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Cloud of uncertainty hangs over the IT-BPO sector

— FILE PHOTO

CHANGING PHASE: The majestic Tidel Park at Taramani in Chennai.

A new leadership has taken over the reigns at the National Association of Software and Service Companies (Nasscom) at a critical juncture in the growth of the IT-ITeS-BPO sector.

Representing different segments of the industry, the apex body seems to be fully conscious of the challenges that lie ahead. But the going is likely to be rough and tough, with a cloud of uncertainty hanging over the U.S. economy, the global trends i n outsourcing, and the sustainability of the continued high growth enjoyed by the Indian economy in recent years. After a spell of high and surging growth, the IT-ITeS sector may be going through a turbulent phase now, though industry leaders expect to emerge unscathed from these clouds. On the ground, the feedback from the floors of the IT, ITeS, and BPO establishments has not been too encouraging.

In quite a few companies, promotions that were expected in 2007 have not materialised. The staff do not know what happens to the performance review or appraisal as of March 31, 2008. But seems evident is the increasing number of staff who are ‘benched’ every quarter or at least half year. The practice is that if a ‘benched’ candidate cannot get back to a team within two or three months, he or she may have to quit. Strangely, most companies are insisting that they will go ahead with their campus placement scheduled for this summer. So why is the situation so muddled?

According to human resource managers in the IT sector, two trends have emerged in the field now:

(1) All companies are becoming quality conscious; they want to raise the bar on the competence of all employees so that the team performances can improve.

(2) The clients, who interact with their teams working out of India, are insisting on better performers to handle their projects. They want better feedback from here and a higher level of performance from the team. Consequently, the companies bench some of the staff and reassign the work to ‘known performers.’

The HR managers explain that in their anxiety to recruit more hands and handle the innumerable jobs they were getting over the past five years and more, the companies had obviously ‘compromised’ on quality. Though all recruits were put through in-house training and orientation, many of them did not measure up to expectations. They could not get into programming, communications, or even in solutions, as the case may be.

What has caused serious concern to the companies themselves is the ‘burn out’ factor. Some of the better hands, and those who were able to handle the clients efficiently, landed up with more responsibilities and projects, leading to a burn out. Attrition became a major problem to deal with. Learning from these experiences, the HR managers advocate more stringent norms for selection and better manpower management strategies. From now on, they want the companies to insist on basic skills in different areas so that they could be groomed to deal with those respective responsibilities. The strengths to look for will be: leadership qualities, communication skills, understanding and comprehension, working on systems, and teamwork.

Nasscom sources say that the association as well as the industry are confident of ‘weathering the storm.’ As Nasscom president Som Mittal said: “There would be growth, but it could be tempered in the short-term. We will meet the $60 billion export target set for 2010. That means a growth of 22 to 24 per cent per year.” The industry will be looking for value addition to projects and focusing on emerging areas such as engineering services outsourcing. The industry has been encouraged by the recent assurance of IT and Communications Minister A. Raja, that concessions enjoyed by the sector may continue beyond 2009.

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