The Hindu Business Line : 5 phases of HR evolution in IT

“It is ironical but true that although the IT industry is a people business where the real capital is human capital, the awareness level on HR is very low in most IT companies.”

Sketch by R. Rajesh

Dr Srinivas Kandula

D. Murali

Given the current scenario, do not take up a career in the IT (information technology) sector just because you think it is a white-collar job and offers attractive compensation, advises Dr Srinivas Kandula, Global Head-HR, iGATE.

Take up an IT job only when you believe in it and if you have keen interest and aptitude, he adds. “If these are missing, you will have an unhappy career, earn a sub-optimal salary, and lead a miserable life.”

What matters are your skill and competency; your engineering degree is just an entry nomination, Dr Kandula clarifies for the benefit of those interested in taking up careers in the IT industry.

From being 29th on the DQ-IDC Best Employer rankings in 2006, iGATE has moved to the No. 1 position this year. What have been the factors that have contributed to this dramatic rise in the rankings? There were two reasons, identifies Dr Kandula, during the course of a recent email interaction with eWorld.

“The first was our holistic approach to people management where we accorded equal importance to all the subsystems of HR (human resources), beginning from hiring to separation.”

The second and more important reason, according to him, was the way the company went about executing the HR approach. “We did not aspire for short-term gains and set our vision on the long-term. The HR model of iGATE is driven by people and highly customised to its growth and existence.”

On what impact the top ranking can have in attracting quality talent at iGATE, Dr Kandula has a quick answer: That it is a symbol.

“The ranking has definitely increased the awareness about iGATE and its people practices in the employment market. We now have less of a task to explain our commitment to human resources,” he elaborates.

Excerpts from the interview:

The role of HR has gained importance in the last few years. Can you take us through the evolution of HR as a key function in the Indian IT industry?

It is ironical but true that although the IT industry is a people business where the real capital is human capital, the awareness level on HR is very low in most IT companies. In fact, many people in this industry are not even aware of the HR model that their company practises.

HR, in the IT industry, has gone through a circumstantial and lopsided journey for a variety of reasons. Everything appears very tentative and accidental rather than thoughtful and deliberate.

In the early stage of the IT industry, HR was more operational in nature, with an increased focus on transactions. It was only later that the focus shifted more towards strategy. There were only a few exceptions where even in the early stage of IT industry evolution, a few companies looked at HR in a holistic manner and focused their HR policies more towards employee enrichment, covering culture, values, ethics, development, relationships and innovation.

The evolution of HR in the IT industry has gone through five phases:

Phase 1: Where HR meant Hiring

In this phase, HR was more of a ‘Hiring Function’ and less of ‘Human Resource Management’ function. The number of employees employed in the recruitment activity used to be more than three times that of all other sub functions ofHR. Those were the days when the common belief was that the growth of IT company was directly proportional to the capacity of its recruitment engine.

Phase 2: When HR meant Compensation

In this phase, HR was nothing but compensation and benefits. This function took a critical shape and, since employee compensation is the single most influential business cost for IT companies, the attention this function got was sometimes more than the entire HR function.

Phase 3: When HR meant Retention

The sudden spurt in the demand for software engineering talent and their inadequate supply resulted in a galloping attrition rate in the IT industry.

In this phase, retention of employees became the priority of companies and therefore the key mandate to HR was to retain the talent pool. In their anxiety and pursuit to retain professionals, HR professionals introduced a slew of initiatives ranging from monetary benefits to work-life balance to building relations with employees.

Phase 4: When HR meant Employee Engagement

Escalating salaries and establishment costs, coupled with pressure on billing rates, forced several companies to focus on quality of work and productivity.

In this phase, many HR departments conveniently forgot other HR activities and turned their attention primarily to employee engagement activities and functions such as performance management and weeding out poor performers.

Phase 5: When HR meant Employee Development

In this current phase, the trend is employee development and therefore the focus of HR in most companies is toward employee development.

Many companies, in order to be in tune with the ever-changing software environment and processes, have started focusing and investing in the development of their employees.

What are the career opportunities for HR professionals in the IT industry?

Career opportunities for HR professionals in the IT industry are mainly three-fold:

HR Generalist Careers: HR professionals in this category need to be sort of ‘jack of all but master of none’.

They need to be familiar with the entire lifecycle of people function and be good in implementation. They front-end all HR activities in the organisation, and are the face of HR. This is also called ‘Operational HR”

HR Specialist Careers: Here one needs to have sheer depth in a specific area within the HR function such as compensation & benefits; competency & assessment; performance management; organisation development; resource management.

They need to build customised models and define organisational policies and processes.

They should be contemporary in the area of specialisation and should possess deep understanding on the implication of specialised HR function to other HR sub systems in the organisation. This is known as ‘Strategic HR’.

International HR: Understanding labour & employment regulations in various countries and continents and understanding of cultural nuances is very important for someone interested to grow as an International HR professional.

The last five-six years have been an ‘employees market’ in the IT industry, with all the IT companies in a ‘hiring mode’. In the light of the recent meltdown in the US, what kind of changes do you see — immediate term impact and long-term outlook for the IT industry in terms of employment opportunities?

I see three key developments, given that the focus in the present environment is shifting more to cost-cutting and optimisation of resources:

Increase in middle and senior level unemployment: There are about 65,000 managers in middle and senior level in the IT industry. A significant number of them have ceased to update their skills relative to their experience. Their current benefits are more a result of their past record rather than their value addition in the current roles. Since more or same value can be brought out by less experienced people, they are likely to be replaced to cut costs.

Stability on employment opportunities and salaries: Employment generation is expected to stabilise at 1,00,000 to 1,25,000 vacancies a year. But if this number is compared with the number of people graduating, it will account for not more than 20 per cent. As a result, the IT industry will no longer be absorbing about 50 to 60 per cent of graduates who pass out every year.

More opportunities for diploma holders and science graduates: In order to achieve cost optimisation, the IT industry is more likely to increase the intake of diploma-holders and science graduates in the place of engineering graduates.

Specifically to iGATE, what was the HR challenge when you took over as the HR head a couple of years ago and what are the initiatives you took to overcome this?

When I took over as HR at iGATE, I came into an environment where an integrated approach to HR was absent and HR was not aligned with the overall strategy of the organisation. We spent the initial two months in devising an integrated HR framework which today in iGATE is known as ‘5C iGATE HR Model’, a model inspired by the Harvard Model of Human Resource Management and Maslow’s motivational framework. 5C stands for:

Compensation: Designed to ensure quality of living of employees and also to take care of future investments.

Camaraderie: A socialisation intervention meant to ensure a great peer group to employees.

Culture: A non-hierarchical and enterprising work environment.

Career: An employee by navigating on the intranet using a defined methodology can plan a career growth for 15 years.

Competency: This is targeted to help employees to actualise themselves.

This framework is aligned with the organisational mission. We have executed this framework well in the last two years.

Can you illustrate how the adult-to-adult engagement model that you introduced works? How is this any different from a typical HR programme in an IT company?

In most organisations, at most times, the underlying assumption is that employees are immature. Therefore, the emphasis is more on processes and dependency is high on systems rather than on people. The fact, however, is that human intervention is dynamic and the real differentiator to produce goods and services can happen only when people wish. This presupposes that you treat people the way they are, i.e., mature individuals.

What iGATE has done is simple, yet very powerful: made senior management team surrender their arbitrary decision-making style, encouraged constructive dissent and consensual decision making, found opportunities to involve employees on continuous basis, and imposed no penalty for failure but penalise for not taking the initiative. All these behaviours have given a fillip to adult-to-adult engagement.

dmurali@thehindu.co.in

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