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HR Evolves in India

August 30, 2007
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Related Topics: Global Business Issues, Managing International Operations, The HR Profession, Featured Article
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The path of today’s Indian human resource executives, like many a manager in the country’s high-tech economy, has its roots in manufacturing.

    "You could almost trace the career path of support staff to manufacturing industries," says Arun Rao, a vice president for human resources at AppLabs, a software testing and quality assurance startup with almost 2,000 employees. "That is the mother of all career paths."

    Rao’s career is a case in point. He found his first HR job in 1989 at a state-run steel company, the Steel Authority of India.

    With no social safety net and few other job opportunities at the time, many with stable jobs were content to stay with their employer for life. As a result, the opportunity for advancement was slim. "People would either die or retire," says Rao, 40.

    The HR function, meanwhile, was not strategic, focused as it was on grievances and union negotiations.

    In 1991, India liberalized its economic policy and the steel concern began offloading its assets amid a worldwide price slump. The company offered 140,000 people voluntary retirement, Rao says. Despite the radical change in economic policy, which opened the doors to foreign investment and sowed the seeds for the country’s tech boom, nobody was fired. Rao was offered a "golden handshake"—an opportunity to try something else and the promise that, if it didn’t work out, he could come back to his job at the Steel Authority of India.

    Rao enrolled in a human resources management program. He eventually left manufacturing and landed a job at Mascom Technologies in 1998, then at Satyam Computer Services in 2002. At a large, fast-growing company like Satyam, which has 40,000 employees, Rao learned the skills necessary in India’s high-tech industry today: recruiting and training.

    During the formative days of the business process outsourcing industry, other companies were also drawing on talent from manufacturing. In June 2000, Nagarajan Sankaran, COO of HealthAsyst in Bangalore, helped establish one of the country’s first business process outsourcing companies for HTMT, which is part of the Hinduja Group, one of India’s largest and oldest companies.

    "It was completely new to me," he says. "The first thing I thought was, ‘What kind of people do I need?’ "

    The answer was college graduates who were not computer engineers and who wanted to break into business technology. To manage these recent grads, he turned to a manager who came from manufacturing.

    "He ran the workplace like a shop floor," he says. "Today, the same guy is managing 4,500 people."

    If many of today’s executives in India got their start in manufacturing, tomorrow’s executives will have been raised in the bosom of the high-tech industry. Once trained, and with a few years’ experience, employees eager to move up the ranks often find a management-level bottleneck at large companies like Wipro Technologies and Infosys. Many find better options for advancement at small startups.

    After several years at Satyam, for example, Rao felt he was ready for senior management.

    "But [Satyam executives] didn’t see it that way," he says. So he joined AppLabs in 2006.

    Startups often don’t have large training budgets to make recent college grads, or "freshers," ready for work, so they often get their employees from large IT companies. Some are not fit to work, leaving a relatively tight talent pool that makes recruiting ready-to-go employees essential, says Nandakumar Prabhakar, director of sales and marketing for Bangalore-based software company HealthAsyst.

    "Because we need productivity from day one," he says.

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