`Indian cos spend more on training'

Priyanka Vyas

Training day


Infosys spends

7 per cent of revenues on training, Cognizant spends 3-4 per cent.

Industry calls

for more flexibility in education modules.

New DelhiFeb. 9Even as India's IT and BPO companies are going global, India's education curriculum still remains outdated, with the onus on corporates to train employees in specialized skills.

This is in direct contrast to other BPO destinations such as the Philippines and Malaysia that have relevant certification courses in insurance, mortgage and other segments to equip students for the sector. Hence, companies in these countries spend much less time and money on training employees than Indian companies.

The problem arises because most of the colleges here continue to teach only basic computer languages while MNCs and Indian companies have started operating on advanced languages such as Java and use newer concepts such as SAAS.

"Take, for instance, knowledge pertaining to accounting standards like US GAAP. Despite the huge demand for Indian accountants for back office operations, companies are required to spend hefty sums to teach their recruits US GAAP, since it is not part of their curriculum. Hence Indian companies spend on an employee as much as two to three months of their salary," says Mr Raman Roy, Chairman and Managing Director, Quatrro BPO Solutions Pvt Ltd.

Mr Noshir Kaka, Partner, Mckinsey &Co, shares the same concern and feels that India, like the other countries, too needs to rapidly adapt its curriculum to make it more suitable for such jobs. "There could be more flexibility in education modules. While not all students would opt for BPO jobs, some of these modules as options would address specific needs of the industry and could certainly be considered," adds Mr Arjun Singh, CEO, Banking, Financial Services and Insurance, WNS Global Services.

On an average, major IT companies spend $1 billion annually on training. At an investment of $5,000 per fresh candidates in training over the first four months, Infosys spends around 7 per cent of its annual revenues as training costs. TCS's Initial Learning Programme (ILP) for freshers takes around 32 days for Computer Science graduates and 44 days for non-Computer Science graduates. In contrast, the overseas ILP course requires only 30 days.

Similarly, Cognizant is learnt to spend 3-4 per cent of its revenues annually on employee training. Apart from initial training costs, BPO companies also incur additional expenses in employee upgradation skills, which cost anywhere between 3 and 5 per cent of their revenues.

"Indian industry certainly invests much more in training employees. With shortage of manpower, a relevant education curriculum can fill the gap for industry. Despite IT companies engaging with educational institutes, greater public-private partnership is required to cope with this challenge," says Mr Pradeep Uddhas, Executive Director, Global Sourcing Practice.

(This article was published in the Business Line print edition dated February 10, 2007)
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