By Sumeet Doshi, Country Manager, India, Ultimate Kronos Group
Every large-scale crisis of this millennium, be it the previous decade’s financial crisis or the humanitarian crisis we are just coming out of, has presented tremendous opportunities for the Technology sector. India’s IT/ITes industry is a key contributor to India’s GDP and has been consistently reporting great results, showing the promise the sector holds. In fact, industry veterans confirm that, even with the pandemic-induced acceleration to digital adoption, most companies have only achieved 20-30 percent of their digitalization agenda, promising much more demand for services for the Indian IT Outsourcing industry.
The Indian IT and ITes industry has been one of the country’s top job-creators; but the growth has also triggered “great resignation” in the sector resulting in high double digits attrition, which still doesn’t seem to abate despite several industry-first EVP initiatives being adopted by the sector. While, on one hand, there is a growing demand that the sector can capitalize on, it is also struggling to mobilize skilled talent that can address this demand meaningfully. Let’s face it, talent acquisition costs have increased multi-fold, almost threatening the cost arbitrage advantage the country has possessed.
Despite having ~5 million IT professionals in India, the sector has witnessed significant resignations over the last couple of years, fast-tracking the need to overhaul existing systems to engage and manage employees better and drive better margins. From the Great Resignation standpoint, there are two key trends that organizations are witnessing. First, many employees resigned because of poor experience, including flexibility restrictions and mundane daily processes, among others. This has led to the second area of concern – a dramatic increase in employee costs, considerably impacting the organization’s margins.
The combination of high growth and high employee turnover is creating significant margin pressure on these organisations. In order to stay ahead, they need to:
1. Win the war for talent – hire right
2. Retain talent – drive daily employee experience and
3. Manage better margins under pressure.
This is where three key aspects of HCM technology play the most critical role and has become a board room discussion viz., Recruitment, Onboarding, and Workforce Management.
Win the war for talent – hire right
Today’s market is driven by job seekers and not employers. And with an increase in demand for technical capabilities, the war for skilled talent is only going to increase. The cost of acquiring new talent is also very high due to very high salaries, training, etc.
With some large IT organisations planning to hire more than 50,000 employees a year, providing the right hiring and onboarding experience goes a long way in building employee trust and a stronger employer brand. Most of these organisations are also global in nature and the talent pool under consideration is also global. This is where organisations are looking at best-of-breed recruitment technologies to drive a consistent global experience to hire and onboard talent.
However, hiring the right talent is just one part of a large puzzle that an organisation has taken care of. The experience the candidate has when onboarding is only a one-time experience. While this needs to be good, it is not an experience that she faces daily. Far more critical is to manage the employee’s daily experience in the company. That drives her motivations and, as we will see in the subsequent sections, also drives company profitability.
Drive Daily Employee Experience – Drive Retention
As an organisation you have hired right, but does that mean you are giving a good daily work experience to your employee if you can’t, you will have talent disruption. Specifically for this sector, which has immense momentum for continued deliveries, any disruption in talent availability can prove detrimental to operations and business. This is why retaining program-critical talent has become a boardroom priority for CEOs, CHROs, and CFOs. In an IT company, an employee’s daily experience is shaped by the work she does daily and the tools available to her to effectively manage this work.
This is where workforce management technology plays a critical role in shaping daily experience. All too often, employees tend to be disgruntled due to various applications like timesheets, time management, leave management not working in tandem, and throwing up billing and payroll errors. This not only has an organisational impact but demotivates an employee. Often simple but user-friendly solutions such as empowering employees to swap/manage shifts, track and avail holidays, etc., go a long way in creating a less intrusive, more empowering workplace and driving better daily experiences.
Workforce Management tools like timesheet, time management, leave management, and scheduling management is the only HR tool that impacts an employee and their manager on a daily basis in IT companies. These tools have a direct connection to billing (driving margins) and payroll (driving employee experience). Hence fixing workforce management is critical for IT companies. The immense daily data points coming out of globally integrated workforce management systems are a treasure trove of information for companies to analyze employee behaviors like the risk of leaving. There is a lot more to seemingly mundane data collected daily on WFM tools.
Making sense of millions of these data points and arriving at actionable insights can help understand often unsaid exit triggers, such as overtime, burnout, need for skill upgradation, abnormal absenteeism, and low productivity, among other parameters. Understanding these trends and patterns can help avert potential problems before they even lead to employee exits.
Let’s now look at the third part of the equation.
Manage better margins under pressure
IT companies in India have for long enjoyed great margins due to the tremendous cost leverage they enjoyed for global project deliveries. However, the great resignation and consequent dramatic increase in salaries have put pressure on this entire model. Annual reports of organisations clearly show a huge rise in revenues but squeezed margins.
This is where companies are realising that they need better visibility and control of their employees’ time. Traditionally this has been done mostly through home-grown systems that have not scaled beyond India. As many of these companies have gone global, the delicate need to manage the right billing, pay right and also be in complete compliance with local laws has made it very difficult to scale. This, as many companies are realising, is a very significant opportunity to leverage.
This is another reason why a global workforce management solution is needed. Global WFM systems are designed to take care of country-specific compliances while taking care of employees’ time spent on aspects like billing, overtime, payroll, etc. And providing complete and daily visibility to the management on their most important inventory – time – driving margins and profitability.
While we address the need for both recruitment and workforce management solutions, undoubtedly, the critical need for the sector is intelligent global workforce management tools. This will enhance employee experience and drive better visibility and control of the most important inventory there is – employee time.
The more decentralized these solutions become, allowing both employees and employers access to meaningful information, it can even play a critical role in identifying good work, increased commitment and improved productivity, etc., all of which can be used to build individual, customized cases for an employee’s growth within the organization. This coupled with the fact that the increasing need for reconciliation between available employee hours and productive employee hours is the need of the hour to drive better margins.
This is where workforce management solutions will make a tremendous difference. A happy
a workforce that feels valued and rewarded will show loyalty and contribute to business growth.