lowest ranking on the image scale was
Zensar, at 2.9. The company is known to be facing some severe internal HR issues
at present and this perhaps led to Zensar coming in at the tail-end of almost
every ranking, except for work culture and interpersonal relationships, where it
ranked last but one!

Job content and career development

A big surprise here–Polaris Software has the most satisfied
employees where job content and career development are concerned. This becomes
significant considering the fact that Polaris doesn’t even figure in our Top
10 list in overall rankings. Also, though Cognizant employees do not rate job
content very highly within the company, the company comes second only to Polaris
on this count with a high score of 4.6.

Compaq, I-flex, Satyam and the Tata companies–TCS and Tata
Infotech–follow the two with a score of 4.5. With an overall rank of No 2, HP
India, however, doesn’t do very well on this count. But the big surprises–with
a score of 4.3, Wipro falls below Birlasoft, Aptech and both the HCL companies–HCL
Technologies and HCL Infosystems–on this count. Infosys does worse, with a
score of just 3.8, barely managing to stay above Zensar, with most of its
employees expressing low levels of satisfaction with job content and career
path.

Compensation and benefits

That compensation has fallen to the third level in importance–behind
company image and career development–is the one big change seen in this
survey. The IT industry has typically been one of the highest-paying sectors in
the country. Despite this, its employees have been characterized by a thirst for
more money. That’s apparently changing now. For one, salary hikes are no
longer what they used to be and as the industry matures and falls into standard
business cycles, IT professionals are being forced to take a long-term view on
salaries.

This is not to say that money is no longer important. It does
emerge as the most important factor that would make IT professionals consider a
job switch today. (We have to remember that this survey was carried out among
the Top 20 IT companies in the country, where a strong brand image is taken for
granted, as it already exists for the employees. This might have given a slight
skew to the findings, in that compensation emerged as the top reason for
considering a job switch).

And it’s not as if IT employees are not cribbing about
salaries. Only two companies have been rated relatively high on compensation and
benefits by their employees–Compaq and I-flex. Compaq employees rated
compensation as the third-most satisfying attribute while I-flex employees rated
it second. In comparative rankings, both companies rank together as the best in
terms of employee satisfaction on salaries, followed by Cognizant, HP and
Polaris.

The big cribbers–Infosys and TCS employees. To be fair to
the employees, both companies are not known as good paymasters. And to be fair
to the companies, that’s probably what’s keeping them from laying off
people.

All things being equal, over 25% of IT professionals still
say they would jump jobs if offered better money. A close 20% say they’d do it
for career development, while a significant 10.9% say they would jump for
stability.

Job security and stability

Job security hasn’t traditionally been on the IT
professionals’ radar screens. It is something one derided government servants
for. Well, the times are a-changing… A stable job is now right up there with
the importance of money and job content. It now ranks above things like overseas
opportunities, training, technology, work culture and stock options.

Following, perhaps directly, from low salaries, is the fact
that TCS and Infosys employees rate their companies relatively well on job
security and stability. As do employees of SAP Labs and I-flex. Companies where
job security is not a very big issue are Compaq, HCL Technologies and Satyam
Computers.

However, there are some very big names among companies where
there is an element of perceived instability. These include HP, Wipro and
Cognizant. The last is a bit of a surprise because the company has announced new
heavy recruitment recently. Others in the category are NIIT, Birlasoft, Aptech
and Zensar.

In the overall comparative rankings, Polaris, SAP Labs and
Tata Infotech are perceived as offering the most job security, followed by
Compaq, I-flex and TCS. The lowest scores go to Philips, Wipro, Pentamedia and
Zensar.

Facilities and resources

These are the ‘hygiene’ factors in any job, especially in
the IT industry–the unstable Net connection, the lack of proper project
development facilities, the perennially insufficient bandwidth... Such support
issues are daily work-sores that employees are unwilling to put up with.
Consistent with the previous survey, the IT industry continues to surprise with
a less-than-satisfactory performance on this count.

Of the few companies rated high on facilities and resources
by their own employees are Cognizant and HCL Technologies. Employees of HCL
Infosystems said facilities provided were next only to company image, but still
gave it an overall low score. Companies where facilities definitely appear to be
an issue are I-flex and Satyam Computer.

In overall comparative scores on this attribute, CTS ranked
highest followed by HCL Tech and Polaris. Polaris is increasingly looking like a
company to watch out for having performed very well on a number of attributes
despite a lower overall ranking.

The bottom few on this attribute are I-flex, Tata Infotech,
Satyam Computer, TCS, Philips Software and Zensar. The inclusion of Philips here
is a surprise, given the company’s extensive investment in the new Philips
Innovation campus at Bangalore, where, reportedly, all employee suggestions on
design and facilities have been followed to the letter.

Finally, a note on IBM. The company did not send in the HR
questionnaire despite repeated attempts by Dataquest-IDC, but it did extremely
well on company image, job content, security, technology and work culture. IBM
employees, however, had issues with stock options and long-term overseas
opportunities. IBM was also one of the few companies where employees low levels
of satisfaction with interpersonal relationships in the workplace.

Sarita Rani in Bangalore
& Manjiri Kalghatgi in New Delhi

Survey by IDC India: Analysis by Parijat Chakraborty, Sandeep Ranjan and Utpal Ghosh

Methodology

Collection of data

The survey was carried out in two phases. In the first phase, a HR
questionnaire was sent out to 150 companies in the last week of June 2001.
The questionnaire sought information on issues like total employee
numbers, break-up of professionals based on technical, marketing or senior
management levels, and region-wise distribution of employees, in different
centers and cities. The questionnaire also gathered information on the
average tenure of employees in the company, the number of days allotted to
employees’ training each year, attrition/retention rates, as well as
salaries and benefits given.

Of these 150 companies, we zeroed in on 31 companies that qualified for
further valuation. Following this valuation and other filters, a final
shortlist of 21 companies was arrived at. Of these 21 companies, 12
qualified automatically, on the basis of their rankings in the previous
‘Software’s Best Employer’ survey, featured in Dataquest in the May
31, 2001 issue. (These were the companies that held the top 10 ranks in
that survey. With joint rank-holders in two positions, the total number of
such qualifiers added up to 12). The other nine companies were selected
after weighing the information provided by them in the HR questionnaire.

The employee survey in these 21 companies comprised of individual
interviews with 30 (plus or minus 3) employees in each organization. The
interviews were based on a structured questionnaire seeking information on
issues like salary, eligibility for perks and satisfaction levels. The
questionnaire also included a series of questions on the employees’
personal profile, their overall satisfaction with the current employer,
their perception of the satisfaction level of others in the same company.
Of these 21 companies, IBM and Tata Infotech chose not to participate in
the survey and, therefore, were left out of the rankings process. A third
company, Cisco Systems, did respond but could not furnish all requisite
information and also had to be left out. The employee survey was carried
out in seven cities–Mumbai, New Delhi, Chennai, Kolkata, Hyderabad,
Bangalore and Pune (Pune only for Zensar Technologies) from mid-July to
August 10, 2001. In each city, the sample quota was assigned based on the
company’s employee strength in that city. A further classification of
target respondents was done on the basis of job profile (marketing,
technical and senior management) and years of IT experience (less than 2
years, 2-5 years and more than 5 years). This quota system was followed
strictly to get a proper representation of different types of employees in
the sample.

Every effort was made to ensure that the management of the company did
not influence the employee responses. Most interviews were conducted
outside company premises. A process of cross-checking was established to
ensure the authenticity of the data and the veracity of the interviews.
During the process of cross-checking, it was found that in the case of
certain companies, some respondents were not employees, but contractual
consultants deployed by external agencies. These respondents were,
therefore, delisted and fresh interviews conducted. In order to retain
objectivity, every attempt was made to take on an unbiased sample.

Compilation and analysis of data

The weightage accorded to data collected from each company was on the
basis of three factors–the number of IT professionals in different
cities, their job profile and years of experience. The data was weighted
for each company.

The data collected from each company was plotted under nine parameters.
Six factors were drawn from the employee questionnaire–overall
satisfaction, peer satisfaction, a composite score on satisfaction on a
set of 16 attributes, its rating as a preferred employer, average salary
and perks. Three factors were drawn from the HR survey through the
questionnaire answered by the companies themselves–attrition, retention
and average employee tenure.

These nine parameters were allotted 10 points each, totalling to an
employee total possible score of 60 points, and an HR total possible score
of 30 points, leading to the DQ empex Score, a total of the two scores,
out of 90 points. The final score was then projected to 100.

The mean score for each company was plotted under each of these
parameters. The company with the highest score in a parameter was given 10
points and the scores for the rest of the companies were calculated to
that scale. For example, as the most preferred employer, Infosys gets 10
points on this parameter, and the next companies on the list get
successively decreasing scores (the difference between scores are,
therefore, proportionate to the actual difference in the mean scores).

This method of indexing was followed in order to make the parameters
uniform, comparable and unitless.

This method of indexing was followed to arrive at each company’s
score on a scale of 10, except for the composite score for satisfaction on
a set of 16 attributes. These 16 attributes included factors like the
company’s image, company’s internal communication, compensation and
benefits, job security and stability, stock options, work climate and
organization culture and so on.

The composite score on satisfaction was arrived at by weighing the
satisfaction score on each attribute with the importance of that attribute
as expressed by the employees.