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HindustanTimes Wed,03 Sep 2014

End of IT staffing as we know it: firms bank on mini CEOs

Reuters  Bangalore, March 25, 2013
First Published: 23:38 IST(25/3/2013) | Last Updated: 23:39 IST(25/3/2013)

India's IT outsourcers are promoting "mini CEOs" capable of running businesses on their own, while trimming on the hordes of entry-level computer coders they normally hire as they try to squeeze more profits out of their staff.

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The shift by Infosys Ltd and others is symptomatic of a maturing industry that wants more revenue from its own intellectual property instead of providing only labour-intensive, lower-margin information technology and back-office services.

For young graduates who see the $108 billion IT industry as a sure pathway to modern India's growing middle class, the transformation is unsettling.

Dozens of industry aspirants who were recruited on campus by No. 4 player HCL Technologies recently protested outside its offices in several cities. They were offered jobs in 2011 before graduating last year but have not yet been given joining dates.

Slower growth, fewer people leaving, greater demand by customers for experienced staff, and increased productivity through automation and software have put pressure on all recruits, HCL said.

Tech Mahindra Ltd, the No.5 player, is naming 100 of what it calls mini-CEOs who will be given broad latitude to run their parts of the business. "We're moving towards a situation like the developed economies, where we're asking people to be more deep," said Sujitha Karnad, who heads human resources at Tech Mahindra.

While plenty of Indian back office work such as technical support, processing insurance claims or staffing call centres will remain labour-intensive, software services firms are looking to move up the value chain, which means relying less on the time and toil of staff.

In years past, it was cost-effective for IT companies to hire new graduates by the thousands.

But budget-constrained clients now demand shorter lead times. IT vendors that might have hired people six months in advance of an expected contract are now working with a one- or two-month window, said Surabhi Mathur Gandhi, senior vice-president at TeamLease, a staffing consultancy.


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