Last week one of my friends put in his papers after spending about 2 years in his organization. The company in question is a US based MNC which is primarily leverging the cost arbitage to drive efficiencies for its US product development and professional services work.( Like most captive offshore units set up in India in the last decade.)
The guy in question had joined the organization about 2 years back and had been sent to the US for a 3 month training and transition before moving the product team to India. With a thin client facing team in US, the entire technology team was moved to India. Pretty much the model upon which the Indian IT industry has been built by the likes of Wipro, Infy and being emulated by others like JP morgan, Goldman Sachs etc for the last 10 -12 years or so. With attrition being so common in India, all the organization had to do was get another guy with the similar background and technology experience and fill in that position.
So why I am even discussing this story here ? Well as a result of this guy quitting, the US team decided not to hire someone in India and instead hire someone locally in the US. The agrument to justify this decision is indeed compelling.This position was moved to offshore ( or best-shored) about 5 years back to India. In a span of 5 years, my friend was the 3rd guy to be hired for this position and being trained by the team in the US.
The US team had just got frustrated .. training and hiring folks only to see them leave after 2 years. This despite giving a double digit salary increase to this guy in the 2 years span.The math here quite simple , Hiring and training costs : About 15K, Salary to this guy :15K, overhead( for time zone differences and communication : another 10K. Total 40K. Spend may be another 10K ( or may be more) and you end up getting someone who will work in ur timezone and will probably stay on with the organization for the long term ( and as bonus not ask for the double digit salary hike).
So the question : Is attrition and the Indian Engineers penchant to only work for the salary leading to a early demise of the Indian Offshoring model ? Admittedly this situation would have occurred sometime in the future but I think this incident of my friend is not one off. Recently , we saw a big UK based bank moving call center jobs back to UK citing poor quality as the reason. I am pretty sure Attrition is somewhere adding to the poor quality -- remember attrition rates in the BPO sector is abnormally high ( ranging from 20% to 50%)
So again going back to the question which I raised in the previous blog posting .. why is attrition rate in India so high ?
Saturday, July 16, 2011
Friday, July 1, 2011
Attrition: Meritocracy or Mediocrity?
The job market in India is booming!!.And How? almost all companies have announced plans to increase hiring in the years 2011-2012 with some of the usual suspects like Infosys, TCS saying they will hire 30K+ this year - as laterals and as campus hires. (Another interesting point to ponder over - why do companies like Infy, TCS keep hiring campus grads letting go of an equal number of experienced folks every year. But will talk more on that in another post). And this boom is certainly not limited to IT sector. I see sectors like Banking, Finance, Infrastructure showing a positive hiring outlook as well.
One of the consequences of this hiring boom is attrition and voluntary exits across the various organizational levels. (But more visible in the junior and middle management levels). And managers, business leaders and HR executives have been looking for innovative ideas to stem attrition and keep the staff on payrolls for longer durations. Here is my take on the attritions we are currently seeing in the India markets. Not trying to offer any solution, but just raising a few questions which may lead us to the root cause.
One of the consequences of this hiring boom is attrition and voluntary exits across the various organizational levels. (But more visible in the junior and middle management levels). And managers, business leaders and HR executives have been looking for innovative ideas to stem attrition and keep the staff on payrolls for longer durations. Here is my take on the attritions we are currently seeing in the India markets. Not trying to offer any solution, but just raising a few questions which may lead us to the root cause.
Inflation - points to ponder over !
After corruption, the next hot topic for among general public in India has to be Inflation. Be grandfathers talking of how they used to get Rice at Rs 1/kg or the housewives nagging over the price of Onions or potatos....(The recent diesel/lpg/kerosene price hikes have only added more fuel to the fire :),inflation effects one and all. Just that the effect is more profound on some sections of the society than other and the effects are so subtle that sometimes you don't notice this at all.
Consider this example (taken from a article I was reading in a business magazine a few days back). Your regular office parking guy charges 1000 bucks for a month to let you safely park your car at your reserved place.(Yeah yeah I know only a privileged few get this honor and BTW this is not my office I am talking of. Parking in my office is free provided you reach early enough to get one ;)) Now say he raises his rate to 1200. You being the privileged guy will say.. 200 bucks wat the heck.. I will pay and get going. But did you even notice that that's a 20% increase in parking ( remember inflation in India is still hovering around a "high" 8-9%.)And now this guy is collecting this 20% increase not just from you but from many others like you. So the money multiplier effect kicks in since the parking management now has 20% more disposable money at hand.
Which raises the question .. Is inflation (especially food and essential commodities) in India a supply driven or Demand Side driven? My guess it is combination of the two. So what can we collectively do about inflation (apart from fretting about it and blaming the government for it). Here are some things I can think of.
Reduce Wastage of Food: Food contributes the maximum points to inflation numbers in India currently. So reduce the food wasteage both from supply side and demand side
Demand Side: Consider one example here. My office cafeteria used to offer free food during lunchtime to all employees till the month of May. After finishing up the lunch, like in most corporate cafeterias, we are supposed to empty our leftovers from the plates into a bin and then put the plates for wash. The Bin would usually become full - with most people taking more than what they can eat and throwing the stuff into the bin. On a given day, the facilities guys said that they have 2 full bins of food leftovers only. However from the month of June, the Company decided to stop giving free food and instead asked the employees to start buying food by paying. Guess what -- most people starting getting lunch boxes from home and the bin which would usually overflow was not even 1/4 full !!!! . Imagine the affect on the food demand if all the corporate and government offices adopt this approach or at least ask people not to waste food !!
Similar demand side changes can be effected at homes. Usually moms cook more rice or food in general at home - the thinking being that if someone is more hungry than normal - he should not be left wanting. But this leads to is huge wastage of cooked rice and food everyday at home. (I am sure most middle class Indians can relate to this). Instead the moms and ( the cooks for the working modern moms) can take a step back and ask the people at home how much hungry they are - that would help reduce some consumption led demand as well.
Supply Side: Encourage organized retailers like Reliance, More etc. They have a strong supply chain and logistic support system which will help from reduce wastes during transportation and storage. Today Food Corporation of India(FCI) godowns/granaries are full but still the food prices are not going down simply because of the lack of the proper supply chain and distribution mechanisms. Not to mention that most godowns have poor storage standards and with Rats/Rodents infesting most of them. (That this is allowed by the FCI officials points to the another nexus - the corrupt FCI guys say that x kg of grains was eaten away by the rats and then sell these x kgs in the open market to distributors and retailers)
So the question is - what can you as a consumer do to control price raise and inflation? Think about it. There are many things we can do (like -do not rip your cars and bikes on road. Ripping decreases you fuel efficiency thereby increasing overall fuel consumption and demand). Can you think of more such ways? Simple but profound innovations??
Consider this example (taken from a article I was reading in a business magazine a few days back). Your regular office parking guy charges 1000 bucks for a month to let you safely park your car at your reserved place.(Yeah yeah I know only a privileged few get this honor and BTW this is not my office I am talking of. Parking in my office is free provided you reach early enough to get one ;)) Now say he raises his rate to 1200. You being the privileged guy will say.. 200 bucks wat the heck.. I will pay and get going. But did you even notice that that's a 20% increase in parking ( remember inflation in India is still hovering around a "high" 8-9%.)And now this guy is collecting this 20% increase not just from you but from many others like you. So the money multiplier effect kicks in since the parking management now has 20% more disposable money at hand.
Which raises the question .. Is inflation (especially food and essential commodities) in India a supply driven or Demand Side driven? My guess it is combination of the two. So what can we collectively do about inflation (apart from fretting about it and blaming the government for it). Here are some things I can think of.
Reduce Wastage of Food: Food contributes the maximum points to inflation numbers in India currently. So reduce the food wasteage both from supply side and demand side
Demand Side: Consider one example here. My office cafeteria used to offer free food during lunchtime to all employees till the month of May. After finishing up the lunch, like in most corporate cafeterias, we are supposed to empty our leftovers from the plates into a bin and then put the plates for wash. The Bin would usually become full - with most people taking more than what they can eat and throwing the stuff into the bin. On a given day, the facilities guys said that they have 2 full bins of food leftovers only. However from the month of June, the Company decided to stop giving free food and instead asked the employees to start buying food by paying. Guess what -- most people starting getting lunch boxes from home and the bin which would usually overflow was not even 1/4 full !!!! . Imagine the affect on the food demand if all the corporate and government offices adopt this approach or at least ask people not to waste food !!
Similar demand side changes can be effected at homes. Usually moms cook more rice or food in general at home - the thinking being that if someone is more hungry than normal - he should not be left wanting. But this leads to is huge wastage of cooked rice and food everyday at home. (I am sure most middle class Indians can relate to this). Instead the moms and ( the cooks for the working modern moms) can take a step back and ask the people at home how much hungry they are - that would help reduce some consumption led demand as well.
Supply Side: Encourage organized retailers like Reliance, More etc. They have a strong supply chain and logistic support system which will help from reduce wastes during transportation and storage. Today Food Corporation of India(FCI) godowns/granaries are full but still the food prices are not going down simply because of the lack of the proper supply chain and distribution mechanisms. Not to mention that most godowns have poor storage standards and with Rats/Rodents infesting most of them. (That this is allowed by the FCI officials points to the another nexus - the corrupt FCI guys say that x kg of grains was eaten away by the rats and then sell these x kgs in the open market to distributors and retailers)
So the question is - what can you as a consumer do to control price raise and inflation? Think about it. There are many things we can do (like -do not rip your cars and bikes on road. Ripping decreases you fuel efficiency thereby increasing overall fuel consumption and demand). Can you think of more such ways? Simple but profound innovations??
Sunday, June 19, 2011
Corruption Corruption everywhere !!!
this blog may be a little late in the day. But havent had the motivation write on something for months ( or is it years;) now. But finally have got over my bumpiness and laziness.And yeah have been thinking abt the noise and high( or it is super high decibel) campaign against corruption that the indian civil society( the new name of the middle class intelligensia)is waging.
As I was thinking about it, i starting with the most basic question ? What is the root cause of all this corruption ? It is not that corruption is unique to India. It is exists in every part of the world and at almost every level. Politicians, bureaucrats, government officials and even private sector employees ( vendor gifts and holidays anyone) in every nook and corner of world indulge in the act of corruption. So what is the root cause of it ?
Well i think there multiple reasons why people are corrupt and support corruption. here are some the possible reasons.
1. GREED GREED GREED !!! : I think this one word signifies a lot. And it leads the various other reasons . How else would one explain the fact that someone like Kanimozhi (who probably wud have inherited crores from M Karunanidhi as a legal heir) is accepting favors from the likes of Unitech and DB realty. The fact remains that the human being is always greedy and is never satisfied with what he already has. That is where the problem starts.the more you get, the more you want !!.
2. Compare and Perish !!! : Consider 2 guys who are best of pals from college, have very similar backgrounds, got similar scores in academics but as luck would have it, one of them got into a government job and other into private sector.As most of us know and would agree, the rewards if you do your job well is much higher in the private sector than in Government and so the government job guy starts feeling left out in the race when compared to his dear pal over years. So what does he do ? Start looking at other options to earn money and that is when he thinks of under-table earnings etc ( it is afterall easy money rather than quitting a cozy government job and trying his rusted skills in private sector. So the point here is dont compare your wealth and success with someone else. You don't know the efforts and sacrifices it took for that success.
Mind you, both of these above root causes have a positive shade to them. And a little greed and comparison is not necessarily bad because it can induce a healthy competition and get you thinking.Especially with the comparison thingy. The key word here is healthy and the line between healthy and unhealthy is rather thin. And that is where the value systems each of us builds becomes very important. Part of what the value system should teach everyone of us to where to draw this very important line.
So the fight against corruption which the Indian civil society is waging really has its roots in the value systems. We may fight to get our black money and get it back now. But there will be another generation of corrupt guys who will learn how to circumvent lokpal or any other bill and continue the corrupt acts.
Can we create a system where by the next generations of leaders have the right values ? Is there a value system test which we can ask the future leaders to take before the can fight elections ? (simply because politicians and law makers are considered the most corrupt and also can be most influential in stemming corruption because of the power they wield) Points to ponder and innovate on !!! .
As I was thinking about it, i starting with the most basic question ? What is the root cause of all this corruption ? It is not that corruption is unique to India. It is exists in every part of the world and at almost every level. Politicians, bureaucrats, government officials and even private sector employees ( vendor gifts and holidays anyone) in every nook and corner of world indulge in the act of corruption. So what is the root cause of it ?
Well i think there multiple reasons why people are corrupt and support corruption. here are some the possible reasons.
1. GREED GREED GREED !!! : I think this one word signifies a lot. And it leads the various other reasons . How else would one explain the fact that someone like Kanimozhi (who probably wud have inherited crores from M Karunanidhi as a legal heir) is accepting favors from the likes of Unitech and DB realty. The fact remains that the human being is always greedy and is never satisfied with what he already has. That is where the problem starts.the more you get, the more you want !!.
2. Compare and Perish !!! : Consider 2 guys who are best of pals from college, have very similar backgrounds, got similar scores in academics but as luck would have it, one of them got into a government job and other into private sector.As most of us know and would agree, the rewards if you do your job well is much higher in the private sector than in Government and so the government job guy starts feeling left out in the race when compared to his dear pal over years. So what does he do ? Start looking at other options to earn money and that is when he thinks of under-table earnings etc ( it is afterall easy money rather than quitting a cozy government job and trying his rusted skills in private sector. So the point here is dont compare your wealth and success with someone else. You don't know the efforts and sacrifices it took for that success.
Mind you, both of these above root causes have a positive shade to them. And a little greed and comparison is not necessarily bad because it can induce a healthy competition and get you thinking.Especially with the comparison thingy. The key word here is healthy and the line between healthy and unhealthy is rather thin. And that is where the value systems each of us builds becomes very important. Part of what the value system should teach everyone of us to where to draw this very important line.
So the fight against corruption which the Indian civil society is waging really has its roots in the value systems. We may fight to get our black money and get it back now. But there will be another generation of corrupt guys who will learn how to circumvent lokpal or any other bill and continue the corrupt acts.
Can we create a system where by the next generations of leaders have the right values ? Is there a value system test which we can ask the future leaders to take before the can fight elections ? (simply because politicians and law makers are considered the most corrupt and also can be most influential in stemming corruption because of the power they wield) Points to ponder and innovate on !!! .
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