re: Jobs, Attrition & Layoffs in IT companies Just to add a slightly different twist to this discussion. Let there be no mistake, many of these companies require a high level of attrition. Because it allows them to higher younger new folks at relative lower wages.
One of the fundamental problems (my view/opinion, no offence meant to anybody) is that many Indian sectors have positioned them as low cost. Which makes it attractive for especially western countries to outsource. The Indian IT industry in particular is build upon that principle. To remain competitive one most create a certain amount of attrition in those job roles that are easily replaced. It is not that difficult to calculate that the attrition rate needs to be above 15% easily and that would be in a period of growth too. Less growth you need higher attrition, or you will need to lay off folks to stay competitive.
Again, not wanting to offend anyone, but if companies can survive and even thrive a 25% attrition rate they are working in the very low cost sector (i.e. relative low experience required and an abundance of young graduates eager to join).
I have never ever understood why anybody would want to work for a low cost company. Obviously, many of us, especially in India, simply don’t have a choice. You need a job, you need to feed your family.
I think this is a very fundamental problem with large parts of Indian industry. There are plenty of very capable and competent people about, but if all you are interested in selling them more cheaply than the next guy, you are going to create a problem long term.
When I started outsourcing the USA Sprint Organisation in 2009 we would still consider China a “low cost company”. Ten years later, China can not be considered low cost. At least not for these sort of jobs. They have moved on. China is actively moving away from copying and being cheap to being extremely industrious and very advanced state of the art technology wise.
Don’t get me wrong, I really don’t like nor approve of the Chinese system. But it is a good example of why you need to move away from cheap!
When I started my career in Telecom we used to develop what we called application systems for our telecom switches. A new release (so added funtionality and new hardware) would be anywhere between 1,5 to 4 million man-hours. And those would be highly, highly qualified R&D folks. We would run those sort of project in 12-18 months. Nobody with less than five years of experience would be on these sort of projects. A lot of development was completely unique to our hardware and our functional requirements. These days I think coding has taken a very different meaning. It comes with very different requirements on training, experience and competence.
Companies really ought to try and add more value to their customers than being the cheapest IT contractor. No matter what, at the end of the day, it is going to be a problem for the employees, the company and the customer. Long term it is simply not sustainable for a developing country. I do believe, (I am no expert, just gut feeling) that it does keep an industry back. Because all of its effort is about cost, managing attrition rates. Not about the customer, their needs, let alone some long term strategic development.
Technology develops constantly. I think India should and can do much, much better than what it is doing today. Plenty of very very clever and well educated people about. Far to many (my opinion) are doing relative simple and repetitive work. The very fact that IT companies get away (even successfully) with such high attrition rates proves my point.
Just to give my comments a bit of a positive spin; if you are working in the IT industry (or are thinking about it) really take a good look at the various IT companies. Which ones are really ahead of the game? Which ones are investing in their employees, not just for the next project, but for the next decade?
Look at what is happening in the AI world. I don’t have statistics at hand, but my impression is that many of the very well paid and hugely interesting jobs are in the west, not in India. As soon as a job can be standardised, as soon as processes can be standardised, the whole shebang will be moved to India, because it will be much cheaper.
It’s high time India IT (and some other sectors too) move away from lowest cost to providing best value for money and provide real tangible benefits. Everybody in sales knows this. If you have something your competitors can’t match, the order/contract is in your pocket. You just don’t want to be competing on price alone.
I worked for a small, but very successful system integrator in the mid eighties. We worked mainly on industrial automation. Huge projects. We were very proud of the fact that we were never the cheapest. Hiring us, took a premium, and companies were willing to pay that premium because they knew we would deliver on time, on budget with the required quality and output with minimum oversight and interference from them. It drove the procurement guys ballistic, but the engineers just kept their foot down. They told procurement, I don’t care what you do, but I want these guys on my project. I have enough headaches as it is. One less thing to worry about when they are on the job!
That’s the sort of company you should be looking for. There needs to be more than just being cheap why they select you. I mean, lets face it, who can live on cheap forever.
Jeroen |