There are consistent pressures on the IT pack that we are seeing getting reflected in the stock market as well. The margin pressure is for all to see Wipro and are holding back variable pay. Is this going to lead to further attrition or is the pressure on margins consistent across the board?
It is disappointing when variable pay is put on hold for employees but we must remind ourselves that variable pay is always linked to the company’s performance and of course the contribution of individuals towards that performance. It often happens – although not so much in the technology world which usually has amazing results – that 100% variable pay does not get paid.
But having said that, my perspective on this is that it is disappointing. However, the good thing is that they are not being withheld permanently, it has been delayed and that in itself is promising. Also it probably may be premature for employees to start looking elsewhere because these are very well known responsible brands and walk the talk when it comes to employee benefits and commitments.
So while it is disappointing, I guess one should just wait it out. I personally feel that while there is always a fear of attrition, it is not that there are other people up there who have a very different scenario from what is happening with TCS and
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In fact, big tech firms like Google and Apple are planning layoffs. Google is warning employees to work harder, Apple has already laid off 100 employees. Some of the other big tech firms Netflix, Microsoft and many more have already fired hundreds of employees. But when we talk about Wipro, we are also talking about inefficiency in talent supply. How real is that picture and how much is that one of the reasons we are seeing a holdback in variable pay?
They are probably trying to drive productivity and all the examples that you cited, are seemingly worried about the productivity levels. I saw similar announcements from Mark Zuckerberg also about Facebook. There is in general a push to improve employee productivity and that is the kind of inefficiency that Wipro is possibly alluding to.
We did have a pandemic when there was a plethora of demand getting created as against the skill sets. It is something very typical of the IT industry that whenever there is this huge demand creation, then there is a lot of money available by way of compensation and then there is also significant pullback when things get a little more stable or a little more difficult. So, productivity is important and paramount for the start-up ecosystem as well as for the established organizations. I would not be surprised if this focus on productivity continues and becomes more broad-based.
I still think technology will lead the way in terms of hiring momentum, but side by side it is the right thing for organizations to remain focused on productivity improvement because once you let go of that, it ends up haunting organizations in terms of their bottom line . So, the focus on productivity is going to be clearly the narrative point.
“We will see a lot more adoption of academy linked degree apprenticeship programs, which is how companies can make themselves resilient, get the job done and also create ample opportunities for today’s youth. Skill dissemination and technology will become more widespread. There has to be a process by which technology skills sets can become much more democratised.”
If the focus is going to be on productivity, what is the shift that you see? There has been a change in approach both at the company level and at the employee level. How is that playing out at the moment?
I think this will compel organizations to look at different kinds of innovations when it comes to talent mobilization. A large part of the technology industry has been surviving through lateral hires. Lateral hires are always very expensive as opposed to productivity gains. I would not be surprised if the technology industry starts investing in long-term pipeline building strategies which gives them the desired skill sets as well as productivity.
We will see a lot more adoption of academy linked degree apprenticeship programs, which is how companies can make themselves resilient, get the job done and also create ample opportunities for today’s youth. Also, the skill dissemination and technology will become more widespread. I feel skill or skill knowledge is still among the elite in today’s youth. There has to be a process by which technology skills sets can become much more democratised. Apprenticeship or investment in apprenticeship is probably a way forward.
So we will see adoption of a lot of layers in terms of talent mobilization. I pretty much think that is how the IT industry will kind of pave the way forward when it comes to talent pipeline building and mobilization.
has also reduced the average variable pay to 70% for their June quarter and they are talking about the margin squeeze. If it is a lot to do with margin squeeze, do you see this lasting and what are the shifts that you see? Do you see gig economy growing in the IT industry as well?
One should not look at it as an attempt to just reduce costs. It is an attempt to get value for money, improve productivity, invest more in just in case and just in time talent. Our organizations and enterprises are geared towards having those kinds of layered employee mobilization and staffing solutions.
For certain jobs, there will be core employees, and we will have an emerging concentric circle of contractual employees. There will be another circle of gig workers, there will be apprentices. So a lot of layers will emerge and that is how companies will remain competitive globally as well. They will remain lean, productive, alert because in technology, the skill sets change very quickly. Companies have to develop and invest in talent mobilization where they can constantly adopt and move from one to the other.
IT would be one industry where we will see a lot of concentric circles when it comes to talent mobilization and that is the way forward. It is not just about saving costs, it is essentially getting a higher return on investment. That is how the future would look and one can stay relevant and ahead of the competition.
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