HR Trends Changing Talent Paradigm 2013

2013: HR TRENDS

C h a n g i n g T a l e n t P a r a d i g m

22013: HR Trends Changing Talent Paradigm

The Indian IT-BPM industry has continuously evolved in various ways to adjust to the changing economic environment. The 2008 global recession

was a watershed moment as it changed the way the industry looked at operating models, including hiring patterns. Changing client expectations,

budgetary constraints, new emerging lines of businesses, new technology trends, and the need to stay relevant to customers forced the industry

to embark on a non-linear growth path, in addition to adding employees with new, unique skill sets. At the same time, increasing diversity of the

workforce is driving the need to foster deeper connects.

In view of the continuously changing environment, NASSCOM recently conducted a dip-stick survey of its member rms to understand the hiring

outlook for FY2014. We received responses from around 30 rms who account for over 20 per cent of industry workforce and nearly 30 per cent of

export revenue (FY2013). Key highlights include:

Industry to remain a net hirer; hiring sentiments positive despite tough business environment

Attrition no longer a challenge for the industry, with most rms recording steady or decreasing levels

There are clear, discernable shifts in hiring patterns with respect to background, skill sets and location:

- Firms are expected to hire most just in time than planned campus hires

- Soft skills and domain knowledge are increasingly being sought after in candidates

- Data scientists is the most in demand technical skill set, engineers and statisticians the most sought after domain skill, and leadership and

customer interaction capabilities the most popular soft skill

- Hiring is increasingly going global as rms expand their footprint across the globe

Industry absorbs ~15 per cent of annual engineering turnover; job opportunities for engineers from non-IT sectors energy, healthcare,

manufacturing, media, etc.

- Entrepreneurship ecosystem developing rapidly in India creating additional jobs

NASSCOMs IT-ITeS Sector Skills Council is working jointly with NSDC and academia to develop future talent:

- Assess demand-supply gap and develop occupational standards for IT services, BPM, ER&D, software products

- Extend deployment of NAC-Tech and NAC (BPM) to access students abilities

- Train the faculty

Executive Summary


The IT-BPM industry overwhelmingly Gen Y with almost 2 million employees born after 1980

Gen Y love challenging jobs with relaxed work environment and fast career growth; they also have a need for instant grati cation and entitlement

which poses a signi cant challenge

Firms connecting to Gen Y both on professional front through rewards and recognition, trainings and career management, as well as personal

front through health plans, exible work environment

Promoting an entrepreneurial culture, ensuring employee safety are key focus areas for IT-BPM rms

Organisations feeling the need to re-invent themselves internally both at individual and procedural levels to become employers of choice

and to stay relevant to Gen Y

HR increasingly employing technology for higher employee outreach this has resulted in better communication and engagement, quicker

turnaround time and improved skill mapping

Social media: Growing in importance as a tool for employee connect and as a recruitment channel to hire across the board from freshers to

top management


ContentsEvolving IT-BPM Sector, Changing Needs 5

IT-BPM industry: Hiring Trends 6

IT-ITeS Sector Skill Council 13

IT-BPM Industry: Diverse Workforce, Gen Y 14

Technology in HR 18

NASSCOM Top 20 IT-BPM Employers in India FY2013 21

Summary 22


Evolving IT-BPM industry trends transforming industry talent models

Industry added >2 millionemployees in last decade

Focus on non-linear growth,global hiring

Skill base who are trained inmobility, social media, cloud,big data

Sustained investment instructured training programmes

Develop in-house universitiesand affiliations with academia

Focus on entrepreneurial skilldevelopment, domain

Talent requisites

Evolving Industry Trends

Source: NASSCOM

Technology

Top 100 IT-BPM firms offerings

>40 per cent: SMAC solution

>35 : Cloud and platform solutionsper cent

Moving up thevalue chain

End-to-end services

30-32 : Verticalised services as percentage oftotal exports

Increased focus on transforming client businessthrough innovative and specialised offerings

per cent

Lines ofbusiness

Business users Influencers to buyers

77 : Business executives who buy their owntechnology without involving CTOs

CMO emerging as key buyers

per cent

Talent

Future-ready workforce

12 : Domain specialists in total industry workforce

~2 : Amount spent on training the workforce

per cent

per cent


Industry to continue hiring despite tough economic conditions

F 2014: Hiring trend of large firmsY F 2014: SMEs A more robust hiring growthY

60%

40%

95%

5%

Industry to continue to be main hirer; most firms to grow hiring, but at slower rate

Net hiring trend more positive for SMEs in FY2014; large firms to hire selectively

Hiring increasingly going global as firms expand footprint across globe; global hiring to constitute 5-7 per cent of totalhiring in FY2014

Note: Numbers in charts indicate percentage respondentsSource: NASSCOM

Hiringto grow

Hiring toremainsteady

Hiringto grow

Hiring toremainsteady


Attrition, no longer a challenge for the industry


Attrition under control firms also indicated a decline

Remainedsteady

Large firms

80%

20%Decrease

SMEs

Remainedsteady

Decrease

56%

44%

~39 per cent survey respondents indicated a decline in attrition levels in FY2013 as compared to FY2012; remainingrespondents indicated steady levels

0 per cent respondents indicated higher attrition in FY2013

Attrition had started declining since FY2011:

- IT/ER&D/Software products declined from 19 per cent in FY2011 to 14 per cent in FY2013

- BPM (voice) attrition declined from 43 per cent in FY2011 to 33 per cent in FY2013


2013 expected to see higher just-in-time hiring with focus on specialised skills

2013: Just-in-time (JIT) hiringtakes precedence

Driving FY2014 HR mandate for focuson niche skills

Equal hiring, 4%


Higher JIThiring, 57%

Higher campushiring, 39%

1

2

3

4

5

Hiringspecialised skills

Skillassessment

Employeeengagement

Training

Academiapartnerships


Soft skills and domain skills increasingly being sought among candidates

Academia tie-up

Higher education

2000-06 2006-11 2011 onwards

Higher demand for domain and soft skills


Internal & external ecosystem beingleveraged to develop expertise

In-house training

External certifications

1

34

85%

10%

5%

65%

22%

13%

40%

40%

20%

Technical skills Soft skills Doman skills

2


With specialisation around SMAC, engineering; demand for leadership skills

Top skills in demand from freshers

Source: NASSCOM

Technology Domain Soft skills

1

2

3

4

5

Cloud/Virtualisation

Platformengineering

Datascientists

Mobileapplications

Userexperience

design

1

2

3

4

5

Banking

Mathematicians

S/wengineering

Lawyers

Doctors,economists

1

2

3

4

5

Customerinteraction

Problemsolving

Leadership

Englishcomm.

Presentationskills


Enhanced capacity across colleges, diverse job opportunities

Domestic market

Domestic IT

A USD 50 billion market

Entrepreneurship status

Enormous opportunities in multiple sectors

- Energy: Smartgrids, smart buildings

- Technology-enabled healthcare delivery

- Medical device design

- Manufacturing

- Media

by 2020

Opportunities in

- Software products, IS outsourcing, ER&D,embedded systems

- System integration

- Mobile software applications

- eLearning

2,400+ product start-ups in India

- Vibrant ecosystem around mobility, eCommerce,education, telecom VAS

>46 million non-IT SMBs in India

- Employs ~47 per cent total India workforce

- Growing IT penetration

Enhanced jobs opportunitiesTech grads : 10-15 per cent hired by IT-BPM1

365

1,323

FY2005 FY2013E

000 nos

3.6X

Technical outturn up 3.6 times in eight years

To attract IT firms, colleges need to createdifferentiation, create students with industry-ready skills

- Strengthen foundation skills

- Define occupational standards for entry-levelunique jobs

1. Includes engineering graduates and engineering diploma holdersSource: McKinsey, Zinnov, NASSCOM


Start-ups fuelling innovation in education and HR

Collaboration

Assessment

Skilldevelopment

Technology

Education

7%

8%

10%

23%

44%

Start-ups in India: Education and HR are the leading sectors

Education& HR25%

Others75%

Education and HR largest share among start-ups

Followed by retail, media/communication

Education start-ups: eLearning/eTutorials

Skill development: Finishing schools, vertical-specific solutions

Source: NASSCOM


IT-ITeS Sector Skills Council: Laying the groundwork for a future-ready talent pipeline

Educationinitiatives

AssessmentFaculty

development

Occupationalstandards

Foundationskills

Design and develop

Occupational Standards (NOS) andQualification Packs

Published for 67 entry level unique job roles acrossITS, BPM, ER&D, SPD

Deploy

NAC-Tech: 137,000

NAC (BPM): ~10,000

F&A, analytics, actuarial, multi-channelcustomer service

Data structures, algorithms, programming

Applied communication, aero structures,automotive electronics

BPM:

ITS:

ER&D:

(By industrytrainers): ~160

(By trained masterfaculty): 211

Master training

Train the trainer

Source: NASSCOM


Diversity in the industry: Gen Y taking over, need to establish connect

>60 per of industry workforce comprises Gen Y

Drivers Challenges

Challenging jobs,learning opportunities

Easy-going workenvironment

Rapid job promotions

Work-life balance

Mobility, social media,device usage

Retention

Instant gratificationand entitlement

Rapid careergrowth

Compensation

Attitudinal andcultural disparity

1

2

3

4

5

Strategies for Gen Y connect:Entrepreneurship Among top five priorities

Professional

Personal

Rewards and recognition

Career management

Entrepreneurship

Open environment

Specialised training

Comprehensive health plan

Self-development

Flexible work hours and employee safety

Employee volunteerism

Child care centres

Source: NASSCOM


Gender inclusivity, global workforce, diff erently-abled, social collaboration key priorities

Diversity and inclusivity: Unity in diversity PwDs: Opportunities for the differently abled

Workforce: From India to global Social media: Changing how we work

workforce comprises

women at managerial level and above

Grooming roles

Talent from background,cities

>30 per cent women

>15-20

women for leadership

underprivilegedTier II/III

per cent

When hiring and working with PwDs

Potential and current PwD employees

workplace

Technology, administration,marketing, accounts, etc.

Sensitise:

Interact:

Accessible

Job opportunities:

ODCs across countries, languages

foreign nationals employed

of foreign employees in top four firms

~580 75 35+

>100,000

7-8 per cent

Communication: (large firms) and(SMEs)

Recruitment: Freshers, top managementcomprise

Peer engagement,decision-making across

>9050-60

48

collaboration/innovation,

per centper cent

per cent

Source: NASSCOM


Promoting an entrepreneurial culture and ensuring employee safety two key focus areas for the industry

Platforms to innovate

Forums and contests

Mentorship and shadow-boarding

Investment councils and funding grants

Employee own time(Time given to pursue own ideas at work)

CoEs/Innovation labs

Personal investments Formalised investments

Sexual harassment policies

Background checks; pick up/drop

Counselling

Survival, self-defence training

Prevent cyber crimes

Employee safety practices

5

4

3

2

1

Source: NASSCOM


HR: New competencies needed to manage inter-generational dynamics

Organisational Managerial IndividualOperate without hierarchy

Enhanced fl exibility in policies

Foster an entrepreneurial climate with greater empowerment

Continuous emphasis on learning and skill development opportunities

Build social networks

Strong work-life balance ethics

Adopt an approachable attitude, greater informality with greater emotional connect

Respect the individual and individual differences

Develop an environment of honesty and transparency

Share knowledge and experience selfl essly

Recognise and reward contributions

Keep abreast of changing technology; actively use technology includingsocial media

Increase focus on excellence and perfection in work

Develop a longer term out look towards work results, rewards and career aspirations

Develop respect for and accommodate others points of view

Actively enhance opportunities to build a larger world view

Build respect for critical organisational process/systems/policies through an increased understanding of their signifi cance

Source: iPRIMED


Technology in HR: Manifold impact, multiplying overall eff ectiveness

Tech-enabling HR processes Leading to greater clarity and responsiveness

1Better clarityof HR policies

2Better

communication

3Higher queryturnaround

4Improved HRperceptions

5Map training

to skills

Source: NASSCOM

Adopting technology to deliverHR services

Mobile emerging deliveryplatform for HR

>85 per cent survey respondentsindicate tech-enabling HR processes

Greater connect with stakeholders;higher productivity


Social media: Increasingly used for recruitment; Gen Y driving this as maincommunication channel

Employeereferrals

Traditionalchannels

2

Social media

95%

71% 68%

Middlemanagement

Domain/Industry

specialists

Freshers Seniormanagement

76%

52% 48% 48%

Social media: Emerging recruitment channel

Nearly 90 per cent of large firms and 50-60 per cent ofSMEs engage social media as communication channel

Social media emerging as an important recruitmentchannel across employee value chain freshers to middleand top management

Being used for senior management and even freshers

Large firms SME

90%

50-60%

Social media for employee connect

Notes:1) Numbers in charts indicate percentage respondents2) Includes campus recruitment, newspapers, recruitment agencies, job portals, etc.Source: NASSCOM


Firms leveraging social media platform for greater connect with Gen Y

HCLs Meme: In-house social networking platform gives complete social media experience whileat work. Conceptualised to enhance connect, build trust through transparency and invertingorganisational pyramid. It can facilitate discussions, engagement, collaboration/innovation acrossgeographies, time zones and employees

Genpacts Glue: An internal collaboration network for social interaction between employees,builds a collaborative knowledge pool, identifies and engages experts and ultimately creates acommon global culture. It has tools such as groups, discussions, blogs, status updates, as well associal features including like, comment and share

Cognizant 2.0: Enterprise social business platform that drives collaborative work management,knowledge sharing, project/service management, innovation management, programme governanceand insight-driven decision making. It connects Cognizant, customers, vendors on singlecollaborative, knowledge sharing platform


Top 20 rms account for >1 million India-based employees

Rank Organisation

1 Tata Consultancy Services Ltd.

2 Infosys Ltd.

3 Cognizant Technology Solutions India Pvt. Ltd.

4 Wipro Ltd.

5 HCL Technologies Ltd.

6 Tech Mahindra Limited1

7 Genpact Ltd.

8 Serco, Global Services*

9 Capgemini India Pvt. Ltd.

10 Mphasis Ltd

Rank Organisation

11 Aegis Ltd.

12 iGATE Global Solutions Ltd.

13 CSC, India

14 Firstsource Solutions Ltd.*

15 WNS Global Services (P) Ltd.*

16 Syntel Ltd.

17 EXL*

18 L&T Infotech

19 Hinduja Global Solutions Ltd.*

20 Aditya Birla Minacs Worldwide Ltd.

1) Includes Mahindra Satyam and Tech Mahindra as they are now a combined entityNote: This list is based on the India-based FTE headcount of rms with IT-BPM operations in India, as reported to NASSCOM in its annual surveyBased on publicly available information, few other MNCs such as Accenture, HP India, Convergys and IBM would have also featured in this list. However, as they have not participated, the survey was unable to rank them.Most rms on this list are engaged in IT as well as BPM. Firms marked with an * indicate pure-play BPM rms.

Source: NASSCOM

NASSCOM Top 20 IT-BPM Employers in India FY2013


Summary

Evolving IT-BPM industry trends transforming industry talent models

Industry will continue to hire recruitment to be skill-based

Soft skills and domain skills are increasingly being sought among candidates

High demand for freshers with SMAC, engineering; and leadership skills

Colleges need to diff erentiate to attract IT-BPM industry, potential opportunities through domestic market and entrepreneurship

Education & HR, emerging as the biggest areas of interest for start-ups; expected to fuel innovation

Increasing diversity in the industry

- Gen Y taking over, need to establish lasting connect

- Gender inclusivity, global workforce, diff erently abled and social collaboration

IT-ITeS Sector Skills Council is laying the groundwork for a future-ready talent pipeline


International Youth CentreTeen Murti Marg, ChanakyapuriNew Delhi 110 021, IndiaT 91 11 2301 0199 F 91 11 2301 [email protected]

HR Trends Changing Talent Paradigm 2013

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