The Hindu Business Line : As fresh as they come...

... youngsters graduating from learning portals seem to hold out a lot of appeal to software companies as against experienced hands. eWorld tracks the scene.

Recruiting freshers, it is felt, helps in maintaining the cultural DNA of the company.

WHERE TALENT grows on the job. - S. Siva Saravanan

Fresh or experienced? Who would a leading Indian software services company prefer to recruit?

Actually, that question is a no-brainer. Consider this: the Top Four Indian software services companies together spent in excess of Rs 15,000 crore in salaries to employees last year ending March 2006. Infosys alone saw a 34 per cent growth in salaries from Rs 3,182 crore to Rs 4,273 crore between 2004-05 and 2005-06. A recent Hewitt Associates survey shows that India showed the highest average salary increase, of 13.9 per cent, in Asia in this sector.

If nearly half of what you earn in revenues is spent on manpower costs (Infosys's staff cost is about 45 per cent of its revenues that stood at Rs 9,521 crore), then it might be a good idea to look for ways to control those costs.

One way to do that would be to roll out the red carpet for freshers. Wipro Technologies, for instance, recruited around 7,000 freshers in its software business last year. Tata Consultancy Services Ltd (TCS) and Infosys too actively scout out fresh talent. Satyam pegs its recruitment figures in the financial year 2005-06 at about 4,500 for entry-level trainees and would hire about 5,000-6,000 at least in 2006-07.

This strategy throws up several questions. eWorld meandered across the industry to find out the answers. We got some, if not all. Read on.

One of the reasons this happens is cost. The other is that companies want to groom people for middle-management levels. This is a medium-term view that companies take."This industry is fast growing, still at an early growth phase with limited middle management talent available in the marketplace. Companies have taken on themselves the responsibility of "building" the middle- and senior-management talent rather than `buying' them, as talent at those levels is not readily available and is more cumbersome to integrate culturally," says Bhaskar Das, Vice-President, Human Resources, Cognizant.

Matter of policy

Do companies have concrete HR policies in place spelling out fresher recruitment? Most do. D.K. Srivastava, Corporate Vice-President (HR), HCL Technologies, says, "We have a directive in place — a majority (60-70 per cent) of our hires next year are to be freshers from a technical background."

Cognizant's philosophy is to recruit about 65 to 70 per cent of its annual personnel requirements from campuses.

Employability

What impact does this have on productivity? After all, if you have freshers joining the organisation in droves, they might not be employable from day one.

Suryaprakash Rao, Chief of HR at the CSS Group, which is into software services, software testing technical support, agrees. "Investment in freshers does not yield much revenue in the first six months. There are long-term savings that accrue because of increased retention rate."

Others try and increase productivity in the early days of a fresher itself. TCS, for instance, has built a statistically significant database of the strengths and the gaps of the academia and accordingly structured an "Academic Interface Program" (AIP) to engage the academia and help them produce more employable students. S. Padmanabhan, Executive Vice-President and Global Head, Human Resources, TCS, explains, "We are engaged with more than 300 academic institutions globally, including the Indian Institutes of Technology in Mumbai and Chennai. Through our work with these institutions, we are able to identify and cultivate new talent." In addition, TCS also has an Academic Conclave/Interface Program in which the company collaborates with top academia to expand local talent pools. This program supports academic institutes in student internships, workshops, awards, and TCS-sponsored events and courses.

Accenture treads a similar path. Apart from hiring freshers directly for job opportunities, Accenture also has an `engagement' plan with identified colleges. Says Rahul Varma, Senior Director, HR, Accenture India, "This includes curriculum support, training, seminars and workshops, guest lectures, visits to Accenture facilities and sponsorships."

Not just cost

While costs do matter, hiring freshers isn't only about cost cutting.

`Moulding youngsters to fit the company' is a top priority. "Recruiting freshers helps in maintaining the cultural DNA of the organisation," believes Bhaskar Das. Achutan Nair, Vice-President, Strategic Sourcing, Wipro Technologies, emphasises that "there is very little un-learning to be done", which would have been mandatory in the case of an experienced hire.

While there are some inherent risks in hiring those without experience, most companies emphatically state that it is not something that training and proper induction methods can't take care off.

"We look at them from a value-add point of view rather than from a cost perspective. Most face the challenge of being untrained in technology; hence it becomes imperative to invest in technical and knowledge training, giving them a horizontal (product engineering, enterprise consulting, BPO) and vertical (telecom, aerospace, retail, life sciences) focus. They also need to be trained in communication skills and soft skills. Recruiting and moulding them from scratch helps a company have a long-term solution to overcome the impending skill shortage problem. To maximise the potential of these new recruits, we have well-defined training programmes supported by constant mentoring and coaching," says Srivastava.

TCS believes in its specific intensive training programme called Initial Learning Programme (ILP) which aims at Initiating `life-long learning' specifically for freshers. "Currently the duration of ILP varies from 32 days for Computer Science graduates to 44 days for non-Computer Science graduates, while the Overseas ILP duration is 30 days," says Padmanabhan.

"At Satyam we ensure retention by providing Fast Career Growth for high potential recruits but also initiatives such as job rotation, On-site opportunities, training programs supported by other policies such as retention bonus for the entry level associates after they have spent a certain period with us," says Hari T, senior vice-president, HR, Satyam Computers.

"We offer careers across different group companies — we allow people to shift jobs within the organisation as part of their career progression," says Rao. The CSS Group actually allows employees to shuttle between IT and BPO jobs depending on their ability and inclination.

And, if they find that, even after coming into the organisation, fresh employees need structured training, they offer to sponsor higher studies on a part-time basis. It also acts as a carrot to employees and allows for better retention. "Specific to freshers, we look at engineers with Computer Science/Electronics background. We also take BSc/BCA graduates who have Phsyics/Mathemathics background under a scheme where they work with us while they study to enhance their qualification to be an engineer in four years time. This is done through a tie-up with BITS, Pilani," says Nair.

Growth prospects

Bright. "The business growth itself promises very good prospects for any fresh employee. We like to give opportunities to our internal employees whenever they are ready to take on higher assignments," says Nair.

Cases of trainees staying long enough and growing well enough in the same organisation to reach top positions are not uncommon. "We already have some professionals who were recruited from campuses about 10 years ago who have become home-grown directors in the company ," says Das.

Employers are willing to take risks with the quality of the deliverable as well as communication with the client when the team on the project is young. As Padmanabhan says, "Resources to a project are allocated based on effort estimates, which in turn are a function of the skills and experience mix required to deliver the project."

But would you not earn the clients' wrath, if a fresher gets to learn from his experience without adding value to the team? (For empirical evidence, refer to `Short Takes' on Page 3). Says UVG Sekar, Senior Vice-President and global head of HR, iGate Global Solutions, "Before they face clients, we ensure that they are well-trained. Inexperienced employees will not come in direct contact with clients."

And, clearly, the project manager leading the team gets the time and space to groom freshers under his wing. Says Padmanabhan, "A typical project is headed by such project managers who manage interaction and communication with clients."

What does recruiting freshers mean to training costs of companies? Mohandas Pai, earlier Chief Financial Officer Infosys had said, "We spend about $5,000 per fresh candidate in training over the first 15 weeks." This means that Infosys' training costs could touch about 7 per cent of annual revenues, or Rs 670 crore. Cognizant is learnt to spend 3-4 per cent of its revenues every year on training. Considering it has reached a revenue run rate of $1 billion, that is about $30 million a year.

Clearly, these costs are far lesser than the price companies pay for recruiting more experienced people than they need to.

paromita@thehindu.co.in

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