Business Today

Time for an overhaul

There is a need for better remuneration for managers and better engagement from the top leadership.

Print Edition: February 7, 2010

After years of rah-rah growth, there is some unhappiness creeping into the IT Enabled Services (ITES) industry now. A lot of it has to do with the industry's lackadaisical growth last year. But there is also a level of "Leadership Fatigue"— senior managers in the industry, having worked for 6-7 years in what is essentially a 24x7 job, seem to have lost their enthusiasm, which has made them unable to bring in fresh ideas and practices.

An industry can create opportunities for its employees only when it is growing. The ITES industry, therefore, has to strategically drive growth in the coming years. For this, it has to look at new areas such as utilities, for example, that are under-penetrated, as well as new geographies, for instance, Europe and Asia. In short, it needs to find non-linear models of growth. Even after a decade, the industry's revenues are directly proportional to the number of people. When 40-50 per cent of its cost structure is the wage-bill and customers are constantly bargaining for concessions, the industry does have a problem.

At the human resource level, there are a few things that the industry can do. First, it needs to set more realistic expectations. The massive growth numbers of the early years cannot be replicated now. Besides, the growth opportunities are not there anymore. The dissonance has come because recruiters are not communicating well.

Two, companies should look at promoting people from within their ranks for leadership roles. The role of team leader, for example, is the first "managerial" role in the industry. By picking team leaders from within, companies can give opportunities to a greater number of people. Of course, this will require a strong leadership training capability, but companies must understand that strong team leaders are the interface between management and people on the floor. People on the floor are not going to walk away from the industry as such because it still offers attractive salaries, but growth opportunities must exist for them.

Three, the industry should sell its virtues like the opportunity to work with large global corporations and considerable investment in training. Even though the BT-Indicus-PeopleStrong survey says people in the industry are not happy with the training, in terms of sheer time spent on training, the ITES industry is ahead of hospitality and retail. No doubt, many companies cut back on training during the slowdown. But there are always opportunities for "team learning".

Training does not only mean human-human interaction; there are extremely evolved e-learning tools that can help train employees without raising costs. The reason many companies cut back on training is because they are publicly-listed firms today, and many of them concentrate more on quarterly results than the long-term view.

As for top-level management talent, this is a particularly delicate time for the industry. Back in 2000-2002, IT/ITES was the only growth sector in the country and getting top management talent was easy. Today, things are different. With the economy firing on several cylinders and the domestic industry affording excellent job opportunities, a 24x7 job in the ITES industry may not be an attractive proposition. Therefore, there is a need for better remuneration for its managers as well as better training and engagement from the top leadership. Good managers are worth the money.

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