Talent Management in the IT Industry: Trends and Challenges

WITH SPECIAL FOCUS ON DELOITTE AND WIPRO

Astha Agarwal Sanil Jain Sumit Majumdar Aanshi Shah Bandish Shah Sankalpa Suara F003 F023 F030 F048 F049 F056

TABLE OF CONTENTS
1. Introduction . 1

2. Importance of Talent Management in IT Industry.. 3 3. Deloitte and Talent Management 4 4. Wipro and Talent Management... 6 5. General Trends Being Followed by Other Companies in the IT Sector.. 9 6. Conclusion: The Future of Talent Management.. 11

Introduction
Before the Liberalization, Globalization and Privatization (LPG), people used to stick to one company and work with it throughout their whole career. However, the present scenario is just the opposite. Most of the talent pools have started changing jobs for growth, stability, security, challenge and for various other reasons. Across industries, organizations face issues of high attrition. The high attrition is due to various factors like increasing opportunities, job poaching, family reasons, health reasons, vested interests, likings of individuals or groups, better pay, better work, environment etc. This leads to a severe talent crunch as well as demand around the world. A continual effort to replace the departing worker is expensive. The cost of hiring, attracting, training and getting new people on board is tremendously costly in terms of both time and money. Faced with a turbulent and dynamic environment, organizations consider acquisition, engagement, development and retention of talent as top priorities. Keeping good people has become a major challenge for most enterprises, big or small. In the twenty first century talent is defined as the new corporate wealth and talent management the strategy to make the most of it. Talent management is the conscious and deliberate attempt to attract, engage, develop, and retain people with the aptitude and ability to meet the current and future organizational needs. In a competitive marketplace organizations are focusing on three kinds of values: The strategic ability to find and motivate the right talent The know-how to correctly keep employees as engaged resources at the right economic equation The ability to transform roles that need to be managed differently in a future context

In this report we explore the issue of talent management in the IT industry, focusing specially on talent management practices of two IT majors Wipro and Deloitte. Wipro Wipro (NYSE:WIT, NSE: WIPRO) formerly known as Western India Products Ltd. is an Information Technology, Consulting and Outsourcing company from India and is a global leader in providing IT services, outsourced research and development, infrastructure services, business process services and business consulting. The organization employs over 130,000 employees, serving over 900 clients including a number of Fortune 500 and Global 500 corporations and is present in 54 countries. Wipro began its business as a vegetable oil manufacturer in 1945 at Almaner, a small town in Western India and thereafter expanded into the manufacture of soaps and other consumer care products. In the early 1980s Wipro entered the Indian IT industry by manufacturing and selling mini computers and began selling personal computers in India in 1985. In the 1990s, Wipro began offering global clients software services. Wipro is one of the pioneers of the Offshore Development Centre model that drove the growth of IT services business to a global scale/ Wipro also has a strong presence in niche market segments of consumer products & lighting and infrastructure development.

With a track record of over 25 years, Wipro implements a unique quality methodology, the Wipro Way, a combination of Six Sigma, Lean manufacturing, Kaizen and CMM (Capability Maturity Model) practices to provide unmatched business value and predictability to clients. Deloitte "Deloitte is the brand under which tens of thousands of dedicated professionals in independent firms throughout the world collaborate to provide audit, consulting, financial advisory, risk management, and tax services to selected clients. These firms are members of Deloitte Touche Tohmatsu Limited (DTTL), a UK private company limited by guarantee. Each member firm provides services in a particular geographic area and is subject to the laws and professional regulations of the particular country or countries in which it operates. DTTL encompasses a series of mergers and acquisitions of various organizations across the globe since 1845 and continues doing the same to widen its umbrella of various business functions. Deloitte Touche Tohmatsu Limited, commonly referred to as Deloitte, is one of the Big Four professional services firms and second largest professional services network in the world by revenue. It has 193,000 employees in more than 150 countries with its global headquarters located in New York City, United States. In India, Deloitte offers a range of Audit & Enterprise risk, Tax, Consulting and Financial advisory services across thirteen cities. The consulting services assist clients by providing services in the areas of enterprise applications, technology integration, strategy & operations, human capital, and short-term outsourcing. Its existence for over a century in the Indian professional arena supplements the technical proficiency of the client service teams to create powerful business solution tailored to the client's need. Deloitte takes pride in their ability to provide quality services - whether they are an owner-managed business or a large multinational corporation. It is a multi-skilled, multi-disciplined firm, offering clients a wide range of industry-focused business solutions.

Importance of Talent Management in IT Industry

The Information Technology (IT) sector is evolving very rapidly, over time it has developed a reputation as a high stress career field, with low personal rewards, little chance of advancement and ultimately an area of low morale. While this is not the case within all IT departments, it has become a common perception of the industry as a whole. This perception has been driven by a variety of factors including lack of efficient employees available to complete tasks and the use of outsourcing for lower cost resources. Thus the industry needs to take more ownership of the employees and skills and work to develop them internally in a way that provides companies maximum value from their IT organization, while ensuring employees are successful, stable and ultimately happy with their work environments. Talent Management is not only needed for success, efficiency, and consistency but today it is one of the most important strategic objectives of organizations. From every viewpoint, talent is essential and is often regarded as a key strategy in maintaining a competitive advantage. However, the major issues involved in managing IT talent are: Compensation - Companies strive to ensure their salaries are consistent with the local market for the level of skills an employee is utilizing at work each day. There are also other costs that go directly with pay. It is very expensive to lose an employee; they take lots of company experience and knowledge with them. Transferring that knowledge to a new employee is costly in the time they are learning the business, they are contributing less to the bottom line. Companies require to always evaluate the cost of raises for employees to ensure they stay at the area average to the cost of losing one employee and having to hire another. Opportunities - Employees within IT organizations are curious by nature, with that trait they constantly want to expand their knowledge and experience. IT employees move on a regular basis, not always up in the corporate ladder, but most often laterally to other jobs that are of interest to them and provide them a benefit of increasing their skill sets. Thus IT employees should be provided opportunities to move both within the IT department and within the company. This movement and change of jobs is often what IT employees need to ensure they do not get burned out while allowing them to stay engaged with their jobs. Interesting Work- Because of the general trait for IT employees being on a constant quest for understanding, most IT employees are always looking for new and exciting projects. Thus it becomes crucial to formulate effective retention strategies by identifying and developing high potentials and provide preferential development or treatment. Flexibility Working from home has become very common in many organizations, especially IT. Although it gives employees freedom and balance between life and work, it should be made sure that this flexibility doesnt hamper the attitudes of employees and productivity levels. Work Space One common perception within IT over the years has been that putting employees in shared space will allow better collaboration. The challenge is that very little IT work is collaborative in nature, the bulk of the work that must be accomplished is individuals working on their pieces of a project, and this type of activity requires that employees be able to focus.

Deloitte and Talent Management

A principal at Deloitte says, We recruit the brightest and the best - whatever their specialization. We combine the dynamism and fluid-thinking of the young graduate, with the business knowledge and insight of the seasoned executive. Investing in our people means our clients get world-class expertise to solve their complex business problems. Its important to prioritize investments in talent, and that includes identifying critical workforce segments, or those jobs or groupings of jobs which create greater value for the business. A central issue to consider is from where the organization tends to draw top talent and from where do the strongest performers comes. Talent Attraction The vision at Deloitte is to be a Magnet for Talent. In keeping with this vision, a variety of initiatives have been pioneered to ensure that they attract the right people, at the right time, into the right place. They believe that the type of individual who is intuitively drawn to Deloitte is a different breed. It is someone who shares their vision and lives their values. They commemorate the uniqueness and diversity of their people. During the interview, Deloitte Executive said that Deloitte has the benefit of its brand name and has reputed track record with the success of surviving through the crisis. The diversity it offers in terms of services also adds to its brand penetration. Thus they believe that its brand value itself acts a magnet to attract world class top employees. They focus on recruiting best students from top universities. Their strategy includes conducting case study competitions and presentations at various campuses to lure students with their culture, values, social involvement etc. The lateral hires get attracted by the lucrative starting compensation offered and work life balance provided. Opportunity to work abroad remains another key attracting factor. The survey 2012 shows that the ratio of male to female was 70:30. Deloitte firmly believes in bringing diversity by recruiting women. Thus an initiative called WIN is undertaken to empower women. Talent Engagement As mentioned by HR Executive during interview, Deloitte believes in engaging their talents from the time they are selected for their organizations. After the recruitment process, to be employees are assigned buddies and mentors to get them learn more about their job roles and organization. The organization tries to regularly keep in touch with them through organization newsletters and distributing mementos. During the On boarding process, the employees are engaged through various quiz contests. While at work, opportunity to contribute for social cause is provided to the employees. Talent Development Today the talent market strives to continuously upgrade their skill sets in order to make them fit for various functional roles, especially the best in class cadre. As Deloitte focuses on recruiting best in class people, conducting development programs becomes imperative not only to attract and retain top performers but also to provide best services to clients.

An interview conducted with HR Executive revealed the following efforts taken in order to provide an opportunity for employees to grow. Industry specific trainings- The IT employees come in with good technical skills but such trainings aims at providing functional knowledge specific to industry, the employee is interested in. This helps employees get better understanding of projects and perform better. CE assessment tests Good Communication skills becomes extremely important when dealing with clients in this industry. This test aims at making employees proficient with such skills. These tests are mandatory at every level of corporate level. Milestone Programs These programs are designed specific to different levels. Like the Analyst level employees have Campus to Corporate program, Managers have Manager Excellent Program etc. Management Programs Top performers are given an opportunity to undergo part time Management courses in affiliation to IIM C. Performance Improvement Programs These programs are meant for low performers to provide those required skills and knowledge base. Talent Retention The survey 2012, notes that employees look for a job change due to a combination of factors, including compensation and career expectations. The top reasons cited by both men and women are similar: 54% of men and 53% of women identify Lack of compensation increase as the primary reason; while for 54% of men and 49% of women, Lack of career options is the second most important reason for changing the job. New opportunities in the market takes the third place with 34% of men and 33% of women picking this as the cause in switching their loyalties. As per our survey, for workforce less than 25 years of age, 56% identify Additional compensation as a key retention strategy. However, employees over 25 years of age recognize Promotion/Job advancement as the crucial factor in this case. The interview with HR Executive revealed some core ideas and opinions on various retention strategies that are used to retain their talent. The key ones being promotion and job advancement, additional compensation, opportunity to work abroad, new training programs, and flexible work arrangements. Also, the first employees to leave are typically top performers, who have more opportunities than others. Thus recognizing the risks of losing top talent, key incentives noted that can contribute to the cause of retaining include additional monetary benefits, recognition, and greater emphasis on integrating family, community, and work commitments. The changing nature of operations world-wide can present better choices and style of working to employees, and perhaps motivate them to stay longer. Preferential development and policy benefits to top performers helps retain them.

Wipro and Talent Management

In the words of Mr. T.K. Kurien, the Executive Director and CEO-IT Business, Wipro, Our employee engagement is a two way connect between an employee and the organization. We initiated the Employee Advocacy Group to bring about changes that are relevant and important to employees. Our simplified people processes have let to better access to information and easier provisioning. The result is evident in a very positive employee perception score. In its target to achieve Accelerated Growth, Wipro targets to be the preferred employer of choice in the sphere of its operations to its employees. In Wipro, a large part of the management focus is in strengthening and caring for employees. The aim is to create and nourish the best in class global leadership and provide them unlimited opportunities for career enhancement and growth. Talent management at Wipro is analyzed in terms of the four objectives of talent management: talent attraction, engagement, development and retention. Talent Attraction Wipro recognizes engagement, learning and empowerment are integral to building a world class workforce. Wipro has a global knowledge workforce that offers high end solutions to a global customer audience. The focus is not only on going global in terms of client services but also employing people worldwide. At Wipro, global standards embraced as a corporation translates into actions as an employer. Wipro was among the top three of the 2012 Business Today List of Best Companies to work for in India. The reputation of Wipro as a success employer has given the company a very strong Employee Value Proposition for potential talent. Wipro is very successful in having the top drivers of talent attraction such as career advancement, learning and development, challenging work, competitive salary, employee benefits, work flexibility and competitive healthcare. Employee Perception Survey (EPS), held every two years, throws light on areas of improvement in career growth. Wipro is an equal opportunity employer and remains committed to the highest standards of openness, probity and accountability. The Code of Business Conduct and Ethics (COBC&E) defines Wipros commitment and actions as a meritocracy and equal opportunity employer. All decisions regarding hiring, learning, opportunity, salary, compensation and separation are based on merit and performance. Wipro is committed to non-discrimination on any grounds, such as nationality or ethnic origin, gender, race, religion, caste, disability, political or sexual orientation. 28% of our workforce in the IT business consists of women employees. In Mentoring for Success programme 515 women employees were covered. In terms of compensation and employee benefits, compliance with basic employment norms such as adherence to minimum wage standards, statutory benefits and timely wage payment have been maintained without any defaults for the reporting period across businesses. At Wipro, learning and development is an integral part of the work culture and takes place in many different ways. Structured learning takes place via classroom training and online elearning. These drivers make Wipro a very attractive workplace. As a success employer Wipro has the ability to attract the best talent pool in India and abroad

Talent Engagement Employee engagement is an inclusive and empowering platform that connects employees with leaders as well as peer groups. Forums such as company level Wipro Meets, Business unit level All Hands Meets and Regional Meets are interactive platforms for sharing information, voicing feedback and conferring reward and recognition. Webcasts and Webchats also form a regular channel of engagement between senior leaders or subject Matter Experts (SMEs) and employees. A host of newsletters are created internally by respective functions to keep Wiproites abreast of latest developments and initiatives. Information on people policies and practices are made available to all employees on the company intranet portal; revisions to policies are updated regularly as well. During 2011-12, several policies and processes were simplified as part of the simplify initiative, to improve employees experience. Wipro respects employees rights to form or participate in trade unions. Less than 1% of Wipro employees in IT business are part of registered trade unions these are a section of employees in Europe, Brazil, Mexico and Australia. Wipro also has Work Councils in France and Germany. Collective Bargaining Agreements are entered into with trade unions in Finland and Brazil. The HR function meets these groups every month to consult on any changes that can impact work environment and terms and conditions. The Employee perception survey covers various themes that are material to employees Culture, Manager Quality, Role, Work environment, Leadership and the Spirit of Wipro values. In EPS 2011, Diversity, Team, Social Responsibility, Customer Focus and Values were the 5 top-rated drivers of engagement. This way Wipro focuses on career growth, development linked to role, greater communication around Wipros strategic direction. In 2011, in order to more directly embed employee feedback into organizational action, the Employee Advocacy Group (EAG) was created. The EAG is formed of volunteers who come together as peers, as a steering group. The EAG works on two specific areas: channelizing feedback on existing policies and practices, and reviewing new policies before launch, wherever feasible. Wipro believes in the power of appreciation. Recognizing performance and valuable contribution is a part of the organizational DNA. Quarterly, half yearly and annual reward events are held across businesses and geographies to recognize stellar accomplishments. In 2011, the Winners Circle reward and recognition framework was launched. The Winners Circle is comprehensive and people-friendly. It brings together all types of rewards under a single point-based framework. Winners earn reward points and have a wide choice of prizes to redeem their points. Talent Development Every employee has an individual learning plan that addresses individual learning needs through the Integrated Talent Management system (ITMS) portal, which is a vast repository of over 17,961 e-learning titles, spread over 3,520 courses. Soft skill training inputs are linked to the performance Management system and are customized to each role within Wipro. The range of training spans technical, domain, process and behavioural training. The pioneering WASE program (Wipro Academy of Software Excellence) was launched in 1995. The WASE program consists of an 8-semester (four years) off-campus collaborative MS program with the Birla Institute of Technology & Science (BITS), Pilani (Rajasthan, India). Students receive technical and academic inputs as well as the opportunity to apply their learning in live projects.

WiSTA (Wipro Software Technology Academy) is the latest entrant in Wipros training repertoire. WiSTA is a new, work-integrated M.S. program in information technology for science graduates with non-mathematics disciplines. It is structured along similar lines as WASE, in collaboration with VIT University, Vellore. Talent Engagement Centers (TECs) enable employees to upgrade their skills, spend minimal in-between projects and find the right assignments. Architect Career Essentials (ACE) framework launched in October 2011 and the Unified Competency Framework are essential for technical competency building. At Wipro, leadership development is a strong, institutionalized process that comprises lifecycle programs and customized interventions to build leaders at all levels. Every year, all leaders above the middle management grade receive 360-degree feedback on the Wipro Leaders Qualities (WLQs). The qualities are periodically revised to keep aligned to current and emerging business realities. Talent Retention Despite best practices in talent attraction and engagement, talent retention still remains a challenge because of very competitive industry and a regressive economy. In the Indian IT industry roughly 100,000 revenue earning employees are estimated to have turned into unbilled benched talent in 2012. An estimated 3.25 lakh of the 1.3 million IT workforce are now idle. This is a demotivating factor for employees. Those on Wipros bench are using idle time to learn newer soft skills, plug into more management gyaan or learn new languages such as French or German. Anyone can apply for these courses under Wipros open enrolment programme. In such an environment, employee recognition and reward programs coupled with a great diverse work environment as discussed earlier enable Wipro to retain talent in a difficult environment.

General Trends Being Followed by Other Companies in the IT Sector

Most of the companies in IT sector are rethinking and redesigning their employment systems that traditionally favoured the employees of particular nationality by global hiring. Many companies are now practicing to leverage increase diverse employee base and incorporating diversity considerations into employee performance and compensation reviews. Managing diversity effectively has many payoffs that go beyond attracting, leveraging and retaining talent. Numbers of organizations are implementing new practices to retain valuable employees. Companies are actively using development partnerships to influence and build the next generation workforce. For example, Infosys has a broad set of initiatives to motivate, educate and help in developing the next generation of future leaders. Infosys Leadership Institute helps in enhancing managerial capabilities and develops leaders to take the organization forward. Global Talent Programme helps developing skills of global workforce through training assignments in India. Global Business Finishing School provides learning initiative to make every new entrant into Infosys ready for a job quickly. Sparsh Intranet acts as a primary channel for news and provides employees a platform to express themselves. IT companies are Measuring Business impact through Talent management metrics by linking human capital investment to financial performance. As organizations increasingly focus on talent management strategies, they seek ways to validate these initiatives and measure their business impact. Many firms are beginning to include talent management in their dashboards or scorecards with talent management listed under learning and growth. Measure may include factors such as employee survey results, turnover and the number of employees on temporary assignments. Sapient in particular has created a niche in their talent management program. Rather than taking pride in weeding out under performers Sapient takes pride in their successful performance improvement program that has been able to turn around seventy percent of under performers Sapient has a Global Corporate Ethics Hotline where employees can restore of ethics violation in an anonymous manner. In order to support an individuals career aspirations, Sapient has introduced a Career Manager Program. People are recognized for living the core values of Client Focused Delivery, Relationships, Creativity, Openness, Leadership and People Growth. Winners of these awards get their place on the coveted Core Value Wall of Fame in the office. Another admired name in talent management is Microsoft. They excel at workforce planning, redeployment, utilizing analytics, and leveraging the internet. They are also truly world class when it comes to the effective use of contingent workers. Microsoft invests more than $ 375 million annually in formal education programs directed at the employee, manager, and leader, offered by the Corporate Learning and Development groups and other profession specific learning groups throughout the company. In addition to the development offered to all employees, Microsoft invests in a smaller group of employees who have the potential for, and strong interest in, taking on more senior, critical roles as individual contributors or managers. These individuals are identified and considered for more focused career development, which may include participation in one of several professional development experiences known as high potential development programs.

Taking lessons from the last slowdown, IT firms are now walking the extra mile to keep the 'benched workforce' engaged, even as they seek to balance P&L pressures and talent management compulsions. Rather than relegate unbilled resources to a nondescript corner, iGATE is getting them to work on pilots of key internal projects that can transform company strategy. Those on the bench work on proof of concepts and internal automation tools. Managers are supposed to hold regular meetings and include all in project-specific meetings, reviews and other forms of communication. iGate also trains unbilled resources on a new solution called Integrated Technology and Operations ( iTOPS), which is expected to make them project-ready. Infosys rolled out Pathfinder Next, an initiative where staff on bench can work on internal projects and assignments, and have access to technology, business domains and other service lines. Through the programme, employees get job enrichment, vertical and lateral career exposure and access to opportunities. Infosys had also launched Smart staffing, a portal specifically created for those on the bench, in February. It enables employees not working on any project to reach out directly to delivery managers and designated unit talent managers and apply for any of the requirements that are vacant. The downturn forced organizations to make fairly dramatic changes to their workforces and talent programs. Now IT companies are planning further changes and preparing themselves for a period of positive but slower growth, which translates into different talent needs. Organizations historically have chased best practices or the newest big idea as a substitute for solid talent strategies and measurement techniques but thats no longer enough. Leading organizations have shown to be more effective at tailoring talent management practices to fit their own business models, then taking a more quantitative, fact-based measurement approach and steadily driving improvements year after year. Talent programs need to be reviewed and tailored to fit this new reality.

Conclusion: The Future of talent management

Talent Management will become more important than ever. Supply-demand gaps will mean it will become a competitive differentiator, even more so than before, and it will be high up on the CEOs agenda. Evolved companies already have boards focusing on key talent issues such as Leadership Pipeline, Talent Depth, Talent Development and Capability building for arrival leadership. One of the major key trends in future will be Differentiation in Talent Management and it will further define the four new trends that will take centre stage cloud computing, use of analytics, delivery through mobile and social media. Analytics will enable organizations to differentiate in terms of its reward & recognition and all other aspects of talent management by allowing the organization to look at data in a more granular fashion. It will also allow organizations to identify availability of talent in large numbers. Further to the use of analytics, there will be increasing delivery through mobile organizations will use it for mobility, collaboration and engagement amongst employees. It will also be used to test and sense new policies that the organizations plan to introduce for employees. India being the largest mobile user worldwide, after China, makes leveraging the mobile medium an obvious choice for quicker, cheaper and more targeted dispersion of information. Some companies are also using mobile devices for learning by sending periodical tips on best practices. Social media as usual will play a vital role too. It is already a way of life for the new generation and there is an increasing inclination to blur the line between work and social life. This outlook influences the manner in which employees must be engaged today. Organizations will see an increasing role of social media becoming a critical part of employees work-life as much as it is already a part of their social life. Further, there will also be more use of internal sourcing networks to connect the workforce and allow them to engage in conversations that are work and non-work related. We expect large firms to increasingly need short-term talent and expertise, and will need to start building their own expert networks, or partner with other firms to build such networks. In the future, the ability to attract creative individuals for specific consulting engagements will be critical for organizations. Organizations with large talent needs, like Genpact have tied up with education providers like NIIT to create a highly skilled talent pool, to benefit themselves as well as most organizations in their respective industries. This is making organizations think long-term about collaborating with other organizations for developing talent pools while they simultaneously compete in the marketplace. As employees spend more and more of their work on technology platforms, they are going to leave digital trails about what they do and how they perform. The activity stream of the social intranet will meet the traditional talent management suite, and unless all aspects of an Employees Life Cycle can be represented in it, the dollars spent on it would be a waste. This steers need of an integrated system that seamlessly combines talent acquisition, talent development and career development modules, and where the data is dynamically kept alive by constant updating by the employee and mentors/supervisors. Talent Management is more and more business critical to organizations, bringing with it, new visibility and challenges, for HR people. This new age also means that other business leaders and the CEO will seek to influence the Talent Agenda. HR must welcome this reality and work to create an organizational culture where talent is accorded top priority.