Services Safari

HR and Human Capital Changes in Indian Services Firms

                     Change is Afoot in Indian Service Firms

                                 Local Workers to Benefit

Some interesting human resources policy changes and stats in a 4/23/2007 article in InformationWeek (see "Tata and Infosys Set the Bar: 15% Raises This Year in India" by Mary Hayes Weier www.informationweek.com).

Here are some of the highlights:

• Some Indian firms are trying to expand their non-Indian workforce. Tata had 6.5% of its workforce as non-Indian last year. Now, it's 9.6% and is on track to be 12%  this year.
• Accenture intends to increase its Indian personnel from 8,000 to 35,000. That number would make its Indian workforce larger than its U.S. workforce.
• Likewise, IBM will grow its Indian workforce from 43,000 to 53,000.

In a recent post, I described a human capital practice of Booz Allen Hamilton called 5-4-3-2-1. The InformationWeek article described an approach Tata is embracing called Maitree. It brings other service firm perks, like concierge services, with a program that helps the employee's family.

Given the number of Indian service workers who have their resumes posted on on-line job boards (another recent post in this blog), retention of talented personnel will still be tough for these companies. Even new programs may not be enough to stem the sheer volume of job hopping these firms will likely encounter.

In the latter half of the 1990s, virtually every big service firm was getting whip-sawed by scarce SAP-skilled personnel. These folks knew they were highly in demand and they got quite mercenary in their approach to employers. Every major service firm resorted to tactics like stay-pay bonuses, temporary salary hikes (to get through the Y2K fueled package software frenzy), raids on competitors, etc. In that era, two classes of consultants emerged: those with scarce SAP skills and mushrooming bank accounts and those who provided more traditional consulting services and got nothing. This was a painful time that caused a lot of hurt feelings.

Mercenary employees are very selfish. While employers should pay workers market relevant, prevailing wages, employers should not reward the mercenaries as their long-term loyalty is not strong and not worth buying.

These are interesting human capital times in the Indian services space. How firms respond to the added pressure of non-Indian firms poaching their workforce while still fueling organic growth will continue to be a matter of great interest to industry watchers.

Outsourcing Help - Who You Gonna Call?

                           Help Is On the Way

Global Services magazine (www.globalservicesmedia.com ) ran a piece on boutique advisory firms for those of you structuring new outsourcing deals or re-negotiating an existing arrangement (see "Boutique Outsourcing Advisory Firms Come of Age").

There's an interesting table of boutique firms you can call on for help. The firms listed include: Backes Crocker, EquaTerra, Everest Group, Global Equations, Morgan Chambers, NelsonHall, neoIT, PA Consulting Group, Pace Harmon, Tholons, TPI and Alsbridge.

For my money, I'd actually recommend a couple of these firms and I'd even recommend my former arch-nemesis (when he was at PWC), former Gartner analyst and former business partner of mine Vinnie Mirchandani (www.dealarchitect.com). His knowledge of service providers is intense and he uses that to deliver crushing results in negotiations for clients.

No matter who you call for help, do the following:

• Don't use an integrator or other firm with outsourcing services in its product mix to advise you on who to choose or how to structure the deal. Independence and objectivity are critical here.
• Make sure your adviser has had extensive, local experience in markets like India, China and Eastern Europe.
• While a lawyer is a critical member of the team, get a team with serious process, negotiation, service firm knowledge and other competencies.

If you're serious about doing an outsourcing deal, drop me an email and I'll forward you a buyer's guide I developed a couple of years ago for BPO deals. It's still relevant and it might save you some heartburn in the future. There's no charge - just shoot me an email with your particulars to: contact@techventive.net .

Consulting's Comeback

                     A Surging Service Sector: Consulting

My alma mater, the University of Texas-Austin, publishes a slick glossy business school magazine called Exchange. Their recent issue carried an interesting piece that details the resurgence of consulting as a career (www.mccombs.utexas.edu "The Consulting Industry's Comeback" by Mary Alice Kaspar). 

Herewith are some of the article's highlights:

• 37% of UT MBA students in 2001 went into consulting. One year later, that plummeted to a record low of 7%. The rate should approach 20% this year.
• Signing bonuses have returned for these graduates.
• Starting salaries have risen, too, with these moving from the low $80s in 2002 to a bit over $100k now

The article mentioned Booz-Allen-Hamilton's 5-4-3-2-1 policy - A policy more consulting and service organizations should consider. This policy requires workers to work no more than 5 days a week with no more than 4 days out of town. Only 3 nights a week should be spent out-of-town. Staffers should have the opportunity to work on at least 2 client engagements annually so as to avoid being burned out on a multi-year effort. Lastly, workers should only work on 1 client at a time. I like this policy!

Approximately five months ago at a Merrill Lynch software, Internet and services conference, I heard an Accenture executive echo the resurgence of pure consulting work mentioned in the UT article. This executive indicated that client demand for more traditional consulting assignments was clearly up, pronounced in fact, from prior years. Growth in both outsourcing and consulting was truly a blessing now.

Hmmm, now that I think about it, I'm even busier than normal these days, too. Let's hope this surge keeps on going for many more years.

The Psychopathy of Bad Bosses

               Who's Running Your Service Organization?

Stanley Bing, the nom de plume of a writer for Fortune, has recently updated his book "Crazy Bosses" and it made this old services executive sit back and reminisce about some prior superiors and the number these individuals worked over a lot of us.

Bing spends much of his book exploring the makeup and actions of five types of really bad bosses: The Bully, the Paranoid, the Narcissist, the Wimp and the Disaster Hunter. Thankfully, he also provides some guidance for dealing with each of these at the end of each chapter.

Whether these people are in your firm or in your client, you would do well to page through this piece on your next trans-continental flight.

Personally, I flew through this book. Maybe, that was because I could distinctly recall working for several bullies and narcissists. I've also encountered the wimp from time to time, too.

While I could write reams about some of my prior bosses, I doubt it would be therapeutic. I did have one exceptionally bad one who was paranoid, a bully and a narcissist. He was an absolute piece of work. This individual single-handedly fired everyone around him. Average tenure of anyone working with this fellow rarely exceeded 10-12 months.

Please read this book to make sure:

• you're not becoming one of these bosses
• you don't have someone in a position of responsibility who possesses these traits

Bad, toxic bosses are more than just a danger to the people who work for them, they usually cause great hardship to their employers, too. Bad bosses are a cancer that must be excised or the company could fail or falter badly.