Echoes of Dot-Com Boom in India

By John Moore  |  Print this article Print


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The struggle of Indian IT firms to retain employees offers a distant mirror of the lengths employers went to during the dot-com boom to retain workers.

U.S. IT workers got the royal treatment at the height of the dot-com craze, with stock options, bonuses, and the odd sea cruise among other perks.

Such goodies were the stuff of employee retention programs—efforts to keep workers from straying to ever greener pastures. At the time, companies did whatever they could to keep attrition rates manageable. But then the boom ended. Employee status suddenly shifted from "most valued corporate asset" to "lucky-to-have-a-job."

The battle to retain employees has resurfaced once again, albeit in a different geographic theater. The offshoring surge has placed India-based IT services firms on a fast growth track. Companies battle each other to win business, but they also compete to attract and retain talent. India's National Association of Software and Service Companies has reported attrition rates among business process outsourcing companies of 25 to 40 percent.

Indian companies are now the ones dispensing perks, which, according to India's Business Standard, include hair and skincare programs. But education programs stand as perhaps the biggest benefit.

Satyam Computer Services Ltd., for example, recently announced plans to launch its Satyam School of Leadership. The company describes the school as a Corporate University intended to cultivate leaders and boost the company's growth.

The company has appointed Ed Cohen as senior vice president for the Corporate University. Previously, Cohen founded Booz Allen Hamilton's Center for Performance Excellence.

Cohen said the School of Leadership will concentrate on the top 1,500 leaders in the organization and the next 1,500 "fast-track" employees, who will become the company's leaders.

The school will open in January, but its official home, a facility to be built in Hyderabad, won't be ready until mid 2006. The school will have a neighboring 300-room executive residence for Satyam's leadership students.

Such learning centers have been a part of U.S.-based services firms for quite some time. Andersen Consulting, the precursor company to Accenture, was noted for its St. Charles, Ill., training center, to which students affectionately referred as "St. Chuck's."

Booz Allen also has developed a reputation in the education department. Training magazine this year ranked Booz Allen second in its Top 100 companies list, recognizing the company as "best in class" in the professional services company category. p>In addition to the physical training center, Satyam's School of Leadership also will provide online resources and real-time learning. In the latter, trainers will "go into the field and work with leaders, shadowing and providing advice and council to them," Cohen explained.

Topics in the School of Leadership's curriculum will include building client relationships, personnel development, change leadership, business development, and business strategy and planning.

Will the school help reduce attrition? Satyam's attrition rate already is relatively low by industry standards. Turnover among the top 1,500 managers is less than 5 percent and in the low teens for the company as a whole, according to Cohen.

That said, Satyam seeks to proactively engage and retain its top talent. The school, Cohen said, demonstrates to Satyam associates that the company can build leadership from within.

"Companies that can build the strongest leaders, and retain the strongest leaders, are the companies that are going to come out ahead in the future," Cohen said.

The long-term test for Satyam and other Indian services firms is whether the commitment to employee betterment will remain strong even when the economy isn't.

John writes the Contract Watch column and his own column for the Channel Insider.

John has covered the information-technology industry for 15 years, focusing on government issues, systems integrators, resellers and channel activities. Prior to working with Channel Insider, he was an editor at Smart Partner, and a department editor at Federal Computer Week, a newspaper covering federal information technology. At Federal Computer Week, John covered federal contractors and compiled the publication's annual ranking of the market's top 25 integrators. John also was a senior editor in the Washington, D.C., bureau of Computer Systems News.


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