March 24, 2013

India's IT outsourcers are promoting "mini CEOs" capable of running businesses on their own, while trimming down on the hordes of entry-level computer coders they normally hire as they try to squeeze more profits out of their staff.

The shift by Infosys Ltd and others is symptomatic of a maturing industry that wants more revenue from its own intellectual property instead of providing only labor-intensive, lower-margin information technology and back-office services.

For young graduates who see the $108 billion IT industry as a sure pathway to modern India's growing middle class, the transformation is unsettling.

Dozens of industry aspirants who were recruited on campus by No. 4 player HCL Technologies recently protested outside its offices in several cities. They were offered jobs in 2011 before graduating last year but have not yet been given joining dates - or paychecks.

"Dear H.R. You were also a fresher... once," read a sign carried by two protesters in a photo in The Hindu newspaper.

HCL's December quarter profits and revenues rose while staff numbers shrank - a rare trick in an industry that has long aspired to break the linear relationship between headcount and revenue growth.

Just 20 percent of the 5,000-6,000 campus recruits offered HCL jobs in 2011 have been taken on board since graduation last summer, and HCL said it made no offers in 2012 to students who would graduate in June 2013.

Slower growth, fewer people leaving, greater demand by customers for experienced staff, and increased productivity through automation and software have put pressure on all recruits, according to HCL, which said it expects to accelerate bringing entry-level staff on board from August.

"It's not that the demand doesn't exist. It exists for different skills," said Ajay Davessar, HCL's head of external communications.

"Typical roles which a student thinks, 'I'll just go there and start coding, and have a good life,' are being tested to reality... Any applicant, be it fresher or senior, will have to have flexibility in applying the skills elsewhere."


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