In a candid conversation with All Things Talent, Richard Lobo, Executive Vice President & Head Human Resources, Infosys talks about the reasons behind India’s tech hiring boom, the importance of investing in talent sustainability, creating the right talent, the ‘Back to Office’ process and various skilling initiatives at Infosys.
Q. What do you think fuelled this rush for talent in the IT sector? Is it just a pent-up demand or an outcome of the pandemic that has caused a major shift in the way work is done these days?
A. It’s a combination of factors. First, there is a push for technical and digital skills across industries happening everywhere in the world due to the pandemic. Companies are seeing the need to invest in digital technology and this is a demand they couldn’t foresee and plan for. Second, I think we had a reasonable amount of talent supply disruptions across the world, both in terms of the shift toward remote working and many people moving out of the workforce. The third thing I feel is the slowdown in terms of business momentum. People have not made sufficient investments for the future in regard to skilling. Normally, companies would have continuous training and skilling programs which would have helped. The combination of these three has led us to a time when the demand situation is at the maximum. That is what has resulted in a short-term supply situation. I don’t see this as a long-term issue. It is more of a balancing situation for the post-pandemic boom.
Q. While largely, this talent gap is attributed to the demand and supply mismatch, there is also an argument that the entire crunch is a distribution problem and not a pipeline issue. What is your take on this and why?
A. There are new technologies and skill requirements that have emerged. It is not easy to ramp up any of these requirements suddenly because a few of the technologies that the companies are using today were not present two years back. It takes some time to build it. Also, in the last two years, enough attention has not been paid to skilling and upskilling. So, people may not necessarily be readily skilled or may not be in the place you want. I don’t think companies could have foreseen this. The requirement for new skills and the development of new technologies has also resulted in a talent shortage. When you use the term good talent, the fundamentals have not changed. Nobody hires for the sake of hiring. But many times, people are hiring with the hope that they can reskill and get people ready because the steady supply is broken. It is a time-dependent thing. You can’t accelerate this process beyond a point. It is a good time for people to look for areas where they can repurpose their skills.
Q. The ‘Great Hiring Drive’ has also accelerated attrition rates (across experience levels) as potential candidates have multiple job offers at hand. How do you think it can be worked on and normalised?
A. I look at it as a good problem to have. There is demand and the world has a huge supply of people, though not exactly matched. There are enough people who are skilled in certain areas or fresh out of the university looking for things to do and there are companies looking for people. An equilibrium will set in. It is a question of matching talent, training talent, or reskilling what you already have. Taking a guess, I believe it will take a year or so. But we also need to remember that skills in demand today may not be the same ones that will be in demand tomorrow. The world is changing very quickly. You might hit a new equilibrium and you might have to look for something else in the future. But one thing that we can be sure of is, nobody will take this for granted anymore, both the companies and the workforce. It’s a good thing from the HR perspective as you are constantly looking for people to solve the problems of the future.
“But we also need to remember that skills in demand today may not be the same ones in demand tomorrow. The world is changing very quickly. You might hit a new equilibrium and you might have to look for something else in the future. But one thing that we can be sure of is, nobody will take this for granted anymore, both the companies and the workforce. It’s a good thing from the HR perspective as you are constantly looking for people to solve the problems of the future.”
Q. Some really intriguing salary trends are being noticed at present with premium CVs deriving a larger pay package. How sustainable are these pay-outs and have they upset the equilibrium?
A. What you are seeing is turbulence in the market. Whenever that happens, you move towards a new equilibrium or a new normal. So, salaries can go higher if people deliver value and skills are in demand. I don’t see a problem with that. The situation will change if they don’t deliver, for example, if there is no demand for a particular skill, then one must be prepared that companies may not want to keep the person in their workforce. You either have to reskill or find other places where he/she is useful. I think we have reached a point where clients would pay higher for certain skill sets in demand and companies would pay more to acquire the same. Finally, the laws of economics will apply to this situation as well. People will not demand more than the value of what they deliver. So, it’s not an unlimited stretch that you see, as, at some point in time, it will even out.
Q. Apart from massive salary hikes, several companies are going the extra mile in showering joining gifts. Then there’s also the ESOP incentive. How do you view this practice?
A. I think in terms of long-term participation in wealth creation, taking risks and expecting returns from the company one works for, is a good thing. Now, the short-term benefits like joining gifts and others, in my opinion, do not make much of a difference. They might delight a candidate in the short term but don’t really add any long-term value. Employees join a company because they see a long-term future, an opportunity to build their careers and learn. So, any incentives that are long-term like ESOP, RSU, long-term bonuses, etc. are viewed much more favourably. Any company intending to attract the best people can look at the long-term benefits in terms of sharing wealth and also in terms of offering something in relation to learning and building one’s career.
“I think in terms of long-term participation in wealth creation, taking risks and expecting returns from the company one works for, is a good thing. Now, the short-term benefits like joining gifts and others, in my opinion, do not make much of a difference. They might delight a candidate in the short term but don’t really add long-term value.”
Q. What are the opportunities and challenges a recruiter faces in finding the right talent?
A. There are two challenges. One is the sheer pressure of meeting requirements in terms of quickly filling positions either due to attrition or demand. So, recruiters across the industries are facing this time pressure for quickly fulfilling the demands. They are also forced to stretch in terms of their workloads. I think recruiter communities have done really well in that context. Apart from that, the challenge is also to attract the right people for your company. The people available may not be the people you want to bring to your company. So, the next challenge for a recruiter is to identify people who aren’t necessarily looking out for a job but could be the right person for the company. That requires a little more time. While the fundamentals of hiring haven’t really changed, a recruiter has constraints including severe time pressure. It has been a challenging year for the recruiters, and I think it will continue for a few more months. I feel the learnings from this will hold the recruitment function in very good stead.
Q. Large IT firms play a significant role in fresh hiring and training a significant pool of talent, which then becomes a reservoir for startup hiring – this trend has been more pronounced this year. How do you view this? What are the industry-level attritions in the 1–3 year experience segment?
A. You must invest in talent sustainability and create the right talent pipeline for your organization. You cannot depend on taking people from the talent pool built by someone else. Any company that is serious about sustainable talent will work on this systematically. In the case of Infosys, through our partnership with universities across the world, we share our course materials, help develop faculty, reach out to students to work as interns here, give them projects, and conduct hackathons for college students. We train our entry-level hires for four months, and over a period of time, they develop into good future talent for us and beyond. I know many believe in taking shortcuts but that’s not how you develop strong HR processes.
This year has seen attrition rates increasing across all segments. Usually, the attrition in the 2-3 years’ experience segment tends to be higher because they either choose to go for higher studies or they join some other company.
“In the case of Infosys, through our partnership with universities across the world, we share our course materials, help develop faculty, reach out to students to work as interns here, give them projects, and conduct hackathons for college students. We train our entry-level hires for four months, and over a period of time, they develop into good future talent for us and beyond. I know many believe in taking shortcuts but that’s not how you develop strong HR processes.”
Q. Could you give us some perspective on the size, role and the functioning of the HR team to the overall employee base and how they aid the business growth of the company?
A. We roughly run a ratio of around 1:400 or 1:500 wherever it’s possible in terms of people who directly engage with employees. But that isn’t the only HR population we have. We have another group of people who work very closely with business in working out innovative solutions for our clients. Today HR is part of business solutions as we see the demand for people-based solutions everywhere. Another group works on the digital, automation and analytics side of HR so you have fewer people to handle the routine and more people to manage complex issues.
Q. Today, HR is no longer a support function but a key department in every organisation. What do you think would be the next step for this?
A. Going ahead, I feel human resources need to maintain the edge that it has achieved over the last few years. Today it is viewed as a core function and is part of any strategic discussion. In the future, HR should focus very heavily on employee experience. Employees will also demand a high level of user experience as they are used to such experiences as a customer. A lot of investment will go into enriching the employee experience of the future like automation, digital analytics, and creating a feeling of a safe workplace.
Q. How has Infosys prepared for the ‘Back To Office’ journey?
A. We have taken a cautious approach as we don’t want to put anybody’s health at risk. Our offices are open across the world. Right now, it is on a voluntary basis. We have encouraged the seniors to come in first. Having said that, we haven’t forced anybody to come daily or relocate. Over a period, if the situation stays stable, infection rates are low, and vaccination is higher; we will probably have a larger percentage of our workforce returning. But we might never see the work situation revert to pre-pandemic time. You will have a mix of people who will work out of the office while others won’t. Then there will be those who will have a mix of both. We will see how it goes because it isn’t that easy to manage a scattered workforce. It’s very difficult to predict for the long-term because it has been a changing pandemic and things will evolve. This approach has so far worked for us.
Q. From Y2K, GFC, and now we have successfully navigated the Covid crisis. As we move towards the fag end of the pandemic, what is your observation on the tech talent availability in this crisis compared to the crisis we faced earlier?
A. In terms of the demand situation, I think the industry is fortunate to go through all the crises with a consistent demand cycle. Of course, the demand for particular skills and technologies has changed. Today, the use of technology is widespread. So, the scope is much wider. I think since we were forced to a remote mode for a couple of years, demand for business solutions based on technology has only accelerated. That’s why the demand in today’s market is much more intense than what we witnessed earlier.
Q. Infosys launched an internal talent marketplace FLUID recently to reskill and progress up the value chain. There’s also Skill Tags and Digital Quotient initiatives. What have been the key learnings from these initiatives? Also, what prompted Infosys to start initiatives of such a nature?
A. In terms of FLUID, a large company like Infosys, matching people’s aspirations with their skills is a constant endeavour and what we are trying to do through FLUID is have a dynamic talent marketplace. Like, how do we dynamically handle, skill, reskill situations that lead to the creation of an internal digital talent marketplace? Another thing we did is what we call the Skill Tags where we felt that certain skills could be paid a premium for. So, if someone acquires a new skill and gets certified, based on the value of that skill, we offer them a premium. As for Digital Quotient, we wanted to see how good people are with digital skills to match the demand situation of the future. We don’t look at these initiatives in isolation, but as steps in our journey to create an interesting and attractive place to work for everyone.
Q. Thanks to the work from anywhere concept, organisations are looking towards tier-II and III cities for hires. What is your observation?
A. Infosys had been way ahead in this as we opened our first development centre in a tier-II city almost 30 years ago. With the pandemic, what has happened is that we have seen an interest in tier-III cities and smaller towns as well. That’s a good thing because there is talent everywhere now and deployable through better communication technology. It will result in more investments in infrastructure in terms of bandwidth, access, etc. This is great for the smaller towns and cities in the country. Second, people can take advantage of living in remote places closer to their families. It will also decongest some of our larger cities which have become almost difficult to live in due to numbers. India will thus see a boom in terms of smaller places developing and giving people a better quality of life while enabling them to work seamlessly.
We also need to be professional in the sense that we handle security and data requirements very carefully so that this model can continue. The type of demographic shift that we are seeing in the country in terms of income and working population distribution, will change the landscapes of several smaller towns in the country.