U.S. companies struggling to land top talent outside their home countries could learn a lesson from Wipro and Tata Consultancy Service. Both companies are huge global technology service providers based in India that recruit thousands of new young employees every year, so their recruiting teams are constantly thinking about how to attract and retain the best people.
In fiscal 2012, Tata recruited 70,400 employees around the world, including 32,263 fresh hires from college campuses, according to its annual report. And the company's attrition rate was just 12.2 percent. In comparison, corporate India reported an average attrition of 19.3 percent for 2012, according to Aon Hewitt's Annual Salary Increase Survey.
The key to successfully hiring so many employees is to look beyond pedigrees, and focus on finding smart people who can be trained to do the job, says Prasad Menon, chairman of Tata Quality Management Services, which provides business excellence training and structure to all Tata companies.
Tata recruits candidates from hundreds of colleges every year, and they are not all "tier one" schools, such as the prestigious Indian Institutes of Technology, Menon says. But that doesn't matter. "The students at these schools are no less intelligent. They just haven't received the best training."
Menon's attitude speaks to what some call "The India Way" of leadership. Wharton School management professor Peter Cappelli and others have noted that India-based firms have traits including a tendency to seek holistic engagement with employees and to improvise amid complex, volatile business conditions.
Tata assumes most recruits will come to the company with skill gaps, so it created a six-month training program that covers everything from engineering and technical skills to teamwork, leadership and other soft skills. "The training enables youngsters from less-privileged background to be as good if not better than those from elite universities," he says, "and it makes them very loyal to the company."
When companies open themselves up to candidates from lower-ranking schools, they also have a better opportunity to fit employees to the corporate culture, says Abhijit Bhaduri, chief learning officer and head of corporate human resources development for Wipro, the $7.3 billion multinational information technology provider headquartered in Bangalore. Wipro has more than 140,000 employees, and hired 13,000 employees last fiscal year.
"We understand the value of engagement," Bhaduri says of Wipro's hiring process. "It doesn't matter if someone comes from a second-rung college. We look at whether the person will enjoy the type of work we offer and our culture."
Bhaduri is the author of Don't Hire the Best: An Essential Guide to Picking the Right Team, which talks about the importance of assessing personality and culture fit along with skills and education when recruiting.
He urges Wipro recruiters to use behavioral interviewing to determine whether candidates will be happy in a role—not just whether they have the right technical qualifications. "IQ and GPA have a limited impact on a person's success," he says. "Excellence comes when they enjoy what they do."
Like Tata, new recruits at Wipro participate in an extensive training program. Wipro puts new hires through an eight-week program called Campus to Corporate. "They all come with different skills and degrees of recall," he says. "This program gets them all on a common platform."
Wipro's training center can accommodate 4,000 people per day, and Bhaduri's team offers a catalog of voluntary and mandatory training courses employees can take to improve their technical, communication and leadership skills as they move up the corporate ladder. Such access to training and career opportunities helps Wipro keep attrition down, and it transforms candidates with even the most mediocre academic training into valuable, long-term employees. Wipro reported an annual attrition rate of 14.4 percent as of April 2012.
"Global sourcing is a very difficult challenge, Bhaduri says, "but when you look beyond labels, you find the people who will be a good fit for your company, and those are the ones you want to stay."
However neither company has a perfect record with respect to employees. Tata recently agreed to pay $29.8 million to settle a class-action lawsuit over wage disputes by Indian employees working in the United States. The lawsuit claimed Tata deducted taxes from their India-benchmarked salaries then forced them to turn over their U.S. federal and state tax refunds to the company. The settlement will be shared among 12,800 employees.
Both firms have also been accused of underpaying employees, although Bhaduri says that other aspects of the corporate culture help to attract and retain the best employees. "Salary is always important to everyone … but workplaces cannot compete on salary alone," he says. He argues that the ability to work with talented people and to take on challenging projects motivates employees as much as salary. "The opportunity to grow one's skills is an important driver for many."