Last year, two unusual top management movements in the $29-billion Indian IT-ITES services industry set a human resources (HR) precedent. Infosys Technologies’ T.V. Mohandas Pai stepped down as CFO in May to lead the company’s HR division. A few months later, Lakshmi Narayanan, CEO of Chennai-based Cognizant Technology Solutions, relinquished the top job to take on a similar role. Apart from underscoring the importance of HR in the IT-ITES industry, the two movements bring into focus the differentiated approach that the industry is now taking to human resource.

In the past decade, the industry has grown export revenues at 35 per cent year-on-year and is on its way to $60 billion by 2010. But this growth has been accompanied by high attrition rates — 30 per cent is the industry average. Today, as the industry guns for $60 billion, IT-ITES head honchos are concerned about a looming manpower shortfall, estimated at 500,000 by the Nasscom-McKinsey IT-ITES report of 2006. That could spoil the party. Little wonder, then, that veterans such as Narayanan and Pai have given up plum assignments to get knee-deep in seemingly softer roles. Except that in the IT sector, HR is perhaps the toughest job to have. Two reasons: people or intellectual property is the industry’s only asset and it has to compete globally to retain it.

“The business has been global from day one. Therefore, the benchmarks also have to be global,” says Sriram Rajagopal, director (HR), Cognizant. The company has recently engaged a London-based consultant to undertake assessment tests for mid-level managers. This is part of an exercise to identify future leaders and would benchmark its managers against overseas peers. With global IT majors such as IBM and Accenture also forming part of the Indian IT-ITES growth story, the pressure to compete on global terms no longer comes just from overseas.

So, practices that are still seen as ‘different’ by traditional industries are pretty much the norm with IT companies. For instance, quarterly performance incentives instead of annual, employee referrals as a recruitment tool, flexible work schedules (mothers are encouraged to work from home), married couples sharing workplaces and cafeteria bonding — most IT companies have common cafeterias for all levels of employees, including senior managers — are now commonplace employee welfare and engagement tools. “Such practices are no longer incentives for attracting talent. You have to think beyond the mundane,” says an HR executive at Mumbai-based Firstsource.

Behind The Myths

That is where career mentoring programmes, like those run by companies such as Accenture, MindTree Consulting, Bangalore-based Infosys and Cognizant come into play. What is interesting about these programmes is that they move the HR function out of the HR department. “The mentor in Accenture, for instance, does not have to be an HR person,” says Rahul Varma, its head (HR). Employees can choose their mentor, either a senior manager from their own division or even from another division. The mentor guides his understudy on setting out and achieving key career milestones — and the mentor is also assessed on his success rate.

At MindTree, which is a mid-sized IT services firm based in Bangalore, keeping employees engaged is a function that is shared by the top leadership. “As we have grown in numbers, the big challenge has been to retain the culture of a small company even as the numbers expand,” says Parthasarathy N.S., its executive vice-president. The company assigns mentors to new recruits — fresh or lateral (in-house promotions) — for 6-8 weeks to ensure that their induction is smooth.

Human resources in an IT company are also a step ahead of traditional peers in terms of the way it uses technology. As in other functions, automation is high on the agenda. This is also important because of the nature of the workforce. “Software workers by definition are more comfortable doing things online,” says Cognizant’s Rajagopal.

So, quick human resource solutions such as employer’s letters for personal loans, leave applications and, even, changing managers can be applied for and delivered online. Of course, it does not always work and, sometimes, traditional methods still hold value — team birthday bumps every year, for instance.