Saturday, May 15, 2010

Dynamics of Society - Educate-to-Hire

Dynamics of recruitment is changing over the time. Long back when my uncle wanted to join a decent company it was pretty difficult for him - reason ? he had secured only Diploma, which was often seen as a low end course. After a long struggle to stabilize his career he did engineering in AU and joined a company. Now he is holding a post of GM for the design team in his company.

My mom joined the government organization right after her PUC when she was 18 yrs. The difference between my mom's career graph and my uncles is just 10 yrs apart. A decade ago engineering bloomed as high paying career option for Indians- thanks to IT outsourcing boom. I'm very specific because, India is still doing the back office work in IT services and not yet the products. Well thats a different topic altogether- we will see it some other day!

Way back in 1999-2002, the Indian IT companies believed in linear growth, i.e, more projects = more manpower. The need of engineers suddenly surged and resulted in mushrooms of Engineering college across the country (still only a boom in major towns & cities). More demand & less supply = high price; simple economics. Companies like Infosys, Wipro and TCS started hiking the salary more than the growth of bank interest or real estate need. They proved that engineering is better investment.

But it didn't sustain for long - reason? Outsourcing always aim at reducing something. If GE is gonna pay $20 on its mainland IT services, by outsourcing they expect to do it by $15. So over the period, price gets reduced (more competition = reduced price). Companies now need to find ways to cut cost.

If you look at IT companies balance sheet, in the expenditure column Salary to Employees will be the major chunk (nearly 30~45%). After 10 years, now IT companies have realized the monster they have built all these years has come back to haunt them. They need to find alternate to engineering. By the way, what these engineers do in IT company? Simple they code. They write piece of logical steps to run something (mostly a software). What makes them highly priced? 1. Demand and 2. Technology - both are dynamic.

IT companies decided to play down their Engineering needs. They started recruiting the less used route of BSc., BCom grads. Its much easily available and IT companies doesn't need a guy who knows laplace transform or Butterfly theory (both are specialized for Communication engineering). They need someone who know simple maths and logical thinking. They started hiring these people at much cheaper salary (5K~11K) comparitively less than engineers (11K~17K). Now I call them really innovative. They cut their cost by 50% while getting the same work done.

Couple of days back, I read Blog of Krishna, who introduced me ZOHO University which hires school students (apparently claims to be between 16 ~20 yrs of age). Now India already doesn't have a sound education model which encourages or inculcates research based study. The exams just build competitiveness within the individual and does really help him to apply the education even after 3/4 years of good education.

By hiring people under 20, who are passed out of schools we are creating a society which will not have formal education which is a basic right of the individual. Though ZOHO claims to provide the best "neccessary" education, end of the day down after 5 years, even if the individual wish to take up a master's degree or something outside India, they would never be able to do that. Because formal education is must for any other university based education. Just to improve their bottomline & profits ZOHO is trying to mis use the unavailability of education to certain sections. Instead if they would tie up with some university like and provide a part time job it would be more beneficial for them.

So from Grads to Diploma to High School students, whom they are going to recruit next? Babies?

1 comment:

  1. Hi you were follower of my blog long time back..have updated the same pls drop by ;)