Small, mid-size IT companies are set to step up hiring

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Since the early 1990s, India has gained an enviable position on the world map on the back of its fast-growing information technology (IT) sector. In the past year, however, India’s largest private sector employer has been in the news for mass layoffs by large firms in the face of shifting macro-paradigms. That the sector is looking at a plunging trend in job growth for the next few years, is a perception shared by many. But do these perceptions really hold true for the sector at large?

A recent study carried out by Great Place to Work Institute covering 146 IT and IT-BPM (IT-business process management) companies in India shows a different picture. Findings show that small and mid-size corporates (with an average employee strength of 1,373) are planning to grow their workforce by about 32% in the next 12 months.

Contrary to the common perception, job security is not a growing concern for about three-fourths of the workforce in this segment, with employees in the age group of 25 years and below being the only exception. Seventy percent of employees still believe that management would lay people off only as a last resort.

In fact, positive perception around job security has grown by 4% in the last two years. This is supported by the fact that employees continue to be brand advocates for their organizations, encouraging acquaintances to join the firm. Hiring through referrals by employees increased from 19% to 24% over the last couple of years.

In particular, the industry maintains its leadership in being a lucrative employer for women. Among five major industries, IT is the second largest employer of women, behind professional services; financial services and insurance; retail; and manufacturing and production. It is also the only industry from this pool where the experience of women employees is on a par with male employees (as compared to other major industries where experience of women employees is less positive than that of men).

Organizations in the IT industry have gone out of their way to ensure a secure career for women.

For example, Pitney Bowes Software India has introduced a unique policy for women employees on maternity breaks where performance rating for the new mother is sealed on the basis of her last two years’ performance. The same is calculated by taking last year’s rating or the average of last two years’ rating, whichever is higher. This gives a fair chance for career growth and development to women on maternity breaks. SAP Labs India aims to have 25% women in their leadership team. Initiatives like these and more have led to an increase in the percentage of women employees in junior and mid-management roles in the industry from 15% to 23% over the last two years.

Known to be one of the most credible methodologies for assessing workplace cultures across the world, the Great Place to Work Institute’s study looks at workplaces from employees’ perspective and assigns 2/3rd weightage to the voice of employees. This is measured through anonymous surveys conducted across these organizations.

The remaining 1/3rd weightage is assigned to the strength of people practices implemented across the organization and is measured through responses to a structured questionnaire shared with them by the GPTW team. On the basis of this, 50 best workplaces in the IT and IT-BPM industry were identified.

All in all, employee experience in this industry has shown a significant positive improvement over the last couple of years, especially in the following areas:

1. Ensuring pay parity and inviting employees to own a stake in company profits:

Having led the introduction of employee stock option schemes in India, organizations in the IT industry continue to advocate this practice as a retention strategy. A total of 85% of employees in Intuit and 65% in Adobe are enrolled in their employee stock option plans (ESOPs) and own company shares. It is also interesting to note that the 50 best workplaces in the industry have gained a significant edge in this space—63% of the best workplaces offer ESOPs or similar schemes to employees as against 38% in the rest of the workplaces.

2. Establishing a deeper connect with employees through 2-way communication and encouraging their involvement in decision-making:

BT Global Business Services shares its company strategy on the employee portal, allowing its large employee base to gain a better understanding and connect with the overall strategy and to invite questions and feedback around the same for consideration by the leaders. Decentralization of decision-making by involving team members is also a practice gaining momentum. Organizations like iNautix Technologies have invested significant time and resources in building people management capabilities in their line managers.

3. Managers showing care for their people and honouring their promises:

Managers today take a deeper interest in the well-being of their employees, including matters of personal life. Managers at Hitachi Data Systems instantly thank team members for exceptional results with a special evening—a dinner for two, a sporting event, cinema tickets, etc.—whatever they feel will be most meaningful for the employee. This practice shows people that their manager cares, which is much appreciated especially after tough projects requiring extra time away from the family.

Multiple factors appear to have favoured the IT industry in recent years. On the back of Digital India campaign by the Government of India, a rising number of internet and mobile technology users and programs for digital inclusion, the IT industry is enjoying a plethora of astounding opportunities for business. The advent of Internet of Things (IoT), demand for digital payment platforms and plans by the government to bring automation in everything ranging from the courts of law to village panchayats hint at a bright future for the industry.

Given that the sector has also attracted foreign direct investment inflows of $1.32 billion between April and June this year (bit.ly/2smBzlP), the Indian IT industry seems to be poised for another exciting phase in its growth journey.

This, however, does not mean that the industry is without its share of challenges. Automation is eating away low-skilled jobs and failure to keep up with emerging technologies is hinting at a dearth of digital talent.

“Skills are the new currency and its life cycle is becoming shorter. So, the mantra is re-skill or perish,” says R. Chandrashekhar, president, NASSCOM. In order to help their employees stay relevant in the face of changing skill requirements, SAP Labs offers early talent stretch assignments to employees who have joined the organization in the past one-three years. These short four-20 week assignments from across different businesses and functions allow employees to broaden their horizon, work on latest technologies at SAP Labs and contribute to parallel teams. Taking a proactive approach to cross-functional career movements, BT Global organizes a career fair wherein representatives from each of the business areas set up a stall to talk about the role they play and address queries around careers in that team. This allows people to move between different stalls and explore cross-functional roles of their interest. Allowing this to be a company-wide affair means that the organization encourages all employees to think about cross-skilling and horizontal career movements, instead of this being a sporadic opportunity assessed on a case-by-case basis. In light of the need for re-skilling and upskilling, it is noteworthy that the best workplaces invest an average of Rs41,432 in employee training per employee per year, which is significantly higher than Rs12,399 invested by the rest of the workplaces.

Social, mobility, analytics and cloud is going to provide a $1 trillion opportunity in the near future in India, according to an India Brand Equity Foundation report. Organizations which are able to attract and retain high-skill and cross-skill talent alone will be able to successfully ride this wave of emerging technologies. The best workplaces have been smart in capturing this opportunity early on, by establishing themselves as attractive employers for skilled talent. Areas where they have gained the highest advantage over the rest of the workplaces are pay parity, profit-sharing and offering unique perks, in addition to work-life balance opportunities, fun at work and creating a welcoming experience for employees who move to a new team within the firm due to job rotation.

To stay relevant in the market for customers, it is essential for the organizations in the IT and IT-BPM industry to first stay relevant in the market for employees. Our research, further validated through independent studies carried out by firms such as RSM India, shows that the best workplaces consistently outperform market indices such as BSE Sensex and Nifty 50. The future looks promising, but only for those who can count on their human resource to innovate and adapt to rapid changes.

We hereby invite all organizations to enhance their employer brand and begin their journey for creating a high-trust, high-performance culture.

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