IT majors to focus on localised hiring

TCS, Infosys ramp up onshore hiring; Infosys committed to hire 25,000 over 5 years, reports Shivani Shinde.

With local hiring gaining ground and the pandemic restricting travel, dependence on visas among top IT services firms will come down in the next two to three years, say industry experts.

Though US President Joe Biden has signed executive orders reforming the immigration system and rescinded some measures affecting the IT industry, it seems the industry has found a way to reduce dependence on visas such as H1-B and L1.

Tata Consultancy Services, the largest IT services firm, has been working on hiring more locals for more than six to seven years.

The company, like its India hiring strategy, has been strengthening its tie-ups with colleges in the US and hiring students.

Between April last year and January 2021, onshore hiring, including taking in trainees and the experienced, stood at 10,938.

Of those over 3,000 were hired in the October-December quarter.

The Q3 hiring number is the highest ever for the company, said HR experts.

In the US over the past five years, TCS has hired 20,000 employees, according to the company's FY20 Annual Report.

In FY20, the firm hired over 2.5 times its usual fresher intake.

It also said for very short-term assignments, it used sub-contractors.

'All this has brought down our use of work visas to a small fraction of what it used to be five years ago, de-risking our business significantly. Looking at the future, as I mentioned earlier, the virtualisation of many activities with SBWS (Secure Borderless Workplaces) will reduce the need for travel and co-location even further,' said Milind Lakkad, chief human resources officer, TCS, in the annual report.

Infosys Chairman and co-founder Nandan Nilekani, recently at an event organised by the Public Affairs Forum of India, said with increased protectionism companies needed to be active players in every market.

Last year, the Bengaluru-based firm unveiled plans to hire 12,000 American workers over the next two years, bringing its hiring commitment in the US to 25,000 over five years.

Peter Schumacher, chief executive officer, Value Leadership Group, said the thinking underlying the decisions of Indian IT services firms to hire more employees in the US went beyond simply responding to travel restrictions and immigration barriers.

"Moving staff closer to customers and customer-based delivery teams will allow the Indian companies to sharpen their customer focus, understand their customers better, and gain the ability to act faster in response to or in anticipation of changes in the customer situation," said Schumacher.

Pareekh Jain, founder and lead analyst, EIIRTrend, said onshore hiring had been related to margins.

However, with the strategy of hiring locals, dependency on visas has come down.

"The pandemic has made customers realise that work can happen from anywhere.
We have seen contracts where the onshore-offshore ratio has moved from 25-30:70 to 10-15 per cent onsite," added Jain.

Nilanjan Roy, chief financial officer, Infosys, during the analyst call after the Q3 results, had acknowledged with the current travel restrictions and work from home a norm, clients were more open to offshoring.

'Our hiring in the US as a pyramid is something unique to Infosys, creating six digital hubs, recruiting from universities and community colleges. Historically the IT industry had a steep pyramid onsite,' Roy said on the call.

'Seventy-five per cent of employee cost is onsite whereas only 25 per cent of the headcount sits there; and therefore, if you do not address the onsite pyramid you really have a battle up your hand,' Roy added.

For instance, HCL, after its third-quarter numbers, said it would be hiring 20,000 over the next four to six months, and of them 15 per cent would be onshore.

Experts point out it is not just about hiring locals, empowering local staff to create, and equally important, and capture added value doesn't happen without preparation.

It requires a thorough conceptual understanding of what customers perceive and experience as value-enhancing and are willing to pay for.

"Three key areas are important for creating more successful customer relationships. The first is a growth driver and the ability to identify opportunities to provide added value for the customer beyond the original project/engagement scope," said Schumacher.

"The next concerns the ability to create, maintain, and pace momentum for change and advancement of the customer's agenda," Schumacher added.

"Finally," Schumacher explained, "local employees must be capable of applying a skilful level of experience, judgment, and local perspective to quickly identify emerging issues and likely solutions."

"Both these areas of competency are becoming increasingly important. given the growing number of transformation projects Indian firms are engaged in."

Feature Presentation: Ashish Narsale/Rediff.com